Raising Private Money in Real Estate

Introduction

• Speaker: Jay Connor
• Focus: How to raise private money for real estate deals.
• Emphasis on mindset: "Own the real estate in between your ears."

Jay's Background

• Started investing in single-family houses in 2003.
• Faced challenges with traditional banks for funding.
• Experienced a turning point in 2009 when the bank shut down his line of credit.

The Shift to Private Money

• Introduced to private money and private lending by a friend during a crisis.
• Private money refers to individuals, not banks, lending money to real estate investors.
• Importance of self-directed IRAs for funding without tax penalties.

Steps to Raise Private Money

1. Get Your Mindset Right

• Approach the situation positively and be knowledgeable.

2. Teach Others About Private Money

• Position yourself as a teacher and expert.
• Connect with your network (friends, church, community)
• Share what private money is and how it benefits lenders.

3. Separate Conversations

• Avoid desperation; don't ask for money when you need it.
• Focus on educating potential lenders first.

Funding Structure and Process

• Example of how to approach a potential lender:
  • Discuss the program, rates of return, and how to get money back in emergencies.
  • Present a specific deal after the lender expresses interest.
• Jay has 47 private lenders funding his deals, all educated about private money.

Key Points on Private Lending

• Interest rates typically around 8% (higher than banks).
• Loan duration: usually around two years.
• Payments depend on lender's needs (monthly, quarterly, or interest-only).
• Private lenders prefer to keep their money reinvested rather than paid back.

Finding Off-Market Deals

• Importance of sourcing deals outside the MLS.
• Utilizes Google search vendors for motivated seller leads.
• Emphasizes the significance of having consistent leads.

Successful Deal Example

• Recent deal netting $161,000 profit:
  • Purchased a beachfront condo for $425,000.
  • Renovated for $11,000 and sold for $618,000 within weeks.
  • The ability to close quickly thanks to private money.

Final Advice for Aspiring Investors

• Work with a knowledgeable mentor.
• Avoid mistakes made by inexperienced investors.

Resources

• Jay's book: Where to Get the Money Now (bestseller on Amazon).
  • Offers insights into acquiring funding without traditional lenders.
  • Includes tickets to a $3,000 live event.
  • Get the book for free at www.jayconnor.com/book (autographed and express mailed).
  • Additional resource: Free guide available at jconor.com/moneyguide