In the latest episode of the Raising Private Money podcast, Jay Conner sits down with Tim Benskin, a former Marine and National Guardsman turned real estate investor, to delve into the world of raising private money for real estate.
Tim has successfully transformed his approach to property investments by leveraging private money—a strategy that offers an alternative to the lengthy and often frustrating process of traditional bank financing. For those looking to break into the real estate market or further their existing endeavors, Tim’s journey offers invaluable insights and actionable advice.
Raising Private Money: Tim Benskin’s Journey
Tim Benskin’s foray into real estate wasn’t without its challenges. Initially, he faced setbacks with traditional bank financing, which ultimately led him to explore alternative avenues. Through mentorship and strategic networking, Tim discovered the power of private money. Today, he has raised over $500,000 in private funds and is working on securing an additional $200,000.
Key Highlights:
- Tim’s first major deal was funded entirely by private money secured via personal relationships, including contacts from his church community.
- Use of promissory notes and mortgages recorded with the county to ensure security for lenders.
- Protecting lenders by naming them on the insurance policy for purchased properties.
The Mechanics of Securing Private Lending
Tim’s approach to securing private lending is both structured and transparent, focusing on ensuring the lender’s protection and trust. Here’s a breakdown of how he makes it work:
- Promissory Notes and Mortgages:
All loans acquired by Tim are secured via legally binding promissory notes and mortgages, which are recorded with the county. This ensures that all transactions are not only formalized but also provide legal protection to the lender.
- Insurance Policies:
Tim goes a step further by including lenders on the insurance policies of the properties he buys. This ensures that lenders enjoy the same protection as a traditional bank would.
- Attractive Interest Rates and Loan Terms:
He offers highly competitive interest rates of 8% on first-position loans and 10% on rehab money. This, coupled with interest-only payments and conservative loan-to-value ratios, makes his program irresistible to investors seeking safe yet profitable avenues for their money.
Success through Networking and Education
After retiring from the military, Tim plans to focus on networking and hosting luncheons to attract more private money for his real estate ventures. He emphasizes the importance of education, not just for oneself but also for potential lenders.
The Power of Mentorship:
Tim credits his mentors for helping him develop his strategies and gain the confidence to invite potential lenders to hear about private money. These mentors provided him with the roadmap to success, allowing him to bypass many of the common pitfalls novice investors face.
Case Study – 210 Skylark Drive:
One of Tim’s notable successes is the property at 210 Skylark Drive. Purchased for $110,000 with a minimal renovation cost of $17,000, this property had an after-repaired value of $360,000. Post-renovation, Tim was able to secure a gross profit of $50,000—an impressive feat made possible through private lending.
Educating and Empowering New Investors
Tim is passionate about sharing his knowledge and empowering others to succeed in real estate. He offers education on private funds and self-directed IRAs through luncheons and presentations, demonstrating how individuals can earn high rates of return safely and securely.
Live Events and Resources:
Moreover, Tim encourages new investors to attend live events hosted by Jay Conner. These events are designed to provide in-depth knowledge and a practical understanding of how to raise private money.
Tim’s Book:
For those who prefer self-study, Tim’s book, “Passive Income Without Tenants and Toilets,” serves as a comprehensive guide for becoming a private lender, outlining the nuances of private lending and offering advice on avoiding common mistakes.
Conclusion:
Tim Benskin’s story is a testament to the transformative power of private money in real estate investing. By focusing on relationships, education, and ethical practices, Tim has built a robust investment portfolio and continues to help others achieve similar success. Whether you’re a seasoned investor or just starting, the insights shared in this podcast episode are sure to inspire and guide you on your journey to financial freedom through real estate investing.
Stay tuned for the next episode, where we’ll dive deeper into the intricacies of using private money in real estate. Don’t forget to grab Tim’s book for more detailed guidance on becoming a successful private lender.
“It’s great to get out and teach people how they can invest money and not be in the stock market and not have to play that up and down trends or worry about the stock market going down at any time.” – Tim Benskin
10 Lessons Discussed in this Episode:
- Mentorship Importance
Find experienced mentors to guide you, provide plans, and build confidence for investment success.
- Private Lender Overview
Understand who private lenders are and how to approach individuals not familiar with private money concepts.
- Raising Funds Effectively
Learn strategies to attract private lenders through webinars, luncheons, and personal networking.
- Quick Closing Power
Discover the significance of closing deals rapidly to capitalize on urgent sales situations and avoid deal collapses.
- Security for Lenders
Ensure lender confidence by securing loans with promissory notes, recording mortgages, and naming them on insurance policies.
- High Returns Assurance
Offer competitive interest rates on first-position and rehab money to attract private lenders looking for stable returns.
- Self-directed IRA Education
Educate potential lenders about using self-directed IRAs to invest in real estate and gain tax advantages.
- Bank Financing Limitations
Recognize the constraints of traditional bank financing and how private money provides flexibility and efficiency.
- Leveraging Relationships
Utilize long-standing relationships to secure initial private lending, emphasizing trust and reliability.
- Community Impact
Highlight the positive local impact of investments funded by private lenders, thus encouraging their involvement.
Fun facts that were revealed in the episode:
- Tim Benskin has successfully raised over $500,000 in private money for his real estate investments and is currently working on securing an additional $200,000. This impressive feat highlights his effective networking and persuasive skills in the realm of private lending.
- Tim managed to buy and renovate a property on 210 Skylark Drive, which he purchased for $110,000 and, after minimal renovations costing around $17,000, brought in a gross profit of $50,000. This deal underscores the potential profitability of skilled real estate investing using private money.
- Interestingly, none of Tim’s private lenders had heard of private money or self-directed IRAs before he educated them. This indicates that there is a significant untapped market of potential lenders who are not yet aware of these lucrative investment opportunities.
Timestamps
00:01 – Raising Private Money Without Asking For It
06:06 – Investment program aids retirees and private lenders.
08:26 – Successful start attributed to invaluable mentorship and confidence.
12:15 – Conducts informative luncheons on investment strategies.
15:55 – Private lenders are long-time acquaintances from the warm market.
18:39 – Private lender receives bank-level protection for loans.
22:33 – “Calculating a gross profit of $50,000.”
24:38 – Transitioning from the army to focus on raising private money.
29:43 – Over 700 episodes in 6 years; subscribe.
30:15 – Jay Conner’s Free Money Guide – https://www.JayConner.com/MoneyGuide
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Jay Conner is a proven real estate investment leader. He maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal without using his money or credit.
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