In this episode, I’m sharing everything you need to know about getting started with private money. With more than ten years of experience in private lending, I’m tired of keeping these secrets to myself! I’m passionate about helping people unlock the unlimited earning potential of private money — and it only took me about two weeks to develop my system!
Lucky for you, your days of begging banks to give you loans are OVER. With this system, you can attract private money without having to ASK anyone! Tune in to learn more about how to approach conversations with potential lenders. Once you hear the secret benefits of private money, there’s no way you’ll want to go back to wasting time and money at the bank.
Ready to learn the secrets to Jay’s Private Money System? This 30-minute episode can change your life!
Key Takeaways:
- Adopt this mindset shift to attracting private money
- Why the traditional way of gaining funding deals needs to go
- How Jay raised $2 million in the first 90 days
- Private money lets YOU make the rules
- Private money doesn’t care about credit scores or income verification
- Buying a property with private money still gives you full ownership
- Where to find existing private lenders
- There’s no limit to how much you can raise!
Check out my book: 7 Reasons Why Private Money Will Skyrocket Your Real Estate Business and Help You Build Incredible Wealth!
Get it here for FREE: www.jayconner.com/moneyguide
Timestamps:
0:01 – Raising Private Money with Jay Conner
1:05 – Mindset: How To Raise Private Money
4:36 – Never Raise Private Money While Offering A Deal
9:28 – Put Your Private Lender’s Money To Work, Fast!
10:54 – It’s All About Teaching Your Warm Market
12:32 – The Private Lender Does Not Own The Property
15:45 – What Is A One-Off Deal?
16:53 – 3 Categories Of Private Lenders
20:59 – Reasons Why Jay Loves Private Money
Jay’s Private Money System – Real Estate Investing Minus the Bank
[00:00:00] Jay Conner:
You go to the bank, you go to the mortgage lender, you get on your hands and knees, you put your hands underneath your chin and you get down in front of Mrs. Banker or Mr. Banker and you say, please fund my deal. Please fund my deal. I need you to fund my deal. There’s none of that in this world. None of that. Because I’m not asking someone to fund my deal.
[00:00:21] Narrator:
If you are a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal then you’re in the right place on raising private money, we’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money. Because the money comes first. Now here’s your host, Jay Conner.
[00:01:01] Jay Conner:
So let’s dive in folks. Time to take notes. I want to talk about mindset. I want to talk about in this world of Private Money that I live in, Crystal Chaffee, all of my team members, my Platinum Members, my Mastermind Members, everybody, the mindset is this, how in the world do you raise or can you raise like me millions of dollars in private money?
[00:01:31] Jay Conner:
I’ve never asked anybody for money. And I get the question all the time. I say, Jay, how in the world do you have eight and a half million dollars of private money at your disposal and you never ask anybody for money? And you platinum and Mastermind members, you’ve heard me say it a hundred times, we simply put on our teacher hat and we start teaching people.
[00:01:57] Jay Conner:
In our warm market, people that we have some kind of relationship with, and they’re in our cell phone, they’re on our email list, social media. We start teaching people what private money is. We start teaching them our private lending program and how they can earn high rates of returns safely and securely.
[00:02:21] Jay Conner:
Carol Joy, my wife, and I, and a lot of y’all have not met Carol Joy yet. You will. But of our 47 private lenders that we have funding our deals, not one of them, I’m talking about the 47 private lenders in our warm market. All these people we had some kind of relationship with. We even went to church.
[00:02:42] Jay Conner:
We went to church with ’em. Still do. Or they are family, friends, or business associates. Rotary Club members in business networking international. We have some kind of association with ’em. Not one of them, not one of them heard of private money or private lending before I introduced this world to them, and one of them had ever heard of self-directed IRAs, and I’m gonna talk more about that in a moment.
[00:03:14] Jay Conner:
I haven’t even heard about several. So I put on my teacher hat and I taught them what private money is. I taught ’em what my program is and how they can make a lot of money, a whole lot more than, going to the local bank. And so here’s the first mindset shift when it comes to attracting private money.
[00:03:35] Jay Conner:
The traditional way. To get private money excuse me, to get funding for your real estate deals, the traditional way is what do you do? You go to the bank, you go to the mortgage lender, you get on your hands and knees, you put your hands underneath your chin, and you get down in front of Mrs. Banker or Mr. Banker and you say, please fund my deal. Please fund my deal. I need you to fund my deal. There’s none of that. In this world, none of that. Because I’m not asking someone to fund my deal. I am teaching them what private money is and what private lending is. And instead of asking for a mortgage, I’m offering a mortgage, right?
[00:04:30] Jay Conner:
Okay, so don’t miss this. Don’t miss this. I teach private now. Now there are other categories and other places to find private lenders. We’ll talk about that time. Time, if we have enough time here on this Zoom. But I teach ’em, and then when they tell me how much they’ve gotta work with, is its investment capital, liquid capital, is it retirement funds?
[00:04:54] Jay Conner:
Whatever it is, they tell me how much they’ve got to work with. If they’ve got money in a retirement fund. And don’t be mistaken, you’re not only borrowing private money from individuals that have money in retirement funds. It can be just liquid capital, it can be retirement funds, et cetera. If they’ve got retirement funds, they want to get a more safe, non-volatile right investment.
[00:05:17] Jay Conner:
I’ll introduce ’em to my Quest representative and they’ll get their money moved over. Now. Don’t miss this point. This is really important. They tell me how much they gotta work with. They love my program, right? They love the program, love the interest rate that I’m paying. And so I then say, I will put your money to work for you just as soon as possible.
[00:05:41] Jay Conner:
And so I said, I’m gonna find you a deal to loan money on and invest in with me and I’ll get back to you asap. Now, here’s the important thing to miss. And that is, don’t make the mistake of teaching someone in your warm market. It’s what private money is and what your private lending program is. And in the same conversation, tell them you’ve got a deal that you need to be funded, right?
[00:06:11] Jay Conner:
You are already desperate without even trying to be desperate. Because you’re telling ’em about private money and you’re bringing up a deal. Ask me how I know not to make this mistake. So what we do is we separate the activity of teaching the private money program and then getting a deal funded.
[00:06:31] Jay Conner:
So here, I’m gonna give you the exact scripting right now. The exact scripting as to what we say when I have a deal that’s ready to be funded. So I got a private lender. They’ve told me how much money they have. They love the program. They know they’re waiting for the phone call. They’re waiting for the phone call, right?
[00:06:53] Jay Conner:
And so I call ’em up. So let’s say Chaffee is one of my private lenders, I call up Chaffee answers the phone. We have, a little bit of chit chat and I get right to it. Here’s the script. I say, Chaffee. I have got great news. I can now put your money to work for you. I’ve got a house in Newport with an after-repaired value of $200,000.
[00:07:22] Jay Conner:
The funding required for the deal is 150,000. I already know Cha’s got 150,000. He already told me. He’s waiting for the phone call and it’s investment capital. I know it’s investment capital, he’s already told me it’s not retirement funds, so I got a house in Newport with an after-repaired value of 200,000.
[00:07:41] Jay Conner:
The funding requires 150,000. Closing is next Thursday, so you’ll need to have your funds wired to my real estate attorney, my closing agent, next Wednesday, I’m going to have my real estate attorney email you the instructions. End of script. I want you to notice a couple of things. Number one, Chaffee’s been waiting for the phone call, right?
[00:08:09] Jay Conner:
This phone call is no surprise to Chaffey. I told him I’d call him and put his money to work just as soon as possible, so I called him up, chit chat, great news. The first thing I told him said, I’m only telling him four things, and after the first deal he funds, he doesn’t even wanna know these four things.
[00:08:27] Jay Conner:
So I tell him I got the after-notice. I’m not telling him the purchase price. He could care less. I’m telling him the after repaired value, is $200,000. That’s the first thing I’m telling him about the property. I’m not giving him the physical address. He could care less about the after repaired value. The second thing I’m telling him is that the funding required is 150.
[00:08:51] Jay Conner:
So I’m telling him how much I’m gonna borrow. I already know he is got that amount of money. Because he told me two weeks ago, right? The third thing I’m telling him is the closing date is next Thursday, so he needs to have his money wired to my real estate attorney’s account by next Wednesday.
[00:09:13] Jay Conner:
That’s it. That’s it. The only time I’ve had a private lender bail out on me is when I didn’t put their money to work fast enough. Cause you know, private money’s like bananas in the grocery store. It will go rotten on you and disappear if you don’t consume it. So you wanna put that private money to work?
[00:09:33] Jay Conner:
So do you understand what I’m saying about the mindset? Of this thing, right? I’m not chasing, I’m not begging. You notice I didn’t call up Chaffey, my private lender, and say, Chaffey, I got this deal. Let me tell you about it. I tell him about it and then I say, Chaffey, do you want to fund the deal?
[00:09:53] Jay Conner:
That’s the most stupid question in the world. I gotta ask my private lender if he wants to fund the deal. Of course, he wants to fund the deal, and I can tell you how he really wants to fund the deal or why he really wants to fund the deal if he does. I taught him the private lending program, if his funds, retirement funds that maybe he had in the stock market, or a previous 401k, and I have introduced him to my Quest representative, and he’s moved, had his funds moved over to Quest.
[00:10:26] Jay Conner:
Oh my land, is my private lender waiting for the phone? He ain’t making no money. He’s not making any money on those funds that he moved over to Quest until I have called him up with the good news and I can now put his money to work. So again, there are no applications for this. It’s all about teaching people in your warm market.
[00:10:51] Jay Conner:
I remember like it was yesterday, how I learned and came about to learn about private money. And a lot of y’all haven’t heard this. Carol Joy, my wife, and I, invested from 2003 to 2009. The first years, first six years. Using conventional funds at the local bank, getting on my hands and knees, and begging right from 2003 to 2009, and then in January of 2009, I called him a banker.
[00:11:21] Jay Conner:
I had two deals under contract. The profits were gonna be over a hundred thousand dollars. I learned I’d lost my line of credit. Oh boy, what am I gonna do? My definition of coincidence is God’s way of staying anonymous. So I was introduced to this world of private money in less than two weeks. I learned all about it.
[00:11:38] Jay Conner:
I stuttered it. I put my program together, and then I started teaching people in our local area. I raised $2,150,000 in the first 90 days because I got my mindset right, put on my teacher hat, started teaching the program, and so we went from there. Now, let’s be clear about this next point when we’re talking private money in this.
[00:12:07] Jay Conner:
I am not talking hard money. I’m not talking about hard money. All you knew PMA members, okay? I’m talking about doing business with individuals, human beings just like you, just like me, that are loaning us money on our deals, either from their investment capital. Or from their retirement accounts. So simply put, it is a one-on-one transaction.
[00:12:38] Jay Conner:
This private money is a one-on-one transaction between you and your private lender, or it may be more than one private lender. You can have more than one private lender on a particular deal. So I’m not talking about joint venturing. All right. You know the old business model, somebody puts up the money, the private lender puts up the money, and then you’re sharing the profits at the end of the deal, and there can be a case for that because there are no monthly payments whenever you join venture.
[00:13:11] Jay Conner:
However, I don’t wanna give up all that percentage of my profit. I wanna pay a straight interest rate. That’s part of the program that we teach, so we’re not talking about joint venture partners. In fact, write this down. The private lender does not own the property. The private lender does not own the property and does not have any ownership in the property.
[00:13:38] Jay Conner:
The private lender is from the same capacity as a bank. So it’s your entity. It’s your LLC or your land trust or whatever entity that you’re buying in, it is your entity that owns the property, and then your private lender is in the same capacity as a bank. They’re gonna get the same protection as the bank would.
[00:14:03] Jay Conner:
I’m also not talking about it. In addition to that hard money, I’m not talking about banks, I’m not talking about financial institutions. When you borrow money from those places, who’s making the rules? They’re making the rules. But in this program, we are making the rules. You’re making the rules, you’re setting the interest rate, you’re setting the length of the note.
[00:14:27] Jay Conner:
I even, structure some deals to where I don’t even make any payments. Hello. So you can structure those three. You’re not even making any payments, particularly if you’re gonna be doing a quick flip, but you’re gonna be in and out of it maybe in six months or nine months.
[00:14:40] Jay Conner:
So this private money in this world, this money works for single families, and it works for commercial as well. Who wants to also do maybe some small apartments, duplexes, triplexes, or quadplexes, right? So it’s the same money. We just structure the deals differently. Also, I want you to understand this world of private money, we are not talking about raising money for a fund, that’s called syndication.
[00:15:11] Jay Conner:
So you can raise money and you can put a fund together, and you can have private lenders invest in your fund. But you’re gonna do that for larger commercial projects. So I want you to write this down. In this world of single-family houses using private lenders, everything we do is called a one-off. A one-off a one.
[00:15:35] Jay Conner:
The world does a one-off mean. A one-off means that you got a private lender or maybe more than one private lender that is secured. Those notes are secured by the property that we’re buying. Okay. Your private lenders are being secured. They’re getting either a mortgage or additional trust. Where we are not.
[00:15:58] Jay Conner:
Here’s another write-down, or we are not borrowing unsecured funds. You can legally, you can unsecured funds, give somebody a promissory note and you’re done. We don’t do that in this world. We don’t. I wanna protect my private lenders by securing the promissory note. The mortgage in North Carolina, it’s called a deed of trust.
[00:16:24] Jay Conner: So in other words, another way of saying on one-off is every deal stands on its own. Now there are three, write these down. There are three primary areas or categories of where you’re going to get private money. There is what we call your existing war market. Those are people you’ve already got a relationship with.
[00:16:46] Jay Conner:
Okay? And then there is what I call your expanded warm market. In fact, at the Private Money Academy live event, Crystal, I see we got Banjo and Eric on here, other Platinum and Mastermind members. We have joined us and we do a deep dive into networking. How do expand your warm market? Some people tell me that all my people are broke.
[00:17:10] Jay Conner:
First of all, I don’t believe you, right? But I say expand your market. How do you expand your warm market and get more connections? Stay tuned for the next Private Money Academy, zoom, and get to the live event. So expand your connections. The third category of private lenders. These individuals are existing private lenders.
[00:17:31] Jay Conner:
Where do you find existing private lenders, individuals that are already loaning money out on real estate? You can do it the hard way. Like I started in 2009 I didn’t do it for 90 days. I hired my real estate attorney’s paralegal to search public records in the local county where I invest, and I had the paralegal search for.
[00:17:57] Jay Conner:
Deeds of trust and promise re notes that were secured by deeds of trust with individual names on those deeds of trust. Meaning not LLCs or institutions or banks, but individuals that were loaning money out on real estate led 90 days. We found two. I said goodnight. There’s gotta be a quicker way to get that.
[00:18:20] Jay Conner:
So now we have software and we’re able to automate that and we get that all updated every month. But I can tell you another free place to get existing private lenders as well. On the, I think it’s the fourth Wednesday of each month. Today is the fourth Wednesday, and I think it’s at 6:00 PM Cheryl, you would know, I think you’re going to the, is it at 7:00 PM Eastern time?
[00:18:47] Jay Conner:
Is that Eastern time? Yeah, so 7:00 PM Eastern time every fourth Wednesday of the month, and it’s free to attend on Zoom and you can go network. Hey look, you may find an interesting statistic right here that you might not have heard. Did you know over 70% of account holders at self-directed IRA companies are willing to loan their retirement funds out?
[00:19:14] Jay Conner:
Who? You who? Real estate investors. They wanna be passive investors. Just sitting back and collecting. Interest safely and securely. Here’s one little caveat or one little thing you need to know about that. Guess what? It’s no surprise. An existing private lender means they’ve already done private money, right?
[00:19:36] Jay Conner:
They’ve already loaned money out, so now you’re not putting your teacher hat on to those existing private lenders. And teaching them your private lending program now, it’s a networking event. It’s a networking activity. You get to know each other. You find out what they are accustomed to getting and when they’re happy with six or 7%, I don’t try to talk them into eight.
[00:20:00] Jay Conner:
So, Cheryl, it’ll be interesting to see how it goes for you on the quest, right? So don’t teach ’em your program, don’t you be offering 8%? You be asking them what are they accustomed to getting right. And when they say 12% and two points, you’re wasting your time and you can move on, right?
[00:20:20] Jay Conner:
So anyway, I wanna make that very clear about where are these private lenders. Now, I hope y’all can take notes really fast because I’m gonna give you a long list right now. In fact, Crystal or Ashley or somebody, in fact, Ashley, lemme just call on you to do it. Cause I think Crystal is monitoring questions over there, Ashley?
[00:20:43] Jay Conner:
So if you would type in the chat, here are the reasons why Jay loves private money and why you do. Are gonna love private money as well if you haven’t gotten any yet, right? So here we go. In no particular order, number one, no credit check. No credit check. Your credit score has gotten nothing to do with how much private money you can get.
[00:21:14] Jay Conner:
It’s because of these private lenders that I teach you how to find and locate. They could care less about your credit because private money is a collateral loan, right? Number two. Number two reasons I love private money. No income verification. No income verification. By the way, Crystal, I didn’t see Scott Patton at the beginning of the meeting.
[00:21:37] Jay Conner:
It’s Scott showing up. Is Scott here? I didn’t see him. I haven’t seen ’em. I’ll quickly look through just to make sure, but I hadn’t seen him at the outset either. Okay, very good. So number two, no income verification. Never have I had a private lender ask me to verify my income right now. Hard money. A hard money lender’s gonna pull your credit for sure.
[00:21:57] Jay Conner:
Number three, I think I saw in the chat somebody asked questions earlier about points number three, not points ever. Have never paid an origination fee or point, and you all know what that is. If it’s two points, that means that’s 2% of the amount you’re plumbing you gotta bring to the closing table.
[00:22:19] Jay Conner:
That’s how the hard money lenders and traditional lenders make their money. So no points. We never pay. Points number four. No appraisals. No appraisals. Hello, good night. No appraisals. I’ve never had a P or ask me to see an appraisal. Now, I might get an appraisal before buying it if it’s a really expensive property, but I always have a CMA, comparable market analysis done by my realtor.
[00:22:48] Jay Conner:
So no appraisals you are not limited to what you can borrow based on what an appraisal says, right? Number five, this is my favorite reason. Number five is my favorite reason for using private money. The thing is, I always receive multiple checks on every private money deal that I do. Listen, I never take any money to the closing table, right?
[00:23:18] Jay Conner:
I always get a check because I borrow more than I need to purchase. Now, that’s only going to work when you are buying properties at a discount, and typically when there’s gonna be some type of rehab involved. I get a check when I buy it. I mean rent the check stub, real estate attorney’s check stub. I love it.
[00:23:39] Jay Conner:
It says excess cash to close. And lemme tell you, I love me some excess cash, right? So I get a check when I buy, and then when I go to sell, if I, and for if I’m selling it on rent or own, maybe I am, maybe I’m not. I can get a large non-refundable lease option, deposit the legal terms and option fee, and then I’m gonna get another check when I sell it.
[00:24:01] Jay Conner: Which is the difference between when I sell it for and when I still owe my private lender, right? So mother checks, you stop and think about it, you buy a property, you use private money. The way we do it, you get a big check. You come home with a check and now let’s say your private lender, let’s say you structure the deals to where there are no monthly payments until you cash out.
[00:24:25] Jay Conner:
You think that’ll help your cash flow, but listen to this. Let’s say your private lender needs the monthly cash flow. Whose money are you using to make those initial payments? Their money? Hello? If I’m caring more than I need, And if they need monthly payments, I’m using theirs. Now, that property, you gotta get that property cash flowing or rehabbed if you’re gonna cash out or whatever.
[00:24:52] Jay Conner:
But if they need monthly payments, I’m using their money initially. Number six, I said it earlier, you make the rules, and you sent the interest rate, right? You set the length of a note. Number seven, here’s a big one. Why I love private money. There is no limit to the number of private lenders. You can have no limit.
[00:25:18] Jay Conner:
Now, if you’re syndicating, there’s a limit, but we’re not syndicating in this work. Okay? So there’s no limit to the number of problems you can have. Number eight, there’s no limit. Profit money you can have at your disposal. And when I was borrowing money from the banks, there was a limit to my line of credit.
[00:25:40] Jay Conner:
There is no limit in this world, right? Number nine across state lines. Private members in 10 different states. You’re not limited to your local area, right? So, therefore, that’s gonna help you get a lot of private money. Number 10, not limited. You’re not limited to borrowing from accredited investors.
[00:26:08] Jay Conner:
Do private money the way I do it, and my platinum and masterminds and crystal and Chaffee. You’re the way we do it. And you can borrow from anybody. They do not have to be accredited investors. Number 11, you can close deals so much faster. Close deals so much faster when buying from the banks. I’m surprised anything ever closed.
[00:26:38] Jay Conner:
I mean got an account over request using their retirement funds. Then I get my deals funded in three days, three business days. I make my offers to where I’ll close any deal, all cash in seven days, right? Therefore, you’re gonna get more offers accepted. You’re going to get more offers accepted because you can close so much quicker.
[00:27:05] Jay Conner:
Alright? The next reason I’m able to do an unlimited number of deals. With multiple private lenders, I’m not limited to the number of deals that I can have going on. Number 13, here’s a big one. No personal guarantees. All my lands. No personal guarantees. I’ve never had a private lender ask me to sign a personal guarantee, but I guarantee you that when you burn from an institution or hard money lender or bank or mortgage company, you’re gonna be signing a personal guarantee. Number four, as I already mentioned, you can structure with no monthly payments. 14, you can structure with no monthly payments.
[00:27:42] Narrator:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide. That’s www.JayConner.com/MoneyGuide and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, www.JayConner.com/MoneyGuide that’s to get your free guide. We’ll see you next time on raising Private Money with Jay Conner.