*** Guest Appearance
Credits to:
https://www.youtube.com/@hanneshennche/podcasts
“How To Raise Private Money For Real Estate Deals With Jay Conner”
https://www.youtube.com/watch?v=EGQAOQF6rlM
In the recent episode of the Raising Private Money podcast, Jay Conner joins Hannes Hennche in an engaging and compelling discussion about raising private money for your real estate deal without ever asking for money.
Renowned as the Private Money Authority, Jay has been an influential mentor, guiding over 2,000 real estate investors in raising private money since 2011. This episode offers a comprehensive deep dive into private money frameworks, providing essential guidance for those aspiring to break free from traditional banking dependencies.
The 2009 Financial Crisis: A Pivotal Moment
Jay Conner’s journey into private money investing was spurred by the financial crisis of 2009. Until that point, his investment strategy heavily relied on local banks for funding single-family houses. The sudden cessation of his line of credit by the bank during the global financial crisis left Jay in a dire predicament, with properties under contract and no fiscal avenues to proceed.
This crisis prompted a crucial self-reflection, leading Jay to a mentor who introduced him to the concept of private money and self-directed IRAs, forever changing the trajectory of his investment approach.
Leveraging Networks for Private Money
Equipped with newfound knowledge, Jay successfully raised over $2,150,000 within a span of 90 days by tapping into his existing network. His sources included acquaintances from his church and members of his Rotary Club. Jay’s experience underscores the importance of personal connections and networking in the realm of private money lending.
For individuals who may not have an established network, Jay advocates for rapid network expansion. According to him, there is a direct and unassailable correlation between the breadth of one’s network and their net worth. He equips newcomers with strategies to build and nurture these relationships effectively.
Educating Over Selling: The Servant’s Heart Approach
A cornerstone of Jay’s methodology is the principle of leading with a servant’s heart. He emphasizes educating potential lenders rather than aggressively pitching investment opportunities. This educational approach fosters trust and counters any impression of desperation, which can be detrimental to securing funding.
Desperation, as Jay notes, carries a distinct and off-putting odor. In contrast, a calm, informative stance invites collaboration and mutual growth, making potential lenders more amenable to funding opportunities.
Ensuring Lender Security and Confidence
In his discourse, Jay underscored the paramount importance of protecting private lenders. Transparency and security are integral to his approach, providing assurances such as collateral, insurance, and an equity cushion. This not only fortifies lender confidence but also builds long-term, trust-based relationships.
Additionally, Jay’s approach includes offering an 8% interest rate devoid of points or origination fees. This consistent and fair treatment of lenders further cements his credibility and reliability in the marketplace.
The Strategic Role of Self-Directed IRAs
A significant portion of Jay’s lenders use retirement funds through self-directed IRAs. This strategy enables greater flexibility and tax advantages for both investors and lenders. Many potential lenders are unaware of such opportunities until they are informed by knowledgeable mentors like Jay.
Collaboration with reputable self-directed IRA companies that adopt transactional fee structures rather than account balance fees is pivotal. This ensures that fees are only incurred when funds are actively invested, not when they are idle, further enhancing lender satisfaction and participation.
Conclusion and Resources
The episode concludes with a reference to Jay Conner’s book, "Where to Get the Money Now" which serves as a valuable resource for those looking to navigate the intricacies of raising private money independent of hard money lenders. The book, which can be acquired on Amazon for $20 or obtained for free by covering shipping costs at https://www.JayConner.com/Book, provides detailed guidance and practical insights.
Hannes Hennche aptly encapsulates the essence of the discussion, acknowledging the manifold benefits and comprehensive knowledge shared by Jay. This episode stands as a vital resource for real estate investors seeking to enhance their funding strategies and secure their financial future.
10 Lessons Covered in this Episode:
- Lead with a Servant’s Heart
Focus on educating your network with valuable information rather than selling, persuading, or chasing after funds. Desperation can repel potential lenders.
- The Power of Private Money
Jay emphasizes private money as a critical component for real estate investment success. This alternative funding source has had a greater impact on his business than any other strategy.
- Financial Crisis as a Catalyst
In 2009, Jay’s line of credit was abruptly closed by the bank. This experience pushed him to explore private money, transforming a problem into a profound opportunity.
- Rapid Money Raising
Jay successfully raised $2,150,000 in less than 90 days by leveraging his existing network. He didn’t directly ask for money or pitch specific deals; instead, he educated his contacts.
- Cultivate Your Network
Your network is directly tied to your net worth. Jay advises actively growing connections through community involvement, such as church groups and rotary clubs, to broaden funding opportunities.
- Teach Before You Pitch
Separate the act of teaching potential lenders from pitching deals. Initial conversations should focus on educating them about high returns from private money investments without discussing specific deals.
- Good News Phone Call Script
When you have a deal, call your potential lenders with excitement. Inform them that you can now put their money to work, specifying deal details and providing wiring instructions without seeking their decision.
- Join Networking Groups
Business Networking International (BNI) is a potent resource. Jay has raised millions by being an active BNI member, which fosters a culture of mutual support and lead-sharing among members.
- Mindset and Confidence
Acknowledge and overcome fear and rejection. Maintain a positive, confident demeanor to attract funding and build trust with potential lenders.
- Educate on Self-Directed IRAs
Introduce potential lenders to the concept of self-directed IRAs. These accounts enable individuals to invest retirement funds in real estate. More than half of Jay’s 47 private lenders utilize self-directed IRAs, underscoring the importance of educating your network about this tool.
Fun facts that were revealed in the episode:
- The Bank Crisis:
Jay Conner faced a financial crisis in 2009 when his reliable bank suddenly shut down his line of credit without notice due to a global financial crisis, despite his excellent credit history.
- Rapid Fundraising:
Despite the financial setback, Jay Conner managed to raise $2,150,000 in private money within just 90 days, drawing from his personal network, including friends from church and the Rotary Club, without directly asking for money.
- Unique Approach:
Jay emphasizes the importance of leading with a servant’s heart in private money lending, focusing on educating and not appearing desperate, which he believes is crucial for successfully raising funds.
Timestamps:
00:01 – Raising Private Money Without Asking For It
06:01 – Teaching people to earn high returns safely.
07:05 – Educate, not sell, leading with a servant’s heart.
11:50 – Overcome fear and attract private money investors.
14:33 – Teaching program to new private lenders protection.
17:42 – Consistently offering 8% with no fees.
20:58 – Promissory note includes 90-day call option.
25:11 – Let experts handle IRA company introductions.
28:21 – “Where to Get the Money Now” – https://www.JayConner.com/Book
Private Money Academy Conference:
Free Report:
https://www.jayconner.com/MoneyReport
Join the Private Money Academy:
https://www.JayConner.com/trial/
Have you read Jay’s new book: Where to Get The Money Now?
It is available FREE (all you pay is the shipping and handling) at
https://www.JayConner.com/Book
What is Private Money? Real Estate Investing with Jay Conner
https://www.JayConner.com/MoneyPodcast
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.
What is Real Estate Investing? Live Private Money Academy Conference
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