Raising capital for real estate investments doesn’t have to depend solely on traditional banks. As Jay Conner revealed in a recent Money with Mission podcast, transitioning to private money can provide a more flexible, accessible, and profitable way to fund your deals. By exploring this approach, you can leverage private money to grow your real estate business and achieve financial freedom.
What Is Private Money?
Private money refers to funds sourced from individuals rather than financial institutions. These individuals, often from your personal or professional network, have the capital they want to invest but prefer not to manage real estate deals themselves. As a result, private money creates a win-win scenario: investors earn better returns than they would with traditional financial products, and you gain the capital needed to close deals quickly without the red tape of bank loans.
Furthermore, unlike hard money, which comes from professional lenders with higher interest rates and stricter terms, private money is more relationship-based. It’s about building trust, educating your lenders, and creating opportunities for mutual success.
How to Start Raising Private Money
To begin raising private money, the first step is to shift your mindset. Rather than viewing yourself as a borrower, start seeing yourself as an educator. Your role is to teach potential lenders about the benefits of private money investing and how they can secure high returns.
Next, start networking within your community. Jay Conner successfully raised over $2.1 million in private money by simply reaching out to people in his church, Rotary Club, and other local organizations. Importantly, he didn’t ask for money directly; instead, he shared his knowledge and allowed potential lenders to approach him.
One key technique Jay uses is what he calls the “great news phone call.” After a lender expresses interest, he informs them when a deal is ready, without asking if they want to fund it. This approach removes pressure and builds confidence between both parties.
The Benefits of Private Money
Using private money offers several advantages:
First, it lets you close deals quickly—often a critical factor in competitive markets. With private funds at your disposal, you can move fast when opportunities arise, securing properties before other investors even have a chance.
Second, private money can help you scale your real estate business. Instead of being limited by your capital or the slow approval processes of banks, you can tap into a broader pool of resources. This access to capital enables you to take on more deals, increase your profits, and grow your portfolio faster.
Finally, private money fosters strong relationships with your lenders. By helping them achieve their financial goals, you create a network of investors who trust you and are eager to support your future projects.
In conclusion, private money is a powerful tool for real estate investors looking to break free from the constraints of traditional financing. By educating your network, building trust, and providing excellent returns, you can raise the capital you need to succeed.
