***Guest Appearance
Credits to:
https://www.youtube.com/@BolaAlabi
“How to Build a 7-Figure Real Estate Business with Less Than 10 Hours a Week”
https://www.youtube.com/watch?v=KlHGPU8cB0Q
The real estate world is a sphere of endless opportunities, yet financing often stands as the primary barrier for both new and seasoned investors. While traditional bank loans have long been the go-to option, they come with their fair share of hurdles and red tape. Enter private money—a game-changing concept that’s revolutionizing how deals are funded and executed.
In a recent enlightening episode on the Raisig Private Money podcast, Jay Conner joins Bola Alabi on The Career Evangelist Podcast and shares his invaluable insights on harnessing the potential of private money to transform the way you invest in real estate.
Why Consider Private Money?
Jay Conner’s journey into private money began from a place of necessity when his bank unexpectedly cut off his line of credit. Finding himself in a predicament with two deals under contract and no funding, Conner asked a crucial question: “Who do you know that can help you with your problem?” This led him to discover private money through a fellow investor, Jeff Blankenship. Unlike traditional loans that often require personal guarantees and creaking through endless bank procedures, private money is sourced from individuals looking to invest their capital or retirement funds in real estate for attractive returns.
The beauty of private money lies in its flexibility and accessibility. Whether you aim to purchase single-family homes, commercial buildings, or apartments, the structure remains consistent. The process is less about convincing hard money lenders and more about creating mutually beneficial relationships with people eager to see their money grow.
The Role of Education and Relationship Building
Jay emphasizes the importance of educating potential lenders and establishing trust as fundamental to raising private money. His approach involves putting on his “teacher hat” rather than pitching deals out of desperation. By clearly explaining the investment opportunity, the security of their funds, and the expected returns, Jay reframes private lending from a transactional agreement to an educational and collaborative partnership. This helps in fostering long-term relationships where lenders are comfortable and eager to participate in future projects.
To illustrate, Jay has developed a network of 47 private lenders, none of whom knew about private money until he explained it. His ability to attract constant investment is rooted in being transparent and providing sound knowledge about private lending, ensuring that both sides of the table feel informed and secure.
Strategies for Success
One of the standout strategies Jay shared on the podcast is the benefit of having funds ready before contracting a deal. This involves separating the conversations about lending opportunities and specific deals, thus allowing investors to feel prepared and confident when entering negotiations. Unlike the conventional wisdom that suggests getting a deal and hoping for the funds to materialize, Jay insists on the contrary—having a financial plan beforehand empowers investors to act swiftly and assuredly.
Moreover, he suggests structuring deals with flexibility in mind, such as offering interest-only payments, allowing lenders to earn consistently without reducing your cash flow during the holding period. This pragmatic approach to investor relations underscores Jay’s philosophy of leading with a servant’s heart and adds an appealing layer of security for lenders.
Conclusion
Jay Conner’s journey and expertise underscore a vital pivot away from conventional financing methods to a more people-centered, knowledge-driven approach through private money. His insights offer a powerful blueprint for investors seeking to expand and enhance their real estate ventures effectively.
By putting education at the forefront and focusing on building genuine relationships, investors are not only able to secure funds with greater ease but also enrich their network, paving the way for sustained success. If you’re aspiring to break free from the constraints of traditional loans and embrace a more dynamic financial landscape, integrating private money into your real estate strategy could be the transformative step you’ve been waiting for.
10 Discussion Questions from this Episode:
- What are some of the key benefits Jay Conner mentions about using private money for real estate investment compared to traditional bank financing?
- How did Jay Conner’s approach to financing change after his line of credit was unexpectedly shut down by his bank?
- What role does a self-directed IRA play in raising private money for real estate investments, according to Jay Conner?
- Jay mentions the importance of “separating the conversations” when discussing private money opportunities. What does he mean by that, and why is it important?
- In your opinion, why is asking the question “Who do you know that can help you with your problem?” a powerful tool in problem-solving, as explained by Jay?
- Jay emphasizes the necessity of having the right mindset before starting to raise private money. What mindset shifts does he suggest for new investors?
- How does Jay Conner differentiate between private money lending and hard money lending, and what are the pros and cons of each?
- Why does Jay recommend having private money lined up before finding a real estate deal, and how does this influence an investor’s confidence?
- What strategies does Jay use to find off-market real estate deals, and how do those strategies contribute to his business success?
- Discuss how the concept of “substitution of collateral” works and its benefits in private money lending, as explained by Jay.
Fun facts that were revealed in the episode:
- Role Play to Fund a Deal: Jay Conner shared a fun and enlightening role play scenario on how he talks to private lenders to get his real estate deals funded without directly asking for money. This approach emphasizes education and relationship-building rather than traditional hard sales tactics.
- Creative Funding Strategy: Jay was able to close a significant real estate deal in just seven days, thanks to his private money lending strategy. This speed and efficiency illustrate how leveraging relationships with private lenders can offer flexibility not typically found with traditional bank funding.
- Impressive Profit Margins: One of Jay’s recent deals involved purchasing a condominium for $425,000, investing $11,000 in renovations, and selling it for $618,000, leading to a net profit of $161,000. This example highlights his ability to find and capitalize on lucrative investment opportunities.
Timestamps:
00:01 Private Capital in Real Estate Investing
03:11 Confronting Financial Crisis: Crucial Inquiry
06:34 Initiating a Private Money Program
10:14 Investment Program with 8% Returns
13:26 Profitable Real Estate Investment Strategy
17:45 Real Estate Collateral Practices
21:29 Interest-Only Loan Advantages
24:54 Effective Pay Per Lead Model
26:36 Dominating Smaller Markets
31:35 Express Delivery: Book and Event
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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