Using Private Money to Dominate Small Market
Real Estate Deals
On a recent episode of the Raising Private Money podcast, Jay Conner, known as the “Private Money Authority,” sat down with Alex Perny to share his journey and pull back the curtain on the incredible world of private money.
From Banks to Private Lenders: A Game-Changing Shift
Like many investors, Jay Conner started his journey relying on traditional financing—local banks and mortgage companies. For six years, this method served him well, but everything changed in January 2009, when his longtime banker abruptly shut down his line of credit. This crisis sparked a pivotal question: “Who do you know that can help fix your problem?”
That moment led Jay Conner to discover private money: raising capital from individuals, not institutions. “Private money is the number one strategy that I implemented in my business in 2009 that’s had the biggest impact of any strategy that I have implemented,” he shared. Unlike hard money or institutional capital, private money comes from people—everyday individuals looking for better returns on their capital or retirement accounts.
The Three Categories of Private Lenders
So, where do you find these elusive private lenders? According to Jay Conner, private money lenders generally come from three categories:
Your Own Network: There’s a direct relationship between your connections and your access to capital. Start by looking to friends, family, and acquaintances.
Expanded Network: As you grow, you might exhaust your personal connections. That’s where networking groups, local organizations like Business Networking International (BNI), and community events come into play.
Existing Private Lenders: These are individuals already lending to other real estate investors, often using self-directed IRAs. Here, it becomes more of a negotiation since they’re familiar with the process and terms.
How to Approach Potential Lenders
A crucial lesson Jay Conner learned early on is that “desperation has a smell to it.” He emphasizes the importance of separating the conversation about the opportunity from the deal itself. Rather than pitching a deal in your first conversation, focus on educating your contacts about private lending and the opportunity it presents. “I’m offering an opportunity, not asking for a loan,” Jay Conner said.
An example from his early days: He approached a well-connected acquaintance at his church, not by asking for money but by requesting help spreading the word about his real estate investment opportunities. This no-pressure approach naturally led to the first $250,000 commitment—and eventually, $500,000—from that single conversation.
Timestamps:
00:01 Alternative Investing: Real Estate & Money
08:44 Discovering Private Money Solutions
14:07 Private Lending Approach Explained
16:47 High-Return Referral Opportunity
26:12 Rehab Strategy Lessons Learned
29:05 Private Lending Strategies Explained
35:00 Private Money Lending Sweet Spot
39:40 Realistic Investment Strategies Discussion
44:12 Real Estate Investment: Regional Challenges
53:55 Evaluating Real Estate Pricing Trends
56:16 Simplifying Real Estate Investment Decisions
01:00:09 Alternative Investing Advantage Podcast
Private Money Academy Conference:
https://www.JaysLiveEvent.com
Jay Conner’s Money Guide:
https://www.jayconner.com/MoneyReport
Free Trial! Join the Private Money Academy:
https://www.jayconner.com/four-week-free-trial-v2-0/
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. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $67,000 per deal.
What is Real Estate Investing? Live Private Money Academy Conference:
https://youtu.be/QyeBbDOF4wo