***Guest Appearance
Credits to:
https://www.youtube.com/@calebdavid807
“Why You’ll Always Be Broke Using Bank Financing”
https://www.youtube.com/watch?v=PWdvSFwBrC8
If you’ve ever found yourself excited about a promising real estate deal, only to hit a brick wall when it comes to funding, you’re not alone. On this episode of the Raising Private Money Podcast, Caleb David sits down with renowned real estate investor and Private Money Authority Jay Conner to demystify the world of private lending and share actionable strategies for investors who want to break free from traditional financing limits.
The Breaking Point: Why Private Money?
For many, the journey into private money doesn’t begin with curiosity—it starts with necessity. Jay Conner recounts his own tipping point, when his trusted bank suddenly closed his line of credit without warning. Six years into his investing career and faced with two lucrative deals under contract, he found himself out of options. This experience—a byproduct of the 2009 global financial crisis—forced him to ask, “Who do I know who can fix this problem?” That pivotal question eventually led him to private money, changing the course of his career forever.
What’s the Difference? Hard Money vs. Private Money
A lot of confusion swirls around the terms “hard money” and “private money.” As Jay Conner carefully explains, hard money is institutional and often brokered through intermediaries who pool funds from multiple investors. In contrast, private money is a direct, one-on-one relationship with an individual lender—often someone within your own network- funding deals either with their investment capital or retirement funds. The absence of middlemen also means no origination fees and more flexibility—key advantages for investors seeking speed and creative deal structures.
The Power of Mindset and Education
Securing private capital isn’t about pitching desperate, high-pressure deals. In fact, Jay Conner stresses that desperation has a “smell”—and people run from it. Instead, the secret is to educate, not sell. By putting on the “teacher hat” and holding informational sessions (over coffee, luncheons, or networking events), Jay positions himself as a resource. His primary goal? To leave every potential lender more knowledgeable than when the conversation started. When people understand the opportunity—earning 8% interest, secured by real estate, with more flexibility than traditional products—they often ask to get involved.
Structuring Private Money for Different Deals
Private money isn’t limited to single-family flips. As Jay Conner describes, it serves any asset class—commercial, self-storage, land, and more. The structuring changes: for single-family homes, it’s usually a simple deed of trust or mortgage; for larger commercial projects, you may need to set up a fund with a formal Private Placement Memorandum, subject to SEC regulation.
Where Do You Find Private Lenders?
Jay Conner breaks down sourcing private lenders into three categories:
- Existing Connections: Friends, family, colleagues—anyone already in your professional or personal circle. These are often the easiest to approach.
- Expanded Network: Organizations like Business Networking International (BNI) offer a powerful way to quickly gain warm introductions to new connections and their networks.
- Existing Private Lenders: These are individuals already loaning money on deals. You’ll find them through self-directed IRA custodians or public records, but be prepared—they usually expect higher rates, knowing the business well.
How Do You Start the Conversation?
Bringing up private lending can feel awkward if done poorly. Jay suggests two main methods:
- Direct Approach: For those you know and trust, simply ask if they have idle investment capital or retirement funds earning low returns.
- Indirect Approach: Use “I need your help”—ask if they know anyone unhappy with the bank or stock market, then explain your opportunity. Frequently, the person you ask realizes they themselves are a candidate, as in Jay’s story about his friend Wayne.
The Good News Phone Call
Once a potential lender is educated and interested, Jay never pitches a deal in a desperate moment. Instead, when a matching opportunity arises, he simply calls to share the good news: “I can now put your money to work for you on a specific property, closing next week.” The groundwork has already been laid, making the transition seamless and professional.
Conclusion: Scaling and Freedom
Private money unlocks the door to scale. Traditional financing is finite, but private capital has no hard limits—enabling investors to grow portfolios at their desired pace. Approached with education, service, and the right structures, it’s a win-win for both investor and lender.
Ready to expand your funding sources and scale your real estate business? Start by educating yourself and your network—the opportunities are closer than you think. And if you want to dig even deeper, check out Jay Conner’s podcast and resources for scripts and methods that can jumpstart your journey into private money.
10 Discussion Questions from this Episode
- What are the main differences between private money and hard money, as explained by Jay Conner?
- How did the global financial crisis impact Jay Conner’s approach to real estate investing and lead him toward using private money?
- Why does Jay Conner emphasize the importance of a “teacher hat” mindset when approaching potential private lenders?
- How does Jay Conner structure deals with private lenders to ensure their security, especially in comparison to traditional banks?
- What are the three main categories where Jay Conner suggests finding private lenders, and which strategies did he find most effective?
- Why does Jay Conner advocate for never pitching a deal out of desperation and for separating the opportunity from the deal itself?
- What are the “direct” and “indirect” methods of approaching potential private lenders, and how do they differ in practice according to Jay Conner?
- According to Jay Conner, in what scenarios is private money the optimal funding source for real estate deals?
- How does private money allow an investor to scale their business in ways that traditional bank loans do not, as discussed by Jay Conner?
- What is the significance of self-directed IRA companies in the world of private lending, and how can investors leverage them to fund their deals?
Fun facts that were revealed in the episode:
- No More Missed Deals
Jay Conner hasn’t missed out on a real estate deal due to a lack of funding since 2009, after transitioning from traditional bank financing to using private money. - Private Money—Not Hard Money
Many people confuse “hard money” with “private money,” but as explained by Jay Conner, hard money typically involves a broker or institutional fund, while private money is a direct transaction between a real estate investor and an individual lender, with no middleman or origination fees. - Teaching, Not Pitching
Jay Conner built a network of 47 private lenders without ever pitching a single deal—instead, he focused on educating people about private lending opportunities, often organizing luncheons to provide value and knowledge first.
Timestamps:
00:00 Passion for private real estate funding
03:31 Understanding hard money vs. private money
07:34 Discovering private money options
09:20 Raising funds with a mindset
13:44 Securing funds for real estate deals
16:21 Creative financing and private money
20:13 Joining a BNI chapter
24:22 Introducing self-directed IRAs
28:06 Asking for investment referrals
30:03 Getting investors on board
34:07 Curiosity Opener and gifts
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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