EP 76: Earning Income Through Private Real Estate Lending

Yeah.

Yeah, it's a good story.

So are you guys also actively buying your own deals with the money you raise?

Uh, so we don't own any of the real estate that we're lending on.

So we're in first lien position.

So we, we basically help borrowers, you know, bridge that gap, whether they're, you know...

I- ideally, they're putting down about half.

You know, our average deal is somebody wants to buy a shopping center, it's 5 million bucks and, you know, they put down two and a half, and we lend out the other two and a half.

That's your, your basic deal that we do and, and repeating that, you know, constantly.

Um, you know, we, we are considered a hard money lender.

We are a private source of funds.

Uh, so we are gonna lend money out at, at generally 12%.

Um, you know, you can get better rates from banks, but they're a nightmare to deal with.

You know, the... a deal that we could get done in a week might take them four, five, six months, and that's realistic.

It happens all the time.

Um, and what's worse is people will go through that underwriting process for four or five months, and they get turned down.

Uh, so then they're, you know, they're left scrambling and, you know, obviously the sellers of buildings don't wanna just let this thing sit in escrow for half a year plus, which is, you know, un- unfortunately very common in, in the commercial real estate world.

Um, so that's where we, we step in.

You know, like that property might have a bad tenant or two, needs some paint, need a parking lot repair.

You know, we f- uh, we'll fund it, do the deal, and then let them get all those good tenants so the building's performing better, it looks better and, and, you know, they can refinance us off at, you know, at a chosen time.

Um, but that's, that's the overall model of our, of our business.

Yeah.

Yeah, it's a good story.

So are you guys also actively buying your own deals with the money you raise?

Uh, so we don't own any of the real estate that we're lending on.

So we're in first lien position.

So we, we basically help borrowers, you know, bridge that gap, whether they're, you know...

I- ideally, they're putting down about half.

You know, our average deal is somebody wants to buy a shopping center, it's 5 million bucks and, you know, they put down two and a half, and we lend out the other two and a half.

That's your, your basic deal that we do and, and repeating that, you know, constantly.

Um, you know, we, we are considered a hard money lender.

We are a private source of funds.

Uh, so we are gonna lend money out at, at generally 12%.

Um, you know, you can get better rates from banks, but they're a nightmare to deal with.

You know, the... a deal that we could get done in a week might take them four, five, six months, and that's realistic.

It happens all the time.

Um, and what's worse is people will go through that underwriting process for four or five months, and they get turned down.

Uh, so then they're, you know, they're left scrambling and, you know, obviously the sellers of buildings don't wanna just let this thing sit in escrow for half a year plus, which is, you know, un- unfortunately very common in, in the commercial real estate world.

Um, so that's where we, we step in.

You know, like that property might have a bad tenant or two, needs some paint, need a parking lot repair.

You know, we f- uh, we'll fund it, do the deal, and then let them get all those good tenants so the building's performing better, it looks better and, and, you know, they can refinance us off at, you know, at a chosen time.

Um, but that's, that's the overall model of our, of our business.