Raising Private Money with Jay Conner Funding Solutions for Real Estate: Raising and Managing Private Capital
***Guest Appearance
Credits to:
https://www.youtube.com/@garretwong
"Startup Funding Explained: Everything You Need to Know"
https://www.youtube.com/watch?v=TzU9FmuVRDM
In the ever-evolving world of real estate investing, access to capital can make or break a deal. But what happens when traditional funding sources dry up or become too restrictive? This was exactly the dilemma faced by Jay Conner, a seasoned real estate investor in Eastern North Carolina, whose journey and strategies were explored in depth on a recent episode of the “Investing to Win” podcast with Garret Wong.
From Banks to Private Money: Jay’s Turning Point
For the first six years of his real estate career, Jay relied solely on institutional financing—local banks and traditional money sources to fund his single-family home deals. But as the 2008-2009 financial crisis arrived, Jay, like many investors, found his credit lines abruptly closed by the bank, jeopardizing multiple deals overnight. Instead of throwing in the towel, Jay asked himself a powerful question: Who do I know that can help me with this problem?
That introspection led him to Jeff Blankenship, a fellow investor who introduced Jay to the world of private money and self-directed IRAs. This new approach, Jay quickly learned, didn’t depend on bank approvals or credit scores but rather on relationships and transparency.
What Is Private Money?
Private money, as Jay describes, is direct investment from individuals, not institutions or hard money lenders. It’s a one-on-one relationship where investors loan funds secured against real estate, often using capital from personal savings or retirement accounts. Unlike hard money brokers who pool funds into lending operations (and charge higher rates and fees), true private lenders work directly with the investor.
Jay emphasizes that private lenders come from all walks of life. Most of his 47 active private lenders wouldn’t consider themselves sophisticated or accredited; many are teachers, civil servants, and retirees simply seeking better and safer returns on their investments.
Key Benefits of Private Money Lending
Why does Jay champion private money with such passion? He lists several compelling advantages:
- Flexibility and Speed: Without lengthy bank underwriting, deals can often close in as little as five to seven days—sometimes a lifesaver for properties facing foreclosure or competitive bidding.
- Fewer Restrictions: Private lenders don’t cap the number of deals or the size of your line of credit. Jay’s deals frequently involve borrowing up to 75% of the after-repaired value (ARV), and it’s common for him to leave the closing table with “excess cash to close”—funds above and beyond the purchase price, useful for renovations or reserves.
- No Appraisals or Red Tape: Instead of formal appraisals, Jay uses comparative market analyses (CMAs) to justify values to his lenders—trusted personal relationships eliminate most bureaucratic hurdles.
- True Win-Win: Lenders earn higher, predictable returns (Jay typically offers 8% straight, sometimes accruing during a flip or paid out monthly), while investors unlock funding quickly and efficiently.
Building Trust and Educating Lenders
The cornerstone of Jay’s approach isn’t just a promising rate—it’s education and transparency. He never pitches deals out of desperation or attaches a project to an initial conversation. Instead, he teaches potential lenders about the opportunity, shows them exactly how they’ll be protected, and only connects them to a specific deal when it matches what they want.
Notably, Jay suggests that new investors leverage the credibility of an experienced partner or mentor when starting. If you haven’t completed