***Guest Appearance
Credits to:
https://www.youtube.com/@mymenrichard
“Private Money Lending with Jay Conner”
https://www.youtube.com/watch?v=hTl7M1X3qb4
When it comes to scaling a real estate investing business, one of the biggest challenges investors face is sourcing reliable funding. Traditional routes—think bank loans and institutional finance—often come with red tape, long waits, and restrictive requirements. In a recent Raising Private Money podcast with Richard Lesperance and Jay Conner, they cracked open the secrets of raising private money—a game-changing alternative for investors looking to close more deals, faster and with greater flexibility.
What is Private Money?
Put simply, private money refers to funding provided by individual investors rather than banks or hard money lenders. Jay highlights a key distinction: while hard money lenders act as intermediaries between investors and funds, private lenders are direct, one-on-one relationships. These individuals use their liquid capital or retirement accounts (often through self-directed IRAs) to passively invest in real estate, earning a healthy return while the borrower benefits from quick, customizable funding.
Jay’s Journey from Banks to Private Money
Jay shares his own story: after years of relying on banks, his line of credit was suddenly cut off during the 2008 financial crisis, leaving him scrambling. This “problem” forced him to look for solutions outside the conventional system. A friend introduced him to the concept of private money, and within 90 days, Jay raised over $2 million in new funding—without ever asking for money directly.
The secret? Jay adopted the role of a teacher. Instead of pitching or selling, he educated potential lenders about how private money works and the advantages it offered. This educational approach attracted 47 private lenders (and counting), many of whom had never heard of private lending or realized their retirement accounts could be used in this way.
Where to Find Private Lenders
Jay breaks it down into three main categories:
- Your Warm Market: Friends, family, colleagues, and contacts in your phone and social networks.
- Expanded Network: Connections made through networking, real estate events, and referrals.
- Existing Private Lenders: Individuals already lending to other investors, often found at self-directed IRA company networking events.
According to Jay, over 70% of self-directed IRA holders are interested in loaning money to real estate investors, making these events rich ground for connection.
Advantages of Using Private Money
The benefits, as Jay enthusiastically outlines, are many:
- Control: The borrower sets the terms—interest rate, payment frequency, and loan-to-value ratio.
- Speed: With no bank bureaucracy, deals can close in as little as seven days—a major advantage in a competitive market.
- No Application Hassles: No credit score checks or drawn-out approval processes.
- Unlimited Potential: Unlike banks, there’s no cap on how much private money you can access or how many deals you fund.
- Attractive Returns for Lenders: Lenders earn solid, secured returns (often much better than a local bank), creating a true win-win.
Is it Safe?
Investor and lender protection is paramount. Jay describes several safeguards:
- Funds are wired directly to the attorney or title company’s escrow account, never to the investor personally.
- Each loan is secured by a mortgage or deed of trust, never unsecured.
- A conservative loan-to-value (typically 75% of after-repair value) ensures a cushion for market fluctuations.
- Lenders are listed on insurance and title policies as additional insured or mortgagee, ensuring their interests are always protected.
Who Should Learn Private Money Strategies?
Jay’s advice is directed at real estate investors seeking a competitive edge—whether they’re flipping single-family homes or syndicating multifamily projects. He offers a “Private Money Challenge”—a free video series designed to demystify this funding strategy for anyone ready to move beyond traditional financing streams.
Conclusion
Jay Conner’s approach demonstrates how teaching, rather than selling, can open doors to powerful funding relationships. Private money offers flexibility, speed, and control, helping both investors and lenders grow wealth more safely and smartly.
10 Discussion Questions from this Episode:
- Jay Conner shared a pivotal moment when he lost his line of credit overnight. How do you think that experience shaped his approach to real estate investing and funding?
- What are the core differences between private money, hard money, and institutional lending as described by Jay?
- Jay emphasizes the importance of “teaching” others about private money rather than “asking” for money. What are the advantages of this approach for both parties involved?
- According to Jay, there are three categories for finding private lenders. Can you discuss the pros and cons of each category?
- The episode outlines several benefits to using private money, such as faster closings and controlling the terms. What specific advantage stands out to you, and why?
- Jay also touches on disadvantages or challenges in private lending, such as maintaining communication with lenders. What strategies would you suggest for managing these relationships effectively?
- Safety and security for both the lender and the borrower were discussed. How does involving a real estate attorney and various legal protections mitigate risks in private money deals?
- In his experience, Jay notes that negotiation over loan terms is rare when educating new private lenders, but more common with seasoned lenders. Why do you think that is, and how might it impact deal structure?
- Jay contrasts single-family investment deals with multifamily syndications in terms of structure and legal requirements. What are the implications for investors seeking to scale into larger projects?
- Reflecting on Jay’s “private money challenge” and other educational resources, how important is self-education in navigating alternative real estate financing, and what steps would you take to get started?
Fun facts that were revealed in the episode:
- Jay Conner Raised Over $2 Million in 90 Days Without Asking for Money!
After his bank unexpectedly closed his line of credit, Jay learned about private money and was able to attract over $2,150,000 in funding in less than three months, simply by teaching others about the opportunity instead of asking for loans directly. - Most of Jay’s 47 Private Lenders Had Never Heard of Private Money Lending or Self-Directed IRAs.
All 47 of Jay’s active private lenders weren’t familiar with these concepts before he introduced them, proving just how untapped and eager this source of funding can be once people are educated about it. - There’s No Limit to How Much Private Money an Investor Can Raise!
Unlike traditional bank loans, which cap how much you can borrow, with private money lending, Jay explains there’s essentially no ceiling to the amount you can raise, as long as you keep building relationships and finding great deals.
Timestamps:
00:01 Funding Challenges Amid Financial Crisis
03:37 Private Money Real Estate Funding
08:58 Private Money Benefits in Real Estate
11:19 Private Lending Communication Challenges
14:58 North Carolina Loan Security Measures
18:50 Real Estate Syndication Explained
21:36 Discovering Private Money Lending
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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.
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