***Guest Appearance
Credits to:
https://www.youtube.com/@realestaterunwaypodcast
“174: Private Lending Truths Exposed!!!”
https://www.youtube.com/watch?v=sttgmeGccWE
Navigating the world of real estate investing today is no easy feat, especially with bank lending restrictions, rising interest rates, and a fiercely competitive housing market. Yet, for seasoned investor Jay Conner, these challenges are nothing new—in fact, they were the very catalyst that led him to discover the game-changer in his business: private money.
Jay recently sat down with Chad Sutton on the Real Estate Runway podcast to share the hard-won wisdom he’s gained in over two decades of investing, flipping more than 500 homes, and weathering multiple economic cycles. For anyone hoping to level up their real estate game—whether you’re wanting to raise capital or are curious about lending your money to others—Jay’s experience provides a roadmap both practical and inspiring.
The Wake-Up Call That Changed Everything
Jay’s journey into private money began with a problem: after years of funding deals through a traditional bank line of credit, his banker cut him off without warning. Two pending deals worth over $100,000 in profit were suddenly at risk of collapse. Like many, Jay initially saw this as a disaster. But a phone call to a fellow investor opened his eyes to a new world. “Have you ever heard of private money?” his friend asked.
The concept was foreign at first. But quickly, Jay dove into learning about private lenders—individuals who invest their capital into real estate deals for a fixed return, often secured by a mortgage or deed of trust. Within 90 days, Jay successfully attracted over $2.1 million in private funding, and he’s never missed out on a deal due to a lack of capital.
Why Private Money Works—For Both Sides
One of the biggest benefits Jay points to with private money is control. As a borrower, you make the rules: you offer the interest rate, set the terms, and negotiate the structure. Since 2009, Jay has paid the same 8% rate to his lenders, regardless of market swings. “We dictate the market,” Jay says. “We’re not at its mercy.”
Private lending also appeals to those tired of stock market volatility and low bank returns. Jay’s program offers better yields, with the safety of backing loans with real estate and naming lenders on both the insurance and title policies. It’s not an unsecured loan—a key point for risk-averse investors.
How to Find Your Private Lenders
Jay breaks down three primary sources for private lenders:
- Your Warm Market: Start with people you already have a relationship with—friends, family, acquaintances, social networks, club members, and more. Retirees are especially good prospects, as they often have idle funds or IRAs seeking higher returns.
- Expanded Warm Market: Grow your network quickly by joining local community groups like Rotary or Business Network International (BNI). “There’s a direct correlation between your network and your net worth,” Jay notes.
- Existing Private Lenders: Seek out individuals already funding real estate deals. County records and self-directed IRA companies can be rich sources—over 70% of people with a self-directed IRA want to loan money on real estate, according to Jay.
Protecting Lenders—and Your Reputation
For those considering becoming private lenders, Jay’s top advice is simple: Invest in the operator, not just the deal. Know the real estate investor’s track record, ensure your loan is secured by a deed of trust or mortgage, and have every term in writing. Never wire money directly to the investor—always use a closing agent or attorney to protect both parties.
Building a Business That Lasts
In the end, Jay’s approach is built on trust, education, and serving others. He doesn’t see raising private money as selling, but as a process of teaching and creating win-win scenarios. His superpower, as he shared on the podcast, is resilience. When problems arise, ask: “Who can help me with this?” and “What’s the opportunity?”
For real estate investors and aspiring private lenders alike, Jay’s experience proves that with the right knowledge and mindset, accessing capital—and building lasting wealth—is within reach.
To dive deeper into Jay’s strategies, check out his book “Where to Get the Money” and his podcast “Raising Private Money.” You’ll find links and more resources in the Real Estate Runway podcast show notes.
10 Discussion Questions from this Episode:
- Jay Conner describes his journey from relying on banks to discovering private money. What circumstances pushed him to seek alternative funding, and how did this shift change his business trajectory?
- The episode emphasizes the “know, like, and trust” triangle for raising private money. Why is this approach essential, and how can investors intentionally cultivate these three components within their networks?
- Jay talks about “offering” rather than “asking” for money when creating deals with private lenders. How does this distinction affect the mindset and method of approaching potential lenders?
- Interest rates and deal structures are discussed as things the investor can “set the rules on.” How has Jay maintained consistency in the interest rates he offers lenders despite changes in the broader economic environment?
- The guests outline three primary sources for finding private lenders: warm market, expanded network, and existing private lenders. Which approach do you think might be most effective for a new investor, and why?
- There’s a discussion around using self-directed IRAs to lend private money. What are the advantages for both the investor and the lender in using these retirement accounts for real estate deals?
- Jay shares elements of protecting private lenders, like conservative loan-to-value ratios, insurance, and written agreements. Why is protecting your lender a key to long-term success and more funding opportunities?
- The podcast highlights lessons from past failures and the importance of planning for contingencies in real estate deals. What specific backup strategies did Jay recommend for flippers, and how do they mitigate risk?
- For passive investors interested in becoming private lenders, what due diligence steps does Jay recommend to ensure their investments are secure?
- Jay and Chad both discuss the broader purpose behind growing their businesses, including philanthropy and giving back. How does having a larger “why” beyond profit influence business decisions and sustainability in real estate investing?
Fun facts that were revealed in the episode:
- Jay Conner Raised Over $2 Million in Private Money in Just 90 Days
After losing his bank line of credit in 2009, Jay Conner quickly pivoted to raising private money from individuals. In less than three months, he was able to attract $2,150,000 from people within his network, without even having to “sell” the idea to anyone! - Corded Telephones Make a Cameo
During the episode, Jay jokes about using a corded telephone to talk with his banker in North Carolina, highlighting that even in the digital age, some old-school tools are still around—and make for great stories. - Jay and His Wife Have Flipped Over 500 Homes
Jay and Carol Joy Conner have been investing in real estate since 2003, and they’ve fixed, flipped, or invested in more than 500 single-family homes in eastern North Carolina alone—a testament to their experience and longevity in the real estate game.
Timestamps:
00:01 Challenges of Securing Large Investments
06:35 Troubles with Line of Credit
07:15 Mastering Real Estate with Private Funds
12:07 Negotiating With Private Lenders
16:45 Harnessing the Warm Market
20:01 Fast Network Growth: Get Involved
21:31 Private Lender Data and Opportunities
26:43 Private Lender Protection Strategies
30:47 Evaluating Real Estate Operators
32:01 Trustworthy Real Estate Investing Tips
37:36 Solution-Oriented Mindset Shift
38:22 Real Estate Investment Failure
42:55 Finding Purpose Beyond Profit
45:54 Real Estate Insight & Resources
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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