Desperation Has a Smell: The Psychology of Raising Private Money with Jay Conner

00:00:00
This episode with Jay Conner. The private money authority is great for anyone who's interested in raising capital, whether it's for real estate investing or a business or anything else. Jay walks us through his story of how in 2009, his line of credit was pulled overnight at his surprise. And how did he deal with that? Well, he figured out, he asked himself a really important question that he talks about, who do I know who can help me solve this problem?

00:00:36
And that went down, that led him down a path of learning about private money. And I love the fact that through those 15 years, the last 15 years, Jay has really been focused on relationships who, not how. That said, he really has done a great job of pivoting through different market conditions, changing his strategy when needed with regard to real estate itself, but also incorporating technological advancements and automation into his business. So in a sense, he's kind of an old school guy where relationships are number one. But he's also changed with the times, and that's really kept him relevant and successful through the years.

00:01:20
Lots of great mindset nuggets in this one about overcoming fear and not approaching people with the smell of desperation. There's a lot more packed into this episode. Toward the end, I asked a question that I've never asked on a podcast before, and Jay reveals something that he's never shared on a podcast before. So you're going to have to wait for that one. I know you're going to enjoy this episode.

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Buckle up.

00:01:49
Welcome to from adversity to From Adversity to Abundance Podcast, the go to podcast for real estate entrepreneurs seeking not just to thrive, but to conquer with resilience and mental sharpness. Each week, join us as we dive into the compelling world of real estate through the lens of mental fitness, where challenges transform into opportunities. Get ready to transform your mindset and expand your understanding of what it takes to succeed in real estate. Let's explore these stories of triumph and resilience together.

00:02:26
Welcome, everybody, to another episode of the from Adversity to From Adversity to Abundance Podcast podcast. I am pumped today to have with us Jay Conner, the private money authority. Jay, I forgot to say, I'm Jamie Bateman, your host. Jay how are you doing today? Jamie I'm doing fantastic, and I'm so excited and so thankful that you invited me to come along, talk about the subject I'm so passionate about.

00:02:50
And of course, that's private money. I'm so excited about private money because it has had more of an impact on our real estate investing business than any other strategy that we've implemented. Absolutely, Mike. As you well know, Jay, if you're a mortgage note investor or a real estate investor, whether it's residential, commercial. If you're a real estate entrepreneur and you're trying to scale your business, no matter what I've found you're going to run out of your own capital, or at least the capital that you want to deploy into your own business and investment.

00:03:24
So there are many ways to raise private capital, and we're going to get into that. But this is absolutely relevant for sure for the mortgage note investor or single family rental investor who may be listening to the show, any kind of real estate entrepreneur who wants to scale, you've got to get access to capital. Now, before we jump into your backstory, Jay, a little bit more, what do you have going on kind of this year, if you will? Well, this year, well, first, let me say where I am and what kind of market that I'm investing in. So I am here in eastern North Carolina and been investing here in North Carolina in the same market since 2003, focused on single family houses.

00:04:09
I've done commercial as well, shopping center from the ground up, condominiums, townhouses. But the focus has been single family houses. We've rehabbed or renovated over 500 single family houses now funded with private money. But what's going on right now, my target market, Jamie, is only 40,000 people. Only 40,000 people.

00:04:32
We do two to three deals a month. So it's not a high volume like some, you know, doing 200 wholesale deals a year. I mean, for goodness sakes, I don't even have anybody to wholesale it to. Right. So we do two to three deals a month.

00:04:45
But our average profit right now this year is $82,000 per deal profit, two to three deals a month. And so these deals are now, of course, I do terms deals I'll buy subject to the existing note, et cetera. But the majority of them are funded with private money. And so right now I've got about ten or twelve houses at some stage or another, you know, that are in a renovation. What's going on right now?

00:05:19
There's no inventory, right. There's no inventory in the multiple listing service. So if you price the house right or even aggressively, you got multiple offers and it's under contract right away. What's going on right now? I'm not buying any houses and I haven't bought any houses in forever out of the multiple listing service because there's no inventory.

00:05:41
So of course, we're finding all of our deals what we call off market or direct to seller for sale by owners. And we have many, many different marketing channels going on simultaneously. I have four different vendors that are getting me Google leads. People going on Google, nice. Searching for somebody to buy their house fast.

00:06:02
We got a two different direct mail programs going on. I got a full time outbound caller. And so we're using different market, we do Facebook ads, different marketing channels to have consistent leads coming in all the time. Well, I tell you, I say it all the time, Jamie, if you don't have consistent seller leads coming in your pipeline every day, every week, you got a hobby, you don't have a business. So you didn't just, when the leads, when the transactions all dried up on the MLS, you didn't just say, okay, I guess, I guess I'm out of business.

00:06:35
I mean, you didn't just pack it in and say, there's no way to make money in this environment. And I'm guessing these market conditions, and I know these market conditions for you personally are not the, is not the most, this is not the most adversity you faced in your business. And so my guess is that you're applying some, you know, mental fitness lessons you learned along the way today to get creative. Look outside the box. Hey, this isn't working.

00:07:03
How, how do I get this done? So let's jump back to your backstory, Jay, I know you've been through some stuff in real estate and some, some real challenges. You mentioned 2003. How did things go after that? So, I was raised in the mobile home business, and so here comes one of the adversity stories, is the consumer financing for mobile home products, also known as manufactured housing.

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It dried up the whole industry fell out of favor with Wall street. So in the early two thousands, I mean, it was in 2002, woke up one morning and had $22 million in inventory and no way to sell them because the consumer finance was gone. So almost had to file bankruptcy. But we didn't. We did workouts and agreements with our vendors.

00:08:03
But I knew, Jamie, if I ever got out of mobile homes, manufactured housing, I knew I wanted to get into single family houses and not building them. I didn't want to build them. I wanted to, I wanted to buy distressed properties and fix them up and flip. And this was even prior to HGTV. Coming along, before it was cool to be a flipper.

00:08:25
You were flipping houses, right? That's right. That's right. So, started in 2003 and the first six years, from 2003 to 2009, from 2003 to 2009, I relied on the local bank to fund my deals. That's all I knew to do, all I knew.

00:08:48
All I knew to do is to go to the local bank, get on my hands and knees, my hands underneath my chin, beg, pull my skirt up so they can look at my personal assets and pull my credit score and all that. That's all I need to do was. And that's what most people think. That's all they know to do. And that.

00:09:08
But you know what? That worked great. Sure. Well, I was going to say, if it's working, why would you need to find an alternative solution? Right.

00:09:15
They work great until January 2009. Yeah. Well, I shouldn't say we all know, but many of the listeners likely know what happened in 2008, 2009. But give us a quick refresh for those who may not be familiar. Well, I was sitting right here at this desk.

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And I know you may find it hard to believe, Jimmy, but we actually still have landlines here in North Carolina with. With cords. Most people don't even know what a. What a handset is, you know? But anyway, I was sitting at this very desk.

00:09:48
I had two houses under contract, and the potential profit on those two houses was over $100,000. And I picked up this phone, and I called my banker. His name was Steve. And so I called him up. Now, bear in mind, Steve and I had done a ton of deals for six years.

00:10:09
He'd been my guy. He'd been my go to. And so I called him up and I told him about these two deals I had on a contract. Well, I thought I still had a line of credit when I made those phone calls. I'd put Earnest money down on those deals, Jamie.

00:10:26
And back in 2009, here in North Carolina, you couldn't get your earnest money back when you paid earnest money. I mean, you were in the deal, right? Non refundable. Yep. And so I told Steve about my deals, and I learned like that on that phone call that my line of credit had been closed with no notice to me.

00:10:50
And I see, I said, steve, what are you talking about? Why are you telling me the bank has closed my line of credit? And we've got a great relationship. I've never been laid on a payment. And he says, Jay, don't you know there's a global financial crisis going on right now?

00:11:11
I said, no, steve, I don't know anything about no global financial crisis. But you're giving me a global financial crisis right now, right? Because I can't fund these two deals unless. Unless you fund them. I don't have anywhere to go.

00:11:23
Sure. This is. I'm sorry, Jay. That's. That's just the way it is.

00:11:27
So I hung up the phone, and I sat here for a moment, and I thought, now, Jamie, I'm getting ready to share with you and your audience the most powerful question that I could have asked myself during that moment right after that phone call. And the power is in the questions anyway. And so I'm going to share a question right now that I don't care what adversity you are going through. I don't care if it's health, relationships, career, financial, whatever it is, whatever your adversity is. Here's the most powerful question you can ask yourself, and here's the question I asked myself when I hung up the phone from Steve.

00:12:08
I said, Jay, who do you know that can help you with your problem? You know, it's not how. It's who. Who can help you with your problem? And by the way, Jamie, by the way, I'm sorry, what did you say?

00:12:24
Who, not how, is a great book as well. Yes, yes. Yeah. But you're absolutely right. It's incredible.

00:12:31
Incredibly powerful mindset shift. You know, going to ask you, asking who, not how. So you asked yourself, who can. Who can help me with this problem? By the way, Jamie, these people going around saying every problem is an opportunity.

00:12:47
I want to throw up. I didn't have no opportunity. I didn't have no opportunity. I had a problem. Right.

00:12:53
And I need somebody to help me with my problem. Yeah, well, you know, hindsight helps with hindsight, and maybe looking at other people's problems helps. Helps maybe, you know, come up with these catchy phrases. And I think after time, we end up seeing what good came out of problems. Oh, yeah.

00:13:12
But, I mean, as I share my story, we're gonna. You're gonna see how this was the biggest blessing in disguise. But. But I. But I couldn't be.

00:13:24
I couldn't be Pollyanna. We got to. We gotta. We gotta address this problem head on. Absolutely.

00:13:32
So anyway, so I asked myself that question. Who do I know that can help me with my problem? Immediately. Immediately, I thought of Jeff Blankenship. Jeff is a dear friend of mine and Carol Joyce, my wife, and he was living in Greensboro at the time, Greensboro, North Carolina, at the time.

00:13:52
And he was. He was investing in real estate as well, single family houses. So I picked up the phone, I called Jeff, and I told him the story of what had just happened. And Jeff said, well, Jay, welcome to the club. I said, what club?

00:14:09
He said, the club of having to bank close your line of credit. He says, my bank just shut me down last week. I said, well, jeff, how are you going to fund your deals? He says, well, Jay, have you heard of private money and private lending? I said, no.

00:14:26
He said, have you heard of self directed IRA companies where individuals, people can take their current retirement funds that they're not happy with and transfer them over to a self directed IRA company, and then they can lend money out as a private lender and make their returns either tax deferred or tax free. You ever heard of that? I said no. And so I knew Jeff had told me something. So I studied private money, private lending, and I'm not talking hard money, by the way.

00:14:55
I'm not talking about brokers and any kind of institutional money, private money. I'm talking about doing business with individuals. Other one to one. One person lends money to the other person. Right, exactly.

00:15:08
With no middle person involved, no broker. So I studied it, and so what did I do? You see, Jamie, here's what's interesting. From that moment in time of learning about private money to this day, although that was 2009, so currently to right now. Yeah.

00:15:26
Never, never asked anybody for money. And I got eight and a half million dollars of private money that we use from projects to projects to projects, never asking. And look, I've never pitched a deal in my life. And people ask me all the time, they say, Jay, how in the world do you get funding for your deals? And you never ask anybody for money?

00:15:50
Well, here's the answer. So I got off the phone with Jeff, studied for a minute. So what did I do? I said, I'm going to take on an attitude of a teacher, of a teacher, and lead with a servant's heart. And I'm just gonna start sharing with people one on one and in groups, private lender, luncheon, put on an event, have a little teaching event, and start teaching people.

00:16:18
I started with my own network, in my own connections, people I go to church with, people in my cell phone, people at the Rotary Club, right, my own connections, and just start teaching them what private money is and how they can earn high rates of return safely and securely. So the first thing I did is I put my program or my opportunity. I put my program together that I was going to start teaching. Now, one of the first things I had to get straight in my mind, Jamie, is that doing private money, borrowing private money, it's 180 degree shift from going to the local bank or a hard money lender and borrowing money, because when you're, when you do it the traditional way, you're selling, you're begging, you're persuading. Sure.

00:17:06
They have all the power. Right. They got all the power and they're making all the rules. Sure. They're making all the rules.

00:17:13
They're doing their own. They're doing their own underwriting. Right. Right. They set the interest rate, they set the length of the note, all that.

00:17:20
So I took 180 degree shift. Shift in that mindset. I said, guess what? I'm going to make the rules. I'm going to make the rules.

00:17:32
I'm going to put together a program that will show people how they can safely and securely make really high rates of return. And so I put my program together. I decided I'm going to start paying everybody 8% simple interest. Sure. Put my, the length of the note.

00:17:50
I put together a program called a 90 day call option, how they can get their money back in case of an emergency, et cetera. So I got a quick question. Sure. So I love that. How did you deal with the what?

00:18:07
A lot of, a lot of people who are starting out in a new business or new skill set, if you will, deal with what people call the imposter syndrome. So you're going out and teaching something that you just learned yourself. And look, I'm not throwing shade, as they say, or whatever. How did you deal with that? You're pushing your own boundaries with what you know, and then you're going out and teaching others how they can invest.

00:18:32
How did you deal with that mindset shift? Well, I didn't create it by myself. All I did was pretty much copy other people's programs that they were offering. Sure. Got it.

00:18:43
Other very successful. Other various. No, I love, I love that answer. Because you're not. I love that about real estate, too.

00:18:49
Generally speaking, you're not. You don't need to reinvent the wheel. It's. It's been done by somebody else who's very successful. Right.

00:18:57
Success leaves clues. So didn't mean to derail us. There was just. No, you're about that. So I put my program together that I'm going to teach.

00:19:05
So I take on the mindset of a teacher, and what did I do? I put on my private money teacher hat. So that's how. That's how I'm thinking. Love it.

00:19:14
Private money teacher. Right. So I'm gonna teach. So I went about teaching other people what it is. And so desperation has got a smell to it.

00:19:28
Desperation's got a smell to it. So what I mean by that is one thing I learned at the very beginning is if I talk about my program, my opportunity, where people can earn these rates of return. If I talk about that and I talk about a deal or a couple of deals that I need funding for, I'm already sounding desperate. Sure. That makes the worst time to be raising money is when you need it.

00:19:59
When you need it, right? For a deal. Great point. Sure. And you know what, Jamie?

00:20:05
I'm getting ready to take a risk. I'm getting ready to take a risk now. I'm getting ready to say something you might disagree with, and if you disagree with it, I'm sure you'll tell me. But let me tell you what drives me crazy. I know you've heard this.

00:20:18
I'm getting ready to say it, and I know you've heard it. It drives me stupid. Crazy. These gurus, other, you know what I will get on the stage or platform, and here's what they say, quote unquote. Oh, just get the deal under contract.

00:20:35
The money will show up 100%. You hear that all the time. I want to throw up. I want to say, where is the money going to show up? Is it just going to, like rain out of clouds or something?

00:20:48
And another thing they'll say, another thing they'll say, they say if the deal's good enough, the money follows the deal. Right. Exactly. That's what we hear a lot. I wanted to disagree with you because controversy is actually good for, for listeners and views and things.

00:21:05
But I agree. I mean, it sounds good, right. It sounds like good advice. It sounds tempting to buy into. But, yeah, I mean, like you, it's a great point.

00:21:16
Even if the money does show up, it's probably not going to be in very favorable terms because, I mean, you. Got really need that money now you're looking for money. Well, you just gave up your power. Sure. Right, right.

00:21:27
It's a great point. You're, you're, you're now into a negotiation. Guess what? Do private money the way I do private money, there is no negotiation. Right?

00:21:36
I pay all my pride, I pay all my private lenders the same exact thing. Right? And guess what? I've been paying them the same thing since February 2009 when I started doing it. And here we are many years down the road.

00:21:51
And you know what, Jamie, people say to me? They say, Jay, how in the world are you still paying your private and no points, no origination fees? Say, how in the world are you paying those people 8%? Ever since 2009, look what the market has done. The interest rates have gone right about.

00:22:10
They can get, they can get 5% in a savings account. Why are they, why are they putting their money with you? Yeah. Why are they putting their money with me at 8%? There's two answers to that question.

00:22:20
Number one, I make the rules. Right. Number two, 8% is still a whole lot more than four and a half or five, actually, that it's come down to four and a half recently. And. And it's going to continue going down.

00:22:34
Sure. So anyway, so this mindset of, I'm not chasing, I'm not begging, I'm not selling. Yeah, you're not making the rules, you know. So what, back to what I did? Yeah.

00:22:48
So I put on my teacher hat. Now, there's another mindset that there's two primary ways to start conversations with people about private money that don't know what private. You know, I got 47 private lenders right now. Not one of them even knows what an accredited investor is. They don't know what an accredited investor.

00:23:11
And there's a small handful of them that are actually. They are accredited. They are credited, but they don't. But they don't know they're accredited. Right.

00:23:19
Right. And look, all 47 of them never heard of private money or private lending until I did. What? Put your teacher hat on. Right.

00:23:28
And none of them had ever heard of self directed iras. And an important thing about self directed iras is establish a relationship with a self directed IRA company so that when you're talking with somebody, an individual that's got retirement funds and they're not happy with the returns, then you can introduce them to the rep so they can move them over, you know. Now that's, that's a very valuable point because there, you know, there are a lot of people who have heard of self directed iras and who have, who have capital there. But in the grand scheme of things, it's a very small number compared to those who have their, your typical, you know, vanguard account or whatever with stocks and bonds. And, I mean, so there's a ton of opportunity there.

00:24:14
Your typical financial advisor. Never heard of them either. Never heard of it. That's so true. And they hadn't heard of it because there's no money to be made for your traditional, you know, financial advisor.

00:24:25
Anyway. How do I start conversations for the sake of time? I'm not going to share, but I'm just, I'm just going to share what I call the indirect method. Okay. The indirect.

00:24:36
I like coming in the back door. Right. I like coming in the back door. So here's the indirect method. Here's how I got my 1st $250,000 of private money.

00:24:46
It was on a Wednesday night at Bible study here in morehead city. And Carol Jo and I were going to Bible study, and I knew there was a gentleman there that I wanted to talk to, and his name was Wayne. He's passed away now, but nonetheless, I walk into the foyer. Wayne is standing over there. I walked up to Wayne, here's exactly what I said.

00:25:06
I said, wayne, if you got a few minutes, I want to talk to you about something confidential. After we finished Bible study. He said, sure, no problem. So we have Bible study, we get together, we go down to the nursery in the building, shut the door, and here's exactly what I said to him. I said, wayne, you know everybody in this town.

00:25:27
And he did. He was the original zenith television dealer. Now, if you don't know what the zenith television dealer was, that means you're too young to remember life before Walmart came to town. That's right. I do know.

00:25:42
For the record, barely, barely, barely, barely much. So anyway, so Wayne was very connected in the community, very involved in the Rotary club. And I told him, I said, you know everybody in this town. And I said, wayne, now, here's the magic phrase. Here's the magic phrase.

00:25:58
I said, wayne, I need your help. There's the magic phrase. I said, wayne, I need your help. I said, I've now opened up my real estate investing business by referral only, and I'm paying insane high rates of return to people that invest with me. I said, wayne, here's how I need your help.

00:26:20
When you run across somebody that's complaining about the stupid low cd rates at the bank, the volatility of the stock market, losing money in the stock market, would you refer them to me and I'll share with them the program and the kind of rates I'm paying? What do you think Wayne said. Wayne said, well, brother J, what you got in mind, right? Love it. Yeah.

00:26:46
And I. And I said, well, I said, wayne, I said, are you saying that you and your wife might be interested? He said, well, yeah, we might be interested. He says, or losing money in the stock market and not making much money, you know, in the. In the cds.

00:27:01
He says, what kind of rate are you paying? And I said, well, Wayne, that sort of depends on the deal. I said, what sounds high to you? He says, well, we're getting 3%. And that's what it was in 2009.

00:27:14
He says, we're getting 3% in the local bank right now. So he said, I don't know, maybe 5%, 6%? I said, wayne, I can't pay you five or 6%. But I can pay you 8%. He said, put me down for $250,000.

00:27:30
So I went to his home, him and his wife's home, the next day, and I went over with them the entire program, how they're protected, how I name them on the insurance policies, the mortgagee, and my maximum loan to value and all that stuff. Well, that 250,000 very quickly became a half a million dollars. Right. Now, notice I didn't share any kind of deal with him. I didn't share any kind of deal with him.

00:27:56
Just the program. Right, right. I want to share this with you, and I'll turn it back to you, Jamie. So I told you at the beginning of the show, not only have I never asked anybody for money, notice I didn't ask him for any money. Yeah, you gave him fomo fear of missing out where he's supposed to.

00:28:15
You know, he's going to miss out on this opportunity for other people. Right, right. I just asked for his help to spread the word. Sure. Absolutely.

00:28:23
So now we got this money, and here and now, how do I get deals funded without pitching deals? Here's the answer. So I said, wayne, I'll call you just as soon as possible, and I'll put your money to work for you. As soon as I got a deal for you. I said, maybe a few days, couple of weeks, whatever.

00:28:44
So I still had those two deals under contract, remember, from the previous month that I'd gotten extensions on? Well, I hadn't brought them up in conversation, because I know desperation's got a smell to it. So a few days go by, and I call up Wayne with what I call the good news phone call. The good news phone call. So here's the script.

00:29:10
So I get my little hand set in my hand, you know, I call him up. Wayne answers the phone. I said, wayne, I got great news for you. I can now put part of your money to work and. But I didn't tell him about both deals.

00:29:25
Talking about one deal, right. I said, I've got a house in Newport with an after repaired value of $200,000. The funding required is $150,000. Closing is going to be next Thursday, so I need for you to wire your funds by next Wednesday. I'm going to have my attorney send you the wiring instructions.

00:29:48
End of conversation. I didn't ask. Hey, look, the most stupid question I could have asked Wayne was, do you want to fund the deal? Well, of course he wants to fund the deal. He's told me he's got $500,000 ready to go.

00:30:03
To work. He's waiting for the good news phone call. And I'll tell you something else. If he had moved retirement funds to a self directed IRA company that I recommended, he wouldn't be making any money until I put his money to work. So now I'm ethically bound to borrow his money.

00:30:23
Cause he's moved the money at my, you know, at my advice. Right. Yeah, no, that's. I love it. So you never really.

00:30:34
Desperation has a smell to it. You cut, you, you take the indirect method asking for his help and you don't really ever share the deal. But it's. Yeah, they don't care. Exactly right.

00:30:47
And that's what I found, too. Once, once people trust you as an operator, they really don't care about. I mean, they may want to understand generally what you're. What they're investing in. Of course.

00:30:56
Well, here's the. And you just said something that's so important, Jamie, when you really get down to it, they are not investing in your deals, they're investing in you. That's right. They're investing in you. Now, of course I'm not going to borrow unsecured money.

00:31:12
They're going to get the deed of trust. Most people call it a mortgage. They're going to get a deed of trust that collateralizes. I'm not going to borrow more than 75% of the after repaired value. I didn't say purchase price.

00:31:23
I always bring home a big check when I buy a. I mean, who wants to get paid to buy houses, right? My favorite phrase on my real estate attorney's check and check is excess cash to close. I love me some excess cash, but yeah, we're going to protect them. But I mean, and after that first deal, they don't even care what the after repaired value is.

00:31:45
They don't care where it is. All they want to know is how much and when do you need it. Yeah, and, yeah, and I have a two mortgage, no funds. And through the years I've operated them, it's become so much more apparent to me that once there is that trust level that we know what we're doing. We give investor updates regularly and I tell my team, don't focus on the assets themselves.

00:32:12
We have full transparency. If you want to log in and see what we purchase in the fund, that's fine. We're not stopping any of our investors. They really dont care. They want to know whens my check hitting, whens my ach hitting, wheres my k one?

00:32:27
How the returns looking? And do you know what youre doing as an operator. Absolutely true. So briefly, from, say, 2009 through today, what has your business looked like? Big picture, maybe one or two highlights.

00:32:44
How were you able to scale and maybe one or two kind of takeaways. I know that's a lot in one question, but kind of review the last 15 years for us, just quick overview, if you would. Sure. Well, we've had market swings and changes during that period of time. And so, for example, when the market is slow and houses are not moving, like the market's super hot, still where I am, no inventory.

00:33:16
You put it in the multiple listing service and boom, it's gone. It's gone. But it's not always like that. Sure. It's not always like that.

00:33:24
Right. So I will pivot during those market cycles and I'll buy more houses on what we call terms. I'll buy more houses subject to the existing note, etcetera. Because when you buy a house on terms and for, if anyone's listening, you don't know what I'm talking about. Subject to the existing note, they leave the mortgage in their name, they transfer title over.

00:33:52
The rule of thumb is when you buy on terms, sell on terms like sell on lease, purchase, sell on, rent on. And when you're selling on terms, you don't care what the market does. You don't care if the price goes up. You don't care if the price goes down because you're not looking to cash out anyway. Right?

00:34:10
Right. Yeah. That makes sense. So, you know, it depend, it depends on what the market is doing. But by and large, over the past 15 years, yeah, the majority of my business still has been fix and flip.

00:34:23
That's where the biggest profits are. Your big. When you, when you've, when you got a property to renovate or rehab, the biggest profits are in the rehabs. I looked and I just bought an oceanfront condominium seven weeks ago. Oceanfront, third story.

00:34:42
You look like you're on a cruise ship looking out over the Atlantic Ocean. Well, I bought it for $425,000. The renovation was a whopping $11,000. That never happens. That was just interior paint, a little bit of sheetrock.

00:34:57
And so I had it for only three weeks, put it in the multiple listing service for, and I cashed out and sold it for $628,000. And I only own the property for five weeks. I'm not sharing that story. So my net net after realtor fees was $160,000. The only reason I share that story is not to brag.

00:35:20
Not to brag. The reason I share that story is because it's the power of private money being available that allowed me to do that deal. The property was going to the foreclosure steps in two weeks from the time the seller contacted us, and I closed on it in five days. You can't close on a property in five days unless you got all the cash and you got a relationship with a real estate attorney. Gonna say, not through a bank.

00:35:45
Right? No. No appraisals. No appraisals, none of that stuff. And so having the power of private money allows you not to miss out on any deals, even when you got to close fast.

00:35:57
Absolutely. And that is a risk we take with this, with, with the show is, is, you know, one, focusing on adversity too much can be problematic. And then two, focusing on a, quote unquote, From Adversity to Abundance Podcast can be come across as bragging or, you know, can actually make the listener feel worse about themselves. That's not the intent at all. The intent is to inspire and to show the power of the mindset that Jay is talking about and the tactical real estate and private lending knowledge and tools that hes putting to work.

00:36:30
So walk us through in a little bit more detail, Jay, and then well get to some rapid fire questions. Walk us through that recent deal as an example. Just a quick case study. I know you mentioned a couple of pieces to it, but how did that come across your desk, and then how did you funded and how did you exit it? Sure.

00:36:51
So that lead, that seller lead came in as a. From a Google Ad. So the seller's name was Brian Younger. Fella, he didn't. He don't live around here.

00:37:05
He went to Google, and he googled. Did a Google search. I don't know what he put in. We tracked about 75 different phrases that people are searching for when they need to sell. If it's a for sale by owner, they need to sell fast.

00:37:19
So the Google lead comes in. So when that lead comes in, it immediately goes into my CRM, and it's emailed to my acquisitionist. Well, what in the world is an acquisitionist? I've had her for 18 years. Her name's Kim.

00:37:36
She talks to all my sellers. I haven't talked to a seller in I don't know how many years. Anyway, so she talks to all my sellers, does the negotiation, gets the information, sends me all the information, and I decide what I want to offer on the property. So he comes in, goes into our contact management. She gets it.

00:37:56
She gets, uh, gets Brian on the phone and gets the information on the property? We'll come to find out. He had two motivating factors. Number one. No, three motivating factors.

00:38:08
Number one, he didn't live around here, not even in this state, I don't think. Yeah. So he's not. He's not emotionally attached or. And doesn't have, you know, real good knowledge of the.

00:38:18
The ground truth as to the property value or. Or maybe the market conditions, et cetera. Exactly. And so secondly, it was inherited. Inherited.

00:38:33
Right. So both his father and mother had passed away, so now it's an inherited property. He doesn't. He doesn't have the interest or the time to come use it. And the next big, huge motivating factor is that it's going to sail at the courthouse steps as a foreclosure in less than two weeks.

00:38:53
Yeah, that's a massive one, right? Absolutely. And so anyway, he owed, or his parents, the mortgage owed $325,000. So I guess he came up with his price of 425,000. Cause he's happy pocketing 100 grand.

00:39:13
Sure. It's a lot of money. Right? Right. And so he gives us his price.

00:39:18
And so I tell Kim, and all of our communication is through the software I send back. I say, offer, I'll pay all cash and close in five days. Five days. So he took the offer. I got two of my private lenders to fund the deal, one in first position, one in second position.

00:39:41
So we closed on it in five days. And so then I already knew what the renovation needed. It needed interior paint and needed a little bit of sheetrock work, and that was it. It's not much. We got it done in one week from the time I closed.

00:39:58
Got the interior paint done in one week. And so anyway, I'm talking to. I'm talking to my realtor. See, we stage all of our houses. I didn't go look at the house.

00:40:07
My realtor went and look at the house, and my project manager, my realtor went to look at it to see if he had any different opinion on the value, and my project manager went to look to estimate the repairs. I knew all that before I had my acquisitionist make the offer. So we've closed on it, right? Renovations are underway, et cetera. I haven't been to the property, and so we always stage all of our properties.

00:40:37
And I do a music video that goes in the mobile listing service. And so I'm talking to my realtor over the phone. I said, I said, chris, how in the world are we going to get this beautiful oceanfront condominium staged and get furniture and elevators and all that stuff upstairs. He says, Jay, don't you know? It came furnished with luxurious furniture and painting on the walls.

00:41:06
I said, wow. No, I didn't know that. Nobody, nobody on the team told me it came with beautiful luxury furniture. That's so funny. I thought you were going to say AI, just to, you know, pretend there's furniture there.

00:41:22
So anyway, so anyway, we got it. Got it. Got the renovation done, got the music video done. Now here's a big secret on how we sell houses really, really fast in the multiple listing service, other than there's no inventory, we go, I have my realtor do a status called coming soon on Monday. Coming soon.

00:41:45
So that's the coming soon status in the mobile listing service. That means that people can watch the music video, they can look at pictures, they can see the written description, they can see the price, but they can't get in the property. Right. So I want to build up demand. I want to build up scarcity, urgency.

00:42:07
And so then on Friday morning at 08:00 we go active, active status. You see, I want appointments lined up of the weekend saying, this property back to back to back. Right. Scarcity, more phone. They see each other.

00:42:25
Yeah. They sit and then they see each other. Right. And I would do that when I was managing my own rental properties, one, for efficiency and not wasting my own time, but two, I would, sorry, I should explain what it, what it is. I'd always have the, you know, a specific window where we meet the prospective tenants, not on their own time, but this is when Im going to be there from four to six or whatever it is, and they see each other and so it creates that demand and that bandwagon effect, I guess, if you will, and that FOMO.

00:42:58
So, okay. I love the fact, too, that you clearly have been at this for a while, and clearly you already talked about the who is who do I know that can help me with this? So it's clearly very much a relationship thing for you, but you've also automated your business and are not afraid of technology, it sounds like. So not only pivoting with regard to market conditions, but also pivoting with regard to technological advancements, but keeping the relationships front and center, that's, that's just a top of mind. A few things that I'm pulling from this.

00:43:38
So, um, I love the approach. And, and so to wrap up that deal, then, how did it go? Yeah, so it went live, right. Active Friday morning, 08:00 well, on Thursday night, I got two all cash offers on Thursday, side unseen wow. Before it even went active.

00:44:01
Well, they were low ball offers. So nothing. Nothing there. Gotcha. But then on Friday, I had three offers, two of which ended up being a little bidding war.

00:44:13
And I had it listed for 595, but I had an offer for 615, and then the winning offer was 628. And listen to how clean this offer was. All cash, no mortgage. No mortgage, all cash. No appraisal, no inspection.

00:44:38
No inspection. Of course. It's a condominium, right? What? Are you sure?

00:44:41
Yeah, yeah. Right. No inspection. Close in ten days. All kinds, right.

00:44:51
Higher than less price. What else? What else could you want? Right? It's like twist, twist my arm.

00:44:59
So there we go. So, soldier 628. Yeah. Paid my realtor 5%. Because of the volume.

00:45:05
I pay five and not six. And I only had, only had carrying cost, you know, for a month and. A very brief period. Right. And the reason you're able to have those funding partners is because you've done so many deals prior to this and you've built that reputation.

00:45:21
And I, they, you say, send me the money here or send them. Send the wire here, and they do it. It sounds like. I mean, I don't want to put words in your mouth, but you wouldn't be able to pull off a deal like that without a track record. Oh, absolutely right.

00:45:37
Absolutely. Absolutely. Yeah. Again, the worst time to be raising private money is when you need it for a deal. So you want your private money lined up, ready to go.

00:45:48
That's why I teach and preach. The money comes first. Love it. All right, Jay Conner, are you ready for a few rapid fire questions? No, that's the first time anybody said that.

00:45:59
I love it.

00:46:03
All right. Some of these are business, and some are a little more personal. We'll try to fly through them. What is a book or two that you'd recommend for my audience? I know you have a couple of your own books, but go ahead.

00:46:14
Well, one book I would definitely recommend changed my life. When I was 24 years old. I was in a very, very dark place. And the name of the book, and it's still in print. The name of the book is University of success by Og Mandino.

00:46:30
University of success by ogg Mandino. And another book I would recommend, and I know you've heard of it, probably Jamie. In fact, I've had the co author, Bob Berg on my podcast. And the name of the book is the go giver, of course. Yep.

00:46:48
The go giver. Absolutely great book. Yeah. Love it.

00:46:54
How about something you've seen in your, in the industry that you'd view as, or maybe that you would label as controversial, maybe unethical. You don't have to name names or anything, but I mean, the real estate space is generally, there's a low barrier to entry, so tends to attract some less than ethical people. So what would you, what would you say is maybe recently a common practice that's, that's questionable? Well, it's a common practice right now. Most real estate investors, and in my opinion, it's unethical.

00:47:33
Most real estate investors, when they sell a house on lease purchase or rent owned, they'll collect, as I do, a large non refundable lease option deposit. The actual legal term is an option fee, which means that that money will be applied towards the purchase price if and when the, we call them tenant buyers. The person renting the house gets ready for a mortgage and there's a predetermined price. So that's called the option price. Sure.

00:48:06
It's called an option because they have an option to close on the deal to buy it. They don't have the obligation, but they have to pay an option fee. So typically I'm gonna get at least a 5% minimum of the purchase price. In my opinion, it's unethical to take that money without helping those people get a mortgage. Now, I know from doing this for, since 2003, the likelihood of them ever getting a mortgage is less than 5%.

00:48:39
Sure. And since I know that, since I know that, then I'm going to offer to help them get there. The reason they're buying on terms is. They can't verify they don't have other options. Right.

00:48:54
Or their credit is messed up. Sure. So I'm on offer to help them get ready for the mortgage. Now, I can't babysit them and I can't make them, but at least I'm going to say, hey, look, I know you need help getting your credit score up so you can exercise this option. So let me plug you into the credit repair company that I recommend.

00:49:15
Okay. I love it, and I know this is rapid fire, but we, I enjoy in the mortgage note space having that discretion. And I've bought a lot of land contracts or contracts for deed which are similar to lease option, and we will try to work with borrowers or buyers in that case. And. But you're right, I can't force them to improve their credit.

00:49:38
I can't force them to manage their money well. And so that is one of the most frustrating things is you want to help people, but they've got to help themselves as well. And so. But I do love the fact that you, you and I, we have discretion, you know, on a deal level basis to be able to help people. So.

00:49:57
And that makes a lot of sense that that's unethical. What would you say is one of the biggest psychological barriers that real estate entrepreneurs face today? Psychological barriers? Wow, that's a big question. So one psychological barrier is.

00:50:19
And you and you and I talked about this a little bit before we went live on the show. One psychological barrier is fear. You know, psychologists can't even figure out what fear is interesting or what causes it, that, you know, what it feels like. Yeah. You know it when you, when you feel it.

00:50:39
Right. You know, when you feel fear. But I really can't figure out how to define it. Is it right? So people ask me, Jay, what's the best way to get started in real estate?

00:50:49
You got to own the real estate between your ears before you start owning real estate, you know, out there. What do I mean by that? Well, the first thing I mean is, first of all, how do you eradicate this fear? Well, in the context of private money, let me ask you a question. How can you fear rejection if you're not asking anybody for money?

00:51:18
How can you fear being rejected if you're not asking now? I am asking for their help. I'm asking them to help me spread the word. Right. But I can't be, I can't be rejected if all I'm doing is offering to serve.

00:51:34
Right? And so now what causes this feeling of fear? One thing that causes this feeling of fear is you don't feel confident. Right? Yeah.

00:51:44
Well, how do you start feeling confident? Well, you start feeling confident by knowing what you know. So if in the, in the context of private money, the first step in raising private money, in addition to getting your mindset right, is you got to know your program. You got to know your opportunity. You got to know what you're offering.

00:52:03
I mean, what interest rate are you going to? I mean, I say just sort of duplicate my program. It seems to work pretty well ever since 2009. Right? Yeah.

00:52:11
But be confident about your program. And here's a big mind shift right here. You're serving these people, these potential private lenders. Yeah. I mean, Carol, Joey and I have gotten, I don't know how many handwritten notes and hugs and kisses from our private lenders, particularly our elderly private lenders.

00:52:32
We've changed their retirement years. Yeah, that's really good. I mean, and that is definitely a mindset shift that goes a long way, and it really is about becoming empathetic and putting yourself in someone else's shoes and solving their problem and serving them. They don't want to do what you're doing. They don't want to go out and find the deals, and they want to put their money to work and go enjoy their.

00:52:56
Their grandkids or enjoy their career or whatever that. Whatever else it is. So you absolutely are serving a need for them. So, um. Yeah, I love that.

00:53:04
Um, if you could have coffee with any. Or. Or a drink or whatever, whatever with any historical figure, whom would you choose? Historical figure. Wow.

00:53:15
Probably Beethoven. Okay, interesting. I heard that one. Yeah, probably Beethoven. I'm a pianist.

00:53:23
I'm a composer. I've been writing and recording and releasing piano music since 1997. And my stuff is in universal studio movies and all that kind of stuff like that. It's amazing. But I studied my first five years of piano.

00:53:36
I studied classical, and Beethoven was my favorite. The thing about Beethoven, I mean, you talk about resiliency and not stopping. You know, Beethoven was deaf. I did. Beethoven was deaf.

00:53:47
Yeah. And do you know how he could hear his music? He took the legs off of his grand piano and put the piano on the hardwood floor, and he would lay straight out on the floor and put his ear down to the hardwood floor and play his compositions, and he actually felt the vibration, and that's how he heard his music. Talk about overcoming adversity and getting to From Adversity to Abundance Podcast. Right.

00:54:13
That's. That's. That's amazing. Um, all right. I've never asked this question.

00:54:17
Final question. What is something you've never shared on a podcast before? Wow. Well, I just popped into my head. Well, I've never shared on a podcast that I actually, on Christmas Day when I was 22 years old, I played the piano in my parents family room while Glenn Campbell sang have yourself a merry little Christmas.

00:54:50
Really? That's. That's amazing. There's a story behind that, but that's the bottom line. We'll tell that story when I bring you back.

00:54:59
If you have. If you have time to come back. I'd love to come back sometime. Jamie, you're a great host and interviewer. I appreciate that.

00:55:07
Jay Conner, where can our listeners find you online? Well, believe it or not, the easiest and best place to find me is at www.jconnor.com. and I'm an eR, not a o r. So Jayconner.com. now, here's why you want to go to Jayconnor.com.

00:55:28
it's not to look at my picture. I can assure you the reason you want to go to Jayconnor.com is because I just finished and just launched and released my brand new seven day private money challenge. And so I recorded seven videos. They're only 15 to 20 minutes long. Chalk blocker full of how to raise private money, how to get it quickly, step by step and go to Jayconnor.com.

00:55:56
i'll come into your email inbox every morning for seven days at 10:00 a.m. eastern time. And so if you want to learn really step by step about how to raise private money and never miss out on a real estate deal, go to Jayconnor.com and enroll in the private money challenge with me. Oh, I love it. In addition to that, I got a podcast with over 700 episodes.

00:56:20
Wow. This is my 7th year podcasting and so come check me out at I know it's going to be hard to believe the name of my show is raising private money. How about that? So I'm on iTunes, Spotify, all the popular platforms. So just go search for raising private money with Jay Conner.

00:56:41
And I have amazing guests just like Jamie come on my show twice a week, Monday mornings and Thursday mornings. Yeah, I mean, that's a, that's another thing that requires staying power and persistence. You know, doing a single episode is not really that hard. But sticking with a podcast twice a week, especially for seven years, a lot of people get what they call pod fade. And it just, after a year or two, it's like, why am I doing this again?

00:57:08
But I love it. And it's a fantastic medium to build trust and learn and build your network and, you know, add value to the listener, really, ultimately. So Jay Conner, thank you so much for spending your time with us today. Jamie, thank you so much for having me and God bless you. You too.

00:57:27
And to the listener out there, thank you for spending your most valuable resource with us. And that is your time. Thanks everyone. Take care.

00:57:40
Thank you for joining us on from adversity to From Adversity to Abundance Podcast. We hope todays episode has equipped you with valuable insights and practical advice to elevate your real estate journey. For more inspiring stories and resources, visit us at www. Dot Adversity two From Adversity to From Adversity to Abundance Podcast Podcast. if this episode has inspired you, please share it with a friend who could also benefit from our conversation together.

00:58:03
Lets turn adversity into From Adversity to Abundance Podcast. Until next time, keep building your mental fitness and your real estate empire.