Raising Private Money with Jay Conner

From Bankers to Private Lenders: Jay Conner's Financial Evolution

Jay Conner

***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 fi