***Guest Appearance
Credits to:
https://www.youtube.com/@FromAdversity2AbundancePodcast
“Desperation Has a Smell: The Psychology of Raising Private Money with Jay Conner”
https://www.youtube.com/watch?v=s3AcMDgutqM
In this episode of Raising Private Money with Jay Conner, Jay reflects on the challenges and pivotal moments that have shaped his real estate journey. From navigating a banking crisis to leveraging private money, Jay’s story is rich with practical advice and inspiration for real estate entrepreneurs.
The Crisis That Sparked Change
In 2009, Jay Conner, a seasoned real estate investor in North Carolina, was blindsided by an unexpected setback. After placing nonrefundable earnest money on several properties, his bank abruptly closed his line of credit without notice. Puzzled and concerned, Jay approached his banker, only to discover that the global financial crisis had severely impacted credit lines. This moment of adversity led Jay to ask a crucial question: “Who can help me with this problem?”
Discovering Private Money
With guidance from his friend Jeff Blankenship, Jay explored the realm of private money and private lending. Jeff introduced him to the concept of using self-directed IRAs for private lending, which allows individuals to lend money while enjoying potential tax advantages. Motivated, Jay educated himself and his network about these new funding avenues, emphasizing the benefits they offered.
Jay adopted an educational approach rather than a direct ask for money. He taught his network how they could earn high returns safely and securely by participating in his lending program. Jay’s program featured attractive terms, such as an 8% simple interest rate and a 90-day call option, designed to appeal to potential private lenders.
Shift in Mindset: Control and Confidence
Entering the world of private money marked a significant shift in Jay’s perspective. Unlike traditional bank loans, where the banks set all the terms, private money allowed Jay to dictate the conditions. This newfound control provided him with the confidence to proceed, knowing that he could secure and use $8.5 million in private money without directly asking anyone for it.
Ethical Practices in Real Estate
Ethics play a pivotal role in Jay’s business practices. He critiques certain controversial methods in real estate, such as securing large nonrefundable deposits from tenants in rent-to-own agreements without assisting them in obtaining a mortgage. Knowing that less than 5% of these tenants end up owning the homes, Jay advocates for helping tenants improve their credit and working closely with credit repair companies to increase their chances of homeownership.
Securing Trust: The Wayne Story
In an illustrative anecdote, Jay recounted how he secured his first private money commitment. During a Wednesday night Bible study, he approached a well-connected community member named Wayne, asking for his help rather than money. Jay outlined his business model and the high returns he was generating, sparking Wayne’s interest. Wayne initially committed $250,000, which later grew to $500,000.
Strategic Lead Generation
Given today’s market conditions, where inventory in the MLS is low, Jay highlights the importance of direct-to-seller channels. Through Google leads, direct mail, outbound calling, and Facebook ads, Jay sustains a steady pipeline of seller leads, allowing his business to adapt to the evolving real estate landscape.
Adapting and Thriving
Jay reflected on a notable case study involving the acquisition of an oceanfront condominium. He purchased the property for $425,000, completed minimal renovations costing $11,000, and sold it within five weeks for $628,000. This deal netted him a profit of $160,000 after fees. Such success was possible due to his ability to close deals quickly with private money, underscoring the importance of having funds prepared in advance.
Building Relationships and Leveraging Trust
Jay’s strategy revolves around building relationships and fostering trust. He emphasizes that investors are more interested in the credibility of the operator than the specifics of individual deals. By consistently offering an 8% interest rate since 2009 and focusing on protecting investor interests, Jay has instilled confidence among his private lenders.
Conclusion
Jay Conner’s journey from banking adversity to private lending triumph offers invaluable lessons for real estate entrepreneurs. His educational approach, commitment to ethical practices, and focus on building trust through strong relationships provide a blueprint for navigating the complex world of real estate investing. Through his experiences and strategies, Jay Conner continues to inspire and empower others to turn adversity into abundance.
10 Discussion Questions from this Episode:
- Strategic Shift:
- How did the 2008 financial crisis impact Jay Conner’s traditional bank financing strategy, and what led him to pursue private lending?
- Private Money Approach:
- In what ways did Jeff Blankenship’s advice on private money and self-directed IRAs transform Jay Conner’s approach to real estate investing?
- Teaching the Concept:
- Jay Conner mentioned embracing a “teacher mindset” when discussing private money. How can educating potential investors build trust and secure funding?
- Crisis Reaction:
- What key message did Jay Conner convey about dealing with financial adversity, particularly the importance of asking “Who can help me with this problem?”
- Ethical Practices:
- Jay Conner criticized certain unethical practices in real estate, specifically with tenant buyers. How can real estate investors balance profitability with ethical practices?
- Handling Imposter Syndrome:
- How did Jay Conner overcome imposter syndrome when teaching others about private money, and what advice does he offer to those in similar situations?
- Investor Trust:
- Both Jay Conner and Jamie Bateman emphasized the importance of investor trust. What strategies can real estate investors employ to build and maintain trust with their investors?
- Market Adaptation:
- How has Jay Conner adapted his real estate business strategies over the past 15 years to account for changing market conditions and financial landscapes?
- Lead Generation:
- Discuss the lead generation strategies Jay Conner uses to standardize his pipeline of seller leads. Which methods seem most effective in low-inventory markets?
- Mindset and Confidence:
- Jay Conner talked about the psychological barriers real estate entrepreneurs face, particularly fear. How can building confidence and having a clear investment program overcome these barriers?
Fun facts that were revealed in the episode:
- Jay Conner is a pianist and once played the piano while Glenn Campbell sang “Have Yourself a Merry Little Christmas” when Jay was 22 years old.
- Jay Conner would choose Beethoven for a hypothetical coffee date due to their shared connection in music and admiration for Beethoven’s resilience despite being deaf.
- The podcast revealed how Beethoven would hear music by feeling the vibrations through a piano placed on a hardwood floor, a method Jay Conner finds fascinating.
Timestamps:
00:01 Raising Private Money Without Asking For It
05:28 Transitioned from mobile homes to flipping houses.
06:34 Funded deals through the local bank from 2003-2009.
12:15 Discovering private lending through self-directed IRAs.
13:49 Teaching private money to personal network contacts.
19:35 No negotiation in private money, consistent 8% interest.
22:43 Secured funds through indirect Bible study contact.
26:31 Using pitch script to secure deal funding.
29:57 Investor trust and communication are key priorities.
33:02 Private money enabled profitable real estate deals.
34:05 Balancing adversity and abundance to inspire listeners.
39:30 Renovation done; use “coming soon” for listings.
40:35 Scheduled viewings to create demand, efficiency, and FOMO.
44:22 Recommended books: University of Success, The Go-Giver.
49:04 Confidence through knowledge; is key to overcoming fear.
54:56 Starting a podcast is easy; maintaining it isn’t.
Private Money Academy Conference:
Free Report:
https://www.jayconner.com/MoneyReport
Join the Private Money Academy:
https://www.JayConner.com/trial/
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
https://www.JayConner.com/MoneyPodcast
Jay Conner is a proven real estate investment leader. He maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal without using his money or credit.
What is Real Estate Investing? Live Private Money Academy Conference
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