Jay started his first real estate investment way back in 2003.
At the turn of every decade, Jay remained resilient and established himself as a reputable authority in real estate private lending. His rich experience gifted him a nose for sniffing out golden opportunities, having rehabbed up to 450 houses. Even better, he also developed the ‘golden touch’ in creating unlimited potentials in private money. Like in his new book, where he directs you exactly where the money is. And believe me, he’s been around the game long enough to know.
Watch the episode and find out why Jay is the Authority in Private Money!
Timestamps
00:00 – Introduction
01:53 – Jay’s Journey
04:27 – The most dangerous number
06:22 – Where to get the money now
09:03 – The three types of private lenders
11:20 – Private lender data feed
15:35 – Raising capital
17:55 – Offering value to organizations
19:57 – How do I start?
22:09 – Private Money Academy Conference
Private Money Academy Conference: https://jaysliveevent.com/live/?oprid=&ref=42135
Have you read Jay’s new book: Where to Get The Money Now? It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner http://www.JayConner.com/MoneyPodcast
Join the Private Money Academy: https://www.JayConner.com/trial/
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
What is Real Estate Investing? Live Private Money Academy Conference https://youtu.be/QyeBbDOF4wo
YouTube Channel:
https://www.youtube.com/c/RealEstateInvestingWithJayConner
Listen to our Podcast:
Real Estate Investing – Jay Conner – Private Money
Narrator (00:00):
Welcome to the Big Mike Fund Podcast, where you learn about advanced wealth building strategies from real estate investing to creating massive ROI and secured retirement profits. So pour yourself a cup of coffee, grab a notepad and lean in because Big Mike has got the mic starting now.
Mike Zlotnik (00:20):
Welcome to the Big Mike Fund Podcast. I’m the Big Mike, Mike Zlotnik. And today it is my pleasure and privilege to welcome back my good friend, Jay Conner. Hi, Jay.
Jay Conner (00:29):
Hello there, Mike. Great to see you again and thanks for having me back on.
Mike Zlotnik (00:34):
Thank you very much for coming back on and I appreciate it. And Jay is a brother from the Collective Genius Mastermind. We’ve been there many years and you hail from small-town America called Morehead, North Carolina, right on the water, right?
Jay Conner (00:52):
That’s it, Morehead City. Little, teeny, tiny town. My total target market that I invest in, it’s only got 40,000 people.
Mike Zlotnik (01:00):
Got it. But it’s your typical small-town America, right?
Jay Conner (01:05):
That’s right. That’s right.
Mike Zlotnik (01:07):
So just to remind folks a little bit about, just a couple of words about you, family, marriage, kids, cats, pets, dogs, anything that we could know.
Jay Conner (01:16):
Sure. So, I was actually born and raised here. I met my wife, Carol Joy, my first Sunday in town, met her at church out in Wichita Falls, Texas when I moved out to Texas back in the ’80s. But Carol Joy and I, in just a couple of months, we’re going to be married 35 years.
Mike Zlotnik (01:37):
Congratulations.
Jay Conner (01:37):
We weren’t blessed with any children, but we got 28 nieces and nephews.
Mike Zlotnik (01:41):
That’s wonderful.
Jay Conner (01:44):
She comes from a big family. But yeah, we’ve been back here in this small area since 1988. We started investing in single-family houses in 2003. So we’ve been doing it a long time. We’ve rehabbed about 450 houses here in this little area. And the first 6 years, we were in the business from 2003 to 2009, and we relied on local banks and mortgage companies to fund our deals. Back in that day, Mike, I’d never even heard of hard money, hard money lenders. I’d never heard of private money. I thought you just went to the local bank and borrowed money for your deals. Well, that was a rude awakening in January of 2009. I called up my banker and I learned real quickly that my lines of credit were gone, like gone overnight and I didn’t even know anything about it.
Jay Conner (02:37):
So that’s when I was introduced to this world of private money and work and doing business with individuals. So, in about 90 days, I was able to raise a little over a couple of million dollars in funding that I didn’t have prior to being cut off. So, I’ve been using private money all that time, since 2009. Carol Joy and I’ve got about 46 private lenders right now, individuals that invest in our business. So anyway, I guess I’m self-proclaimed as the Private Money Authority because I’ve taught so many students how to do it and how to go find capital. And like yourself, I tell everybody, you need to have fantastic relationships with as many people as you can. Hard money lenders, private lenders because you just don’t know what deals are going to come along that you need more than one relationship to make that deal happen.
Mike Zlotnik (03:33):
Yeah, that’s the great wisdom, having private relationships with folks that have some capital that’s sitting and earning very little or waiting for the next project and it is much better and much safer for you as a dealmaker and a shaker to raise money from private investors versus the banks. Because as you said, you don’t know when the bank’s going to turn off the faucet. It has nothing to do with you. It has to do with banking issues at that time, we obviously hit a crisis. But the crisis aside, you’re still better off with that. I mean, the big question, would you rather have 67 individual investors or 1 investor who’s funding everything, right?
Jay Conner (04:23):
Well, you know, I learned the hard way, Mike, the most dangerous number in any business, no matter what business you’re in, the most dangerous number is the number “1.” In other words, I don’t want to have one realtor that I do business with, or one general contractor or one plumber or one electrician or one lender. But, Mike, it was a huge blessing in disguise that I lost my lines of credit because in the first 12 months of that year that I lost my lines of credit in January, the next 4 months that year, our business tripled because this happened in 2009. And you and everybody else remembers what was going on in 2007, 2008, 2009. All these foreclosures came along and I would not have been able to take advantage of that opportunity of all those properties if I didn’t have a bunch of private money lined up because you gotta pay cash for that stuff. So due to the adversity and that difficulty, that challenge, it was the biggest blessing in disguise that I’ve come across since starting this business in 2003. In fact, if it were not for that difficulty and that challenge, I wouldn’t even be here on the podcast for you.
Mike Zlotnik (05:51):
Yeah. That’s the good, old expression. Every pessimist finds difficulty in every opportunity and every optimist finds an opportunity in every difficulty. It was a difficulty having your lines of credit cut. The reason it was an opportunity is because all these houses got distressed and you can pick them up at a great price. You just needed to have the capital. And the capital came from private money. By the way, I heard you have a new book out. What’s the new book?
Jay Conner (06:18):
I do. It just hit number one on Amazon. So it’s called, “Where To Get The Money Now,” and for your listeners there, Mike, I’m glad to give it away that will save them 20 bucks on Amazon. I’ll ship it to them if they’ll just pay a couple of bucks and cover shipping. www.JayConner.com/freebook. And we’ll rush that book right out. The book, I go into great detail as to how I’ve actually been able to attract all these private lenders on funding our deals. I teach in the book where the private lenders were located, where you go to find them exactly what you say.
Jay Conner (07:17):
And it’s all about framing. I mean, I have yet, Mike, to ask anybody for money. I haven’t asked anybody for money and people say, “Well, Jay, how do you get over $8 million from these different individuals to invest in your business?” And it’s really simple. I just put on my teacher hat. So of these 40-some private lenders, none of them had ever heard about private money. None of them had ever heard about self-directed IRAs. And that’s a big writer-downer right there. Over half of our private lenders are loaning money from their retirement accounts for our deals. And they never heard of how to transfer their money over to a third-party custodian who really could actually lend the money out and have unlimited income per year that’s either tax-deferred or tax-free. But I go into all that detail in the book right here.
Mike Zlotnik (08:12):
It makes total sense. Thank you for sharing. Let us cover a couple of topics. I’m sure you talk about them in the book. Let’s just go to the basics. Besides the country clubs since typically the country club is where most folks with some capital hang out. Anyway, where do you find folks with investable capital? Maybe untapped retirement money, which is sitting in stocks now? And most people don’t know that they can move it to a self-directed custodian and lend the money out, or it is just taxable money. So what are the best places in an average-town America, and anyone who wants to raise capital for whatever real estate deals they have?
Jay Conner (09:03):
So as you said, I go into detail around the book, but here they are. There’s 3, in my experience, there’s 3 categories of what I call people. There’s 3 categories of private lenders as to where you find them. The first category is what I call your own “warm market,” your own center of influence. People that are in your cell phone, your email, your Facebook friends. And I don’t mean your fake Facebook friends, but your actual people you know.
Mike Zlotnik (09:34):
All your friends and family, let’s just call them real friends and family.
Jay Conner (09:36):
Exactly. The second category of where private lenders are, is what I call your “expanded warm market.” A lot of times I’ll have students say to me, “Jay, all my people are broke. My family, my friends ain’t got no money.” Well, first of all, I don’t believe them. But anyway, I think they’ve got a fear that they don’t know how to approach the people and put on their teacher hats. But the expanded warm market I say, go to where the money is. In other words, I say, “The more money you wallow around in, the more money sticks to you.” So what’s your expanded warm market? Well, first of all, your local community. Getting involved in your local community. All the different social networking civic groups, such as rotary clubs, chamber of commerce, your local church or churches. So how can you expand your own network that you have?
Jay Conner (10:33):
The third category of private lenders are existing private lenders. People that are individuals that are already lending money out to real estate investors. And I’m not talking about institutional money, but just individuals. But when I first started attracting private money back in 2009, one thing I did was I hired my real estate attorney’s paralegal to search the public records, looking for deeds of trust or mortgages for individuals who were loaning money out secured by real estate. Well, that plan didn’t work too good. In 90 days in this small area, we found one person. I said, there’s got to be a better and easier way. So actually we developed the Private Lender Data Feed, which is software that my company has and my students have access to, that goes out every month and we get every new private lender loan from public records.
Jay Conner (11:35):
And we can go into the software and search by zip code who these private lenders are, get their contact information, etc. Another place to find existing private lenders are your self-directed IRA companies. They have networking events. And now, since we’re on this side of COVID, they have in-person networking events. Well, the companies that I’m associated with, Mike, and that I know very, very well, about 70% of those account holders at self-directed IRA companies are loaning money out, or they are looking to loan money out on real estate secured by real estate to real estate investors. So those networking groups, and of course, they’re doing them now on Zoom and virtual as well, is a great place to network and to make contacts with people that have money that are looking to lend it out.
Mike Zlotnik (12:35):
Yeah, it makes total sense. Appreciate you jumping into a little bit of depth. Self-directed IRA custodians do have a phenomenal sort of universe of investors with capital. You obviously need to spend time to network with them and build relationships. So at the end of the day, I don’t know who would loan you any money out before they get to know, like, and trust you. And you are a very likeable guy from that perspective, you should have it fairly easy. And that’s step number one. And I agree with you. It’s your close family. You are a little bit of the extended family, and then obviously the professional sources. Just curious, do you ever go to the “The Super Big Boys,” the institutional players, the anchor loans of the world, the Genesis of the world, the big players who loan a lot of money? Or you’re always better off with your private folks? You may pay them a little more, but you get a little bit more lenient terms.
Jay Conner (13:54):
Yeah, so it depends on how big the deal is, right? I’ve got a couple of relationships with our fellow CG members that are our hard money lenders and like. You know, I recently did a deal that was right around $400,000. Well, I just didn’t want to tie up that much money of my private lender money, particularly when I knew that I was going to get in and get out on the short term. Probably within, like, a 6-month period. So the answer is “yes.” So, like with yourself, I’ve got relationships with hard money lenders. So I let the type of deal dictate the type of money that I’m going to use on that deal, whether it’s going to be hard money or private money.
Mike Zlotnik (14:45):
Yeah. That makes total sense. Now I’m going to shift you a little bit and kind of walk in the arena of commercial real estate equity. I do a lot of commercial deals. We invest into a lot of commercial equity deals. Do you, by any chance, just again, I haven’t read your book, do you teach folks how to raise capital for equity deals or only pure debt deals?
Jay Conner (15:08):
Yeah.
Mike Zlotnik (15:09):
In other words, is it a hard money classic versus acquiring some small multi-family? And you’re raising capital for that equity capital, not firstly in mortgage?
Jay Conner (15:20):
The focus of the book is for single-family houses, all the examples that I have in there are single-family. And of course, as you know better than anybody else, Mike, if you’re raising private money for commercial deals, you know, some small apartments or whatever, it’s all the same money, it’s just structured differently. And their security is typically different if you’re raising money for a fund, say, in contrast to what we call one-offs, right? Every deal stands on its own. So in this world of private money, we borrow the money. They’re getting the deed of trust or mortgage, securing that loan by that property that they’re loaning money on. So, as I said, it’s all the same money, but it’s structured differently.
Mike Zlotnik (16:12):
It makes total sense. You’re teaching them how to do plain vanilla. First, the first trust did the deeds or mortgages, relatively safe. They don’t capture the same upside as the equity at the same time. Most people just look for safety when they invest in these trustees. So that makes total sense. And then on the commercial side, of course the relationships are similar, but the capital structure, a little bit different. So, any other quick tips, suggestions, for folks on how to build relationships? This is the most fundamental, questionable question. They get to know somebody, they go to an event, like you said, go to a local church or rotary club or volunteer events, or country club, whatever you want to call them. And how do you wind up not trying to sell, but instead trying to build the relationship? I think it’s the most fundamental question because a lot of people go there with an agenda and your agenda is to meet people. Other people’s agenda is to raise money. And sometimes I can’t put the carrot ahead of the horse. You got to go into a relationship first.
Jay Conner (17:28):
So, I practice and I teach all the time when you are getting involved, particularly with a new group, say it’s a civic group or whatever in your local area. And by the way, I have raised a lot of money and I’ve had just a fantastic relationship with BNI organizations. And Ivan Meister started that group. And so I teach in our practice, go to these organizations giving value. What can you bring? What can you offer to the group as a participant in the group? One big thing that you can offer to do is volunteer to serve in these different groups in whatever kind of capacity, like if it’s your local REIA group. You can be a member in a lot of realtor associations and not be a realtor yourself. Well, volunteer to check people in at the group, volunteer to take money at the door, be a volunteer, be a servant, go there sincerely with a servant’s heart. And you’re going to be quickly recognized as someone that’s trustworthy and that’s just not there to be a taker. I mean, you and I experienced the same thing in our mastermind group. I mean, all of us in that mastermind group, we have got the attitude of what can I do for you? Because it’s like Zig Ziglar says, you know, “If I can have everybody else get enough of what they’re looking for, I’m not going to have to worry about me.”
Mike Zlotnik (19:02):
Yeah. It’s the servant’s attitude. It does take an investment of time and effort and energy. And it is not for everyone. And you have to be genuinely servant in heart, if you are not, you’re not going to enjoy it. And it’s not going to flow well, but it is a time commitment. It is an effort commitment. And as long as you feel great about it, it brings warmth to your heart helping others, then you’ll do well through that process. Any other thoughts of, besides just spending time serving others? Are there other suggestions, like you said, go with the teacher’s hat? Any other thoughts on this?
Jay Conner (19:50):
Yeah, so one of the most common questions I get is, “Jay, how do I start? How do I start? What’s the first thing that I do?”
Mike Zlotnik (20:00):
Before that, how do you start them? That’s a question you get when you get somebody interested. Before that happens, how do you get people to ask you that question?
Jay Conner (20:10):
Well, no, that’s my students asking me how do I start finding private money. That’s not the private lenders question. That’s my student’s question. And so first of all, and of course in the book, it goes into it step-by-step. First of all, make your list. Make your list in your own warm market of who it is that you would like to reach out to. And they say, “Well, how do you start making your list?” Well, I say, start with everybody you know that’s retired. There’s a good chance that someone who has retired has got retirement funds, right? There’s a 99% chance they never heard of self-directed IRAs. So it gives you the perfect opportunity to teach people what that is all about. And one of my favorite questions to ask people is to lead in with the question, “Did you know?” And one of my favorite questions that I ask people is, “Did you know that there is a legal and safe and ethical way to use retirement funds to get unlimited returns a year with your retirement funds, either tax-free or tax-deferred with no penalty?” They’re going to answer, “No, I never heard of that.” So here starts your conversation.
Mike Zlotnik (21:34):
Yeah. That’s a great hook. Did you know, and you tell them what you want them to ask about.
Jay Conner (21:42):
Exactly.
Mike Zlotnik (21:43):
Yeah. It makes sense. Yeah, like they say, all good things must come to an end. We are kind of beginning to run out of time. Once again, how would folks get a hold of you? And besides the book, you mentioned you have an educational program. I assume you teach folks how to raise capital. What do you teach?
Jay Conner (22:07):
Yeah, so my live event is called The Private Money Academy Conference. As a matter of fact, Mike, when they get the book, I’m going to include 2 free tickets valued at $3,000 to The Private Money Academy Conference. So at that conference, not only do I teach about how to locate and secure a lot of private money very quickly, but I have private lenders at the event for the attendees to network with. I also teach at the event all 4 pillars of our business. And that is how we find deeply discounted deals. And we don’t rely on the multiple listing service, particularly in this market, but how do we find deals? How do we get them funded? How do we sell them very, very fast? So finding, funding, flipping and freedom. How do we automate this business to where you can actually be running a business and it’s not running you? The actual business itself, I’m in it less than 10 hours a week, more like 6 or 7. And so automation, we spend a lot of the third day on automating the business.
Mike Zlotnik (23:20):
Yeah. That makes a lot of sense. You either delegate, automate, or get rid of it, right?
Jay Conner (23:27):
Exactly. I tell people – dictate, delegate, and disappear.
Mike Zlotnik (23:33):
Yeah. It’s the good, old not-to-do list and you start with not to do it. And then you decide what do you do with not to do items?
Jay Conner (23:43):
Exactly.
Mike Zlotnik (23:44):
That’s a perfect solution. So appreciate you, Jay. Thank you for your wisdom. Thank you for sharing. Thank you for giving the gifts off your book. So, Jay, again, it’s JayConner.com/freebook, right?
Jay Conner (24:00):
That’s it. JayConner.com/freebook.
Mike Zlotnik (24:07):
Thank you very much. I appreciate you. And we’ll do it again soon.
Jay Conner (24:12):
All right. Thank you, Mike. See you soon.
Narrator (24:14):
Thank you for listening to the Big Mike Fund podcast. To receive your copy of Mike’s “How To Choose A Smart Real Estate Fund” book, head to BigMikeFund.com or visit Amazon and type “Mike Zlotnik.” Keep listening and keep investing, Big Mike style. See you on the next episode.
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