Transform Your Business: The Power of Asset-Backed Private Money for Real Estate Growth

***Guest Appearance

Credits to:

https://www.youtube.com/@lightspeedinvestingpodcast           

“Podcast Ep 88: Raising Millions Without Banks- Private Money Secrets with Jay Conner”

https://www.youtube.com/watch?v=Co6x-JhgtuE  

Building a successful real estate investing business often comes down to one key ingredient: funding. For many, the journey starts with traditional lenders—your local banks and mortgage companies. But what happens when those funding sources abruptly dry up? For Jay Conner, that moment marked a turning point, sparking a radical and highly profitable evolution in his investing strategy—one that anyone aspiring to real estate success can learn from.

From Banking Crisis to Private Money Breakthrough

As Jay Conner recounted to Philip Chan in a recent episode of the Lightspeed Investing Podcast, his real estate journey began conventionally. He and his wife, Carol Joy, started investing in single-family homes in Eastern North Carolina back in 2003, funding projects through local banks. For six years, it worked—until, abruptly, in January 2009, the bank called and shut down his line of credit.

“I learned like that over the telephone that my line of credit had been closed with no notice to me whatsoever,” Jay Conner recalled. With two houses under contract and no funding, panic could easily have taken over. Instead, Jay asked himself a crucial question: “Who do I know that could help me fix my problem?”

It was this pivot—from “how” and “what” to “who”—that led Jay Conner to private money, through a conversation with another investor, Jeff Blankenship. That conversation, and following exposure to private money at his first real estate investing conference, changed his business forever. Within 90 days, Jay Conner had raised $2,150,000 in new private funding—more money than he ever had from the banks.

The Power of Private Money: Simpler, Safer, Scalable

What is private money, and why is it such a game-changer? In Jay Conner’s words, it’s “getting funding from just ordinary people … using their investment capital or their retirement funds.” He calls it 'lazy money'—money that’s not working hard in CDs or low-yield savings, but instead can earn much higher, safer returns through real estate-backed loans.

Jay Conner offers his private lenders 8% annual returns—vastly superior to what most are earning at the bank, and, crucially, fully secured by first or second position liens on the property. That means the lender is protected by the real estate asset itself; if Jay fails to pay, the lender can foreclose. In addition, Jay won’t borrow more than 75% of the after-repair value of the property, ensuring a robust safety cushion for his lenders.

While this approach might sound complex, Jay emphasizes its simplicity. He doesn’t raise funds for a big, pooled investment fund, avoiding the need for complex legal structures. Instead, each lender’s loan is secured by a note and a deed of trust (like a mortgage), tied to a specific property. This transparency builds trust.

The Blueprint for Replicable Success

What’s most impressive about Jay’s method is its replicability—even if your market is small. “Our total target market is only 40,000 people, and we do two to three deals a month. Average profits are $86,000,” Jay Conner shares. You don’t need to swim in a huge pond; dominate a small market, and you can thrive.

Another key takeaway: momentum with private lenders grows. Jay now has 47 private lenders on his roster—and none of them had even heard of private lending before he taught them about it. He continues to source funds simply by educating those in his network about private lending’s opportunities and safety nets, then matching deals to those