All right, we are live with investor thrive. I have Jay Conner on here. I’m very pleased and grateful to have you on Jay. How are you man?
Nathan, I’m doing fantastic. And thank you so much for inviting me to come on and first to talk about my favorite subject that I’m so passionate about. And that being private money.
I’m excited to talk to you about private money because I think a lot of new investors don’t really even think about private money at least wholesalers, right? They’re like, Okay, let me just get a deal. But private money is huge to doing deals. I know, because I’ve had to get, you know, get a lot of it.
Absolutely. As you say, you know, if someone’s starting out wholesaling, though, they may be thinking, Well, what in the world do I need private money for? Well, here’s the deal, as you know, as well as anybody, when you’re focusing on wholesaling, there’s some deals that come along rather quickly that you think to yourself, Well, man, how could this like change my business? If I could stay in this deal, right, instead of getting an assignment fee and you know, get all the profit, and instead of passing on that profit to somebody else,
100%. So most of the audience that I have are brand new investors or their wholesalers. So what advice would you give to wholesalers that really aren’t thinking about private money at the moment? Or even know what it is? Like? What would your advice be?
Well, you know, we always want to begin with the end in mind on any deal that we’re doing. So when analyzing a deal, first of all, I’ll just I’ll just give an extreme example. I do know this one thing for sure. Which is a fact the biggest profits, the biggest profits that are made in real estate typically, are those that have rehab involved, right? So you know, let’s say a wholesaler says, Well, you know, I don’t have any relationships in place that I can even rehab, well, there’s a writer downer, you’re not going to want to stay in a deal and use private money to fund your deal if a rehab is involved, and you don’t have a relationship in place for the general contractor. So that’s like number one, right? Now ever. However, how about those deals, Nathan, that come along, that like Harley don’t need any rehab at all the people want sell creatively, they won’t sell subject to the existing note, they won’t sell with seller financing, they require all the cash. Well, I’m thinking of a particular deal right now that I just closed on over in Havelock, North Carolina, the after repaired value is $280,000. I just closed on it yesterday for 141,500. The rehab, the rehab on it, or the renovation is actually less than 10,000, I could actually sell it as is and not sell it for 280, I could sell it as is for like 225 or 230. And not even touch it. But the only way I can do that and stay in the deal is if I’ve got private money to fund it. So the questions that I recommend asking are on the exit strategies. What if I stay in this deal? What all is involved? Am I gonna need to renovate it? And so here’s the deal. Bottom line. It’s amazing when you got all cash available at your fingertips, how many more deals you actually do?
That’s true. Yeah, it is very true. Because if you can’t find, you know, if you can’t find someone to buy it, then you would lose it right. But right here, you have this great deal.
Exactly. And so by having the private money available, ready to close, and that’s the great thing about private money, you get to make the rules, there’s no applications, I can close deals in less than seven days using private money. And when a real estate investor has those funds available, the bottom line is you’re just going to do more deals and your deals are going to be more profitable.
So let’s kind of talk about that as a new investor private money. That might be kind of a confusing term is that when you say private money, are you talking like a hard money lender? Are you talking about how that’s private or you talk in private where you can get that money from like family, friends, people, you know, is there a difference?
There’s a big difference. There’s a big difference. So when I talk private money, I’m not talking about hard money lenders or hard money brokers that have a fund and they have gone out and raised private money for their fun and now they’ve blown that out real estate investors. I’m talking about doing business with human beings doing business with individuals, and as you said, it could be family or friends. It could be existing private lenders or all the above, right. So an extra year question. We’re doing business with individuals that are loaning us real estate investors either money from their investment capital and or their retirement funds. So that conversation of self directed IRAs is brilliant. poured into.
So why would someone go to a hard money lender? What’s the benefit of a hard money lender if you can raise enough of your own private money?
So I say forge as many relationships as you can. Right? So I’ve got 47, private lenders, individuals that are loaning us money on our deals. So why would you go to a hard money lender? In addition to individual private lenders? Well, there’s one thing about it, if you’ve got a relationship with a hard money lender, you don’t have to worry about the money disappearing on you, right? However, in my case, I’ve never had money disappear on me, because I stay in contact with my private lenders. They let me know what they have available. And so it’s my job to put their money to work just as soon as possible.
Okay, and what is the return that you’re giving that you find that most most private money lenders or people that are willing to lend their money are willing, willing to do for? Is there like a percentage that you usually see?
Yeah, so I pay 8%. Okay, I’ve got friends that are paying 6% and 7%. Because still, that’s a whole lot more than you can get, or they could get at the local bank. But I pay 8%, and no origination fees, no points. If we don’t cash out within the term, no extension fees, it’s just a straight interest rate.
Okay, do you keep their money? Or do you only ask for it when you need it?
So I’m only using their money and paying them a return on that money while that funding is invested into a property? Right? So I’m not keeping their money unless we’re using it on real estate. So I don’t borrow any unsecured funds. We secure every note with the real estate that we are purchasing.
Is there a personal guarantee that that you’re signing with them as well? Or is it a just hate secured by the asset?
No personal guarantees, that’s another big benefit to using private money, as opposed when you borrow hard money, or you’re borrowing any kind of commercial or institutional money. There’s always a personal guarantee. But in this world of private money, no personal guarantee,
yeah, I’ll be open and honest, because that’s how I am with everything is I have a property in Provo, Utah, that we bought in the market, as we know it was hot, Utah has taken a big hit on the prices because we went up super high, and values. But now it’s gone down pretty, pretty hard, pretty fast. So we have a hard money lender that we’re in negotiations with, because the property that we bought and fixed up, it was going to sell, we’re gonna make profit right now we’re at a loss. So we’re having to negotiate. We’re in the talks. And he’s telling us like, hey, there’s a personal guarantee. So if you sell this, and I’m at a loss, or you’re at a loss, you still gotta make me whole, because of the personal guarantee. So it is very interesting, but it happens, right? And you gotta go with the blows, but private money, you’d still want to make that private money lender hole as well if you were at a loss course. But that’s I guess, the hard money lenders really have, you know, everything locked and loaded, right, locked down.
Yeah, the biggest difference between borrowing institutional money, hard money, banks, whatever. And working with private lenders, individuals, is we make the rules. You know, when I was borrowing money from the banks, they made the rules, they set the interest rate, they set the loan to value, they set the length of the note, they set how often you have to make payments in this water private money, we make the rules, right, for example, I set the rule that I will not allow my private lenders to loan or invest more than 75% of the after repaired value. I didn’t say 75% of the purchase price 75% of the after repaired value, what I bought but I buy it for is doesn’t make any difference. So let’s say for example, for easy figuring there is a house I’m going to buy with an after repaired value of $200,000. Well, after repaired value 200,000 Well, let’s say it’s kind of a $30,000 rehab. Well, I buy houses that need rehabs all the time at 50% or less of after repair value, so I might buy that house for $100,000 Well, here’s another big reason I love private money. I never never with a capital N ever take any of my own money to the closing table when I’m buying love it. I always get a big check because I always borrow more than I need to buy. Okay, well the only way that formula works is if you are buying at a discount, right? So I’m never bring anyone by using private money, never take any my own money to closing I get a big check when I buy and then we actually structure deals to where if we’re gonna do a flip, I don’t even make any monthly payments. You don’t have to make monthly payments. You can structure it to where the interest just accrues when you until you’re ready to cash out and that’s only going to work if you’re in it for like six months or nine months seven And then when you sell it, you pay off the private lender note along with the accrued interest. But another great thing about private money is there’s no hurry to pay it back. If you can sell that house and have a positive cash flow, you could sell it on rent to own as long as you’ve got a positive cash flow and what you can rent it out for work over and beyond your underlying debt of the private lender note. So depending on how cheap you buy that house, I’ve sold a lot of houses on rent to own while I had used private money to fund it, but here’s a big lesson learned, don’t go do don’t go do a major rehab on a house and sell on rent to own even though I’ve required people to get on our credit repair program. I got tired of rehabbing them more than once.
Yeah, I don’t take care of them. Right.
So, you know, I my definition is I’ll sell a house on rent to own if I’m not having to put more than $10,000 for renovations in it again, but I might but a major rehab, I’m going to want to get that money back out of it.
And I’m assuming rent down is the same thing as a lease option. Correct. Same thing, I think, okay, and I’m assuming you require a down payment from whoever you’re getting a lease option rent down from or not, not always,
Well, the legal term I would require a down payment if I’m selling it with owner financing and transferring title if I’m selling it on lease option lease purchase rent to own all the same thing. I’m gonna get a large the legal term is a large non refundable option fee option. Most people most people call it a non refundable lease option deposit. Okay? Well, I don’t say deposit because deposit in furs that they don’t get mad. Gani. However, when they’re ready for a mortgage, the option fee, there’s non refundable that they paid when they moved in 100% of that option fee is applied to the purchase price.
Perfect. And you specifically call it option fee. Correct. Okay. Wow. So I think this is awesome. So for me, I’ve actually raised quite a bit of private money too. And this is how I structured it, I would get hard money for 80%. And then I get private money for the down and for the repairs. But it sounds like you’re get you have enough, or you’re raising enough to do the whole the whole purchase, is that correct?
Correct. purchase more than I need to buy it. And if rehabs involved all the rehab money up front, and the beautiful one of the beautiful things about, you know, using private money. And you know, I teach all the time how you raise private money without asking for it. The beautiful thing is there’s no application fee, there’s no application period, there’s no credits, your credit score has got nothing to do with how much private money you can get the way I do private money, it really puts you in the driver’s seat and in control of the destiny of your business.
Wow. So do you suggest people use private money for anything outside of backing like buying a real estate property? Like, is there anything else that they can be doing with that? Or is it only buying properties.
So private money in the context of real estate can be used for single family houses, it can be used for commercial self storage. In fact, if a self storage operator is selling, and they’re not selling with seller financing, then a lot of my friends use private money for that private money is used for small apartments, you know, large apartments, right? It’s all the same money, but it’s how you structure it differently. So like on large real estate stuff, where you they’re gonna be doing what we call syndication, raising money for a fund. So the private lenders will be investing in a fund that will fund the upcoming project, the way I do private money is everything is what we call one offs. And what I mean by one off is that every single family house that is funded by private lender, or more than one private lender, that house is collateralizing. The note that the private lender, you know, that were that were borrowing the money, but in answer to your question, private money can be used for anything. I mean, you know, venture capitalists, I mean, that’s, that’s private money. But in most of those cases, it’s not going to be backed by real estate, if you’re like raising money to start up.
Something that was kind of my question is like, can’t do other people maybe raise you know, pay the return of 8% on maybe something marketing spend if they want to send out mailers. I don’t know if that really happens. But, you know, well,
I can only speak from my experience. And that is the only private money that I borrow is when I have a property that’s got the equity in it that I can back and secure that note.
So let’s let’s talk about this so you can get properties at 50 percent normally or a little bit lower, you ask for 75% of ARV. So you’re getting more, you’re borrowing more than you need, and they don’t. So they don’t even ask what you what you got it for you don’t even talk about, you’re just saying, hey, I need 75% of what this property is worth. And that’s the discussion.
Let me go through that discussion. Now even less, let me go through that script. So one way or not one way, the way that I raise millions and private money without ever asking for it is first of all, you know, the old traditional way Nathan a barn money for real estate, is you go to the bank, and you get on your hands and knees and you put your hands under your chin. And you look at Mrs. banker or Mr. Banker, you say, Please find my deal. Please find my deal, right? And this world, there is no asking, begging, selling, chasing, we’re doing business with individuals. So you know, the old traditional model is you’re is you’re going and asking in this world, we’re offering a mortgage, we’re not asking for a mortgage. So how do we start out? How do we start out? How do we do this without asking for money? Well, step number one is you put on your teacher hat, okay. And you see, my first six years, I’ve been investing in single family houses, I’ve done over 450 rehabs, my first six years in this business, I relied on the local banks, and I was at the mercy of the local banks. And then I lost my line of credit due to the global financial crisis in 2009, January 2009, I learned about private money immediately. And so then I put my own program together, the See, I wasn’t going to be following the bank’s program anymore. So what I mean by my own program, my program of to what I’m going to be paying and offering my private lenders, what’s my and well, you know, what’s my interest rate, right? What’s the point? What’s the length of the note, maximum loan to value, et cetera. And so I put my program together, and then I put on my teacher hat. And I started first of all, teaching people in my own circle of influence. What in the world private money is? What are self directed IRAs, how they can use retirement funds to get unlimited income per year tax free or tax deferred, at least. So I put on my teacher hat, I view myself as a teacher. In fact, when I meet somebody new, they asked me what I do. I say, I teach people, just like you and me how to earn high rates of return safely and securely. I teach her about several IRAs. So I teach them what it is, then I teach them my program. I don’t ask them for money. They can get those.
Yeah, you’re Yeah, it sounds like you’re just telling them what you do. And yeah, I love it.
And so I’m teaching them the program. I don’t have to ask, I don’t have to ask, you know, do you want to invest whatever, if they’ve got investment, capital retirement funds? Of course they do. Where else can they get these kinds of returns, if they’ve got retirement funds that I introduced them to my connection at the self directed IRA company where I refer all of my private lenders that have retirement funds. So now I know how much money they have. So I hadn’t asked, I told them what it is. Now, how do I get a deal funded without asking them if they want to fund the deal, so I know how much someone’s gotten to work with. So let’s, let’s go through this little script roleplay here. So let’s say Nathan, you’re one of my new private lenders, let’s say you’ve got $150,000, right? Just just in liquid capital, just sitting there that you’d like to get a higher rate of return safely and securely. So as a Nathan, I’m gonna put your money to work for you just as soon as possible. Or if you’ve got retirement funds, I’ll introduce you to my self directed IRA representative. And they’ll help you move your funds over. So I know how much you got. You got $150,000 In our example, so let’s say a week goes by, and now I’ve got a deal that I want that I’ve gotten a contract and I want to get funded. So I pick up the phone, believe it or not, Nathan, we still have white hands. Carolina with core. Can you believe so? I pick up the phone. I call you you answer the phone. Here’s the script as a hey, Nathan, how’s it? How’s it going, man? Good, good for you. We’re having like a little chit chat, you know, and then I say, Nathan, I have got great news for you. I can now put your money to work for you. I’ve got a house in Newport under contract with an after repaired value of $200,000. The funding required for the deals 150,000 I know you got 150,000 Because you already tell me the closing is next Thursday, so you’ll need to have your 150,000 wired to my real estate attorneys trust account next Wednesday. A, I want to have my real estate attorney email you the wiring instructions. Now, that’s the end of the conversation. I didn’t ask you do you want to fund the deal? That’s the most stupid question in the world, I could ask you, of course, you want to fund the deal. You’ve been, you’ve been waiting for me to call you to let you know that I can put your money to work. See, there’s a big lesson I learned years ago, Nathan, don’t ever make this mistake. Don’t ever talk about private money, your private lending program, how it works. And in the same conversation, you got to deal to be funded, you’re already desperate. And you don’t even sound like you’re desperate. Right? When is the worst time in the world to be raising private money when you need it?
A lot of time, yeah, like private money, right?
You don’t teach you teach people what the program is how much they got to work with. And now you call them back as soon as you can with a deal for them to fund.
So let me ask you this. So this scenario, this person you call they are you asking or just telling them? Hey, let’s time to put your money to work? Is there money in a self directed IRA? And you know, that’s why you know, how much is in there?
No, both cases, either I have introduced them, they got retirement funds, and I introduced them to myself and an IRA rep. And they’ve transferred funds over, or they’ve told me they’ve got X number of investment, capital X dollars 200,000 300,000 that they want to start with, by the way, Nathan, they always have more than they tell you, right? Of course. So they want to start with $200,000. And it’s just liquid capital, okay? And I say, Okay, I’ll put you down, I’ll put you in the queue. And we’ll put your money to work for you just as soon as possible. Now, one of the first questions they’re gonna ask is, well, how fast can you put my money to work? You need to have an answer for that question. My answer is typically within 30 days. Do you know how I know that? Because when I have a new private lender, guess what? They go to the top of the queue? Yes, they do. And we’re gonna put their money to work first, because I want to show them and prove to them that I can perform, and I can actually get their money invested for them.
So let me ask you this. So I have a traditional IRA and I have a Roth IRA, me and my wife, do we max it out every year? Right. But if we were to transfer it to a self directed IRA, does that not? Crew interest does not make money unless it’s being directed or less, it’s being worked on?
Is it just correct. It’s just sitting there. So I have a moral and ethical obligation. If I have even introduced, which, you know, none of my private lenders ever heard of several, IRAs, none of them ever heard of private money, until I told them, your private lenders are probably the same way. Right? And so, particularly, if they have retirement funds, and they’ve moved those funds over for the purpose of you to put their money to work, because they don’t have that they don’t have anywhere else to go, because you’re the person that taught them about it. Right, right. So I am obligated to put their money to work just as soon as I can.
And on the self directed IRA, any money that you make, that they’re making on the 8% is not is just tax deferred, or they don’t pay taxes on correct,
all right, because all those returns are going back to their self directed IRA account, the returns are not going to them directly.
Can you transfer Roth or traditional anytime to self directed? Or is there like, Okay, so there’s not a cut off on age or time or? Interesting? Yeah, cuz I was thinking about doing making it self directed, but you can’t invest your own. You have to have someone else invest it. And I don’t think it can be family either, right? It has to be like, it can’t be family, and it can’t be yourself, correct?
Well, it can’t be yourself. That’s called self dealing. But it can be your family, depending on who your family member is. Okay. So the IRS will not let you borrow money from someone else’s retirement account. If you have a vertical relationship, meaning if it’s your father, your mother, your grandparents, your great grandparents, or if it’s your children, right, or your grandchildren, those relationships cannot borrow from each other on real estate. However, lateral relationships, yes. Okay. So you can borrow from your cousins, you can borrow from your brother, you can borrow from your sister, you can borrow from your own code from your aunt. I mean, got it. My wife, Carol, Joanna, we’ve got a lot of nieces and nephews that are that are our private lenders.
Gotcha. And do you want to primarily when you do a single family property, you just try to have one person versus bring in multiple private money lenders or it all depends on our minimum.
I don’t have any problem to lenders unless they have at least $50,000, gotcha, they have to invest either liquid capital or retirement funds. And so it depends on the deal. I mean, it depends on what I’m buying, and depends on what monies I have available. But I call sitting in the queue, just waiting, just waiting to be used. For instance, I bought a bought a property yesterday, and $150,000 was in first position, and then there was a smaller $50,000 in second position. So it just all depends on the deal. However, when you’re using more than one private lender to fund a deal, then what you want to be careful about is what we call the total loan to value. So I want to add, if I’m having more than one note, more than one lender funding a property, I would add up both of their loans, right, divided by the after repaired value. And I still don’t want that after repaired value percentage to be the loan to value to be more than 75%. total loan to value.
Yeah. Okay, let’s talk about first and second position. I think I understand it. But just to make sure, how does that work? The person that puts up more money is usually in first position, and the second direction, and that that means if for example, you had to sell the property and it was under the first person would first position gets paid before second,
When you say sell the property, like Sure. So for example, let’s say you borrow 150 total, and you try to sell the property, but it’s not worth 150. Right? You say it’s 140? And you’re under, right? Like you would have to pay off the first position first before the second position, does it? Does that make sense? In that scenario, like you’re just under underwater, you selling it for less than what you bought it for?
So listen, let’s address that. So any Junior lien position is at higher risk than a first position. Meaning, let’s say a second position, private lender, if they were to foreclose, because you’re not paying, well, they got the only way they can be made whole is they’re gonna be inheriting the first position. So that’s why there’s a big, there’s a five letter word in this business, it starts with a T called trust, right? So you know, that well, that’s, that’s why I’m not borrowing more than 75% of the after repaired value, if the market starts to come down, and typically, I won’t be able to lower that price and liquidate out before I am upside down. I will say ever since 2009, of doing private money. I’ve never been upside down on what I could sell it for, versus what I had borrowed because of that 25% equity cushion, as we call it.
Yes. Okay, that makes sense. I just I know a lot of people say like, Okay, I want to be in first position, like when they’re, they’re borrowing money, they want that. And I think hard money lenders are will never take like a second position. Right?
Of course not. So your junior positions are only going to come from your own connections and your warm market and people that you teach about this world.
Gotcha. So what situation would you need a second position is that when you’re not able to raise the complete amount from the first position? Correct? Okay, can there be like 10 positions on a property?
Well, the most I’ve ever had is five. And that’s when I was doing a property for 900, after repaired value of $900,000, down at Mr. Lyle, North Carolina, but that’s out of the ordinary. Typically, I’m gonna have maybe two, maybe three, depending on how much how much funding each one has
in syndication is when you syndicate a property is are there multiple? Is it work like that to where there’s a first position, second position? Or do they all when they syndicate get, like the first position? They just bring their money together?
Well, there is no positioning, there’s no positioning and a syndication, okay. They’re just invest. They’re investing in the Fund. All right, they’re investing in the Fund. And they already I mean, depending on how the fund is set up. And then if it’s for a development project, there may not be any interest that’s paid, they may get what’s called preferred interest, which is a piece of the back end of the profit five years down the road after the project is developed and then sold off. So when we talk positions, we’re talking about people having mortgages or deeds of trust, you’re in North Carolina. That’s the context of when we’re talking about positions.
All right, and that scenario that roleplay we did, where you call that person and said, Hey, wire, my attorney is going to send you our wiring instructions, is that the situation someone would be in with a self directed IRA they would still have to wire the money from their self directed out or would you have access to that person self directed to just take the money after asking for their permission? Shouldn’t how does that usually work?
Yeah. So regardless as to whether it’s just investment capital, or average retirement funds, all funds are gonna be wired to the closing agent. Now, you know, some states use title companies. And so it may be wired to the title company, but the real estate attorney is still going to prepare the closing documents for private money, because the title company doesn’t prepare closing documents. They’re just used to receiving closing documents. But in answer your question doesn’t matter where the money’s coming from retirement funds, investment, capital, liquid funds, it’s all being sent to the closing agent. And then no funds are dispersed until after closing, and everything’s on record.
Got it. You know, it’s interesting, I was trying to refinance this property that I was telling you about, unfortunately, it’s less worth less than what we bought it for. But it’s like it’s 7.5% interest from a bank for an investment loan. So you’re getting a percent. So like, we’re pretty close. Has that has that changed over this time? Since interest rates have been creeping up? Have have your private money lenders been like, hey, I want a little bit more since interest is, you know, going up?
No, I’ve had, I’ve had one asked me that question in the past year. And I say, Well, what we do is we compare what we’re paying to our private money lenders to what a private money lender can get in the local bank. And when it’s still close to 1%. Eight times 1% Seems pretty good to us. Yeah, for sure. But remember, remember, who’s making the rules? You are?
They need you? That’s right. Because you’re out there finding the deals and putting their money to work? Yeah, exactly. Do you ever lend out your private money and become the hard money broker? Or do you not really sure? Sure.
I use my retirement funds at the self directed IRA company. I love I love passive income, too.
Okay. So you’re able to do that, because I was just wondering with, let’s say, you have all this money from 47 people or more, they, I don’t know, if you’re able to give them all work, like put all their money to work. So you probably do lend their money out as a hard money lender?
No, no, no, no, I can’t do that. Unless I’m a licensed mortgage broker in the state where the deal is happening. So I thought you’re asked me if I use my own personal return.
I’m just saying like, with all the people’s money that you have available, right, that, I don’t know, if you’re able to put all their money to work. And so they’re all just sit sitting there until you call them. I was wondering how you if you put their money to work somehow, some other way than bringing them ask them to write?
Well, I just, yeah, I just use our private lenders funding on our deals. Okay.
Is that what a hard money lender is, though? He has all these private money lenders and he gets him? And he says, hey, I’ll lend it out to this guy in
Yes. Okay.
But you don’t do that.
No, hard money lender or broker, which I have lots of friends that are I say, Make as many relationships as you can. But if you don’t have private money, hard money is a whole lot better than no deal. Yeah. If it’s a good deal, right?
Yeah. Have you have you kind of been on the edge of being like, Hey, I got all this, these people that have money that is available, maybe I should start lending their money out of you know, because I’m able to use it.
That’s a lot. I got, I got I got eight and a half million dollars of private money that we’re using on our projects. But that’s sort of easy to do when you’ve got nine or 10 projects going simultaneously.
Yeah. So do you How are you coming across a lot of the deals that you’re investing in? Do you have a team that’s going to acquire them? Like acquisition team? Do you have people that bring you deals, and you just analyze them all day? How does that work on your side?
Well, I sure don’t analyze them all day. It takes me about one minute to analyze a deal. So I’m, I’ve had I’ve had a full time acquisition is that negotiates and gets all the information initially. And so we have multiple marketing funnels that are feeding that are feeding leads coming in every day. So I’ve got three different pay per click Google ad campaigns going on simultaneously. I have two Facebook ad campaigns going on simultaneously. We also track and direct mail every foreclosure open file in our market and so between the foreclosures which by the way, have opened up big time, and the Google Pay per clicks and the Facebook ads and probe pre probates that we direct mail to our marketing funnel stays full in a very small market of only 40,000 people. How about that? I only Nathan I only do two to three houses a month but the average profit right now was $78,000 per house.
Do you feel like because you’re in that small market you’ve you’ve really mastered it and that is actually benefit you to stay in that local market in that one place.
Outline smaller markets are always outperforming the return on your marketing dollars. versus all that competition in the city.
100%. I agree with you on 100% Because it is that’s what I kind of as a wholesaler we’ve target these major cities, right? So because that little place that that smaller unless you’re buying those properties, it’s kind of hard for us when you do nationwide to find those buyers that are kind of like you, you’re a buyer, right? You’re looking. Wow, that’s amazing strategy. I love it. How long? Have you been doing that strategy for where you’re like, you’re taking down those deals with private money, and you’re running your own thing in this market?
Since 2009. Wow.
And you really perfected that thing? I bet it’s like a well oiled machine.
Well, I still learn lessons.
Well, that’s been I’ve had a really good time. chattery This is amazing that you’re able to do it. And that’s kind of the struggle that wholesalers face is we’re not buying the deal. So we really are at the mercy of can we sell it but you’ve solved that problem. By brain getting enough money. We’re like, Hey, this is the deal. I can make money. I don’t have to run this by anyone. It’s my decision.
Exactly. Like you are the committee. You are the committee.
Wow. So that that would help a lot of wholesalers that are maybe struggling that are like, Man, I know this is a deal. I know there’s a return but I can’t find anyone to buy it, then you get the private money. There you go. Before we end, if you had any advice for a wholesaler that’s starting out, what would that be for them for a wholesaler starting out?
Well, first of all, if you want to start out in wholesaling, you need to work with somebody that knows what they’re doing, and don’t go about this by yourself. And that guy’s name would be Nathan Payne. I need to work with Nathan Payne, right. I mean, I started in this business, investing in real estate, without a mentor without a coach, bad way to go. I lost a lot of money and made some money made big mistakes. So be sure if you’re starting out in wholesaling work with somebody that knows what they’re doing.
That’s 100% True. And for anyone that needs it, I’m assuming you have like a course and you teach people exactly how to do the script, kind of what we went over, do you sell something like that? Like, of course,
I got some better than that. What you get about absolutely free fr EE free. I just recently finished writing my private money guide, right, which is called seven reasons why private money will skyrocket your real estate business and help you build incredible wealth. It’s free. You can download this private money guide to get you on the fast track at Jay conner.com J y co nn er.com. Forward slash money guide. That’s J Connor with an ER JY co nn er.com. Forward slash money guide.
Alright, let me put that up there. Let me see if I got it for you. We’re gonna we’re gonna have the scrolling across the bottom. Is that it? J conner.com. Forward slash money guide.
That’s it right there.
Wow, you’re giving that out for free? Why are you so nice?
Because I hang around go givers like Nathan Payne.
That’s awesome. You know, I’m actually gonna go and grab that. I’ve been focusing mainly on just getting the down, right? Like, I’ve never really thought, oh, I need to raise the whole, you know, amount. But sounds like it’s a good idea. You know, it’s saying,
Do you really want to be if you really want to be in control and not paying the points, origination fees, etc. And I’ll tell you, Nathan, if I could let me also tell your audience about my podcast, please do which is all about private money. So wherever you listen to your podcast, or Spotify, iTunes, the name of my podcast is raising private money. With Jay Connor very, very easy to find. Just go in your search bar. I’m on YouTube as well. iTunes or Spotify, you can definitely not miss out on anything there. So raising private money with J Connor podcast
podcast, raising private money with Jay Conner actually had the privilege of going on your podcast and I had a wonderful time. I think it’s amazing. I appreciate you having me. I’m so grateful to have you on here. And we’re actually going to be seeing each other soon. The end the month that are one of the mastermind meetups we’re part of so I look forward to it.
Me too. Nathan, thank you so much for having me. Come on.
Anytime. All right. Well, we’ll catch you later everybody that’s tuning in, hit up J Connor has given him a free books and he’s got an awesome podcast. Definitely do it because I’m doing it. See you guys later. See ya.
