All Forum Posts by: Dave Van Horn

Hi @Karen Margrave

Thanks for starting this discussion.

I’m leaning towards syndication; I prefer private placements. Actually, looking back, I don’t know how I did it any other way. It actually acts like an insurance policy, insulating me if the deal goes south, and any potential liquidation is well-defined. The cost of setting up the placements can be borne by the passive investors in the fund. What's nice about placements is that it continues to be my company after the investors are paid off, and I get to run day to day operations and maintain control. I prefer to pay a flat, consistent return without sharing any upside.

I like to think of it from a different angle—If I had unlimited capital, what could I do? So, with this train of thought, I consider scalability and product (or deal flow) just as often and just as importantly as I consider capital. I tend to think that making sure you have the manpower and systems in place to handle a certain amount of deals is just as important as raising the money to do them.

Best,

Dave

Hi Nick,

Thanks for reaching out!

I agree with @Ellis San Jose that there's a big difference between raising money for one deal vs. a big syndication.

And, I agree with @Bryan Hancock that it is smart to have the money teed up ahead of time, especially if it's a sizable project.

As far as mentioning your deals—the SEC doesn’t want you to hard sell anyone into an investment. But, this does not mean that you can’t have normal conversations with people, where you may mention your deals at some point after building relationships. If you’re interested, here are a few articles I wrote about raising money:

“Where Do You Find Your Investors? Here’s Exactly Where I Find Mine” http://www.biggerpockets.com/renewsblog/2013/05/29/find-investors/

“The Best Ways to Raise Private Money” http://www.biggerpockets.com/blogs/2872-daves-blog?page=4

A few things that I’ve done, which have really helped me, include the following:

1.Raise money for a charity.

2.Work for a company that’s trying to raise money for their projects, or connect with someone who’s raising money and offer to help.

3.Expand your Network the best you can, or join a better network, such as a CEO group.

My best advice would be to utilize a securities attorney. But, before you meet with him/her, be familiar with the key parts of a private placement. For example, have your business plan, use of proceeds, and bios of your key team players ready in advance. And, also, have your risk disclosures ready so that when you meet with the attorney, he will be able to set up the private placement quicker, easier, and for less money. I suggest using a template or speaking with someone who’s successfully utilized placements before.

I learned a lot by doing these things. I hope some of it helps!

Best,

Dave

Hi Taylor,

Unfortunately, we do take back properties on occasion. We own several thousand loans and file FC on about half of our portfolio but actually FC on < 10%. We rarely fix them. Most of them we sell as REO's . With 1sts you can also sell with owner financing or rent-to -own. With 2nds, many times we'll get a workout negotiated post FC sale, or we'll just rent it out, with us paying the 1st as a subject-to, or without paying the 1st and keeping the rent until the 1st forecloses, it's a business decision at that point.

Best,

Dave VH

As someone who specializes in 2nd mortgages, as well as delinquent 2nds where most have little or no equity, I tend to agree with Dion. There are a few points I'd like to add though. First of all there are multiple asset classes within the 2nd lien space and they tend to be priced accordingly. (e.g. 2nds trading at 2% of UPB, obviously this is a much riskier and much cheaper asset class) For our model, senior lien status is much more important to us than equity, especially in the current market, although equity is starting to rebound in some locales and thus note pricing will start to rise as there is a direct correlation. As for re-performing 2nds, we rarely see them trade at 15% these days ( but if you see any Dion, please let me know) and much of that again deals with length of time re-performing, as well as Sr. lien status, and then equity. I think another important factor here is not just how much you've paid for an asset (FYI, I have paid $.60 for a 2nd before in an up market and made $$) but how much, and how quickly you've turned a profit, and whether you've hit your own targeted revenue for that asset or pool.

"I'd rather have a mortgage payment than a rent check any day!"

And

"Leverage your equity"

Anyone else attending?

http://www.trustetc.com/2013-networking-conference/

They had some great speakers last year and I met a lot of interesting people.

Also, since I'm going to be in the Orlando area, I will also be attending a BP meetup too so feel free to join!

http://www.biggerpockets.com/forums/86/topics/97830-anyone-interested-in-a-central-florida-bp-meetup

Best,

Dave

@Steve Babiak I must have missed yah! We did have a booth as well.

Met and caught up with a lot of great people, if anyone wants to reconnect or connect here on BP just shoot me a message!

Sincerely,

Dave

Hey guys, I'm actually from Philadelphia but I'll be in Orlando for the Equity Trust Networking Conference so I would love to stop by!

Best,

Dave

Just a heads up, although I was there the last couple of years, I'm actually not speaking or attending this year's Noteworthy Convention.

I will be in Orlando at the Equity Trust Conference in September, is anyone else attending?

@Joe C.

Bill is right, there are 3 main types of licensing: collections license, mortgage origination license/mortgage broker license, and a servicing license.

Also just wanted to add that licensing requirements are very state specific.

One of the best affordable resources I've come across to learn about the requirements is ACAInternational.org

If you get to the stage of needing a good securities attorney recommendation, feel free to message me.

Best,

Dave