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Real Estate Financing Demystified: Differences Between Hard Money and Private Money Explained

Private money in real estate isn’t just a financial tool; it’s a gateway to unparalleled flexibility, control, and success. In this episode of Raising Private Money, hosts Jay Conner and Frank Iglesias deep-dive into the sonic depths of private lending. Whether you’re a seasoned real estate investor or a curious newcomer, understanding how to master private money can be the game-changer you need. 

The Benefits and Responsibilities of Private Money

Greater Freedom and Control

One of the resounding themes discussed by Frank Iglesias is the level of control private money offers. As opposed to institutional or hard money lenders, private money allows investors more leeway in terms of flexibility, enabling a smoother, often faster transaction. However, with this level of freedom comes the onus of responsibility. Due diligence is crucial, as missteps can lead to substantial liabilities.

Jay Conner’s 7-Day Private Money Challenge

An Accelerated Path to Funding

Jay Conner takes the opportunity to introduce the audience to his latest initiative—the 7-Day Private Money Challenge. This program is geared towards real estate investors who wish to quickly and effectively raise private money. This rapid-paced challenge aims to equip participants with the tools and techniques needed to secure funds without conventional hurdles.

Networking: The Heartbeat of Fundraising

Building Trust Beyond Transactions

Frank Iglesias sheds light on his preferred methods for raising private money—networking and relationship-building. Far beyond mere business interactions, successful fundraising often stems from establishing genuine relationships. Whether it’s joining social circles like church groups or gym communities, places where mutual trust already exists, turning these relationships into financial partnerships can be far more effective.

 

Risk Management and Lender Expectations

Keeping Risk in Check

Mitigating risk when using private money is a vital focus for Frank. He underlines the necessity of assessing the risk tolerance of lenders meticulously. Evaluating deals conservatively and always seeking third-party opinions are strategies that can prevent potential pitfalls. This approach not only safeguards the investment but also builds trust with lenders, providing a safety net for all parties involved.

Hard Money vs. Private Money Lending

Understanding the Nuances

While hard money and private money are sometimes used interchangeably, Jay and Frank take the time to explain their distinctions. Hard money lenders run a more institutionalized operation, often advancing between 65-90% of a property’s purchase price. Private money lenders, on the other hand, offer 100% financing, providing borrowers with greater latitude. Understanding these nuances is crucial for any investor looking to optimize their funding strategy.

Frank Iglesias’ Journey From Hard Money to Private Money

A Breakthrough in Investment Strategy

Both Jay and Frank share personal anecdotes about their transitions from relying on hard money to embracing private money. Frank recounts the tipping point that made him pivot to private lending—realizing it was a cheaper, quicker, and streamlined alternative. This transition marked the beginning of significant breakthroughs in his real estate endeavors, offering unprecedented control and success.

Final Words of Wisdom: Tips and Pitfalls

The Do’s and Don’ts of Raising Private Money

To cap off an enlightening episode, Jay asks Frank to offer some final pieces of advice for the audience. Frank’s advice is straightforward yet invaluable. Always revisit your existing network to uncover potential opportunities. Avoid convincing yourself that a deal is flawless without getting a third-party opinion. Conservative assessment and a fresh perspective can be your best defenses against potential setbacks.

10 Lessons Covered in this Episode:

  1. The Power of Private Money

Responsibilities and benefits of using private money in real estate deals. Emphasizes due diligence and a conservative approach.

  1. Real Estate Investor’s Toolbox

Introduction to Jay Conner’s 7-Day Private Money Challenge for quick private money-raising strategies for real estate investors.

  1. Building Relationships

Effectiveness of networking and relationship-building in raising private money. Focuses on deeper connections beyond business.

  1. Finding Lenders in Familiar Places

Private lenders are often found in places where trust is established, like churches or gyms. Leveraging existing trust for investment.

  1. Assessing Risk Tolerance

Crucial to understanding private lenders’ risk tolerance. Importance of conservative deal assessments and seeking third-party opinions.

  1. Raising vs. Hard Money

Distinguishing between hard money and private money lending in real estate. Understanding different terms and conditions.

  1. Control and Flexibility

Private money lenders can provide 100% financing, offering the borrower more control and flexibility in real estate transactions.

  1. Everyday Investors

Private money lenders are often everyday people, not just accredited investors. They seek simple and lucrative real estate investments.

  1. The Trigger for Change

Experiencing pivotal moments that drive real estate investors to transition from hard money to private money for better flexibility.

  1. Networking Within Reach

Revisiting existing network, including contacts in your phone, to discover opportunities and potential private money lenders.

Fun facts that were revealed in the episode:

  1. Breakthrough with Private Money:

One of the most exciting revelations was that Frank Iglesias experienced significant breakthroughs in his real estate endeavors after transitioning to using private money. This shift provided him with unparalleled control and flexibility, which he didn’t have with hard money lenders.

  1. Favorite Networking Method:

Frank revealed that his favorite and most effective method for raising private money is through networking and nurturing personal relationships. He emphasizes that in real estate, it’s all about the people you know rather than just the transactions or deals.

  1. Jay’s Private Money Challenge:

Another intriguing tidbit is Jay Conner’s promotion of his 7-Day Private Money Challenge designed for real estate investors aiming to raise private money quickly. This challenge offers participants actionable strategies to secure private funding efficiently.

Timestamps:

00:01 – Raising Private Money Without Asking For It

05:15 – Real estate investors finding trigger, seeking private money.

07:53 – Accepting lower interest rate for hard money.

12:44 – Real estate entrepreneurs use private money advantageously.

13:36 – Private lending revolutionizes the real estate financing process.

18:58 – Quickly raise private money with a 7-day challenge.

21:17 – Find private money that you frequent consistently.

23:37 – Consider the worst case, assess risk tolerance, real estate.

27:07 – Your business is your people.

28:24 – Connect with Frank Iglesias: https://www.FrankIglesias.com   

30:16 – Jay Conner’s Free Money Guide: https://www.JayConner.com/MoneyGuide







Private Money Academy Conference:

https://www.JaysLiveEvent.com

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

https://youtu.be/QyeBbDOF4wo

YouTube Channel

https://www.youtube.com/c/RealEstateInvestingWithJayConner

Apple Podcasts:

https://podcasts.apple.com/us/podcast/private-money-academy-real-estate-investing-with-jay/id1377723034

Facebook:

https://www.facebook.com/jay.conner.marketing

Twitter:

https://twitter.com/JayConner01


Pinterest:

https://www.pinterest.com/JConner_PrivateMoneyAuthority


Listen to our Podcast:

https://www.buzzsprout.com/2025961/episodes/15395536-real-estate-financing-demystified-differences-between-hard-money-and-private-money-explained

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