Are you planning to start a real estate business but don’t know where to start? Is the thought of where to get funding holding you back? Well, we’ve got this special episode for you.
In this episode, Jay Conner himself talks about private money and how it became a game-changer for his real estate deals. If you are one of those wanting to enter the realty business or a seasoned real estate investor, join us and take down notes because Jay has outlined everything you need to know about raising private money. He talks about the nature of funding your deals through private money, the benefits, and how you can actually start attracting private money lenders.
Key Takeaways:
- What is private money?
- Self-directed IRAs and how they can help fund your deals
- Private money is not hard money.
- Myth: It is impossible to buy properties without taking money out of your pocket
- Reasons to love private money
- When borrowing private money, you are the one setting the rules.
- Money comes first. The worst time to look for private money is when you actually need the funding.
- When to use private money
- Reasons why a private lender would be interested in lending private money
- Where is the private money, and how can you actually get started?
Resources:
- www.questtrust.com
- 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:
00:44 – Private money: the game changer for real estate.
04:09 – 87% of for sale by owners require cash.
09:08 – Promoting private lending program with high returns.
12:02 – Jay’s Free Private Money Guide: https://www.JayConner.com/MoneyGuide
13:41 – Private money changed our real estate dreams.
Demystifying Private Money: What It Is and Why You Need It
Jay Conner [00:00:00]:
Are you perhaps dreaming of escaping your nine-to-five job and getting into real estate investing, but you just don’t know where to start? Maybe the term private. It seems complicated and maybe out of reach. Well, let me tell you, you are in the right place.
Jay Conner [00:00:44]:
In this episode, I’m going to be demystifying the game changer that private money really is. How was it a game-changer for me? We’re going to unpack what private money is, why it is the key to unlocking your real estate success, and how it could help you fast-track your journey from a day job to a successful real estate investor. Stay tuned, because this episode might just be the first step on your path to financial freedom. Well, my name is Jay Conner, the private money authority. Welcome to this special episode of Raising Private Money. Now, first, let me tell you, I understand where you’re coming from. If what I asked you a moment ago you resonate with, maybe you’re in a place where you haven’t done a real estate deal yet. You’d love to leave your day job, perhaps, and jump and plunge right into real estate investing.
Jay Conner [00:01:37]:
But perhaps you’re feeling overwhelmed and you don’t know where to start. Maybe you’ve considered wholesaling or flipping or even buying and holding. But the options are just too many and too confusing. You got distractions. You’re dealing with fear. You got a lack of knowledge. And let me tell you, I know from experience, they are all real and they are all very valid feelings. And they can hold most people from ever even getting started.
Jay Conner [00:02:06]:
And one of those fears might just be around the concept of private money. Well, first, let’s start by understanding what exactly is private money. Private money, in simple terms, is a private lender. Or private money is a human being who loans money to you from their investment capital or their retirement funds. It’s as simple as that. Doing business with individuals, in other words, private money is not hard money. A lot of people, when they hear private money, they think of hard money. Well, it’s not hard money.
Jay Conner [00:02:43]:
You see, a hard money lender is typically a broker of money that goes out and raises money for their funds. So we’re not talking about doing business with any kind of institutional money, not doing any kind of business with banks. And there are some big differences between hard money and private money. For example, the interest rate average hard money lender right now is charging 14% interest. Private money lenders on average right now are 8%. Hard money lenders have origination fees or points. Private money never charges any origination fees. Hard money has extension fees.
Jay Conner [00:03:21]:
Private money doesn’t have extension fees. And another big one is that a hard money lender will only advance to you at the time of purchase between 60 and 80% of the purchase price. In this world of private money, you’re going to get 100% of the purchase price. And if you’re rehabbing a house, you’ll get 100% of your rehab money upfront. In fact, doing private money the way I do it, you always bring home a big check when you buy. And you never have to take any of your own money to the closing table. Now, why do you want private money? I can tell you from experience. I mean, Carol Joy, my wife, and I, we’ve been doing this business investing in single-family houses full-time since 2003.
Jay Conner [00:04:09]:
I have reviewed thousands of property lead sheets. And did you know that 87% of for sale by owners of their houses will not sell to you because you don’t have private money? Now, why is this? Well, here’s the deal. In the real world, 87% of all for sale by owners require all the cash. They won’t sell to you creatively or on terms. So without the private money, you’re missing out on 87% of the for-sale-by-owner deals. Now, my list of reasons for using private money and my favorite reasons is actually pretty long, but here are a few of them. Number one, reason, one of my favorite reasons for using private money is because we get to make the rules on every deal that we do. Now, contrast that to the banks and institutions and hard money lenders.
Jay Conner [00:05:04]:
They make the rules, they set the interest rate, they set the length of the note, et cetera. They set what’s the maximum loan to value in this world of private money, we make the rules. Secondly, as I just said, you always bring home a big check when you buy using private money. I mean, who wants to get paid to buy houses, right? So you never have to take any of your own money to the closing table. And you bring home a big check when you’re using private money when you buy, of course, you get another check when you sell. There’s no credit check. Your credit score has got nothing to do with how much private money you can get. There’s no income verification.
Jay Conner [00:05:42]:
There’s actually no application. There are no points. There are no appraisals. You receive multiple checks on every deal you do. There’s no limit to the number of private lenders that you can have. You can borrow across state lines. You’re not limited to borrowing from accredited investors. You can borrow money from anybody.
Jay Conner [00:06:03]:
And you can close deals so much faster and actually negotiate more profitable deals when you’re using private money. In addition, you’re able to do an unlimited number of deals with multiple private lenders. There are no personal guarantees. You can structure deals to where there are no monthly payments. Now, stop there for a second. Imagine this. You buy a property using private money, and by the way, this private money is also used for commercial deals, small apartment complexes and et cetera. But think about this.
Jay Conner [00:06:36]:
You buy a house or a property using private money to fund the deal. You make no monthly payments and you bring home a big check when you buy. Do you think that’s going to fix your cash flow? Absolutely. And then in addition to all those reasons, there’s no hurry to pay back private money. Unlike a hard money lender, it talks about my land changing and transforming your investing career or getting to your very first deal. That’s another reason I love private money. Private money gets you to your very first real estate deal if you’ve not done a deal yet, quicker than any other method. Now, when are you going to use private money? Well, you’re going to use private money when the seller, whether that property is in the multiple listing service or it’s for sale by the owner when all cash is required.
Jay Conner [00:07:25]:
And of course, that’s in the real world. When all cash is required from the seller, you’re going to use private money. In addition to that, if you’re buying bank-owned properties, short sales, auctions, all those, of course, you’re going to need the cash to close on the deal. Now, why would a private lender be interested in doing business with us? Well, here are three big reasons. Number one, their investment is secure and safe. We’re not borrowing unsecured funds from private lenders. They also get to earn a lot of money. I mean, when you pay them 8% compared to what they can get in the local bank, that’s a lot more times than what they can earn at a local bank.
Jay Conner [00:08:05]:
And we have a way that they can get their money back early in case of an emergency. So you may be asking, well, Jay, where in the world is this private money? I’m telling you, this private money is all around you. My wife Carol Joy and I, we’ve got 47 private lenders individuals right now funding our deals. And guess what? You don’t need 47. You just want to start with one or two. It could be your brother-in-law. It could be a past coworker, it could be a friend. It can be a relative.
Jay Conner [00:08:33]:
It could be somebody you go to church with. And I’m going to be showing you here in the next few minutes how you can learn the easy steps of getting plugged into this private money. My very first private lender actually came from church. It was on Bible study on a Wednesday night. I had gone to church there. I knew I wanted to talk to this one particular individual and we met after church. And I told them that I had now opened up my real estate investing business to people that I know and trust. And I told them that I need their help.
Jay Conner [00:09:08]:
I asked them to tell people when they hear someone that’s complaining about the stock market, the volatility of it, they can’t earn much money in the local certificate or deposit to please refer them to me. And I would tell them about the private lending program that I’m offering to individuals. And this individual looked at me and says, well now, what do you have in mind? And I said, well, it depends on the deal. And I said, are you interested? And they said yes. And that time back in 2009, they were only getting 3% at the local bank. And he said, Well, I don’t know, maybe five or 6% would be pretty good. I said, Well I can’t pay you 5% or 6%, I can pay you 8%. They became my 1st $250,000 private lender by me simply asking them to help spread the word.
Jay Conner [00:10:00]:
I went to their house the next day. I taught them the private lending program. You can duplicate my program and I’ll show you here in just a moment as to how you can download it for free in this ebook that I have for you. So again, it’s so simple. The private money for your real estate deals is all around you. You see, this word for private money is in contrast to the traditional way of borrowing money. The traditional way is you go to the local bank, you get on your hands and knees and you say, please fund my deal, please fund my deal. Well, in this world, you’re not asking anybody for money, you’re not asking for funding.
Jay Conner [00:10:39]:
Instead of asking for a mortgage or applying for a mortgage, you’re offering a mortgage. Very big difference. So now, you know, in the real world, it’s really private money. That is the missing link that you may have been searching for to get started in real estate. I mean, a lot of people say, hey, go get the deal under contract, the money will show up. That’s the most stupid thing I ever heard. Why do you want to get a deal under contract and you have no idea how you’re going to fund it? That’s why we want to get the money lined up first for your real estate deals.
Jay Conner [00:11:16]:
So you now understand when I’m talking about the significance of private money. Now let’s talk about how you can start attracting private money into your world right now. So here’s what I’d like for you to do first. First of all, I would like for you to download my free Private Money Guide. It’s called Seven Reasons Why Private Money Will Skyrocket. Your real estate investing business. This will get you on the fast track to getting private money. You download it for free at www.JayConner.com/MoneyGuide.
Jay Conner [00:12:02]:
So that’s www.JayConner.com/MoneyGuide now, right after you download the Money Guide, here’s the second actionable item or step that I’d like for you to do. I’d like for you to go through your cell phone and write down a list of all the retired people on your cell phone and your social connections. People you go to church with, Facebook friends, Instagram, et cetera. Now, the money guide that you downloaded first will get you on the pathway to start conversations with these people. How do you start a conversation with these people, with these retired people, and move them forward to them being a private lender for you? So here’s a summary of the key points in this episode. First of all, in this world of private money, you are making the rules.
Jay Conner [00:13:04]:
You’re not asking anybody at all. You’re attracting the money. You’re not chasing, begging, selling, or trying to persuade anybody. You’re going to put on your teacher’s hat and do what I do. You’re going to just start sharing and teaching people that you know how they can earn high rates of returns safely and securely. And how are you going to do that? By doing the first thing that I just want you to do download the Money Guide at www.JayConner.com/MoneyGuide. And you’ll do this and you’ll never miss out on a deal going forward because you didn’t have the private money. You’ll never miss out on a deal.
Jay Conner [00:13:41]:
I haven’t missed out on a deal since I started using private money all the way back in 2009. And I’ll tell you this, Carol Joy and I are in a very small market. We’re right here in eastern North Carolina. We do two to three deals a month. Our average profit is $78,000 per deal, and it’s all because of the private money. Listen, you don’t have to let fear of the unknown anymore hold you back with private money. Your real estate dreams really, really can come true. Be sure to follow me or subscribe to me on this podcast so you don’t miss out on any of the upcoming amazing episodes of Raising Private Money.
Jay Conner [00:14:24]:
I’m Jay Conner, and I hope to see you right here on the next episode of Raising Private Money.
God bless.
