How Jay Conner Raises Private Money: The Power of A Servant’s Heart

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Jul 4, 2024

Renowned real estate mentor Jay Conner shares his journey into private money investing during the 2009 financial crisis, raising over $2 million in less than 90 days. The podcast covers strategies for attracting private lenders through education and a servant's heart approach, navigating SEC compliance, utilizing self-directed IRAs, and structuring emergency money returns for investors.

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ANECDOTE

Bank Cutoff Led To Rapid Private Money Raise

Jay lost his bank line of credit during the 2009 financial crisis and scrambled to fund two deals under contract.
He learned about private money and self-directed IRAs and raised $2,150,000 in under 90 days from church and Rotary contacts.

ADVICE

Lead With Teaching Not Pitching

Teach first instead of pitching; lead with education about safe high-yield lending and self-directed IRAs.
Host private lender luncheons and one-on-one teaching so prospects tell you how much they're willing to invest before any deal is presented.

ADVICE

Use A Good News Phone Call To Activate Funds

Use the 'good news' call once a lender is prequalified: tell them you can now put their money to work and give clear wiring/closing deadlines.
Avoid asking 'do you want to fund this?' since they've already committed amounts during education.

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*** Guest Appearance

Credits to:

https://www.youtube.com/@hanneshennche/podcasts

"How To Raise Private Money For Real Estate Deals With Jay Conner"

https://www.youtube.com/watch?v=EGQAOQF6rlM

In the recent episode of the Raising Private Money podcast, Jay Conner joins Hannes Hennche in an engaging and compelling discussion about raising private money for your real estate deal without ever asking for money.

Renowned as the Private Money Authority, Jay has been an influential mentor, guiding over 2,000 real estate investors in raising private money since 2011. This episode offers a comprehensive deep dive into private money frameworks, providing essential guidance for those aspiring to break free from traditional banking dependencies.

The 2009 Financial Crisis: A Pivotal Moment

Jay Conner's journey into private money investing was spurred by the financial crisis of 2009. Until that point, his investment strategy heavily relied on local banks for funding single-family houses. The sudden cessation of his line of credit by the bank during the global financial crisis left Jay in a dire predicament, with properties under contract and no fiscal avenues to proceed.

This crisis prompted a crucial self-reflection, leading Jay to a mentor who introduced him to the concept of private money and self-directed IRAs, forever changing the trajectory of his investment approach.

Leveraging Networks for Private Money

Equipped with newfound knowledge, Jay successfully raised over $2,150,000 within a span of 90 days by tapping into his existing network. His sources included acquaintances from his church and members of his Rotary Club. Jay's experience underscores the importance of personal connections and networking in the realm of private money lending.

For individuals who may not have an established network, Jay advocates for rapid network expansion. According to him, there is a direct and unassailable correlation between the breadth of one’s network and their net worth. He equips newcomers with strategies to build and nurture these relationships effectively.

Educating Over Selling: The Servant’s Heart Approach

A cornerstone of Jay's methodology is the principle of leading with a servant's heart. He emphasizes educating potential lenders rather than aggressively pitching investment opportunities. This educational approach fosters trust and counters any impression of desperation, which can be detrimental to securing funding.

Desperation, as Jay notes, carries a distinct and off-putting odor. In contrast, a calm, informative stance invites collaboration and mutual growth, making potential lenders more amenable to funding opportunities.

Ensuring Lender Security and Confidence

In his discourse, Jay underscored the paramount importance of protecting private lenders. Transparency and security are integral to his approach, providing assurances such as collateral, insurance, and an equity cushion. This not only fortifies lender confidence but also builds long-term, trust-based relationships.

Additionally, Jay's approach includes offering an 8% interest rate devoid of points or origination fees. This consistent and fair treatment of lenders further cements his credibility and reliability in the marketplace.

The Strategic Role of Self-Directed IRAs

A significant portion of Jay’s lenders use retirement funds through self-directed IRAs. This strategy enables greater flexibility and tax advantages for both investors and lenders. Many potential lenders are unaware of such opportunities until they are informed by knowledgeable mentors like Jay.

Collaboration with reputable self-directed IRA companies that adopt transactional fee structur