Following Your Purpose: How Jay Conner Discovered the Opportunity of Private Lenders in Real Estate

0:00I've always had a calling of sharing with other people how I do what I do, being a teacher. When I started coaching other real estate investors, that's when I realized that this is my calling. When you're going after success, and especially financial success, maybe you're going the wrong way. Jay Conn is going to take us through today about what following your purpose and how that works to getting success happen. At 12 years old, I was so blessed to be surrounded by very successful people, which really brings home the point that you're pretty much defined by the five people that you spend most of your time with.

0:35Jim Rohn gets the credit for that. David Meltzer, for those of you listening, he has an interesting take on failure. He says, I don't believe in failure anymore. He says, I believe in lessons. Building a real estate empire with private capital. That's what we're going to learn about. That's what Jay Kanna teaches. So Jay, your definition of success, How do you define it? Well, I can tell you what my definition of success is not. My definition of success is not getting involved in an opportunity or venture. And the only reason or main reason you're doing it is for the money. And I'll tell you why.

1:14I've been down that road. I've been down that road. Been around long enough to know that if I'm just getting involved in an opportunity for the money, I never get off square number one. So what is my definition of success? Here it is. My definition of success is being totally passionate and excited about what you're doing every day. And you're getting paid pretty well for it. And what goes along with that is being able to ask yourself, what am I doing that's really making a difference and giving an impact into other people's lives? because making all that money, setting your own schedule, the wealth, the freedom.

1:58Yeah, that's great. But the end of the day is, is what is your higher calling? What's your higher purpose? So success is defined by knowing what your higher purpose and calling is because after all, the money is a rule stick and not the end of the runway. Yeah. You know, most of our listeners are sort of trying to define a path to success and there's so many different paths. Where do you think, Jay, that definition started to become real for you? Because obviously as a young man, it was probably different to what it is today. Are you saying I'm not a young man anymore? I might be intimating that you and I got a couple of different colored hairs than we had when we were a few years back.

2:42I started, I didn't start. I mean, it was abundantly clear as to when I was really in the mode of success and enjoying success. And that's, I mean, I've been investing in real estate full time since 2003. And that was primarily transactional from 2003 until 2011. And I've always had a calling of sharing with other people how I do what I do, being a teacher. And so when I started coaching other real estate investors in March of 2011, that's when I realized that this is my calling. This is what I really need to be doing because I discovered I was able to make such a huge impact on so many more people all across North America, to tell you the truth.

3:37So it's when I began teaching and coaching that I really knew that this is what I needed to be doing. Yeah. Where do you think, buddy, you chose success in your life as a young boy, a young man? Like where did success become your like standard of operation? I guess in that same period of time. Now, I've always had a big drive. I was raised by my father, Wallace Conner. He's going to be 91 in a couple of months, and he's in the midst of a 350-house subdivision development that he's building. When I grow up, I want to be like him at 91 years old. I think we all want to be Wallace at some stage. Yes.

4:19But he at one time had one of the largest, not one of, he had the largest retailing operation of manufactured homes, mobile homes in the nation. And so huge drive. It's like, so my dad put me to work in the summer when I was 12 years old, calling people on the telephone. We actually still have telephones here in North Carolina with a cords attached to them. But some people don't even know what that is. But anyway, I was actually calling people, verifying income verifications and getting landlord references at 12 years old before my voice even changed. I used to hate it when they say, yes, ma 'am, I get that information for you.

5:00but I start at 12 years old I was so blessed to be surrounded by very successful people which really brings home the point uh which all of us have heard here probably on the show that you're pretty much defined by the five people that you spend most of your time with Jim Rohn gets the credit for that so I have I just sort of grew up feeling uh successful I mean I went to Wake Forest University way back, and my goal was to become the drum major of the marching band at Wake Forest University, and I did, sophomore, junior, and senior year, and so pretty much because of my people that I was surrounded with when I was growing up, which, again, there's the lesson, be very, very cognizant as to who you're spending your time, and I tell you, I really had a mind shift.

5:52I'm glad you asked this question. I had a change of mind when I was 24 years old. This really changed my trajectory. I went into the restaurant business right out of college, not my business. I was working for a corporation, a chain of restaurants. And I ended up living and being in a very, very dark space. Dark space. Well, what was making it dark. Well, I'll tell you what was making it dark, alcohol, drugs, no real purpose, the kind of friends that I was hanging around. And you know, I woke up one day when I was 24 years old and I said, you know, Jay, there's got to be a lot easier and better way than you're going about this thing called life.

6:39So for the first time ever, Brad, I found myself in the bookstore in the self-improvement section, and I'm looking at books, and I came across this book that changed my life. The name of the book was, and it's still in print today, the name of the book is University of Success by Og Mandino, and in that book, University of Success by Og Mandino, he had many many many contributing authors and he called it university of success because it was like divided down the chapters were semesters if you will um and lessons and i devoured that book i still have that book on my bookshelf at the end of my sofa right now i mean the the ears are torn it's highlighted i mean it's underlined and the book made so much sense to me i started embracing that book.

7:36And it was released back in, I want to say 1982, 1983, along in there. And so you had all these authors, these success authors, the positive mindset authors that were contributing to it. And it literally just put me on a different path. And from the time I was 24 years old, I have been a book junkie on autobiographies, self-improvement books, et cetera. And so what I started reading had the biggest impact. Yeah. Yeah. You don't have to hang out with the five people. You can read from the five people. You can listen to the five people. You can go on Jay's podcast, my podcast. You can go anywhere and be with five people more often than you can be with the people you actually live with if you do it the right way.

8:23Buddy, how does success happen? What's your formula now after doing this for this long? What's the Jay Conner version of how success happens? Know while you're getting up in the morning. I mean, don't, don't, I mean, be very intentional. I mean, it's, it's the goal setting. I still set goals. I still write them down. I still review my goals. And so that definition of success is being able to measure. Well, first of all, do you even know where you're trying to get to? Do you, do you even know where you're trying to go? Do you know what you're trying to get better at? So that's what I do today is, and I review and retool my goals every four months, every four months.

9:12I know it's important to be thinking down the road 12 months. It's important to be thinking down the road five years. But you know, quite frankly, if somebody asked me, Jay, where do you see yourself in five years? I wouldn't have a clue. I don't know where I'm going to be in five years. Here's why I don't. I have no idea what other and new opportunities are going to come along that may shift my direction and shift my trajectory. So, um, four months, I take four months at a time. In fact, I've got a friend, fellow podcaster. Uh, you probably heard of him, Ryan Pineda, Ryan Pineda. In fact, I had Ryan on my podcast a few months ago.

9:52And did you know, he doesn't make any appointments in his calendar past 30 days. 30 days. Because he doesn't know what other and better opportunities are going to come along after 30 days from now. I like that theory. So if, I mean, we don't all succeed on the first try. What's your theory on the relationship between success and failure? Well, that's a great question because success does not exist. Well, let me choose a different between success. I mean, technically speaking, a definition of success is you achieved a goal, right? Whatever that goal was, you achieved it, right? And so what's the relationship between success and failure?

10:42You probably have heard of David Meltzer. Probably heard of David Meltzer. David's been on my podcast. There you go, huh? Yep. I've had David on my podcast. He just, he's a podcast junkie out, David. yes well i'll tell you david melzer for those of you listening m-e-l-t-z-e-r he's worth following uh he has he has an interesting take on failure um or mistakes he says i don't believe in failure he did it one time he said but i don't believe in failure or mistakes anymore he says i believe in lessons i believe in lessons so when you don't succeed as you had started out to then what can you learn from not succeeding the way that you had planned on it nothing is nothing is all lost if you learn from it unfortunately that's a problem with some people and a challenge they just keep doing the same thing over and over and over again expecting a different result well um there's a there's a book and you can help me think of it brad really really short book it's It's only got five chapters.

11:50It's written by a lady and it's a, there was a pothole. There was a hole in the street and she kept, she kept falling in the hole and she's going and I'm paraphrasing wonder where I was wrong. I mean, who put that pothole there? Right. And, and then as, as the story progresses, she takes ownership for falling in the hole. Well, so then the next chapter, she's walking around the hole. She's at least walking around the hole. But then she still has a problem. She still keeps falling into hole. So she finally had a revelation when she said, I walked down a different street. I walked down a different street.

12:30And you know, to get back on your road to success, sometimes you just need to stop walking down the same road and walk down a different street. Now, how does that parable get interpreted? Well, walking down a different street, Could first of all mean the street over there has got a different crowd of people on it than the crowd of people on this street, right? The street over there could have more opportunities on it than this street, right? So in answer to your question, another association between failure and success is how much resilience do you have as a person? because I'll tell you, you're never going to marry success for a very, very long time unless you are resilient.

13:23Because let me tell you, it never goes as you planned. It never goes as you planned. I can't think of anything that I achieved that it went exactly as I thought it was going to go. And so I use this technique called the observer, the observer. So when something happens to me in my life and I'm going, oh my, that's like, that's looking and feeling pretty bad. Step back and just observe what's happened and just sort of observe what's going on. And you can step back from it and have solutions come to mind. When I used to work with my dad in the manufactured housing business, we'd have a problem in business.

14:04We'd be meeting with people in the afternoon and he'd say, boys, this problem is too big for this afternoon. Let's look at this again tomorrow because you can have a totally different perspective and then i'll finally answer this most recent question this way because this is so important uh i've learned a lot from jack canfield jack canfield was the co-author of the chicken soup for the soul series with mark victor hansen had the pleasure of being around jack for three times and actually got certified as a Jack Canfield trainer about five years ago. But Jack has got his book, The Success Principles by Jack Canfield has got 69 success principles in his book.

14:48And his very first principle is foundational to all of success. And that is take 100 % responsibility for everything that happens in your life. You know, there's two different kinds of attitude. There's having a victim attitude, and then there's the victor attitude. And Jack, in that first chapter, where he talks about taking 100 % responsibility for everything that happens in your life, first of all, you can't make it better unless you're taking responsibility for it. If you're on the blame game and blaming everybody else for everything that's happening in your life, then you can't make it better.

15:30So he shares in his very first chapter of the book, this formula, and I love this formula. This formula will help you take responsibility, 100 % responsibility, and dictate the outcome that you experience in your life. And here's the formula. The formula is E plus R equals O. Now, unfortunately, most people walking around live by a different formula. Most people are walking around living by a formula called E equals O. Well, the E stands for event, the event that happened in your life. The O stands for the outcome that you are experiencing from that event. Well, again, if you've got a victim attitude or outlook, whatever happens in your life was not your fault, somebody else's fault, and that's going to determine how I live the rest of my life.

16:24I got a very, very good friend named David. His father died when he was seven years old, and everything that went wrong in his life, he attributed and blamed his father dying when he was seven years old. Well, he didn't do anything to attract that event in his life, but he allowed that event to determine what his life was going to look like. Well, when David learned this formula by Jack Ganfield, E plus R equals O. The R stands for your response to the event. You see, we get to choose how we want to respond to any event that takes place in our life, whether we brought it in or we didn't bring it in.

17:09So the event happens. Maybe you caused it, maybe you didn't. But when you have 100 % choice to respond to that event that happened in your life. Now that is going to determine the outcome. For example, I'm a real estate investor. The first six years I was investing in real estate, I used the local banks. That's all I knew to do. And then in February, 2009, I got cut off from the banks. I had nothing to do with that. So the event was I lost all my lines of credit. Well, I could have let that event determine my real estate investing career, and I could have put my tail between my legs and went home and crawled in a ball in a corner and cried and drank alcohol and hope that's going to help the event and my outcome.

17:56or I could respond to that event by looking for a better way. You know, one of the most powerful questions when failure comes along or a problem comes along is I ask myself this question, who can help me with my problem? And by the way, these people walking around saying every problem is an opportunity. I want to throw up. I mean, when you got a problem, you got a problem. Let's face it. You got a problem, right? Don't call it an opportunity. It's a problem. And so I asked myself, and this is like for relationships, finances, career, no matter. And there's a great book that you know as well, Brad.

18:35It's not who, it's how. I mean, it's not how, it's who. I'll get it straight in a minute. And so that's a great book, Not How, But Who. So anyway, excuse my rambling, but that's what came to mind. You know, you bring up the real estate investing. You kicked that off back in 2003, and then 2009, you had to learn the world of private money. We'll get to that in a second. Firstly, why real estate investing, Jay? Why real estate? Well, real estate, if someone's interested in wealth, then most of the wealth in the world has been created by real estate. That's just a fact. and I don't know, you know, the way I, the way I invest in real estate, I don't know any other industry that you can be in when you learn how to do it the right way that has got so little overhead with the amount of profit that you can be making on your deals.

19:36For example, and what I'm getting ready to share, I'm not sharing because I'm bragging, It's just fact. So for example, I only have three W-2 employees. I started out for years. I had no W-2 employees, but I've only got three. I've got a full-time office manager and bookkeeper. I got a full-time assistant. I got a full-time acquisitionist that works from our home that talks to single family sellers, off-market sellers. And so that's my overhead and then my marketing to find deals. Well, my average profit right now in this small town that I'm in, in Eastern North Carolina is$82 ,000 per single family transaction.

20:17I just, I just made$160 ,000 in five weeks on a condominium over at Atlantic beach. And so why, again, I'm not bragging. I'm just answering the question. I don't know where you can make this kind of profit in other businesses with Solo Overhead. Well, hey there, and thanks for listening. I've noticed that 78 % of you are brand new, which means you haven't hit the subscribe button yet. By subscribing, you help us bring on even better guests, better quality content, and serve you better with even more podcasts. So please hit that subscribe button. It only takes a second. It makes a huge difference.

20:54If you support us, we're going to support your success and help you achieve big success together. Now, I want to, first of all, when we come to getting private money, deal with the psychology of this. Most people have a psychology, I got to do it on my own. You know, I got to work hard. I got to hustle and grind. I got to do it on my own, bootstrap it. And I know as a young man, I almost wore it as a badge of honor, how hard I worked and how much I had to do and how I did it all by myself sort of thing. When it takes to raising capital, what's the psychology shift or what's the way we got to shift so that we're excited about using other people's money, not scared of it or worried about it or thinking it's the wrong way to go?

21:41Yeah, I'm glad you asked that question because this world of private money is 180 degrees different than the traditional way to borrow money. You know, the traditional way that 99.9 % people think about borrowing money is you got to go to the local bank or the hard money lender, institutional money, get on your hands and knees, put your hands underneath your chin and plead and beg and raise up your skirt and show them your personal assets and get a colonoscopy and everything else they want you to do. That's the traditional way of borrowing money. The traditional way of thinking is the lender makes the rules.

22:25The lender sets the interest rate. The lender does the underwriting. The lender sets the maximum loan to value. The lender sets the frequency of payments. So what I had to get my mind wrapped around, and I tell people it's going to be hard for you to own real estate using private money until you own the real estate between your ears. I say the first thing you got to understand is we're not asking for money. We're not asking for money. So how do we do this? And, you know, I've never pitched a deal. I got 47 private lenders right now. Not one of them had ever heard of private money until I put on my teacher hat, my teacher hat, my private money teacher hat, and I started teaching them what private money is.

23:12Not one of them had ever heard of private money or how they can use self-directed IRAs and their retirement accounts to earn tax-free or tax-deferred money. So how do we go about this? I tell new real estate investors, they say, Jay, how do I overcome the fear of rejection? Well, let me answer that question with a question. How can you be rejected if you're not asking anybody for anything? So let me unpack this to where it makes sense. so when i lost my line of credit i put my private money program together that i was going to offer and teach to individuals just regular people i know in my own connections is how they can earn high rates of returns safely and securely so first i would teach them the program you know the worst time to be trying to raise private money is when you need it for a deal for goodness sakes and desperation has got a smell to it.

24:12And if you're talking about, well, here's what private money is and how you can earn high rates of return. And here's a deal that I need funded. You're already sounding desperate and you're not even meaning to, right? So we separate the conversations of here's the private lending program, how you can be a lender yourself, either with investment capital and or retirement funds. here's how you can be a lender i don't have anything for you today but i should be able to put your money to work pretty quickly if you're interested in this and so we teach in the program what's the interest rate i pay eight percent how can get you how can you get your money back in case of an emergency um what's my maximum loan to value which by the way is maximum loan to value of after repair to value and not purchase price that's why i always bring them a big check when I buy.

25:03So we share the program and then they say, yeah, I like that. Right. Or if they've got retirement funds that they're not getting a good rate of return, we'll introduce them to our self-directed IRA company that we recommend. They move their funds over. So they've told us how much they got. They like the program. And there here is some secret sauce. I call them up with the good news phone call. So I say, Brad, let's say that you're one of my new private lenders. I call you up. We have a little chit chat. I say, Brad, I got great news. I can now put your money to work. I got a house in Newport, North Carolina here with an after repair value of$200 ,000.

25:43The funding required is 150 ,000. You told me that's what you got that matches up to you. And the closing is going to be next Thursday. So you'll need to have your funds wired to my real estate attorney's trust account by next Wednesday. I'm going to have my real estate attorney email you the wiring instructions. End of conversation. The most stupid question I could ask Brad is, do you want to fund the deal? Well, of course, Brad wants to fund the deal. And here's why. I'm not bringing him a deal to fund unless it matches the criteria of the program that I already taught him. And secondly, if Brad has moved his retirement funds over to a self-directed IRA company at my recommendation and my introduction, Brad's not making any money until I put his money to work.

26:30So again, it's not coming. You're not chasing, begging, selling, persuading. You're actually teaching, offering an opportunity, leading with a servant's heart. And what I discovered way back in 2009, the private lenders need us as much as we need the private lenders. It's a win-win-win. And really, truth be told, there's more money out there today than there are deals. No, that I 100 % agree with. That is a, it's like, let me go back into two things you said, though, first and foremost. When you're teaching, you're educating, you're giving people knowledge. I think that that's doing a service for people.

27:15It's not, you know, I think most people really want to know, and that's why I do this podcast, people want to know, how do I succeed at stuff like this? What got you to love teaching? What was it about teaching that brought you to there? I was raised in the Church of Christ here in Newport, North Carolina, and I grew up hearing some fantastic speakers, and I grew up hearing some horrible speakers. but I was exposed to this world of public speaking as a child so I was around three times a week people teaching and so then before my before my accent really changed I've got on cassette tape now I know some of your listeners don't have a clue what a cassette tape is but I still have on cassette tape, the 15-minute recording of me doing my very first talk on a Wednesday night.

28:14And the name of the talk was Why I Believe in God. I mean, I cringe whenever I've, I mean, it's like pretty entertaining right now. But why teaching? Well, I enjoy it. I grew up seeing it going on. And it's just a joy. I mean, it is a joy to see people benefit from what you're able to share with them. And I tell you, if you start talking about what self-directed IRAs are and how they can earn unlimited money, either tax-free or tax-deferred, tax-free for goodness sakes, you're sharing knowledge and information with 99.9 % of the people that never heard of that world. But when I set like my two eldest daughters, now 21, 22, when I set them in their own self-directed IRA and people are like, what do you mean?

29:05Yeah, well, they got their Roth IRA over here. That's doing that stuff, right? Just to do the basics for them for the rest of their lives. They'll be here. They got their self-directed IRA and they're learning to invest. They're becoming better investors. But I think it makes sense to work with great partners. Jay, I want to ask you one other thing, a little detail in one of the things you mentioned there. It's important for people to understand that you tell them this is what we're doing. It's not like the market's been up and down. Have you changed what you've offered during that time? Tell me more about that.

29:44So I started borrowing private money, teaching individuals how they could be a private lender. February 2009. I started out, I put my program together, paying 8%, either accruing and not making payments, depending on how long I was going to be in the deal, or if they needed monthly payments, paying them interest-only payments. And so here we are today. I'm still paying them 8%, the same thing. And people ask me, particularly in the market we're in, they say, Jay, how in the world, can you still be paying your private lenders 8 % and interest rates have gone out of sight? I said, well, there's two answers to that.

30:27Number one, you can go down to the bank today here in Moorhead City on Bridges Street at First Citizens Bank, and you can get a 12-month CD for somewhere around 4%, 4.5%. Well, 8 % is like twice as much as you can get at the bank, right? Now, Now, prior to COVID, that 12-month CD got down to 0.17 % per year. 8%, of course, was fantastic. But 8 % now is still twice as much as the local bank. And the other reason I'm still paying 8 % is because I make the rules and not the lender. Yeah, I think that's really important to understand. Hey, Jay, I could chat with you about this for hours. I know we got a time schedule.