Raising Private Money with Jay Conner

Using Private Money to Dominate Small Market Real Estate Deals

Jay Conner

***Guest Appearance

Credits to:

https://www.youtube.com/@AdvantaIRA             

“Episode 182: How Jay Conner Raises Millions in Private Money for Real Estate”

https://www.youtube.com/watch?v=oUGSDCB0r-I&t=580s   

If you’re a real estate investor—or thinking about venturing into the world of property investing—there’s one question that always comes up: “Where do you get the money to fund your deals?” While banks, institutional lenders, and hard money sources are familiar options, they aren’t always ideal, especially if you plan to scale your business. 

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:

  1. Your Own Network: There’s a direct relationship between your connections and your access to capital. Start by looking to friends, family, and acquaintances.
  2. 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.
  3. 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.

Structuring the Deal: Protecting Lenders and Setting Terms

Private lenders in Jay Conner’s model are given a deed of trust or mortgage, are named on insurance policies, and enjoy flexible terms such as penalty-free early withdrawals. He keeps terms straightforward: 8% interest, two-year notes, and transparent communication. Notably, he includes a “minimum return” clause so lenders always receive at least six months of interest, even on quick turnaround deals.

Why Private Lende