Investing Smarter: Creating Investor Trust and Diversification in Private Funds with Merriah Harkins
The world of real estate investing continues to evolve, especially when it comes to capital raising and private money. Industry veterans like Merriah Harkins are at the forefront of these changes, demonstrating that successful wealth generation is not just about finding the right deals but strategically building trust and strong capital relationships.
In a recent conversation hosted by Jay Conner on “Raising Private Money,” Merriah Harkins, a senior sales executive at Lukrom, shared her experience and perspective acquired over two decades in the field.
Navigating an Evolving Investment Landscape
When Merriah Harkins began her career, the investment environment was less cluttered. Investors had fewer choices, which made decision-making more straightforward. Fast forward to today, and the private money landscape has transformed dramatically. Investors now encounter a plethora of options, which can make due diligence daunting and diversification essential.
For those seeking passive opportunities in real estate, the proliferation of funds and firms means greater risk and reward. Merriah Harkins emphasizes the importance of finding trustworthy companies and spreading investments across different products and asset classes to mitigate potential losses and maximize gains.
Lukrom’s Approach in the Marketplace
Lukrom, based in Phoenix, specializes in private credit funds and lends to real estate investors and businesses aiming to acquire, improve, or develop properties. The company’s niche is short-term loans, ranging from six to twelve months, primarily for residential improvement or quick acquisitions with a goal of resale or refinancing. For real estate investors, this means fast access to capital without the delays common with traditional banks.
On the fund side, Merriah Harkins leads the effort in raising capital for Lukrom. The firm accepts accredited investors from across the nation—those meeting specified income or net-worth thresholds. These investors receive monthly cash flow payouts between 8 and 9 percent, a structure designed to provide both consistent returns and strong protections, such as first lien positions on underlying properties.
The Shift from Marketing to Relationship Building
Lukrom initially sourced capital through friends, family, and social media outreach, but found this approach unsustainable for long-term growth. Upon joining, Merriah Harkins redirected efforts toward building relationships with broker-dealers, registered investment advisors, and family offices. The strategy focuses not on pitching or hyping the investment, but on education, extensive due diligence, and integrity.
For high-net-worth and institutional investors looking to diversify their portfolios, Merriah Harkins stresses the importance of understanding a fund’s track record, the sponsor’s experience, and the structural protections in place. Lukrom, for instance, is structured conservatively, targeting high-growth markets and maintaining strict loan-to-value ratios. The executive and advisory team also invests in the fund, placing their capital at risk ahead of clients—a powerful gesture of confidence and alignment.
Mitigating Risks in Private Investments
Every investment carries risk. Merriah Harkins encourages investors to carefully consider liquidity constraints, the sponsor’s history, and the ability of the fund to fully deploy capital. Lukrom’s practice of thoroughly vetting borrowers and maintaining diversity in loans helps protect against concentration risk and defaults. Short-term, first-position loans in high-growth markets tend to be more resilient, reducing investors’ exposure to downturns.
A Blueprint for Investors and Advisors
For those considering real estate funds or seeking private money for projects, Merriah Harkins advises prioritizing education and clarity. If sponsors aren’t willing to spend time explaining risks and protections, it’s a red flag. Building authentic relationships with investment advisors and sponsors lays a much stronger foundation for long-term wealth than chasing the latest trends or highest yields.
The conversation with Merriah Harkins offers several key takeaways for anyone interested in private capital: focus on trust, transparency, and credibility; work with sponsors who invest alongside their clients; and always conduct detailed due diligence. For both passive investors seeking alternatives and active developers in need of quick capital, these principles are essential in reimagining—and realizing—wealth generation through private money in today’s dynamic market.
10 Discussion Questions from this Episode:
- Jay Conner opens the episode, challenging the traditional idea that raising private money is about pitching deals. What does it mean to focus instead on trust, positioning, and playing the long game?
- Merriah Harkins mentions an explosion of investment choices compared to early in her career. How do these expanded options affect investor decision-making and due diligence today?
- The conversation explores Lukrom’s focus on short-term real estate loans in the Phoenix market. What are the main advantages and risks of specializing in this niche?
- Why does Merriah Harkins believe social media is not an effective channel for raising private capital for professional funds? Would you agree or disagree?
- Relationship-building is a recurring theme. How do long-term relationships with investment advisors and broker-dealers contribute to successful capital raising?
- The episode highlights Lukrom’s due diligence process and emphasis on educating investors. In your opinion, how important is education in building trust and attracting capital?
- Merriah Harkins discusses the importance of being in a first lien position to protect investors. How does this structure differ from other types of investment security, and why is it significant?
- The fund offers monthly payments to investors, which Jay Conner views as “out of the ordinary.” What impact might this payment structure have on attracting investors?
- Lukrom’s team puts its own capital at risk through a first-loss commitment. How does this affect investor perceptions of risk and the credibility of the fund?
- At the end of the episode, Jay Conner emphasizes that “capital responds to clarity, credibility, trust, confidence, and consistency.” Which of these qualities do you think is hardest to establish in the world of private lending, and why?
Fun facts that were revealed in the episode:
- Merriah Harkins and the Lukrom executive team have invested their own money into the fund, taking the first loss position to add an extra layer of protection and confidence for investors.
- Lukrom specializes in providing short-term, first-position loans (typically six to twelve months) primarily in the Phoenix real estate market, with a focus on residential investment projects.
- Before joining Lukrom, Merriah Harkins found that marketing through social media like Facebook and Instagram was not effective for raising capital from sophisticated investors, so she shifted the strategy to focus on building long-term relationships with broker-dealers, registered investment advisors, and family offices.
Timestamps:
00:01 Navigating Private Investment Choices
05:08 Short-Term Real Estate Loans
09:57 Building Trust for Investor Funds
11:22 Passive Real Estate Investment Strategy
18:07 Liquidity and Investment Strategy Insights
19:36 High Loan Demand vs. Funding
24:04 Short-Term Real Estate Business Loans
28:55 Investment Education and Diversification Strategy
30:35 Connect with Merriah Harkins:
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
YouTube Channel
https://www.youtube.com/c/RealEstateInvestingWithJayConner
Apple Podcasts:
Facebook:
https://www.facebook.com/jay.conner.marketing
Listen to Our Podcast:
Comments