All Forum Posts by: Malachi Weary

 Me. I've been a lender for 33 years and own a mortgage company. I also do a lot of industry speaking and consulting work for banks and law firms in addition to our loan and real estate investment activities. Everything I type in answers simply comes from years of experience, mistakes, and "seeing it all". 

That's one of the reasons we can't/don't do loans below $100K. There are fixed costs to us and variable costs to us as lenders. You mentioned a couple in your question. It costs me roughly the same amount to process a $10,000 as it does a $100,000 loan. I have to pay the processor per file...not based on a % of the loan. The appraisal is the same cost. You get the idea. Few of the costs are variable, which skews the fees charged as a percentage of the loan. Regulators look at loan fees as a percentage in most instances, so as we get down lower we can actually be in violation of regulatory rules such as usury simply because of the fixed costs. I would have to see the settlement statement to truly pick it apart, but small loans will typically have a much, much higher cost as a percentage of the loan than larger loans due to the fixed costs that are involved. I hope that helps. 

@Malachi Weary

Send me a DM if you want to talk in more detail. I'm happy to help and have nothing to sell. 

1. Browse the forums on topics of interest, listen to every podcast you can find - BP money, main BP podcast, Real Estate Rookie, On the market. Turn your car into a university on wheels. Same for books - read things like The simple path to wealth, Richest Man in Babylon, some of BP's book offerings, One Rental at a Time, Thy Psychology of Money, etc.

2. Develop a BS meter. You can look through posts and see who is giving solid, honest advice and who is either directly trying to sell or posting regularly to up their post count and presence to be noticed enough to get business. 

3. Reach out directly to individuals that cannot profit off of you purchasing a property or course AND that seem to know what they are talking about. I think that you would be surprised at how responsive a lot of folks are on this site. There is a large contingent of people that log on to answer questions and help new investors. I hope that I fall in that category.

@Robin Simon Is that enough value? I've also, in the last 60 days, saved 2 new investors a pile of money and stress (see previous post) from making a terrible investment on the other side of the country. I get on the phone with newbies that reach out 3-4 times a month to talk through their ideas and plans without the motive or possibility of making a dime off of them. 

Two real examples - 24 year old that just bought his first house hack and now has his mortgage covered renting out spare bedrooms on furnished finder based on our regular, ongoing conversation. Another 20 something that just downsized his life based on our chats - sold an expensive car and moved into a buddy's spare room to get his monthly expenses down to pay off debt and eventually invest. He's not ready to invest in real estate and needs someone to tell him that. The "get your financial house in order and start from a position of strength" section of RE investing advice gets skipped over by those with a profit motive. 

I'd go so far as to say that that's more "value" than some nonsensical STR list or "Best DSCR Lender" ad that pops in my notifications every week. I wish that I was big enough to let that go, but sadly I'm not. This one appears to be the straw that broke the camel's back. I'm just tired of some (definitely not all) agents, lenders, property managers, etc. soliciting business in a direct or indirect manner and then acting like they're innocent and "just trying to help". We all know what they are doing.

 What is the information they are asking? When someone asks us a question we are not going to answer we typically state: "Thank you for your question but as a private company we have certain trade secrets and business operations that we do not share". The other answer is "We have not finalized how we are going to address this specific issue at this time"