“How to Raise Private Money for Real Estate Without Banks - EP 22”
The world of real estate is often synonymous with big banks, endless paperwork, and the looming fear of being denied essential funding at the last minute. But what if the traditional approach to financing a property acquisition wasn’t the only— or best—way? On a recent episode of the Raising Private Money podcast, Jay Conner broke down his journey from relying on banks to pioneering the use of private money for real estate deals, opening new doors for investors everywhere.
The Frustration with Traditional Funding Jay’s real estate story began by following the tried-and-true path of working with local banks and mortgage companies. For six years, this was his only option. But things quickly changed during the financial crisis in 2009, when his line of credit suddenly evaporated without warning. This unexpected hurdle forced Jay to rethink his entire funding strategy. Instead of panicking, he chose to seek out solutions and new connections, leading him to the concept of private money lending.
The Shift to Private Money The turning point came from a conversation with a seasoned friend who introduced him to the world of private lending and self-directed IRAs. The idea was simple: individuals, not institutions, could become lenders by using their investment capital or retirement funds. The process could be tax-advantaged and offer investors a higher return on their money than what they’d get sitting in a traditional bank account.
By attending a real estate investing conference to learn more, Jay immediately adopted the role of a teacher. Rather than just searching for lenders, he educated his own professional and social circles about how private lending works. This strategy was so effective that he raised over $2 million in private funds within his first 90 days.
How Private Money Works in Jay’s Model Jay’s strategy focuses on single-family homes, although he notes private money can be used for larger projects as well. The key difference with his method is the “one-off” model—rather than pooling funds into a single pot, each property is funded by specific private lenders, secured by asset-backed debt.
Private lenders in Jay’s model are protected in the same ways banks are. They receive promissory notes, mortgages, or deeds of trust, are listed as mortgagees on insurance policies, and are named in title policies as additional insured parties. If the borrower defaults, the lender’s recourse is foreclosure on a property whose loan never exceeds 75% of its after-repaired value, giving the lender significant security and potential upside.
The simplicity is part of the appeal: real estate investors pay private lenders like they would a bank—through mortgage payments or, in the case of property flips, accrued interest paid out at closing. Lenders don’t speculate on property appreciation; instead, they receive steady interest—often more than what’s available via other low-risk investments.
Timestamps: 00:00 Discovering private lending strategy 05:36 Learning about private money options 07:19 Networking without desperation 09:39 How private lending works 13:48 Funding a real estate deal 18:04 Free signed book offer 20:11 Private lender rates vs. market rates 23:02 Wrapping up with Jay's advice
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What is Private Money? Real Estate Investing with Jay Conner
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 $86,000 per deal.
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By: Raising Private Money For Real Estate - Jay Conner Title: Real Estate Funding Made Easy: Jay Conner’s Private Money Approach Sourced From: www.youtube.com/watch?v=4Z_1Mx0solE
