Real Estate Debt Funds: How Fix and Flip Lending Actually Works - Episode 227 w/ Brandon Rickman

Real estate debt funds sit on the other side of every fix and flip, and Brandon Rickman has worked both sides. Brandon and his wife flipped between 500 and 600 houses in metro Atlanta before he co-founded ProLend Capital four years ago. He joins Alternative Investing Advantage host Alex Perny to explain how these loans are underwritten, how draw schedules work, and what an investor should ask before investing in a fund. Key Points: \- He switched sides for economics. Brandon says his flips grossed 20 to 25 percent but netted closer to 9 percent after the work. \- Borrowers fall into three buckets. Institutional banks underwrite the person, while hard money and private lenders underwrite the property. \- His fund never lends above 70 percent of the value. That leaves at least 30 percent equity if a property has to be taken back. \- Rehab money sits in escrow and is released on inspection. Finish half the flooring, and you get half that drawer, not all of it. \- Leverage inside a fund matters for retirement accounts. Brandon confirms his fund uses none, which Alex ties to tax treatment for IRA investors. Chapters: 00:00 Introduction: real estate debt and fix and flip lending 02:40 From 600 house flips to running a debt fund 06:16 Why he moved from flipping to lending 09:59 The deal that tied up his capital for two years 16:56 Institutional, hard money, and private lending compared 23:09 Why the fund focuses on fix and flip over DSCR 26:11 How a fix-and-flip loan gets underwritten 32:06 How draw loans work and what triggers a release 37:13 Loan terms, points, and interest 43:04 How investors participate in a debt fund 48:34 Why leverage matters for IRA investors 50:46 How to connect with Brandon Rickman Subscribe to our YouTube channel and join our growing community for new videos every week. If you are interested in being a podcast guest speaker or have questions, contact us at Podcast@AdvantaIRA.com. Learn more about our guest, Brandon Rickman: https://prolendcapital.com/ Learn more about Advanta IRA: https://www.AdvantaIRA.com/ https://podcasters.spotify.com/pod/show/advanta-ira https://www.linkedin.com/company/Advanta-IRA/ https://twitter.com/AdvantaIRA https://www.facebook.com/AdvantaIRA/ https://www.instagram.com/AdvantaIRA/ #RealEstateDebt #SelfDirectedIRA #FixAndFlip