My guest today is Jay Conner from Moorhead City, North Carolina. A big, kind shark in a small pond, he works in small-town real estate investments. Today we talk about raising “small money,  ‘mom-and-pop’ style money” for real estate deals.

0:30  — Introduce Jay Conner to the show

0:53 — Moorhead City, North Carolina

1:41 — Small city with private funds “Mom and pop money for real estate deals”

2:05 — Why “mom-and-pop money” is great for businesses who need investments

4:17 — Giving Jay Connor credit for his amazing accomplishment

5:11 — How do you go from $0.00 to $2 million in 90 days?

5:37 — Develop a program to offer people

6:18 — “Warm market”

6:57 — Jay’s program

8:34 — Why Jay’s program is perfect for “soft money” lenders

9:09 — How do you bridge the trust between you and a “soft money” lender?

9:40 — “Positioning”

12:15 — Focus on the program

13:46 — The bottom line answer

14:18 — How does a brand new real estate investor do this program?

15:20 — Recap of Jay’s answer

15:28 — One of the best ways-these days-to deliver a message and why

17:13 — The three types of partners

18:07 — How to break through on your warm leads

18:51 — How to host a successful private lender luncheon

19:15 — Who do you invite to a private lender luncheon

20:37 — How to have credibility at private luncheons

21:21 — The good ol’ traditional way to build investor trust in small towns

23:14 — Jay’s free online class

24:00 — Thank you, Jay!

24:16 — Thank you for listening to the Big Mike Fund Podcast

RESOURCES:

Tempo Management Group LLC: https://tempofunding.com/

Jay’s Free Online Class: https://www.jayconner.com/training/wtgtmn-webinar-rev2/

“‘Mom-and-pop money is very favorable to you as a project sponsor, as an operator, as a fix-and-flipper, because it’s generally friendly. It’s soft money.” — Mike Zlotnick

“Recorded video in today’s day and age is one of the best ways to deliver a message.” — Mike Zlotnick

“What is it that is going to make them feel good about doing business [with you]?” — Jay Conner

“Education works better than trying to sell them.” — Mike Zlotnick

Today, I offer you a presentation about risk-adjusted returns. Listeners have been asking me, “how do I calculate my risk-adjusted return?” Well, I will do my best to answer that question and cover how variables like investment quadrants, market conditions, and sponsors affect the calculation.

00:00 — Introduction to the Big Mike Fund Podcast.

00:22 — Welcome to the show.

00:58 — How to calculate risk-adjusted returns.

01:43 — A little bit about me.

02:44 — How to learn more about my business and contact me.

03:33 — Why do we care about risk adjustment returns?

05:26 — A project must fit your portfolio.

06:32 — Understanding and identifying speculative investments.

07:30 — The pros and cons of the 4 investment quadrants.

08:57 — Quadrant one — cash flow focus.

10:05 — Quadrant two — growth focus.

10:56 — Quadrant three — Speculative grade projects.

11:30 — Quadrant four — ground-up projects.

12:00 — All projects have risk, remember that.

12:33 — The types of risk you can expect.

13:28 — How do you compute risk-adjusted return?

14:17 — The risk-versus-reward side of the capital stack.

14:53 — The pros and cons of Senior Debt.

15:43 — What are Junior Debt and preferred equity?

16:09 — The joint venture equity and common equity option.

16:48 — How do you compute loss reserves?

19:15 — Why market conditions are important.

20:37 — The stress test you can use to help your calculation.

24:39 — My opinion about losses in a normal market.

28:37 — Loss reserves for investment grade projects versus speculative projects.

30:01 — The risk level of Speculative grade projects.

31:18 — ROI expectations regarding investment quadrants.

34:22 — Cash flow expectations regarding the investment quadrants.

37:16 — What is a quality cash flow syndication or a similar fund focused on the cash flow?

41:00 — The role of a good sponsor.

42:45 — Should you invest in individual deals or funds?

45:05 — Thank you for joining me for today’s episode.

45:42 — Outro to the Big Mike Fund Podcast.

RESOURCES

The Big Mike Fund

Real Estate Investment Fund: How to Choose a SMART Real Estate Investing Fund: Top 10 Biggest Mistakes To Avoid Before Investing Into a Real Estate Fund (Private Money, REITs, Equity, Structure, Tax)