Private money lending

[Marty Smith]

Hi BP friends.  I'm currently a private money lender based here in Phoenix.   I'm currently seeing a surplus of capital and reduction of rates with new competition.  I'm looking for alternative options to place capital such as purchasing discounted or non performing notes.  Also looking at lending on less than conventional types of deals. For example out of area deals, construction projects, mobile homes on land, commercial etc.   It seems like a lot of the players here are going after the small stuff :)   Does anyone have any ideas or tips of where to start looking?  Thanks guys, appreciate your insight.  

[Jay Hinrichs]

@Marty Smith I think the biggest void out there today for private or HML is ground up construction loans.. those that specialize in that niche has NO problem with deal flow.

your target borrower is the builder that had to BK in 07 to 2011 because of market conditions but has uber experience and now can't go to their local bank like they used to .. but they still can execute and they usually have enough capital to have equity as well.

I tried to get a few of the crowdfunding platforms to open up ground up in the PDX market but they only want rehab loans and as you know rehabs loans are sooooo competitive these days.. especially for proven borrowers.. in our PDX market a proven borrower can get 100% up to 80% LTV from his or her pet lender NO problem.

Look at what Gorilla Capital is doing.. I know the owner well and you may know him as well as they were pretty active PHX court house steps buyers for the good years.

those are some ideas.. the NPN and buying notes is saturated as well with all the Guru's and such teaching the mass's how to do it.. I know I do some owner financing and in many markets I will get oh 10 to 20 yellow letters.. all saying the same thing... Hey you don't want to fool with taking payments let me cash you out now... Its the same as the letters used to buy homes.. just the discounted note spin. Not to say you can't do it... but its going to take a lot of effort to get deal flow.

I went out and created my own deal flow in this space so we are closing 10 to 15 of these each month but its a process that I have created top to bottom.