***Guest Appearance
Credits to:
https://www.youtube.com/@KeshavKolur-CliveCapital
“EP. 32 – Fire Your Banker Alternatives to Bank Funds and Hard Money with Jay Conner”
https://www.youtube.com/watch?v=b_VOlONeAtw
If you’re a real estate investor—whether just starting out or already seasoned—chances are you’ve wrestled with raising capital. Traditional bank loans and hard money lenders might seem like your primary options, but as Jay Conner shares in his recent conversation with Keshav Kolur and John Lai, there’s a powerful alternative many overlook: private money.
In this candid and insightful episode, Jay draws from over 23 years of real estate investing experience, breaking down exactly how he’s leveraged private money to transform his business.
What Is Private Money—and Why Does It Matter?
First things first, Jay clarifies: private money means raising funds directly from individuals (private lenders), not banks or hard money lenders. These lenders are real people—perhaps folks from your network—who are willing and able to loan money from their capital or retirement funds in exchange for an attractive, secured return.
Jay started his journey relying on local banks, only to have his “funding rug pulled out” during the 2009 financial crisis. That abrupt shift forced him to get creative. That’s when he discovered that teaching people about private money—and offering them a safe, secure way to invest—could open doors not just for him, but for the lenders as well.
He emphasizes, “I’ve never missed out on a deal for not having the money,” and has built relationships with 47 private lenders, raising millions without ever begging, selling, or convincing anyone. The key? Education.
Three Keys to Finding Private Lenders
According to Jay, there are three categories where you can source private lenders:
- Your Warm Market: These are people you already know—friends, family, colleagues, folks at your church or local Rotary club, even your golf buddies.
- Your Expanded Network: Go where money-minded people congregate. Jay highlights organizations like Business Networking International (BNI) for the rapid expansion of your connections and credibility.
- Existing Private Lenders: These are individuals already lending money to real estate investors. While you can comb public records or lean on software solutions for contact info, networking events (especially at self-directed IRA custodians) are goldmines.
How the Process Works
Instead of racing to find funds when a deal appears, Jay builds relationships ahead of time. Private lenders don’t hand him checks directly—instead, their funds are wired to a closing attorney or title company, and each transaction is secured by a mortgage or deed of trust, protecting the lender.
Transparency and structure are crucial. Every deal is “one off,” and the lender’s investment is tied to a specific property. The typical return? Jay pays 8% interest, with no points or equity sharing, making it extremely appealing compared to traditional savings vehicles, even in times of rising rates.
Best Practices and Pitfalls
Jay’s philosophy is clear: “The money comes first.” Don’t fall for the myth that “if you find the deal, the money will show up.” Instead, secure your capital ahead of time so you can act confidently when opportunities arise.
He urges investors to build credibility and relationships. A “credibility kit” isn’t a substitute for integrity and real results. Your network—as Jay puts it—is directly linked to your net worth.
For private lenders, due diligence is important, but Jay’s approach is to work with people he knows, trusts, and has educated on the process. He also points out that most of his lenders had never considered private money investing—or using self-directed IRAs for it—until he showed them how.
Lessons Learned
Jay is candid about his past mistakes: investing in a property without positive cash flow from rental income if he couldn’t sell, for example. His advice? Always make sure a deal is sound, as both a flip and a potential rental.
Final Thoughts
Jay’s journey is a blueprint for anyone looking to unlock the power of private money in real estate. His story shows that by focusing on relationships, education, and win-win structures, you not only build your business but also empower everyday people to grow their wealth safely. If you want to learn more, check out Jay’s “Private Money Challenge” or his “Raising Private Money” podcast for in-depth training and inspiration.
If you’d like to go deeper, visit www.PrivateMoneyChallenge.com or www.JayConner.com for Jay’s resources and connect with a thriving community of real estate investors leveraging private money for generational wealth.
10 Discussion Questions from this Episode:
- Jay Conner describes private money as his most influential strategy for real estate investing over 23 years. What unique advantages does he see in private money compared to traditional bank loans or hard money lending?
- Jay mentions that he has never asked anyone for money—he acts as an educator instead. How might the approach of teaching versus directly soliciting funds impact building trust and long-term relationships with potential lenders?
- The episode explores the three main sources of private lenders: your existing network, expanding your network, and identifying existing private lenders. Which of these avenues do you think would be most effective for a new investor, and why?
- Jay explains his process of securing funds directly through private lenders by backing every note with real estate. How does this security structure contribute to the appeal of lending for individuals outside of institutional finance?
- With interest rates on traditional investments fluctuating, Jay continues to pay private lenders 8%. Why do you think his lenders are satisfied with this fixed rate, and what does this say about their investment goals and risk tolerance?
- Jay mentions the importance of nurturing one’s network, stating that there’s a direct correlation between your network and your net worth. What practical steps can investors take to authentically grow and maintain this kind of network?
- The episode distinguishes between hard money and private money. What are the key differences discussed, and in what scenarios might an investor realistically consider one over the other?
- Jay shares some best practices and “gotchas” for both private lenders and real estate operators. What are the main risks he highlights, and how can both parties protect themselves when structuring deals?
- He points out that most of his private lenders had never heard of private money or self-directed IRAs before. What strategies did Jay use to educate and onboard these individuals, and how important is financial literacy in this field?
- Reflecting on his biggest failure, Jay emphasizes the necessity of planning exit strategies, including potential rental income. Why is it important for investors to ensure properties can cash flow as rentals, even when planning to flip, and how might this lesson apply to other investment choices?
Fun facts that were revealed in the episode:
- Jay Conner Has Never Missed Out on a Deal Due to a Lack of Money
After being cut off from traditional bank funding during the 2009 financial crisis, Jay switched to private money and hasn’t looked back. He now has 47 private lenders backing his deals and has raised millions, without ever asking, chasing, or begging for money!
- Private Money Lenders Can Be Anyone—Even Minors!
Jay has worked with a wide variety of private lenders, from retired teachers and entrepreneurs to even minors under 18 years old (with inherited money). His go-to tip for finding new lenders: check your cell phone contacts for anyone retired—they may have untapped funds perfect for investing.
- Jay Pays All His Private Lenders the Same Rate—So He Doesn’t Have to Keep Track!
All of Jay’s private lenders receive the same 8% interest rate. Why? Not only does it keep things simple, but as Jay jokingly puts it, “I don’t have to remember who I paid what—private lenders talk!”
Timestamps:
00:01 Pros of Investing in Small Markets
03:28 Birth of Private Money Funding
08:31 Leveraging Local Networks for Business
12:04 Single-Family vs. Commercial Property Investments
16:01 Private Lender Protection Measures
18:27 Prioritize Financial Prep Before Deals
20:27 Guide to Starting as a Private Lender
24:51 Maximizing Profits in Real Estate
29:59 Tax Implications of Investment Capital
33:04 Private Lender Note Exchange
37:08 Diverse Private Lender Profiles
39:20 Join the Private Money Challenge:
https://www.PrivateMoneyChallenge.com
42:47 Creative Real Estate Financing Strategies
45:35 Explore Alternatives to Banking
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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