I LOVE being the bank!

Real Estate Deal Analysis & Advice
10yFollow

I LOVE being the bank!

Chad Brey
Specialist · Bakersfield, CA · Member since 2016 · 74 posts · 35 votes

My money is in the lowest risk position, I'm the first to get paid, and I make the most money! 

I love my job! 

6Reply
175 views

Most Popular Reply

Joel Fischer
Henderson, NV · Member since 2016 · 84 posts · 21 votes
10y

Chad,  A few paragraphs about how one might go about getting into private lending and the keys to succeeding in it as you have would be greatly appreciated by the BP community.

8Reply
See this reply in the discussion

64 Replies

Jump to latestLatest
  • Keeya WangJones
    WA · Member since 2016 · 99 posts · 44 votes
    10y
    Bac Nguyen I will be there to learn more. I'm in San Diego. First-time investor.
    0Reply
  • Bac Nguyen
    Notes Investor · San Diego, CA · Member since 2012 · 109 posts · 51 votes
    10y

    @ Keeya - Welcome and hope to see you at the meeting tomorrow. I will be present a "deal profile" for one of my 2nd NPN. So, we can learn and avoid the mistake that I make :)

    Cheers,

    0Reply
  • Jeet Sangha
    Realtor · Gilroy, CA · Member since 2016 · 255 posts · 72 votes
    10y
    Chad Brey Hey Chad, I'm always looking to meet local real estate professionals. Glad you posted here, I'm actually considering a private lender for my next rehab
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Chad Brey  under what license do you lend money..  CA BRE  NMLS RLMO?

    I did not see a brokers license number on your profile or sig line..

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    3Reply
  • Daren H.
    Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
    10y

    I can see it being great to be the "bank" if you are the decision maker and your compensation is directly correlated to getting paid points, interest, etc off of "other people's money". If you are simply the guy or gal giving the bank your money as a private lender, have no decision making power, and are hoping the bank makes good decisions to give you a good return, I don't think that is so great. That is pretty normal. It is not that different from investing in stocks, bonds, mutual funds,  etc. 

    0Reply
  • Seiichi Ishikawa
    Los Angeles, CA · Member since 2016 · 16 posts · 9 votes
    10y

    @Bac Nguyen and @Chad Brey, thank you for the information. The interest my friend offered to pay is in line with your numbers. 2nd trust deed, money for the rehab, about 10% LTV.

    1Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    10y

    It works out nicely :)

    0Reply
  • Peter C.
    Investor · Felton, CA · Member since 2016 · 37 posts · 14 votes
    10y

    @Chad Brey Thank you for starting this thread and for the book recommendation; I will definitely be checking it out. As an aspiring lender, I would love to hear a little bit about how you got into the business and made your success.

    @Jay Raught @Jay Hinrichs Glad to see you are both posting here; I'm interested to see what this thread develops into. I've learned a lot from both of you as I build my basic understanding of this area of investing.

    2Reply
  • Bac Nguyen
    Notes Investor · San Diego, CA · Member since 2012 · 109 posts · 51 votes
    10y

    @ Keeya - Correction, the SDNI meeting is on Thursday, Sep 8, 2016.

    0Reply
  • Chad Brey
    OP
    Specialist · Bakersfield, CA · Member since 2016 · 74 posts · 35 votes
    10y

    Jay:    We do not have brokers licenses.... our brokers do. As does the real estate attorney we work with, title, escrow, servicing co., etc. To avoid being in violation of certain lending laws, we tell the broker what our criteria is, step back, and they do the negotiating with the borrower, manage the docs, etc. This way we are compliant with CA usury laws and stay on the DRE/BRE's good side. We are considering obtaining a broker license in the future, but for now we just let the brokers on our team do all the work. 

    Daren:     See response to Jay above. In our case, the private money lender is the broker. We are the bank (money source), but we make the decisions, meaning we tell the broker our underwriting criteria and how we'd like the deal structured, and the broker goes to work for us, "for points". We get the interest payments from the borrower (through a licensed servicing company). The servicing company/escrow pays our OPM sources (other people's money) first, and we keep the rest (the spread). I LOVE this business because we play such a passive role. 

    0Reply
  • Bryce Davis
    Los Angeles, CA · Member since 2014 · 113 posts · 17 votes
    10y

    So if i have 500k liquid cash. Following your model i can make 50k a month. Is that correct?

    If not could you provide potential profit numbers on 500k monthly and annually. 

    0Reply
  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y
    Originally posted by @Jay Raught:

    @Colleen F. I started with less than 60k and I own 7.  The amount will differ dependent on if you are buying a performing note, non-performing note, a second position note etc. 

     jay, can u recommend a book or a source where i can get the nitty gritty detals on how to start? i am tired of renovations and need to venture out a little bit.

    and yes, you see poor bankers. bear sterns and company. remember?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Chad Brey  Love it someone doing it the right way.. so many folks from CA get on here and argue they can lend money with no licensure or use a broker.. if its your own money and your doing more than 7 a year and it sounds like you are.. this is exactly how you need to be set up.. Congrats again on doing it the right way.. I hope you get a lot of business, and the borrowers will understand your fully compliant.. the amount of lender scammers this summer on BP was off the charts.. it seems to have calmed somewhat as many got called out.. and there was a concerted effort buy the BP members to help the newbie understand they can't borrow 100% of their first project at 3 % interest  LOL.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    2Reply
  • Chad Brey
    OP
    Specialist · Bakersfield, CA · Member since 2016 · 74 posts · 35 votes
    10y

    Jay: Haha... 100%LTV @3%. That's how the banks went belly up during the 2008 bubble burst. You're right though, I've "known" private lender newbies who've tried to lend money without working with a broker but "acting" as the broker and get nailed by the SEC.

    They WILL learn the hard way though. 

    Ever live in Los Angeles? I went to school with a Jay Hinrichs

    0Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    10y
    Chad Brey I'm from CA, as you asked. I like it when Jay Hinrichs appreciates somebody. I too am a fan of doing it right. Keep up the education, maybe someday if I decide to get passive income, I might remember you. Lol. Right now there's always something going on around LA, especially on commercial and government side so bank accounts keep depleted which is good, money sitting in the bank is not good, simply means it's not working for you. Hope you'll get more business.
    0Reply
  • Antonio Cooper
    Investor · Lansing, IL · Member since 2016 · 7 posts · 3 votes
    10y

    @Chad Brey I am from the South Suburban Chicago Area Chad and was wondering if you would be willing to help me with a refinance on a property that has been appraised at $200,000 and the amount to payoff the hard money lender is $136,000.

    0Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    10y

    Ive done private lending and like it. But its not the only way to make money and has its own drawbacks. For example you dont control the asset. In a downturn borrower can hand you the keys and walk away. Multiply that by 300 and @Jay Hinrichs can tell you that story. Also, any interest and points income is taxed at ordinary income rates. No depreciation, no 1031 exchanges nothing. For someone in a high tax bracket thats a big concern. There are others but you get the point. There is no single magic bullet investment strategy. BTW you cant compare yourself to big banks. If they fail we bail them out. They have access to unlimited capital at 0% from the Fed. You dont. And there is a reason private lenders exist. Its because banks dont do these loans. Ever wonder why?

    3Reply
  • Lesley Rodriguez
    Miami Lakes, FL · Member since 2016 · 22 posts · 7 votes
    10y
    Chad Brey yes , thank you for sharing your knowledge & book. I am just starting off into the whole REI but first with wholesaling but have been interested in the Deeds & have been trying to gather Info on it. Just joined BP & love all the info that ppl sharing.. Thanks
    0Reply
  • Peter C.
    Investor · Felton, CA · Member since 2016 · 37 posts · 14 votes
    10y

    @Account Closed Thank you for sharing some insights on the other side. 

    It is interesting to compare what would happen to a person's portfolio in a downtown, depending on if they were more exposed to rental property or focused on "being the bank." I think it would hard to argue against some of both. A moderate amount of secured private lending could actually be a great help in a downtown. The tax advantages of rental property are too hard to pass up as well. 

    0Reply
  • Chad Brey
    OP
    Specialist · Bakersfield, CA · Member since 2016 · 74 posts · 35 votes
    10y

    @Peter C. No problem. As per your request earlier, I'd love to tell you about how I got into the business and how it became successful. It'd be too lengthy to type out in this chat forum, so we can always email back and forth. 

    0Reply
  • Vinford Michael
    Wholesaler · Newark, NJ · Member since 2016 · 1 post · 0 votes
    10y

    Hello @Chad Brey,

    Would you or have you already invested in the NYC Tri-State area?

    0Reply
  • Bryce Davis
    Los Angeles, CA · Member since 2014 · 113 posts · 17 votes
    10y

    @Vinford Michael

    Chad Brey is advertising his business on the forums just going round about it. I talked to him via PM and he sent me a link to his PAID training. Such a scam. I'm not going to pay him thousands to tell me about his methodology. Just another person trying to make money by scamming people. 

    0Reply
  • Chad Brey
    OP
    Specialist · Bakersfield, CA · Member since 2016 · 74 posts · 35 votes
    10y

    What paid training are you talking about?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Bryce Davis  to be fair to Chad can you post a link to what he sent you so the BP members can see what your talking about.. don't want to acuse someone of this.. ( I know its a pet peeve of many to get suckered into those that just want to sell you their system)  here on BP.. when you think they are offering free advice.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Bryce Davis
    Los Angeles, CA · Member since 2014 · 113 posts · 17 votes
    10y

    @Jay Hinrichs

    Direct from my PM

    hey Chad im a successful investor in the Carolinas but your being the bank post got me to read the bankers code. Excellent book. I was wondering would you be willing to take on a mentee?

    Bryce

    You, sent 2 days ago

    Sure. That's what we love to do, we love to teach people about Trust Deed Inveting and how to make money like the banks do. If you check our website you can email or talk to me or any of my business partners - we'll get back to you as soon as we can with any questions you might have.

    http://*His WebLink Entered Here* Not copying due to spam 

    Nice to meet you Bryce!

    Chad

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free