Raising Private Money with Jay Conner

In the latest episode of Raising Private Money, Jay Conner dives into the inspiring story of Jonathan and Cara Broyles, a dynamic duo in the world of real estate investment. From starting their journey in 2021 to closing high-value deals, Jonathan and Cara have shown the power of strategic planning, persistence, and the importance of nurturing relationships with private lenders. This episode highlights their recent property acquisition and the lessons they learned along the way.

Securing the Deal: 143 Royalty Drive

Jonathan and Cara's most recent endeavor revolves around a property located at 143 Royalty Drive. The property, after undergoing necessary repairs and renovations, boasts an impressive After Repair Value (ARV) of $550,000. However, reaching this point was no small feat.

Assessing the Property:

The house, previously occupied by an owner and 80 Siberian husky dogs, was in dire need of cosmetic repairs. Recognizing the potential in the property, Jonathan and Cara estimated a generous $100,000 for the rehab, including a contingency fund for unexpected expenses—a strategy they call "Murphy," named after Murphy's Law that suggests if something can go wrong, it likely will.

Negotiating Purchase Price:

Initially listed by a wholesaler for $367,000, Jonathan and Cara knew their maximum allowable offer based on their rehab estimates would be $310,000. Despite the significant gap between their offer and the asking price, they stuck to their numbers, a testament to their disciplined approach to real estate investment. The wholesaler initially countered with $330,000, but eventually, Jonathan and Cara's persistence paid off—their $310,000 offer was accepted.

Lesson Learned:

• Stick to your evaluated numbers and don't let emotions sway your decisions. By adhering to their calculations, Jonathan and Cara secured the property at a price that allowed for a profitable investment.

The Power of Private Lending

A vital piece of Jonathan and Cara's strategy involves leveraging private lenders to fund their property acquisitions and renovations. This approach minimizes the need for traditional loans, accelerates the buying process, and often provides more favorable terms.

Expanding Their Network:

For the 143 Royalty Drive property, Jonathan and Cara initially anticipated using $250,000 from a new private lender. However, this transaction took an exciting turn—the lender expressed interest in funding the entire deal, boosting his investment to $410,000. This unexpected increase emphasized a crucial point in private lending: private lenders often have more funds available than they initially disclose.

Key Point:

• Always present opportunities to your private lenders confidently. They may have more capital ready to deploy once they see a promising investment.

Interest Rates and Returns:

For this particular deal, the private lender agreed to an 8% interest rate on the $410,000 loan. Over the projected six-month rehabilitation period, this translates to approximately $16,000 in interest—a reasonable return for the lender while still allowing Jonathan and Cara to achieve their target profit margins.

Working with Realtors: A Smart Investment

Another pillar of Jonathan and Cara's strategy is their partnership with a reliable realtor. Although paying realtor fees can seem daunting—30,000 in this case on a $550,000 sale—the benefits far outweigh the costs.

Benefits of a Professional Realtor:

• Realtors handle the legwork, both pre-and post-renovation, helping to price the property appropriately and sell it quickly.
• They ensure the property reaches a wide audience, increasing the chances of a top-dollar sale.

Advice to Investors: