whats up with Kiavi

Buying & Selling Real Estate
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whats up with Kiavi

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Not sure about any other lenders or Capital partners like I am.. but I have gotten 4 request in last 7 days to take out stalled projects funded by Kiavi and last month closed one that paid off Kiavi

as a rule of thumb dont generally bail out other lenders.. but it sounds like they are not all the flexible if the project runs over dollar wise or time wise leaving their clients to scramble and have to pay title and escrow again points again and new interest rates .. instead of helping their clients through a tough spot like I personally do

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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
1d

Despite all the conveniences of the virtual age I miss the local connections. Back in the 90s I dealt with 2 inner city neighborhood banks. One in particular never foreclosed and one day when I was in there making a deposit the bank mgr threw me a sweet deal on a property that was in default. I got a shell in prime location, buyer walked with a few thousand and bank flipped it into a new mortgage that was paid on time.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1d

    We have been receiving similar and it's not just the lender you mention. Many of these institutional lenders are getting very strict and not allowing for extensions and not allowing any changes to the loan amount or construction draw process.
    tightening belts as I believe they finally have to statrt to figure out what to do with all their defaults  

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    • Jay HinrichsBusiness Member
      OP
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1d

      I suspect also since most of the big box non trad lenders package up and sell their notes to hedge funds might not be in the lenders control

      there is value in doing deals with lenders that control their own funds without selling off their paper..

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    • Jules Aton
      MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
      1d

      Despite all the conveniences of the virtual age I miss the local connections. Back in the 90s I dealt with 2 inner city neighborhood banks. One in particular never foreclosed and one day when I was in there making a deposit the bank mgr threw me a sweet deal on a property that was in default. I got a shell in prime location, buyer walked with a few thousand and bank flipped it into a new mortgage that was paid on time.

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    • Jay HinrichsBusiness Member
      OP
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1d

      agreed on local banks.

      coming out of the GFC and getting humbled big time personally.. My bank kept 1 LOC for 1 mil for me even though the feds were on them to call that loan to.. So they also foreclosed on lots.. they allowed me to use my LOC to buy the lots from them and then gave me vertical to build them out.. thats how I got started building houses by accident.. 300 houses later with the same banker. I started with him in 93 and we are still at it. He and I will retire about the same time I think .. although I will never retire doing what I do is not a JOB in the sense most people think of a job its really just managing finances and investments but helping others build their portfolios and do their flips.

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    • Robin SimonBusiness Member
      Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
      1d

      We might **actually** be seeing the long-awaited valuation "crash" (although more like correction) starting to appear. Many of these hard money lenders have basically never lent in a truly declining market in like 15+ years...

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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    1d

    They just sold the company a couple months ago - probably a lot of turbulence and changes in that kind of thing.

    https://nationalmortgageprofessional.com/news/figure-acquires-top-rtl-lender-kiavi-717m-deal

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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    1d

    They have new folks they're answering to. So there's no longer extend and pretend. Once you start swapping yields, you start answering to different folks and anything that doesn't come in properly faces the consequences.

    And really they should be stiffer up front. There's a lot of accountability that needs to come; overbid, underwrite incorrectly these things just to win. Really, you lost.

    It's happening exactly how it should.

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  • Bonnie Low
    Lender · Asheville NC · Member since 2025 · 1 post · 0 votes
    22h

    Same here, @Jay HinrichsWe've been getting a lot of these bailouts as well. Seems like terms change at the last minute and borrowers are left unable to close the deal. I'm being told by clients they don't have anyone they can reach out to for an explanation or support. I don't think Kiavi is the only big lender in this position. The reliance on virtual support is taking a toll on client relationships. This has been going on for at least the last year.

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    • Jay HinrichsBusiness Member
      OP
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      20h

      borrowers calling me are coming up on note due dates or ran out of rehab funds.. both not great positions to be in and when lenders are in flexible can lead to some pretty stressful situations especially newer flippers that have never dealt with an aggressive/corporate lender.

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    21h

    This makes no sense to me. Foreclosing in a down market heightens the probability that you will end up owning a property that continues to decline in value. It seems like a sure way to lose money when you eventually try to sell.

    The commercial banks learned to “pretend and extend” during the GFC, and many are doing it again now, aggressively, in the multifamily market.

    According to a recent article, Kiavi earned $250 million on $7.8 billion in loans. That's "roughly 3.2%, top line, on every dollar it lent," according to the article. Short-term Treasuries have been returning more than 4%, risk-free and partially tax-free. Figure paid $717 million for Kiavi. Maybe that represents a better ROI, but clearly there is more to the story.

    I know Figure bought Kiavi to expand its tokenization business, but 3.2% in revenue would otherwise be unacceptable to me, considering the alternatives.

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    • Chris SeveneyBusiness Member
      Moderator
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      6h

      No choice honestly. Many of these borrowers also walked away from rehab projects and proeprties are just sitting colleccting violations / fines and increased tax bills.

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    • Robin SimonBusiness Member
      Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
      2h

      3.2% is very solid in the current industry and market environment.

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