***Guest Appearance
Credits to:
https://www.youtube.com/@MatthewMaSF
“Most Deals Die Before the Bank Says No”
https://www.youtube.com/watch?v=DqHIUbQyETQ
In today’s shifting real estate landscape, the difference between closing a deal and watching it slip away often comes down to one crucial factor: access to funding. While traditional bank loans have long been the norm, they can be restrictive, slow, and fraught with unexpected roadblocks—something Jay Conner knows all too well.
The Wake-Up Call: When Banks Say No
Back in January 2009, after years of relying on banks for investment funding, Jay Conner faced a challenge familiar to many investors. Despite maintaining a solid relationship with his local bank, Jay Conner received an unexpected call: his line of credit was shut down overnight due to a global financial crisis. Without warning, two pending deals were suddenly at risk. That moment proved to be a turning point: “Who do I know that can help fix my problem?” Jay Conner asked himself, shifting his attention from conventional lenders to alternative methods.
Discovering Private Money
Through a referral, Jay Conner learned about “private money”—funds provided by individuals rather than institutions. Private lenders are often regular people: retired teachers, police officers, family friends, or even minor heirs. This approach opened a door to consistent funding without the headaches and uncertainty of bank financing.
Private money is fundamentally different from hard money or bank loans:
- Hard Money: Typically comes from institutional funds or brokers, carries high fees and interest, plus origination points.
- Private Money: A direct relationship between borrower and lender; no brokers, fewer fees, more flexibility, and friendlier terms.
As Jay Conner explains, Private lenders are ordinary people. Unlike banks, these lenders are not swayed by credit score or the investor’s experience but by the security and fairness of the loan’s structure.
The Private Money Advantage
There are three main categories for finding private lenders:
- Warm Connections: Existing relationships—family, friends, colleagues, or community contacts.
- Expanded Network: New connections made via business networking organizations.
- Experienced Lenders: Individuals already making private loans, often met through self-directed IRA company events.
With private money, terms are straightforward and uniform: Jay Conner pays 8% annual interest, with loan notes of 2 to 5 years depending on the funds’ source. Unlike typical banks, there are no origination or prepayment penalties, and the process allows for creative structuring—such as splitting loans among multiple private lenders, each with clear positions of risk and return. Every private lender receives collateral in the form of a mortgage or deed of trust, including insurance policies, and is protected by conservative loan-to-value guidelines.
Why Agents Need to Know About Private Money
Many deals collapse after banks back out late in the game. Jay Conner urges agents and investors to line up private money in advance rather than as a last-minute fix. Agents who want to stand out must understand these alternative funding tools and incorporate them into their practice. It’s not just about saving the deal—it’s about providing value and education to their clients.
Jay Conner recommends that agents equip themselves and their clients by sharing his book, “Where to Get the Money Now,” which covers strategies and even includes scripts for talking to potential private lenders.
Protection Against Scams
Beware of online scams promising too-good-to-be-true rates or requesting upfront fees. Legitimate private lending is always secured, with funds transferred directly to the closing attorney or escrow agent and with public documentation.
Moving Forward
The best real estate professionals are those who adapt, learn, and offer creative solutions. Whether you’re an agent supporting your clients or an investor looking for your next opportunity, private money could be the key that unlocks your financial freedom—even and especially when the bank says no.
Explore more about private money, grab Jay’s book, or connect at his next Private Money Conference. Empower your next deal and never let funding hold you back from success.
10 Discussion Questions from this Episode
- What are the key differences between private money, hard money, and traditional bank loans, as explained by Jay Conner?
- How did Jay Conner’s experience during the 2009 financial crisis reshape his approach to real estate funding?
- According to Jay Conner, what are the three main sources for finding private lenders, and how can new investors access them?
- Why does Jay Conner recommend not negotiating the terms with each private lender individually, and how does he standardize offers?
- What strategies does Jay Conner suggest for real estate agents to educate their clients about funding alternatives when the bank says no?
- How does collateralization work in private money lending, and what protections are offered to the lender?
- What are some risks or scams associated with private money lending, and what red flags should investors watch out for?
- In what ways does using private money allow for faster real estate transactions compared to traditional bank financing?
- How can new real estate investors leverage the credibility and experience of a mentor like Jay Conner when seeking private funds for the first time?
- Why does Jay Conner believe it’s important for all private lenders to receive the same interest rate, and how does this approach impact his business relationships?
Fun facts that were revealed in the episode:
- Private Money Lenders Can Be Anyone
Jay Conner shared that his private lenders include a diverse group of people—retired school teachers, police officers, civil service workers, and even minor children who inherited money from their grandparents, proving that private lenders aren’t just big institutions but everyday individuals. - Speedy Closings with Private Money
Switching to private money allowed Jay Conner to close on properties in as little as seven days—much faster than the 30–45 days typically needed with traditional banks. This quick turnaround gives investors a significant edge in competitive markets. - No Credit Score Required
A major advantage highlighted in the episode is that private money loans are collateral-based, meaning Jay Conner doesn’t require credit checks. This opens up opportunities for new or non-traditional borrowers, in contrast to the stringent requirements of most banks.
Timestamps:
00:00 Talking about private money strategy
04:51 Discovering private money options
09:00 Tapping into your warm market
09:38 Finding private lenders quickly
13:28 Approaching private lenders casually
16:16 Protecting private lender investments
21:02 Private lender incentives explained
23:45 Promoting a book on private money
27:10 Understanding short-term private lending
31:56 Real estate investment basics
33:59 Quick property purchase process
36:49 Consistent lender interest rates
39:41 Discussing repayment terms with investors
43:37 Warning about private lender scams
45:14 Explaining private money lending basics
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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