In a recent episode of the Raising Private Money podcast, Jay Conner, known as the Private Money Authority, hosted an inspiring session with Willie and Haruna Oyola. This husband and wife duo have successfully raised over $1,100,000 in private money for their real estate ventures, bypassing traditional banking routes. The conversation delved deep into their journey, their strategies, particularly buying properties subject to existing notes, and how they effectively leveraged private money to expand their portfolio.
The Traditional Route vs. Private Money
Willie and Haruna began their real estate journey in 2015 using conventional banking loans. These loans required substantial down payments and came with the stringent limitations set by banks. Eventually, they reached a point where the traditional method capped their growth potential. Discovering the world of private money through Jay Conner’s podcast was a game-changer. Private lending offered flexibility and scalability, drastically different from the restrictive terms of traditional banks.
The Journey to Raising Private Money
The Oyalas first educated themselves through Jay Conner’s resources and soon attended a live Private Money Conference. This pivotal shift allowed them to break through significant barriers in raising private funds. Haruna played a crucial role by encouraging Willie to fully commit to the process. For newcomers interested in private money, the advice is straightforward: seek education and mentorship, as these can accelerate learning and execution in the field.
How to Start: Networking and the Elevator Pitch
A crucial piece of advice shared by Willie and Haruna is the importance of networking and having a refined elevator pitch. An elevator pitch is a concise, compelling introduction to what you do, designed to spark interest in brief interactions. They emphasized the need to create a succinct pitch and leverage networking opportunities to share your goals and attract investors. This initial step is vital for anyone looking to raise private money.
Understanding Subject-To Deals
One of the strategies that Willie and Haruna have effectively combined with private money is purchasing properties ‘subject to’ the existing mortgage. This method allows investors to acquire properties without needing to secure new financing. It is particularly attractive when dealing with distressed sellers, as it provides a viable solution for them while offering favorable terms for the buyer.
A Case Study: Maximizing Profit with Subject-To and Private Money
The Oyalas shared a compelling case study to illustrate the effectiveness of combining private money with subject-to-deals. They acquired a property with a high market value and a much lower existing mortgage at an advantageous interest rate. They supplemented this with private money to cover the seller’s arrears, make necessary repairs, and provide the seller with some additional funds.
This strategic use of private funds not only alleviated the seller’s distress but also positioned Willie and Haruna to rent out the property by the room, targeting military personnel and contractors in their area. This approach ensures substantial positive cash flow, demonstrating the potential for high returns in similar deals.
Conclusion: The Win-Win-Win Scenario
In the world of real estate investing, combining private money and subject-to-deals presents a powerful avenue for growth and profitability. By educating people about private money and providing secure investment opportunities, Willie and Haruna created a win-win situation for all parties involved — the sellers, the private lenders, and themselves.
For those eager to dive into real estate investing or to scale their existing operations, educating oneself, networking effectively, and leveraging innovative financing strategies could be the key to unprecedented success.
By exploring these strategies and gleaning insights from seasoned investors like Willie and Haruna, you can unlock the potential of private money to transform and elevate your real estate business.
10 Discussion Questions from this Episode:
- Understanding Motivation: What initially motivated Willie and Haruna to pivot from traditional bank financing to seeking private money for their real estate deals?
- Challenges with Traditional Financing: Willie mentions that banks limit your ability to grow. What specific limitations did Willie and Haruna face when using institutional lenders?
- Advantages of Private Money: What are some of the major benefits of using private money over traditional bank loans, according to Willie and Haruna?
- Community Service Impact: How do Willie and Haruna describe how raising private money allows them to serve their community?
- Educational Approach: Why does Willie emphasize the importance of being a “private money teacher,” and how does this educational approach benefit their business?
- Subject-to Strategy: Describe the “subject to” strategy as explained by Willie. Why might a property owner agree to sell their property using this strategy?
- Deal Dissection: In the specific deal discussed, what were the terms of the existing mortgage Willie and Haruna took over, and how did they finance the additional costs?
- Exit Strategies: What exit strategies do Willie and Haruna consider for their real estate deals, particularly the one with the six-bedroom house?
- Investor Relations: What reasons do Willie and Haruna provide for why their private lenders love working with them? How do these elements contribute to building trust and securing more capital?
- Getting Started: Willie and Haruna offer advice for those new to raising private money. What actionable steps do they suggest for beginners to start attracting and raising capital?
Fun facts that were revealed in the episode:
- Willie Oyola is a United States Marine Corps veteran, showcasing his dedication and service to the country.
- Willie and Haruna Oyola specialize in property investments based out of the Emerald Coast of Florida. They have been actively investing since 2015 and have grown their portfolio to include over 8 single-family houses, duplexes, and several development projects in Central Florida.
- They adeptly combined the strategy of buying a property “subject to” the existing mortgage with raising private money. This creative financing approach allowed them to acquire a property with a significant amount of equity and the opportunity for substantial cash flow, demonstrating their innovative and strategic investment skills.
Timestamps
00:01 Raising Private Money Without Asking For It
05:01 Conventional Real Estate Investment Path
08:06 Private Money Conference Overview
10:31 Private vs. Institutional Lending
14:21 “Private Money Teacher” T-Shirt Explained
19:13 Motivation Behind Distressed Property Sale
21:05 Distressed Property Sale Analysis
24:05 Secure Loan-to-Value Strategy
27:11 Rent-by-Room Strategy for Profit
31:46 Self-Directed IRA Investment Advice
32:46 Connect with Willie and Haruna Oyola: https://www.instagram.com/willieoyola/
34:12 Jay’s Free Money Guide: https://www.JayConner.com/MoneyGuide
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What is Private Money? Real Estate Investing with Jay Conner
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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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