Building Real Estate Wealth in Small Markets Using Private Lenders

***Guest Appearance

Credits to:

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

"Raising Private Money Like A Pro: $2m In Just A Few Months!"

https://www.youtube.com/watch?v=Epb08dAiKDs 

For new and experienced real estate investors alike, the challenge of finding funding is one of the biggest obstacles to growing a profitable portfolio. If you’ve ever wondered how some investors manage to raise millions in private money, without begging banks or feeling desperate in front of lenders, you’ll want to pay close attention to the strategies shared by Jay Conner, known as the “Private Money Authority.” Recently, Jay joined seasoned investor couple Mel and Dave Dupuis for an in-depth discussion about the art and science of raising private capital for real estate deals.

Overcoming the “Bank Said No” Club

Jay’s real estate journey began traditionally, with bank financing. But in 2009, when his banker abruptly cut off his line of credit, Jay was forced into what he calls the “club of being told no by the bank.” Many investors find themselves here: good credit, a history of successful deals, but suddenly, institutional partners slam the door shut. For Jay, this so-called setback was the doorway to a better way: raising private money from individuals.

What Exactly is Private Money?

Private money, as Jay explains, is funds lent by individuals (not institutions) who are looking for secure, high-yield investment opportunities. Unlike hard money lenders, who often charge hefty fees and high rates, private lenders can be ordinary people—friends, acquaintances, or referrals—looking to invest their savings or retirement funds through self-directed IRAs.

Jay’s “Secret Sauce” to Raising Millions (Without Ever Begging)

Here’s where Jay’s approach is both counterintuitive and powerful: He never asks anyone for money. That’s right. Instead of pitching deals or putting on the hard sell, Jay puts on his “teacher hat” and educates potential private lenders about the opportunity to earn attractive, safe returns by acting as the bank. He keeps the educational conversation separate from any specific asks or deals.

The process goes like this:

1. Teach, Don’t Pitch: Jay hosts one-on-one conversations or small luncheons to explain how private lending works, what kinds of returns they can expect, and how their investment is secured.
2. Let Them Volunteer: By the end of the conversation, prospective lenders often tell him how much they have available to invest, sometimes even moving retirement savings into a self-directed IRA.
3. The “Good News Call”: Once a suitable deal comes along, Jay updates his new lender with a simple call: “I have good news! I can put your $150,000 to work on a house in Newport next Wednesday.” He explains the terms, closing date, and logistics—but crucially, he never “asks” for the money. The lender has already expressed their interest and is waiting for the opportunity.

This approach eliminates desperation, builds trust, and positions Jay as a partner and educator, not a salesperson.

How Jay Protects His Private Lenders

A major reason people hesitate to lend is concern about risk and security. Jay addresses this upfront:

• Each loan is secured by a deed of trust (mortgage) on the property, just like a bank loan.
• Maximum loan-to-value is 75% of the after-repair value, not the purchase price, ensuring enough equity for safety.
• Private lenders are named as mortgagees on insurance policies and as additional insureds on title policies.
• Loans are set up with conservative timelines (typically two years), so extensions or surprises are rare.
• Most importantly, if Jay ever fails to pay, the property itself secures the lender’s investm