*** Guest Appearance
Credits to:
https://www.youtube.com/@TheBigPictureBlueprint
“Raising Private Money with Jay Conner”
https://www.youtube.com/watch?v=oYvFywuPL88
In the ever-evolving world of real estate investment, securing funding can often be the make-or-break factor for success. Between complex financing options and stringent lending requirements, many investors find themselves in search of alternatives that offer more flexibility and potential for profit. This blog post delves into the insightful discussion between Jay Conner, Dan Haberkost, and Mason McDonald revealing the significant advantages of utilizing private money over traditional hard money lenders. Follow along as we explore the strategies to effectively raise private money, the benefits it provides, and how you can leverage these insights to maximize your real estate deals.
What is Private Money?
Private money involves raising capital from individual investors rather than institutions or traditional lenders. Jay Conner, a seasoned real estate investor, explains that he has successfully secured private money for his deals since 2009, paying his private lenders an annual percentage rate (APR) of 8%. Unlike traditional lenders, private money lenders offer more flexible terms and often provide 100% of the purchase price and rehab money, based on the property’s after-repaired value.
Why Choose Private Money Over Hard Money?
**No Hidden Costs:**
Private money comes without the extra-associated costs that are common with hard money lenders. This includes origination fees, extension fees, junk fees, or appraisal costs.
**Flexibility in Terms:**
Private lenders typically do not require strict credit score checks, making it easier for investors to secure the necessary funds.
**Lower Interest Rates:**
While hard money lenders may charge interest rates upward of 15%, private money has a more appealing 8% rate. These savings can significantly impact the overall profitability of a real estate deal.
**Faster Access to Funds:**
Jay emphasizes the importance of having quick and straightforward access to capital, allowing investors to seize opportunities promptly. Private lenders can often expedite the funding process compared to traditional banks.
How to Secure Private Money
**Building Relationships:**
One of the pivotal strategies Jay Conner highlights is the importance of personal relationships. He suggests targeting your existing network—church members, rotary club peers, and business network groups—educating them about private lending and self-directed IRAs.
**Transparency and Trust:**
Proving your performance to new private lenders is crucial. Jay suggests using their funds first to demonstrate successful deal execution, thereby building trust and credibility.
**Leveraging Personal Networks:**
Jay shares an anecdote about a conversation at church that led to onboarding retired school teachers as private lenders. It’s a reminder to capitalize on the potential within your immediate circle, where you might find people looking to invest their funds more effectively.
Raising Private Money Strategically
**The 7-Day Private Money Challenge:**
Jay underscores the importance of structured learning and highlights the 7-Day Private Money Challenge—a master class designed to teach realistic methods to raise $500,000 in private money. This training is interactive, easy to follow, and helps investors understand the nuances of securing private funding.
**Quantifying Your Needs:**
Being clear about how much private money you require for your deals is essential. Jay outlines an exercise to determine your “freedom number,” which is the amount needed to cover expenses and achieve your desired lifestyle. It’s crucial to plan and fund each deal adequately, ensuring you can comfortably meet your investment goals.
Best Practices in Raising Private Money
**Marketing and Social Media:**
Utilizing various marketing channels like podcasts, books, and social media can amplify your reach. Jay suggests sharing success stories and being open to talking about money on these platforms, which can attract potential private lenders.
**Understanding Legalities:**
When raising private funds, it’s essential to use appropriate legal language and be aware of SEC regulations, ensuring all interactions and agreements are compliant to avoid legal complications.
**Scalability:**
Finally, Jay encourages investors to think big but start small. Begin with raising smaller amounts and progressively aim for more significant sums as you build confidence and experience in managing private money.
Conclusion
Private money presents a robust alternative for real estate investors seeking flexible and profitable financing options. By fostering personal relationships, being transparent with potential lenders, and utilizing strategic marketing, you can effectively raise and manage private funds for your real estate ventures. As Jay Conner emphasizes, knowing how to secure funding before embarking on a deal is crucial—ensuring that the money always comes first. Embrace these insights, and you’ll be well on your way to unlocking the full potential of private money in your real estate investment journey.
10 Lessons Discussed this Episode:
- Raising Private Money
Learn strategies for leveraging private money to significantly boost profits on real estate deals. This includes understanding the crucial concept that securing funds is the first step in successful investments.
- Money Chasing You
Discover how to attract investors so they actively seek you out, eliminating the need to beg, persuade, or sell. Jay Conner shares actionable tips on making money chase you.
- Introduction and Setup
Introduction to the episode featuring hosts Dan Haberkost and Mason McDonald, and guest Jay Conner. The setup emphasizes the importance and insights on raising private money for real estate investment.
- Private vs. Hard Money
Detailed comparison between private money lenders and hard money lenders, discussing key differences in terms, fees, interest rates, and credit score requirements.
- Understanding APR Rates
Insight into Jay Conner’s rationale for maintaining an 8% APR for private lenders since 2009, and how this fixed rate benefits both lenders and borrowers.
- No Credit Score Requirement
Understand the advantage of private money lenders not needing credit scores for loans, contrasting this with the stringent requirements of hard money lenders.
- Zero Extra Fees
Explanation of how private money lending eliminates extra costs like origination, extension, and appraisal fees, thereby increasing net earnings and making deals more attractive.
- Secured Private Money
Importance of securing private money through promissory notes backed by deeds of trust or mortgages, especially for single-family home deals, to ensure investor confidence.
- Performance Proof
Strategies for building trust with new private lenders by proving performance through transparent deal deployment timelines and initial successful ventures.
- Seven-Day Masterclass
Overview of Jay Conner’s 7-day private money challenge, a master class designed to help real estate investors realistically raise $500,000 in private money for their deals. Jay discusses the interactive, consumable nature of the training sessions.
Fun facts that were revealed in the episode:
- Jay Conner has never asked anyone for money:
Since starting his journey with private money in 2009, he has always had lenders chase him rather than him seeking them out.
- Jay Conner’s Queue System:
Jay operates a queue system for his 47 private lenders, ensuring that new lenders get their money deployed first to build trust and prove performance.
- Flexible Fund Usage:
Jay sometimes uses new private lender funds to pay off existing lenders, demonstrating the quick deployment of capital and securing the confidence of new investors.
Timestamps:
00:01 Private lenders build strong, high-integrity relationships.
06:25 Using private money to secure real estate.
08:33 Distinguishing private and hard money lenders, benefits.
13:58 Money access and differences impact property purchases.
15:22 Borrow based on repaired value for profit.
18:39 Securing the promissory note is essential.
23:03 Teaching exercise to calculate financial freedom goals.
25:04 Questioning advice to secure funding for deals.
27:56 Model involves land flipping with quick turnarounds.
33:49 Require $50,000 profit, project, plan accordingly.
34:53 Calculate private money needed for anticipated deals.
39:53 Private money discovery through personal connections and sharing.
42:26 Real estate deals may surprise some investors.
47:59 Teaching real estate investors to raise capital.
49:32 Successful investment: finding non-sophisticated wealthy investors.
53:17 Exercise caution in sharing financial information online.
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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