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All About Private Money with Jay Conner


In this episode, Larry invited a friend who is a private money guy. Jay Conner has rehabbed 300 houses over the last 14 years. He has also been involved in over $52 million in transactions.

Jay has completely automated his 7-figure income business to the point where he only works 10 hours per week. This has been his setup for the past 7 years. Jay is a leading expert on private lending and is a contributing author to the best-selling book “Real Estate: Getting Deals Done In The New Economy.”


  • Jay's backstory
  • On rehabbing 300 houses
  • How he started with traditional funding
  • Discovering private money
  • What private money is
  • Different ways of doing private money
  • 3 main categories where you can find private money lenders
  • Creating his private lender data feed
  • One way he doesn't have to ask for money
  • Why you should not put money in a house you don't own
  • On doing a private lender luncheon
  • On doing business with private lenders
  • Reasons for using private money
  • Rundown of the different terms
  • Credit repair program
  • What his typical deal looks like


  • "It's a whole lot more fun to start up a company than it is to shut down a company."
  • "Go where the money is."
  • "Don't put money in a house that you don't own."



Larry: Welcome to the Brain Pick-A-Pro show live from Lake Wylie, South Carolina, and not too far from me actually, all the way down in, I believe it’s Morehead City, North Carolina, is my good friend, long-time friend, we see each other out on the road all the time, we’re in a Mastermind together, and this guy is a mover and a shaker. He’s the private money guy. Just to let you know, he’s rehabbed over three hundred houses, right? He’s been doing this for fourteen years and he’s been involved in over $52 million in transactions and he knows what he’s doing, he is a mover and a shaker, and I call him the private money guy. You wanna learn how to raise private money, how to do deals with private money? This is the guy right here and you get ready to learn for the next thirty minutes or so. He’s gonna share all kind of cool stuff with you. Jay, welcome to Brain Pick-A-Pro.

Jay: Thank you so much, Larry. Before we went live here on the show, we were just talking. We’re getting to see each other in another couple of weeks at the Mastermind we’re at, but, wow, man, I tell you what, your show is very popular. I think we’ve been trying to coordinate schedules for about six months to get on here together but thank you so much for inviting me and getting it coordinated.

Larry: Awesome, man. Well, I appreciate you being on. It’s gonna be a lot of fun. Why don’t you start out and tell our listeners a little bit about yourself?

Jay: Sure. Well, I grew up here in Eastern North Carolina, and I went off to school and moved out to Texas in my early twenties, that’s where I met my wife, Carol Joy, and met her at church. You know, momma said it’s better to meet them at church than a bar, right? So, anyway, in fact, Carol Joy and I are celebrating next month our thirty-two-year anniversary, so, anyway, a little bit about the personal side but I grew up, Larry, in the mobile home business. My dad, Wallace Conner, and you may remember back some years ago, Conner Homes.

Larry: Right.

Jay: Conner Mobile Homes. So, I grew up in the housing business helping people get affordable housing and the retail financing on that industry went away by and large about fifteen years ago.

Larry: Right, right.

Jay: And I knew if I ever got out of the manufactured house and mobile home business, I wanted to get into single-family housing, and so that’s when we started. Fifteen years ago, we were shutting down the mobile home company and it’s a whole lot more fun to start up a company than it is to shut down a company. So, my first year when we were shutting down the company, I did three flips. Not really knowing what I was doing. I wasn’t smart enough at that time to get my education that I should’ve gotten when I started, but we did three houses, you know, our first year and so we’ve been full time now fourteen years in the business.

Larry: Wow, that’s great, that’s great, man. You’ve rehabbed over three hundred houses. Better you than me, man.

Jay: Well, thank goodness it’s not like me, me, me. You know, I don’t even know how to swing a hammer but I know how to find the people that know how to do it but I know what you mean. That reminds me of a student of mine some years ago who said, “Oh, Jay, I just love rehabbing my own houses. It’s like therapy to me,” and I said, man, anybody that rehabs their own house needs therapy. But, anyway, when I started out, when it came to funding my deals, Larry, all I knew to do was go to the local bank, you know, go to the mortgage company, you know, whatever. I didn’t know anything about subject to, I didn’t know anything about lease option, I didn’t know anything about seller financing, all these other ways, you know, that you teach, you know, on how to control properties, wholesaling and all that, and so the first six years I was in the business, I used traditional funding.

Larry: Right.

Jay: And, you know, back then, you know, Larry, my lens, if you could fog a mirror, you could walk into the bank and get an unsecured line of credit. That’s what I did.

Larry: Right.

Jay: I got a $250,000 unsecured line of credit because I had, you know, good proof of income and I had good credit score and so I used that line of credit. Well, man, I tell you what. Man, I remember like it was yesterday but it was such a huge blessing in disguise. Nine years ago now, I called up my banker and I had two deals under contract and told him where they were. I mean, I had this conversation, I don’t know how many times with Steve, was my banker, operative word was, and so I tell him what I’m doing and he goes silent on me which is never a good sign, right?

Larry: No, no.

Jay: And so in that conversation, nine years ago, I learned that I’ve been cut off with no notice.

Larry: Wow.

Jay: And this is 2008, 2009.

Larry: Right, right.

Jay: So, I called up my buddy, Jeff, in Greensboro, North Carolina. I told him what had happened. He says, welcome to the club. They just cut me off too. And I said, well, what are you doing? What are we gonna do? And then Jeff told me about private money. I’ve never heard about private money, using private money, and I’m not talking hard money, I’m not talking hard money.

Larry: Right, right.

Jay: And so when Jeff told me about that, man, I put it on steroids, I put a system together and then less than ninety days, I raised $2,150,000.

Larry: What?

Jay: In private money, so my banker and the economy did me a huge favor by cutting off that source of funds and it forced me to find another way and if I hadn’t been cut off from the banks, I wouldn’t be on your show today, Larry.

Larry: Wow.

Jay: I wouldn’t have been led to this private money thing.

Larry: That is awesome, man. That is awesome. Now, you know, a lot of people talk about private money and a lot of people, you know, talk about their need in private money, I mean, you know, but nobody really knows what to do or how to do it but, you know what, the thing I have learned over the years and I’ll tell you, I’m just being upfront with you, I don’t use private money, I’ve talked about using it. I have people offering to loan me private money just because of the position we’re in, right, Jay?

Jay: Sure.

Larry: But there’s a lot of people out there who think, oh, man, this is really some kind of really hard thing to do or who has money, nobody has money, but once you really get into it and learn what to do and how to do it, it’s not really that complicated, is it?

Jay: No, not at all. So, just so all of your viewers and listeners are understanding what we’re talking about, when we say private money, we’re not talking about doing business with institutions or banks or mortgage companies or hard money lenders, and, if time permits on your show, Larry, I’ll share right now today what is the differences between hard money and private money, but a private money is a private lender, an individual, just like you, just like me, just like your viewers and listeners, that lend money from their investment capital or their retirement accounts.

Larry: Right, right.

Jay: That’s another big one. I never even heard of self-directed IRAs which someone would need to know how that works. I’ve got forty-seven private lenders right now.

Larry: Wow.

Jay: Just funding our deals.

Larry: Right.

Jay: ’Cause we know we do a lot of rehabs. Now, bear in mind, you need private money when a for sale by owner won’t sell to you creatively, i.e., subject to lease options, so use the private money for that but it’s doing business with an individual, for individuals.

Larry: Right, right. Multiple individuals apparently.

Jay: So, it’s not a – we don’t need private placements.

Larry: Right.

Jay: We don’t do money pools.

Larry: Yeah, explain that.

Jay: Yeah, so different ways of doing private money. So, you could hire an SEC attorney and have a private placement, you know, a deal put together and so people invest into that pool or into that private placement and depending on the amount of ownership that they have, then it’s not like getting a percentage rate of return, it’s – or it could be. It could be a percentage rate of return or it could be a percentage of the profits, but the only security that the private lender has in doing that is a piece of paper like a stock.

Larry: Right, right.

Jay: So, the way we do the business is every deal stands on its own which means every private lender or individual gets a – most people call it a mortgage as, you know, here in North Carolina, in New Jersey and a few other states, it’s a deed of trust but it’s the instrument that protects the private lender in case of default. So, I don’t borrow any unsecured private money. All the private money I borrow and what I teach my students to do is to protect their private lenders, you know, with giving them the mortgage. So, the three main categories on where you find these people are, a, your warm market, people that you’ve got a relationship with, people in your cellphone, your e-mail, all that stuff. Your social groups, church, rotary club, blah, blah, blah, blah, blah. Number two is what I teach are – I say go where the money is. Like, you know, a lot of times people say I don’t know anybody with money. Everybody I know is broke, right? So the second category is, well, go to where the money is, get involved in the community, trained commerce, rotary, social networks, etc.

Larry: Right.

Jay: The third category are existing private lenders that are individuals. Well, so how in the world do you find them? Well, I started out the hard way on looking for existing private lenders. Now, I’m not talking about my warm market, I mean, I put the word out quickly.

Larry: Right.

Jay: And what I did is Irecorded this sixteen-minute audio called Stress-Free Investing and, I mean, I handed those CDs out like popcorn, and I let the tools do the work but on existing private lenders, I hired my real estate attorney’s paralegal to search local public records looking for individuals that had loan money out secured by real estate. That was not the right way to do it. I’m in a small area. I mean, I do two to three transactions a month, average profit now is $64,000 per deal, per house, okay? Two to three a month and, you know, funded with the private money but I’m in such a small market, my total target market is only forty thousand people.

Larry: Yeah, that’s small.

Jay: Very small and, of course, that’s by choice. I mean, you know, like in the Mastermind we’re in, we got a number of real estate investors that invest in multiple cities, you know, simultaneously. So, I hired the paralegal to search and very, very few existing private lenders, like it took ninety days to find one, alright, in our local area. So, that’s when about seven years ago, seven and a half years ago, I hired a team of software developers to create my private lender data feed and so every month, by sophisticated software, it skims all the public records nationwide and gets from public records individual’s names that are loaning money out and so we have their contact information and so that’s the easy way, you know, to locate them. If you wanna do those with the existing private lenders.

Larry: Yeah, that’s – I’ve heard pros and cons about working with the existing private lenders in the sense that existing private lenders, they already know too much about the business and they wanna charge way too much where you’re better off finding friends, family, social connections, that sort of thing that maybe they’re pulling their money out of the stock market or out of a money market, you know, because they’re getting 1 percent return and then you can get lower. Would you speak a little bit to that?

Jay: Sure. So, in the warm market, when you’re doing business with people that you have some type of relationship with, then you write the program. It’s your program, it’s your private lending program. It’s not a negotiation process. It’s here’s the program, you know, are you interested kind of thing, which by the way I don’t say are you interested. Do you know, Larry, I’ve yet today asked anybody for money?

Larry: I love that, I love that. Tell them about this. This is good stuff.

Jay: I have not asked anybody for money. All I do is I’ll make the program known. You know, here’s my program, alright. Paying, you know, right now I’m paying 8 percent, okay, and that’s the average private money rate across the nation, not hard money. Hard money is 14 percent on average with four points and 2 percent extension fee, average per year is 20 percent hard money. I’m at 8 percent, so I put the word out. So, how do you put the word out? Well, you need private lender luncheons. You can, you know, convert my CD or record your own CD and convert it to an MP3, e-mail it out, text it out. The purpose of that recording is not to sell your private lender program.

Larry: Right.

Jay: The purpose of that audio is to just give people an overview of what private money is and to get their greed glands swelled up in their neck, which then leads to what I call the one on one, alright? Lender program. So, here’s one way. I have multiple ways, so we’re gonna share at least one way right now here on your show. One way that I do not ask for money is I’ll be speaking with someone and it may be at a social gathering or they may be responding to the sixteen-minute CD and also it’s something along these lines. So, let’s say you’re my friend, Larry, which you are, but let’s say we don’t have a setting. We know each other at a social group or whatever. We’re talking along and I’ll say, Larry, you know I’m investing in real estate these days. I’m still taking advantage of the tidal wave of foreclosures that are coming along and I’ve got a program that some of your friends might be interested in. What I’m doing, Larry, now is I’m paying really, really high rates of return to people that I know and trust, some kind of relationship, and, Larry, I know you know a lot of people. You’re like plugged in, you’re involved in, you know, everything that’s going on in the community, so, Larry, I just wanna ask you to spread the word. When you hear someone that’s talking about they’re not happy with the rates of return or, you know, don’t know what the stock market is going to do or their low CDs that are averaging less than 1 percent, would you mind referring them to me and I can explain my program to them and how rates return, you know, safely and securely?

Larry: That’s really good, that’s really good.

Jay: I didn’t ask for money.

Larry: No, you didn’t.

Jay: I asked you to help spread the word.

Larry: But what’s their response?

Jay: Well, I’ll tell you the response from my very first private lender and from many others since then. So, Wayne was my second private lender and so I went up to Wayne before Wednesday night Bible study. I said, Wayne, I got something I want to talk to you about confidentially. I said if you got a few minutes after Bible study tonight that I can visit with you for a moment. He said sure. So, when the closing prayer comes along at the end of Bible study, I looked over and Wayne’s on the other side of the auditorium. Wayne’s making a beeline out of his pew coming around the back side of the building ’cause he wants to know what this confidential thing is, right?

Larry: Right.

Jay: So we go off into a classroom and I say to Wayne what I just said to you. And he looked – and he says, “Well, Jay, what kind of rates have you got in mind?” And I said, “Well, you know, it depends on the day, etc., but what sounds high to you?” Now bear in mind this was nine years ago.

Larry: Right.

Jay: And he says, “Well, we’re getting about 3 percent or so in our certificate – twelve-month certificate of deposit.” He says, “So I guess, I dunno, maybe 5 or 6 percent sounds high, I mean, sounds good,” and I said, “Wayne, are you saying that you’re interested?” And he says, “Well, absolutely I’m interested. I mean, you know, the stock market is volatile and, you know, we’re getting older and we don’t have time for correction and 3 percent sure ain’t doing it for us.” He says, “Yeah, 6 percent sounds good to me.” I said, “Wayne, I can’t pay you 6 percent but I can – my iPhone told me what 6 percent was, sorry about that. Anyway, I said, “I can’t pay you 6 percent, Wayne, but I can pay you 8 percent,” and we had a little bit more conversation and by the next five or ten minutes, he looked and he says, “Put me down for $250,000.” So, again, I didn’t ask him for money. I asked him to spread the word and obviously when someone learns what the program is – I mean, if they got money, they’re gonna ask, you know? But I’m not gonna shove, I’m not gonna shove that information on him, and I tell you, Larry, recently I raised – I mean, you have that one on one conversation but, you know, I’ve learned I can pretty much explain my program in the same length of time to a group as I can on individual.

Larry: Right.

Jay: So not long ago, I had a private lender luncheon and got $969,000.

Larry: Wow.

Jay: Just in that – in that ninety minutes, you know? So, again when do you want to use the private money? When you want to control the house and own the property and the seller requires all cash. So, obviously anything in MLS, anything that’s in MLS, REO, bank-owned, auctions, you gotta have all the money, right? And if you wanna own it, and it’s a pretty house and you don’t wanna do the lease option, you need the private money. Obviously, if you’re gonna do any rehabs – I mean, I’m not gonna rehab a house unless I own it, unless I own it or my company owns it but I’m not gonna control the house lease option or that kind of thing and put any money in it unless I actually have, you know, ownership of it.

Larry: Sure, sure. You wouldn’t want to, you wouldn’t want to.

Jay: Ask me how I know.

Larry: Nah, right. You don’t wanna rehab somebody else’s house.

Jay: Exactly. I mean, this was years ago. I controlled this house on lease options. She didn’t wanna sell it subject to and because she had good credit, she had good credit. And so I controlled the house lease option, and, Larry, my lands, one of the dumbest mistakes I’ve ever made, thank goodness it worked out okay but I put like $15,000 or whatever money in that house and then I found a buyer and we did, we did a closing with me never owning the house. I got the spreader on the settlement statement but that was stupid. I mean, don’t put money in a house that you don’t own. Thank goodness that worked out okay but a mentor of mine said, “You did what?” So, thank goodness that seminar didn’t cost a lot of money.

Larry: That’s true. Some of the best experience you have or some of the best seminars is you experience, right?

Jay: That’s right, that’s right, that’s right.

Larry: That’s true. Now, you mentioned you recently did a luncheon.

Jay: Yes.

Larry: How did you fill that room with people?

Jay: Yeah, yeah, so good question. So, you know, there’s two ways. You can – now this was all warm market.

Larry: Right.

Jay: People I had relationship with or people that they knew I had a relationship with and so when I’m doing a private lender luncheon, I want to make up a list of fifty names is what I wanna do.

Larry: Right.

Jay: Okay? And I’ve tried it both ways, Larry. I’ve had a virtual assistant call and give invitations to the luncheon. Now what we say to them on the telephone is very important. I’m putting on a luncheon. I don’t say private lender, okay. They don’t even know what I’m talking about.

Larry: Right.

Jay: I’m putting on a luncheon and I’ve got a program that I’m now offering and I would like for you to come and support me, important words. I would like you to come and support me. I’m buying lunch, I’m buying lunch for you. I’ll be doing a presentation with lunch. I promise to have you out within an hour and fifteen minutes because they don’t get to order food. It’s pre-set food.

Larry: Right, right.

Jay: Pre-set menu. By the way, this is not at Denny’s, okay? You wanna have this at the nicest place that your budget will allow.

Larry: Yeah, the Golden Corral.

Jay: Yeah, Golden Corral, there you go.

Larry: They even have a meeting room off to the side.

Jay: Exactly, exactly. So, asked them to come and support me and I’m presenting a new program that I like to get their feedback on, and that’s it. You know and we start making the phone calls two weeks in advance so my go is to get twenty yeses. That’s just the way I do it. I want twenty yeses and then I have my team there. Now, you know, some of your viewers or listeners may not have done their first deal yet, so you may not have a team, right?

Larry: Right.

Jay: But whoever you’ve done business with, like if you’ve already got a private lender, definitely have a private lender there that can give credibility if you’ve already got that relationship in place. Your real estate attorney, you know, who does your taxes.

Larry: Right.

Jay: Who’s the realtor you work with so they can see the presentation, you know, this is the real deal, right? And then I give the presentation and then at the end of the luncheon, we hand out a little form that asks them to, you know, are there any names of people they know. You know, do they have any interest, etc., and, I mean, from that private lender luncheon alone, of that $969,000, one lender was $500,000.

Larry: Wow, that’s huge, and you did all of that by not asking for the money.

Jay: That’s it, that’s it. Because, you know, what I learned from other people and just what I knew by instinct of dealing with people, you know, when you chase money and when you beg for money, it eludes you, you know, but when you are in the position of, you know, if you don’t wanna do private money with me, that’s okay. You know, there’s money all around us and so – I mean, here’s an example of not chasing and begging, alright? So, I teach and I practice the money comes first. In other words, focus on having the money pledged from your private lender or private lenders and then go negotiate the deal. Now, I’ve got some friends and you’ve got some friends that say, “Oh, go get a house under contract, the money will show up.” And I’m sorry, I don’t wanna put a house under contract unless I know what my end strategy is or – I wanna control that thing.

Larry: Right, right, right.

Jay: So, when I’ve got the money lined up and they’re ready to go, when I go get a house under contract, Larry, I don’t call up my private lender and tell them about the deal and ask them, “Do you want to do the deal?” I know they want to do the deal. They already signed on to the program, you know, verbally. I’m not gonna bring them a deal that doesn’t match the criteria.

Larry: They’re waiting.

Jay: They’re waiting, you know, and so we call them up and on the very first one, there’s only four things we tell them and they don’t even wanna know that much. Good news, we got a deal and, you know, here’s the after-repair value, here’s where it’s located, here’s the amount needed to fund it, and here’s the closing date. Now, after we’ve done a deal or two, they don’t even wanna know that. They just say, when, how much money, and when do you want it sent to the real estate attorney. That’s it.

Larry: Wow. Now, I think you said something really, really important there. The four things you told them, none of it had to do with ARV appraisal, the amount of repairs, how long it’s gonna be on the market, all that stuff, what you’re paying for it. None of that had anything to do with that, right?

Jay: Correct. They could care less how much you paid for it. They want to know – ’cause they already know the rate of return, so all they really want to know is, okay, how much do you need and when do you want it there for closing.

Larry: Yeah.

Jay: And so I practice and I also teach make it super easy for your private lenders to do business with you.

Larry: Right.

Jay: The only thing I want like, you know, about half of our funding are from private lenders that have accounts that are self-directed IRA, okay?

Larry: Right.

Jay: So, you know, the self-directed IRAs, there’s the direction of investment, you know, they don’t wanna be involved with all that. So, we fill out the documents for them, you know, they do it by DocuSign and I wanted to just be totally as passive as possible. All they gotta do is sign a document, wire money or send a document, wire money, and get checks.

Larry: There you go. That’s it.

Jay: Make it easy for them.

Larry: And you’re paying them 8 percent. Now, do you pay them monthly payments or they just get paid at the end of the deal?

Jay: Good question. So, in the warm market which is that’s where a lot of it is, I really leave it up to them but I do tell them here’s what happens most of the time. When the money is coming from the self-directed IRA account, I tell them we typically pay quarterly, semi-annual, or annual, and I say, you know, I got private lenders doing annual, semi-annual. You know, the money is not going back to them, it’s going to the account and I’ll let them pick, ’cause I know I’m gonna have, I know I’m gonna have that house cash flow and most of the time within ninety days, anyway, but that’s for the determined accounts, but, now, listen to this closely for your viewers and listeners. This is one of my favorite reasons for using private money. One reason is I’m not limited to the number of deals I can do. When I was borrowing from the banks and mortgage companies, I could only do, you know, so many deals. I could do unlimited, unlimited deals now.

Larry: Right.

Jay: But beyond that, I never, never take any of my own money to the closing when I buy. We get multiple checks on every deal ’cause I always borrow more than I need to buy, whether I’m gonna rehab or not. There’s always marketing costs, carrying costs, etc.

Larry: Right.

Jay: So, then of course we get another check when we sell, right, and I may get a third check in the middle of the deal if I’m selling a rent to own, but back to my point, so let’s say, and I’ve got a number of these. Let’s say I’ve got a number of private lenders that walk the income. They’re not using retirement money. They’re using their own liquid investment capital.

Larry: Right.

Jay: And they want monthly income. That’s fine because watch this. When I borrow, which is always, when I borrow more money than I need to buy the house and I’m gonna pay them monthly payments, whose money am I using to cash flow their monthly payments right after I purchase? Their money.

Larry: Right.

Jay: I mean, it’s not uncommon for, you know, me to get a $20,000 or $30,000 check at closing when I buy. One of my favorite phrases, Larry, on the check stuff, from my real estate attorney’s office is “X says cash to close.” I love me some x says cash. But anyway, of course, I’m not gonna walk away with $20,000 or $30,000 at closing unless I’ve got some rehab going on.

Larry: Sure, sure, sure.

Jay: I don’t wanna pay interest on that money unless I really like to use it but, initially, I’ll be using the private lenders money to make those first few monthly payments but of course that money’s gonna run out. I wanna get that house cash flowing on rent to own or I wanna to get it cashed out, you know, in the MLS if I’m selling it that way. And by the way when it comes to selling houses, I’m now doing simultaneous marketing to locate sellers. I’ve got an agreement with my realtor, I put it in the MLS, alright, I simultaneously marketed through my own marketing like on Facebook ads and, you know, to my buyers list and all that, and I just let the market speak as to which way, you know, what exit strategy were used but I still compensate my realtor if we find the buyer because my realtor gives me all these comps and after-repaired values for free. It’s all about relationship.

Larry: Right, right. That’s awesome, that’s really good. Will you kinda run down a little bit of some of the terms. I know 8 percent is what you’re typically paying but, you know, you’ve gotta have different terms whether it’s a fix and flip deal or you’re gonna do a rent-to-own lease option, that sort of thing. Give us a little bit of run down because there’s short-term money and then there’s long-term money.

Jay: Right, so the program we put together is – and it’s regardless of whether it’s gonna end a cash-out MLS or it’s gonna be rent to own, so if the private lender is lending us money from their investment capital, just liquid funds, then the term is two years, two years, and if they’re lending money from their retirement account, then it’s five years because, again, it’s not going back in – it’s going into the retirement account and not back to them, and what I’ve discovered over these years, Larry, is even if I have a cashed it out for whatever reason in two years, I’ve done a rent to own thing, and whatever reason it hasn’t cashed out, private lender doesn’t want the money back, the private lender wants you to keep the money in play, okay, but of course, you know, we’ll be selling houses, you know, on flips or whatever, from six months from the time we bought them and after we rehab them. And, you know, a lot of times what the private lenders do, they’ll say, “Hey, can’t you just keep the money and don’t send the money back?” Well, I can’t keep the money ’cause the real estate attorney has got to have it assigned to a property.

Larry: Right, right.

Jay: So cash ’em out and then we put their money back to work just as soon as possible.

Larry: Right, right. That’s good. But the good news is they’re wanting you to keep their money and keep it working for ’em. I know we’ve, as a private – as a hard money lender over the years, you know, we’ve done hard money lending and continue to do some of that, and as a hard money lender back when we used to broker other people’s money, you know, they would have a payoff and we would try to have another loan lined up to where they get the money through the attorney but the attorney just keeps it and puts it in another deal, right?

Jay: And that works if there’s another deal to get.

Larry: If there’s another deal lined up, another deal lined up. So, on your longer – like if you’re gonna do lease options or rent to own, whatever, and I’m assuming your rent to own is kind of a lease option, they eventually got to get a loan and pay you off.

Jay: Yeah, same thing.

Larry: Is five years the most you’re doing, are you doing interest-only payments for five years or you’re doing amortization or what?

Jay: Yeah. We’re doing interest only on all the deals for two reasons. It’s a win for the private lender and it’s a win for us, the real estate investor, the borrower, and here’s how. If I’m paying principal and interest, then of course that is paying the principal down for the lender and they’re not making as much money.

Larry: Right.

Jay: They make more money if they keep all their principal in play and, of course, from our standpoint, interest-only payments are less on cash flow than principal and interest. Now I’m not saying there’s not a time and a place for paying principal and interest.

Larry: Right.

Jay: For example, in some areas of North Carolina, I mean, you can buy a house, you know, for $30,000, right? And what I discovered the amount of rent across the board are not exactly perfectly correlated with how much you pay for a house and how much rent you can get.

Larry: Right.

Jay: So if you could pay to a private lender on a, you know, seven-year or eight-year term and have at least your property break even and pay principal and interest, now you got a free and clear house, you know? And you haven’t, you know, killed the golden goose, so to speak.

Larry: Right, right. But I see your point. There’s two different ways to go with it, interest-only, you’re gonna have more cash flow, but you eventually got to pay off that full loan, you know, by either selling the property or whatever, or I’m sure, at this point, as long as you’ve been doing this, I’m sure a lot of your people, if the rent-to-own buyer or lease option buyer, if they don’t exercise, you just tell your private money lender or they’ll probably ask you, “Can I just renew this? Can I just keep it going?”

Jay: And what you just said triggered a really, really important point that I wanna bring out, and that is unless you, as the real estate investor, have got a program in place to where you assist or you got a credit repair company to assist that rent-to-own buyer and get him ready for a mortgage, you don’t wanna be borrowing private money and selling on rent to own, okay? Because – I mean, that would be – ’cause here’s the deal, and of course you know this, Larry, better than anybody. You sell ’em rent to own, if you don’t help that family or that buyer, that lease purchase buyer, if you don’t help them in the credit repair process, the odds are very, very unlikely that they’re ever gonna get, you know, ready for a mortgage. So, actually, in our lease option agreement, we require them to enter the credit repair program and so the credit repair program company we use actually has a VIP service. I use the option money to cash flow paying for the credit repair and I’ve got an 80 percent success rate now, 80 percent of our rent-to-own buyers get ready for a mortgage within a year or so, sometimes six to nine months.

Larry: That is awesome.

Jay: And we don’t have to rely on them receiving the responses from the disputes, from the repositories, the credit bureaus, for them to send those responses back in. It’s always done online by the credit repair company that we use. So, let me put a bow on that is what I’m trying to say. On selling on rent to own, just know as the real estate entrepreneur, if you want to move the cash out, you may not wanna move the cash out. I mean, somebody could be doing a sandwich lease purchase, you know? Lease purchase over here a pretty house that doesn’t need rehab, lease purchase over there to somebody else and, you know, you got the profits in the middle and, etc., but if you want them to cash out, you gotta be with a credit repair company who knows what they’re doing.

Larry: I agree with that. It’s been my experience but I do a lot of those $30,000 type houses, right? But it’s my experience that 99.9999 percent of ’em never cash you out.

Jay: That’s right. That’s right. Without having that in place and, you know, you as the real estate entrepreneur may not be interested in cashing out.

Larry: It doesn’t matter to me. I want to see ’em be a homeowner. I would love for ’em to be a homeowner, but you and I both know, Jay, especially on the lower priced homes, the vast majority of ’em never cash out. That’s why I call ’em homeowners in training, right? They never pass.

Jay: I had never heard you say that, Larry.

Larry: Yeah. That’s what I call ’em, homeowners in training, and actually a lot of people think, even if I sell one of those houses with the lease option person in it or as you call it a rent-to-own person, if you sell a house with that in it, they’re like, well, what if they default? What if they default? Quite frankly, that’s the best thing that can happen, because you get another down payment or another option consideration, right?

Jay: That’s right.

Larry: What’s the typical one of your deals look like and then I know you got a gift for everybody.

Jay: Yeah. So, right here in Morehead City in this market, our median price of a single-family house is $225,000 so we’re higher here ’cause we’re, you know, some areas of North Carolina, and so that’s the median, so, for someone to own a home or buy a home that’s nice, three bedroom, two bath, you know, 1,400 square feet, that’s gonna be $150,000, $155,000, and so we try to keep our investment between $150,000 and $250,000 but I’m not sure I answered your question.

Larry: Well, yeah, I think you did. I think you did. I was just looking kinda for the price range of what types of properties you’re buying and selling and that sort of thing.

Jay: That’s right, that’s right. Yep.

Larry: That’s good, that’s good. Now I understand you got a free gift for everybody.

Jay: I do have a free gift, Larry.

Larry: And we created a special page for it.

Jay: Yep, yep. So, what I have is I’ve got a free masterclass, free online class, that’s called – it’s on demand, and the title of the class is called “Where to Get the Money Now Regardless of Your Credit, Regardless of Your Income, and Regardless of Your Experience in Real Estate Investing” and so, Larry, we got a special website we put together for your viewers and listeners and that’s and so your viewers and listeners can go to that link, I’m sure you’ll have that link in the show notes as well.

Larry: We will, we will.

Jay: And go there, and so on that masterclass, I will explain the five steps of getting the money in your warm market and the five steps of how you could also get the money from existing private lenders, so, you know, any of your viewers or listeners that are interested in getting private lined up and pledged, if they’re, you know, whether they’re gonna be buying a house that the seller requires all the money, then they definitely wanna attend this masterclass.

Larry: That’s awesome, that’s awesome. Guys, go to, and you’ll be able to get access to your free on-demand masterclass, right, Jay?

Jay: You got it, Larry. Man, I loved being on here with you. It’s been fun.

Larry: It’s been a lot of fun, it really has. I really do appreciate it, and, guys, be sure to grab that free training as well and, Jay, thanks a lot, man. I’ll see you soon.

Jay: Alright. Thank you, Larry. See you soon.