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How to Raise Private Money for Real Estate Without Begging for It
One of the biggest reasons people never get started in real estate investing is simple: they think they do not have enough money.
They see an opportunity, maybe even a great deal, but then reality hits. They look at their bank account, see they are short on cash, and assume that means the deal is dead. Or they think the only option is to go beg a bank, rack up debt, or awkwardly ask friends and family for money.
The good news is that none of those are your only option.
In this episode of the Money Ripples Podcast, I sat down with Jay Conner to talk about how to raise private money for real estate without having to ask for it in a desperate or uncomfortable way. Jay has been investing in real estate since 2003, has completed over $118 million in transactions, and has become one of the top voices on private money for real estate. What I love about his approach is that it is not about pressure, sales tricks, or manipulation. It is about education, structure, and solving problems for both sides.
If you have ever wondered how to fund real estate deals without relying on traditional lenders, this is a conversation you need to hear.
Why Private Money Can Be Better Than the Bank
Most people are trained to think that if they need money for a deal, they should go to the bank first. That is what most investors do in the beginning. And yes, sometimes that works. But private money offers some big advantages that traditional lending simply cannot match.
For one, private money gives you more flexibility. When you borrow from a bank, the bank makes the rules. They decide the underwriting, the terms, the payment schedule, the documentation, and whether they even want to lend at all. With private money, the structure is much more customizable. You are creating an opportunity, not begging for approval.
Another major advantage is speed. Jay mentioned that he can close on some deals in as little as seven days. If you know anything about real estate, you know that speed matters. The faster you can close, the stronger your negotiating position becomes. Sellers love certainty, and time kills deals.
Private money also removes some of the normal limitations that come with institutional financing. Jay pointed out that there is no preset cap on how many deals you can do just because a bank has decided you have hit your borrowing limit. On top of that, your credit score is often not the deciding factor. Private lenders are not usually focused on your FICO score. They are focused on the opportunity, the security, and whether they trust you.
The Mindset Shift That Changes Everything
One of the most powerful takeaways from this conversation is that raising private money is not really about asking for money.
It is about offering an opportunity.
That is a very different mindset.
Jay explained that he never starts with a deal. He does not lead with desperation. He does not call someone and say, “Hey, I need money for this property. Can you help?” That instantly puts you in a weak position.
Instead, he starts by diagnosing whether someone even has a problem.
For example, he might ask a simple question like, “With the markets being so crazy these days, are you invested anywhere that is giving you a really good return?”
That question does two things. First, it gets the person talking. Second, it helps reveal whether they are happy with what they are currently doing. If they say they are earning excellent returns already, then there may be no reason to continue the conversation. But if they say their old 401(k) is sitting there doing nothing, or their money is barely earning anything in a bank account, now you know there may be a need you can help solve.
That is the shift. You are not chasing money. You are identifying people who already have money that is underperforming, then showing them a better alternative.
Ordinary People Can Become Private Lenders
A lot of people hear “private money” and assume that means rich investors, financial insiders, or some secret network of high-net-worth people.
But Jay made it clear that many private lenders are just ordinary people.
They may be professionals, retirees, business owners, or people with old retirement accounts sitting idle. Some may have money in self-directed IRAs. Others may have cash parked in a CD or savings account earning next to nothing. The point is, they are often not looking for something complicated. They are looking for something safe, understandable, and better than what they are currently getting.
That is why education matters so much.
Most of these people have never heard of private lending until someone like Jay explains it to them. They do not know how self-directed retirement accounts work. They do not know what an asset-backed loan looks like. They do not know what protections can be put in place.
Once you teach them how it works, and once they understand the safeguards, the conversation becomes much easier.
How Private Lenders Are Protected
One of the biggest concerns people have when they hear about private money is safety. And honestly, that is a fair concern.
If someone is going to lend money for your real estate deal, they need to know how they are protected.
This is where Jay’s system is powerful. He is not borrowing unsecured money. He uses asset-backed debt. That means the private lender is secured by the property itself. They receive a promissory note and a deed of trust or mortgage, depending on the state. They can also be named on the insurance policy and title policy for additional protection.
That is a major difference between this and many other investment structures. In some larger real estate deals, investors are simply buying into a fund or syndication. They may own equity, but they do not necessarily have a direct lien position on the property. With the kind of single-family private money deals Jay is talking about, the lender has a more direct and secured role.
That added security can make a huge difference in helping people feel comfortable.
The Fear That Stops Most Investors
I asked Jay what tends to hold people back from doing this, and one of the first things he mentioned was fear of rejection.
That makes sense. A lot of people hate the idea of being told no. They do not want to feel like they are pitching. They do not want to come across as needy or salesy.
But Jay’s answer was simple and brilliant: how can you be rejected if you are not asking for anything?
That is what makes this approach so much less stressful. You are not trying to convince everyone. You are not twisting arms. You are simply educating people and showing them an opportunity that may solve a problem they already have.
The second big fear is credibility, especially for newer investors.
If you have not done many deals yet, it is reasonable to wonder why anyone would trust you with their money. Jay’s advice was clear: if you are new, partner with someone experienced. Bring credibility into the deal. Learn from someone who has been there before. Protect your private lenders by making sure you have proper underwriting, good deal analysis, and conservative offers.
That is smart advice. Confidence does not come from pretending you know everything. It comes from building the right team and following a proven process.
Why Conservative Deals Matter
At the end of the day, the deal itself still matters.
You can have great people, good communication, and proper paperwork, but if you overpay for a property or underestimate repairs, you can still get into trouble.
Jay talked about how renovations rarely come in perfectly on budget. Surprises happen. Murphy lives in every house. That is why your margin matters so much. If you buy right, that spread protects both you and your lenders.
That is one reason I believe so strongly in not just chasing returns blindly. Whether you are borrowing capital, lending capital, or investing passively, there needs to be a real cushion in the deal.
The numbers have to work.
Can This Work Outside of Real Estate?
One question I asked Jay was whether this kind of funding model could also work for private equity, business investing, or other types of deals.
His answer was yes, the same principles can apply. Money is money. People are still looking for opportunities. The challenge is that when you move outside of real estate, you may not have the same kind of collateral backing the investment. That makes structure even more important.
This is one reason real estate can be such a great place to start. You have a tangible asset. You can secure the loan against the property. That makes it easier to explain, easier to document, and often easier for lenders to understand.
Raising Private Money Creates a Ripple Effect
What I love most about this conversation is that private money is not just about helping the investor.
es, it can help you close more deals, build wealth faster, and create passive income. But it also creates value for the people lending the money. They can earn better returns than what they might be getting in a savings account, CD, or stale retirement plan. It can create more cash flow and more options for them too.
Then the ripple goes even further.
The contractors get paid.
The realtors get paid.
The distressed seller gets relief.
The buyer gets a home.
The investor builds wealth.
The lender earns passive income.
That is how real wealth works when it is done right. It blesses more than just one person.
Final Thoughts
If you have been holding yourself back from real estate because you think you do not have enough money, I want you to stop using that excuse.
Lack of personal cash does not have to mean lack of opportunity.
What matters more is whether you know how to structure deals, protect lenders, communicate clearly, and create real value. Private money is not magic, and it is not a shortcut around doing your homework. But it is a powerful skillset that can dramatically accelerate your ability to do more deals and create more freedom.
The biggest lesson here is this: stop thinking like someone who needs money, and start thinking like someone who solves problems.
That shift alone can change everything.