Raising Private Money in Real Estate

Introduction

• Speaker: Jay Connor
• Focus: Raising private money for real estate deals.
• Importance of mindset before seeking funds.

Key Points on Raising Private Money

Mindset

• Own the real estate in your mind before investing.
• The right mindset leads to successful investment.

Personal Journey

• Started investing in 2003 focusing on single-family houses.
• Experienced challenges with traditional bank funding until 2009.
  • Bank cut off access to line of credit without notice due to financial crisis.
• Realized the need for alternative funding methods.

Discovery of Private Money

• Learned about private money and private lending from a friend, Jeff Blankenship.
• Definition of private money: loans from individuals, retirement funds, or investment capital.
• Introduction to self-directed IRAs, allowing individuals to invest their retirement funds in real estate.

Steps to Raise Private Money

1. Get Your Mindset Right

• Understand the opportunities private money can provide.

2. Teach Others

• Position yourself as a private money educator.
• Share information about private lending with your connections.
• Develop a program to inform potential private lenders.
• Separate teaching about private money from pitching specific deals.

3. Creating Relationships

• Approach people in your network (friends, church, community) to educate them about private money.
• Build trust and rapport before discussing actual deals.

4. Funding Process

• When a potential lender is ready, present a suitable deal based on their criteria.
• Use an exact script for communication with potential lenders.
• Example script for funding a deal:
  • Inform lender of a property under contract and funding required.
  • Confirm the lender’s readiness and the necessary steps for wiring funds.

Private Money Lending Details

Loan Structure

• Typical duration of a private money loan: around two years.
• Interest rates usually set around 8%.
• Payments can be structured based on lender preferences (monthly, quarterly, or interest-only).

Benefits of Private Money

• Fast closing on deals.
• Flexibility in payment structures.
• Potential for repeat business with lenders who wish to keep their funds working for them.

Finding Deals

Off-Market Properties

• Focus on off-market deals, not listed properties.
• Use Google search vendors for lead generation.
• Pay-per-lead services to find motivated sellers.

Successful Case Study

• Recent deal example:
  • Acquired a condominium for $425,000, renovated for $11,000.
  • Resold for $618,000, netting $161,000 after fees.
  • Highlighting the power of private money in quick turnarounds.

Final Advice

• Work with knowledgeable mentors and coaches in real estate to avoid costly mistakes.

Resources

Book Offer

• Jay's book: "Where to Get the Money Now" available for free at www.jayconner.com/book
• Book includes two tickets to a live event.

Free Guide

• Download free guide on seven reasons why private money will boost real estate business at jconor.com/moneyguide.

Conclusion

• Encouragement for listeners to take action and educate themselves on private money.