Originate Report - December 2018

DECEMBER 2018 THE OFFICIAL MAGAZINE OF GERACI

Industry Spotlight:

Cities to Watch:

Chicago

Adonis Lockett,

Lockett-N-Homes

Also Inside

BREW JOHNSON & the Power of

PeerStreet

December: Blending

TRADITION with

TECHNOLOGY ORANGEWOOD

Foundation

YIELD COMPARISON www.originate.report 1

2 Originate Report | December 2018

contents DECEMBER 2018

Features

16 Three Factors to Watch in a Cooling Fix or Flip Market Robert Greenberg, Patch of Land

18 Yield Comparison: Declining Finance Rates in a Rising Interest Rate Market

20

Edward Brown, Pacific Private Money

20 Private Lending IRA- An Opportunity to Blend Tradition with Technology

Clay Malcolm, New Direction Trust Company

Who to Know 8 Profile

Brew Johnson & PeerStreet

22

Charles Peckman, Originate Report

12 Generosity Report

Orangewood Foundation Max Berger, Originate Report

14 Industry Spotlight

Adonis Lockett, Lockett-N-Homes

In Every Issue

6 Anthony’s Rules for Success Anthony’s Top Ten

6

16

Anthony Geraci, Geraci LLP

13 Industry Job Watch

22 Cities to Watch

Chicago, Illinois

Charles Peckman, Originate Report

24 Upcoming Events 26 Loan Home

8 www.originate.report 3

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4 Originate Report | December 2018

ANTHONY GERACI CEO/Editor

RUBY KEYS Marketing/Editorial Director

JOHN PELACHE Account Executive

ALICIA CARTER Event Coordinator

MAX BERGER Content Editor/Content Marketing Specialist

DAVID BASEN Digital Marketing Specialist

Letter from the Editor

PAM HUBER Art Director

CONTRIBUTORS Max Berger • Edward Brown Anthony Geraci • Robert Greenberg Clay Malcolm • Charles Peckman

FOUNDING UNDERWRITERS

MARK HANF President, Pacific Private Money

ORIGINATE ONLINE www.originate.report

GERACI ONLINE www.geracilawfirm.com Interested in advertising in Originate Report? Please reach out to John Pelache at John@Originate.Report or (949) 379-2600 For Advertising Submissions, Article Submissions, and Inquiries contact Submissions@Originate.Report

ORIGINATE MAILING ADDRESS

Welcome to our December Edition of Originate Report!

The holiday season is upon us, and with it comes an important opportunity.

For at least a while, we have the chance to set our worries aside and prioritize family and community. We sincerely hope you’re able to make the most of it, and enjoy quality time with loved ones.

In the spirit of the season, we are proud to introduce a new column going forward – the Charity Highlight! Many in our industry are making a difference through their partnerships with non-profits, and we would like to recognize these accomplishments. In this edition, you’ll learn about the Orangewood Foundation and the inspiring work they do for foster youth in Orange County.

We also hope that you’ll find value in this edition’s cover story on Brew Johnson, co-founder and CEO of the powerhouse real estate investment platform PeerStreet. You’ll also find out how our Industry Spotlight Adonis Lockett is changing the game for investors.

As always, thank you for your continued support.

Happy Holidays!

Max

Max Berger Originate Report Content Editor

Geraci LLP 90 Discovery, Irvine, CA 92618 PHONE (949) 379-2600

GERACI CONFERENCES www.geracicon.com

www.originate.report 5

ness, a relationship or your personal journey. Make

ANTHONY’S RULES FOR SUCCESS

improvements every day, no matter how small they may be. Read a book. Listen to a book. Learn a new lan-

Anthony’s

Top

~

By Anthony Geraci, Geraci LLP

guage. Live life. The Japanese have a concept called Kaizen, which means that small daily improvements eventually result in huge gains.

{ I’m not interested in when you’ll get knocked

down. I want to know how quickly you’re going

to get back up. I love Rocky Balboa. My favorite quote of his is so true in life: “It’s not how hard you can hit – it’s how hard you can get hit by life and still keep moving. How hard you get hit and keep moving forward.

That’s how winning is done!”

| What gets measured gets done. I have to

admit, I hate clichés, and I hated this one too. But I

“The first rule is not to lose. The second rule is to remember Rule #1.” – Warren Buffett

C

onsidering the title of this series, I thought I’d share with you my actual rules for success; that is, the rules that have actually impacted my life. I don’t take credit for all of

these and fully acknowledge I have collected them from

various sources. But they suit me very well, and I think you might find value in them too. When we launched Geraci Law Firm almost 12 years ago, I had Bob Parson’s 16 Rules for Life on my desktop. Through the

good times and the bad, there was always a rule to com-

xWhen you think you’re done and ready to

quit, you’re only at 40% capacity. Most people live

their lives to avoid pain. I understand why that is, but I think we only find ourselves when the pain begins. Or

as David Goggins says, “We don’t do anything unless it sucks.” Keep pushing and finding the edge, and you’ll find yourself.

y With regard to whatever worries you, not

only accept the worst thing that could happen,

but make it a point to quantify what the worst thing could be. Coming straight from Bob Parson, this

swear this gets truer every single day. You watch sports?

How boring would it be if they didn’t keep score? Would

you even watch it? No. We all love winners, and there has to be a score to win. It’s the same in business or life

– measure everything, and I promise you it will grow or improve simply because you’re measuring it.

} Listen to understand. Talk Less. I’m definitely not perfect, but I try to listen more than I speak, because

I don’t learn anything when I’m speaking. I only learn when I listen to people. I also listen to understand the

other person’s perspective, not just to respond. People have a need to be heard. Hear them.

rule helped keep me warm on very cold winter nights

~ Actions will never lie; words sometimes do. actually convinced themselves that what they’re saying

too busy, or that I can’t do something. Only when I start

“I try to listen more than I speak, because I don’t learn anything when I’m speaking.”

capable of so much more. Which brings me straight into

when everything was going wrong. Bob added that

fort me. Here are the first 10 rules I’ve written down for myself over the years.

u Your only limitations are the roadblocks

your mind puts in front of you. Every year that I

get older, this becomes truer. People always tell me I’m to believe them does that limitation truly exist. You are rule #2…

v Don’t believe your own BS. Your inner critic

can be tough. Maybe it’s telling you how you’re not good enough, not strong enough, that people don’t like

you… Don’t listen to it. There is nothing positive on this path, and your inner critic is a liar.

“Very seldom will the worst consequence be anywhere

near as bad as a cloud of ‘undefined consequences.’ My

father would tell me early on, when I was struggling and losing my shirt trying to get Parsons Technology

going, ‘Well, Robert, if it doesn’t work, they can’t eat you.’” They can’t eat you.

Grow or die; If you’re not growing, you’re w Stay Humble. Stay Paranoid. Staying humble is z dying. Growth is life. This is true whether it’s a busi-

Sometimes people intend to lie. Other times, they’ve is true. No piece of advice has been more useful to me than this: When trying to judge character, you must listen to what people say- but it’s far more important to

watch what they do. Actions speak louder than words,

as the saying goes. Actions are the manifestation of

someone’s intention. Watch where they walk and you’ll see where they go.

If you’re interested in seeing the rest of my rules, reach

out and I’ll be glad to send them to you. The key theme in all of my rules is that I want to happen to life; I don’t

want life to happen to me. I can move mountains, if I

only want to badly enough and keep working at it. What rules do you live by?

key in life. Don’t worry, this isn’t where I tell you that it makes you happy. It will, however, keep you sharp.

Without humility, you pave the way for pride and arro-

gance take its place. And pride and arrogance can’t listen when people are telling you you’re going the wrong

direction, and can’t see when people are moving against you. Stay paranoid. Because, as Andy Grove says, only the paranoid truly survive.

6 Originate Report | December 2018

ABOUT THE AUTHOR: Named a Super Lawyers® Rising Stars in the legal field, Anthony Geraci is the managing shareholder of Geraci in charge of firm strategy and development of Geraci’s team and culture. He is skilled in mortgage lending and securities law and has authored numerous articles on real estate finance and security subjects. Mr. Geraci is a leader in creating national mortgage pools and mortgage funds as well as sophisticated net branching arrangements among several mortgage companies. Mr. Geraci is also an active member and a member of the board of directors of EO (Entrepreneurs Organization).

CONTACT: (949) 379-2600 | a.geraci@geracillp.com | www.geracillp.com

Revenue diversification

Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial

TODAY’S MARKET OPPORTUNITY: •

•

•

100 billion dollar non owner-occupied investment space SFR ’s 1-4 Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial Diversify product offering and add new revenue opportunities you may be missing out on Legally compensate your most prized relationships (Realtors) for referrals

WHAT TO LOOK FOR IN A BROKER + CAPITAL PARTNER RELATIONSHIP: • • •

Concierge across product offering with underwriting, training, service and support Dedicated call center for loan origination support and fund control Marketing materials provided including product tear sheets, pitch decks and web banners

In today’s market, refinancings have limited availability and there’s not much new housing inventory to lend against. For mortgage Brokers, this means the obvious; there are a lack of transactions in the market to profit from.

For shops that are only doing refinance or traditional mortgages, opportunities only come around every 5-7 years. You’ve got to have a big client base to have volume. With financial products across SFR ’s 1-4 Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial, the sales cycle is faster, there is significantly higher recurring business, and a few lenders have teams dedicated to helping you succeed.

BROKERS, PARTNER TODAY

Think of it as a new product offering which results in the diversification of your potential revenue. All of this is well within reach, and much easier than you may think.

The NON-O/O investment space is a 100 billion dollar industry that has come full circle since the last market downturn. Over the last decade private lending has been growing, and the comeback of property investors is at an all-time high.

Here’s what it takes to do these types of loans and a good private lender will handle these things for your Brokerage…

• • • • • • •

Review and process loan applications Document collection Facilitate Appraisal Coordinate Title & Escrow Complete underwriting Facilitate Funding Pay you

Traditional Realtors and Mortgage Brokers have the misconception they need an NMLS license to be a lender in this product space. The main point in dealing with a private lender is while they primarily fund SFR’s, these loans are governed under commercial guidelines.

Thus we are not governed under RESPA, TRID or TIlLA. These loans are funded only into business entities allowing 7-10 business day closings and can pay anyone under a Brokerage license a referral fee or commission on the HUD at closing.

There are two avenues a Brokerage launching this type of product to Real Estate professionals can expect to see. You can be a Correspondent Partner (the lender would fund in your name)

http://triumph.capital/brokers

or an Origination Partner (the client would see the lender’s name on the HUD). Most deals are funded under a single set of product guidelines allowing training, underwriting and servicing to be easily understood.

CORRESPONDENT PARTNER (CP): You look and feel like the lender, a complete white-label product.

ORIGINATION PARTNER (OP): Traditional Broker + lender relationship, lender shows on HUD. A full concierge service for Broker partners handling everything from A-Z is an entirely new model for private lending and Mortgage Brokers / Real Estate professionals. Working with a direct lender enables Mortgage Brokers to keep the lion’s share of the profit and have the potential to earn from the yield spread as well, all while monetizing on much more frequent lending transactions, instead of the normal 5-7 year customer lifecycle.

There many private lenders chasing this strategy and it’s safe to be wary of who to work with.

While choosing a partner, look for someone who understands the business and has a strong reputation for closing transactions. You’ll also need support with marketing materials. Having the right documents and product tear sheets (one-pagers) for conversations, trade shows, etc. is helpful in positioning the opportunity with your existing book of referral business from Realtors.

For more information call

877-450-9741

ROB JENNINGS robert@triumph.capital

GEORGE O. FLINT goflint@triumph.capital

www.originate.report 7

PROFILE

Changing the Game:

The Power of PeerStreet

By Charles Peckman, Originate Report

B

rew Johnson, the co-founder and CEO of PeerStreet, usually starts his day by drinking an iced tea and checking in on his employees. Despite the rather mundane sound of his mornings, Johnson is anything but nonchalant when it comes to running his company.

PeerStreet, the brainchild of Johnson and co-founder Brett Crosby, is a marketplace where accredited investors and institutions can invest in and buy private real estate loans. In a few short years, investors have funded over $1.5 billion of loans through the platform. “PeerStreet is a two-sided marketplace,” he said. “On one side we have investors who are looking to invest in quality real estate-backed loans. On the other side we have lenders who want to sell loans or interests in loans to fund their ongoing lending operations.”

Johnson said that, in ways, PeerStreet can be analogized to a marketplace like eBay or Amazon, for example, because of the buy/sell component. Where this analogy

8 Originate Report | December 2018

starts to dematerialize, however, is in its level of intricacy. When buying something on eBay, you see the item, purchase it, and it arrives at your doorstep. In the private lending and real estate market, there are nuances that make it much harder to navigate.

“Historically, it would be impossible for private lenders to go around and establish relationships with tens of thousands of investors, and it would be as difficult for investors to establish relationships with hundreds of lenders, underwrite thousands of loan investments, and then manage those individual loan investments,” Johnson said. “In this marketplace [PeerStreet], buyers and sellers aren’t interacting directly, but rather interacting with one counterparty, our technology platform.

The result is both sides of the marketplace can leverage PeerStreet to access much larger opportunities in a hassle-free and more efficient manner.

“Now, to do this we’ve basically had to build a real estate company, a law firm, a finance company, and a tech company at the same time, which seems a little crazy

to do from scratch, but we think the long-term benefits we’ll provide to the market participants makes it worth it.”

But where, you may be asking yourself, does this conglomeration of components stem from? Or rather, where did Johnson come up with this idea? As it turns out, his background is as complicated as the company’s individual mechanisms. After graduating from USC with degrees in international relations and history, Johnson earned his JD from the UCLA School of Law. From there, he worked as a technology attorney at Brobeck Phleger & Harrison, and as a real estate attorney at Allen Matkins Leck Gamble & Mallory. Before co-founding PeerStreet, he was general counsel at VirtualTourist, where he oversaw the company’s $85 million sale to Expedia/TripAdvisor.

“The challenge of the private lending market is that it is hyper fragmented, and private money loans aren’t ‘cookie cutter’ or commoditized.”

“It’s a long story, and it was a long journey to bring PeerStreet to where it is,” Johnson said. “Serendipitously, coming out of the turmoil of the .com blow up, I got involved in the real estate industry on the legal side just as the housing bubble was starting to inflate.”

During his time in real estate law, Johnson worked with a variety of clients — from national home-building companies and major banks to small developers and investment companies. “At the time (2001 - 2006), there

were a lot of things happening in the market that didn’t make sense to me and I wanted to really understand the risk associated with decisions that our clients were making. I spent all my spare time devouring information about the housing market, federal reserve monetary policy, and the securitization market. Needless to say, it became obvious to me very early on that the whole market was a house of cards that I thought was going to crumble,” he said.

Johnson shorted bank stocks and anything he could find related to the housing market, and planned to set up a vulture fund once the global financial crisis unfolded. In the interim, he joined his brother’s technology company, VirtualTourist.

made it difficult for lenders to access large pools of investors, easily.”

“When I looked at the private lending space, I always thought ‘Wow, here you have lenders who were making what I thought were high-quality loans, but their cost of capital was very high compared to traditional lenders,’” Johnson said. “But it seemed very weird to me — when a loan is done correctly, I didn’t believe there is as much difference in the risk between a well-done private

Being involved with the day-to-day operations of a technology company opened his eyes to the possibilities of technology in a number of different fields.

would be much more attractive to investors — and, hypothetically, would create much lower risk than could be achieved investing in the space historically. This could drive more capital to lenders and push down the cost of capital, as well.

“The value PeerStreet provides to the private lending industry is similar to how Fannie Mae and Freddie Mac provide value in the traditional mortgage markets,” Johnson said. In the traditional mortgage markets, lenders like Wells Fargo and Quicken originate mortgages, then sell those mortgages to Fannie Mae and Freddie Mac, who in turn sell mortgages or interests in mortgages to investors in the financial markets. Those investors, in turn, get broad diversification across many loans and consistency.

That should translate into consistency of capital to lenders that participate in that market.

“We are applying that same concept to the private lending market,” he said. “But the goal is to take the positives from the traditional securitization markets, understand the issues that led to the financial crisis, and use technology to create a better type of marketplace for private lending — one that is transparent, data-driven, and has fewer intermediaries, so that the value accrues to the real stakeholders in the market (lenders, borrowers, and investors) and not value extractors.”

“I entered the tech world in 2006, as LendingClub and Prosper were changing and redefining the consumer credit space,” he said. “I was totally intrigued by their model. I thought that whenever this financial crisis truly unfolds and the banks get obliterated, how powerful would it be if we could create a similar technology platform to fill the voids in the real estate markets?”

But Johnson didn’t think the timing was right for a tech-based real estate investment platform, so he put his idea on hold and, instead, started making private money loans, and buying foreclosed properties and distressed notes from banks. But even though he was an experienced lawyer with a seasoned insight into risk, who had accurately called the housing bubble and subsequent downturn, it was still very difficult to raise capital for real estate deals.

“Even with my background, it was very difficult for me to raise capital to grow a business,” Johnson said. “At that point it became clear that creating a technology marketplace to connect people like me — skilled and knowledgeable lenders who may not have access to broad sources of funding — to diverse and deep sources of capital, would solve real problems for lenders. At the same time, interest rates were being driven down and investors had no good options to find yield, so connecting investors to lenders who were making quality real estate loans would solve real problems for investors, as well.”

But even though Brew’s background was conducive for establishing PeerStreet, that doesn’t mean the creation of such a company was a smooth undertaking. First, nothing quite like PeerStreet existed. Bringing a marketplace mindset to the real estate sector comes with its own considerable hurdles.

“The challenge of the private lending market is that it is hyper fragmented, and private money loans aren’t ‘cookie cutter’ or commoditized. Because of this fragmentation, it was a very high touch investment, which

The creation of this “dynamic marketplace” is how everyone involved in it can win. “Investors get an easier way to access this great asset class plus much broader diversification, which translates to more capital for quality lenders and, indirectly, borrowers,” Johnson said. “And for us, we create value as a technology platform by creating value for those parties.”

Brew Johnson, Co-Founder and CEO, PeerStreet

lending loan and a traditional bank loan, at least not to the extent of the difference in interest rates.” What he found was that everything came back to the fragmentation. Because of the fragmentation in the private lending market, investors couldn’t get consistent information or broad diversification.

This limited private lenders’ ability to access large pools of capital and kept cost of capital higher than it needed to be. But, Brew realized that if you could create a platform that allowed hundreds or thousands of private money lenders to, effectively, pool their loans and offer them to investors, and then present all of the relevant information for investors in a consistent way, that

Looking forward, Johnson said he hopes more lenders and investors start to realize the benefits of being part of an online marketplace for real estate deals. As of right now, PeerStreet has over 150 employees and has plans to grow in the future.

“The idea of how this marketplace benefits everyone is really important, and I think most lenders out there understand that we’re trying to create value for them,” Johnson said. “If lenders establish a track record, PeerStreet should be able to be a source of capital in any market condition — and over time, lenders of any size should be able to compete with the largest, most sophisticated financial institutions.”

For more information about PeerStreet and its co-founders, visit peerstreet.com

CONTACT: To learn more about PeerStreet, visit PeerStreet.com www.originate.report 9

Geraci Media Group 90 Discovery Irvine, CA 92718

ice Media Agency

ll-serv Geraci Announces Fu

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ve expand ASE: firm. Since then we ha LE law RE a TE as IA 07 ED 20 M in ed IM nd serFOR i Media Group – a fulli LLP was originally fou rac rac Ge Ge , – nt 18 me 20 ve , hie 12 ac v. st ., No newe

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Yours, oup The Geraci Media Gr Media Contact: Ruby Keys Media Director Geraci LLP

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10 Originate Report | December 2018

You’re going places.

Don’t stop until that place is the top.

If you’re a loan originator looking to build your business and gain insight from the nation’s top mortgage brokers, bankers, lenders, and lawyers, Originate Report is for you. Distributed to 35,000 professionals in the private lending industry every month, this is where you come to see and be seen.

To discuss submitting original articles, or for general Originate Report questions, email us at submissions@originate.report.

behind you all the way. find us online at www.originate.report www.originate.report 11

GENEROSITY REPORT

Charity Highlight:

Orangewood Foundation

By Max Berger, Originate Report

O

rangewood Foundation, a 501(c)(3) non-

visits. Approximately 94 adult Orangewood mentors

and prevention. Orangewood also held the “Belle of

on supporting current and former foster

dation’s teens and young adults and spent over 2,800

and self-esteem workshops. Additionally, Orangewood

profit based in California, focuses its efforts

teens and young adults in the Orange County area. The Foundation assists around 2,000 foster youth on an

annual basis, and helps prepare them for independent adulthood.

By using the “Orangewood Way,” the organization rec-

ognizes that their relationship with these foster youth is

one of collaboration and partnership. Throughout this

built positive, supportive relationships with the Founhours advising their mentees.

Through a new program, The Lighthouse, the nonprofit

the Ball” event which included formal dresses, makeup, provided $486,000 in college scholarships to over 230 students.

has begun assisting victims of sex trafficking. Last year,

Perhaps the star of Orangewood, however, is its Samueli

who received 24/7 intensive assistance from Youth

ago by two philanthropists and board members of the

the program housed nine survivors of sex trafficking Support Specialists who helped them build healthy re-

lationships, engage in social activities, and develop life

Academy, a charter school that was started five years nonprofit. Through this school, 98 percent of its se-

nior class graduated and 100 percent of the foster youth

Geraci LLP and Orangewood Foundation partnered this past October to throw an “incredible” family friendly Halloween Event, featuring scenes from Coco, candy, and fun galore.

supportive relationship, Orangewood works with its

goals. Through its Rising Tide transitional housing pro-

aptitudes, and attributes so they can overcome chal-

foster youth, which included eight mothers and their

youth one-on-one to help them identify their strengths, lenges and reach their highest potential. The staff at

Orangewood works with foster youth in four distinct areas, including health & wellness, housing, life skills &

employment, and education. Throughout this process,

Orangewood provides basic necessities like a hot meal and transitional housing to one-on-one counseling.

Often struggles in areas like health and wellness can create challenges for foster youth later in life, and this

is why Orangewood focuses on programs that relate to

this topic. Securing housing and employment later in life are crucial in assisting youth to become self-sufficient,

and in the last year alone the organization has helped

scores of foster youth in this area. Through the onsite Orangewood Resource Center, 700 youth were helped in the last year, and the organization saw over 6,300

12 Originate Report | December 2018

gram, Orangewood provided housing for 48 former

graduated. The school also boasts a 96 percent college acceptance rate.

11 children. Additionally, the nonprofit provided nearly

Some of the former foster youth that are assisted through

need it the most.

Orangewood is just as committed to making a differ-

$35,000 for emergency housing assistance to those who

Although housing is a necessity, it cannot help foster

youth form life-long goals on its own – this is why Or-

angewood also focuses on life skills and employment, two incredibly important aspects of life that can make

or break someone in adulthood. Through a variety of programs, youth who walk through the front door have access to life-changing skills training. In the last year alone, there were 52 workshops that allowed over 350

foster youth to learn about topics like money management, volunteering, job readiness, and building healthy relationships. These workshops also included heavier,

but equally important topics like suicide warning signs

these programs have young children of their own, and ence in their lives as well. Geraci LLP had the chance to partner with Orangewood Foundation in October for a family Halloween event. Many of these families could

not afford to purchase the costumes that their children wanted, so the Geraci team made it their mission to provide them. Together, Orangewood and Geraci were

able to host a wonderful holiday event for the children with plenty of costumes, fun games and activities, and all the candy they could eat.

CONTACT: Orangewood Foundation, Santa Ana, CA (714) 619-0200 | orangewoodfoundation.org

INDUSTRY JOB WATCH

Money360, Inc., Ladera Ranch, CA Commercial Real Estate Loan Underwriter must be able to eval-

Look Wh o’s Hiring!

Looking to fill a posit Originate ion? Adve Report’s rtise it he Industry re in of thousa Jobs to g nds of qu et it in fro a lified can nt Contact J didates. ohn Pela che at joh n@origin or (949) 3 ate.report 79-2600 .

uate loan opportunities, including, the real estate collateral securing the proposed loan, the surrounding market and demographic area and the adequacy of the loan structure of the transaction and/or relationship. Primary duties include the underwriting of commercial real estate and bridge loans, reviewing loan documents, spreading financial statements, evaluating borrow/guarantor financial support and management, and developing rationale for pricing decisions. The role will be responsible for all aspects of a proposed loan from the time the borrower executes the term sheet through closing. Interested parties should contact Paul Cleary.

CONTACT: paulcleary@money360.com | www.money360.com

REDWOOD MORTGAGE, San Mateo, CA California’s Redwood Mortgage, a privately owned real estate mortgage and investment company located on the SF Peninsula, seeks Account Executives for key California territories. “Redwood Mortgage has been one of California’s leading innovators in private mortgage lending and mortgage pools. The company offers the right candidate the opportunity to build a territory and career in our loan sales department. The ideal candidate has solid experience in commercial, multi-family and residential investment real estate lending, have an active Cal DRE real estate license, and NMLS. The person will learn and understand the commercial bridge loan product and private money loan product, and manage a territory and develop relationships with Bankers, Brokers and Retail borrowers. Benefits include 401K, dental, life insurance, medical, and vision. Interested parties should contact the Director of Sales and Marketing Steve Belleville.

CONTACT: steve@redwoodmortgage.com www.redwoodmortgage.com

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SPOTLIGHT

Industry Spotlight:

Adonis Lockett Founder, Lockett-N-Homes

14 Originate Report | December 2018

W

ith a B.S. degree in Electrical Mechanical Engineering and Lean Six Sigma Certification, Adonis excelled in Corporate America for upward of 10 years doing testing, failure analysis, process improvement, and implementation of preventative solutions for companies such as Boeing, NASA, Lockheed Martin, Caterpillar, and Northrop Grumman.

In 2010, Adonis left Corporate America and founded Lockett-N-Homes, a real estate investment firm, mortgage & real estate brokerage, and home buying solutions company that specializes in helping clients with distressed credit get qualified to purchase homes; in addition to offering resources and funding solutions to investors who want to buy, rehab and sell investment properties.

After launching a real estate tech start up and developing and proving a model that monetizes all components needed to close a real estate transaction using vertical integration of all mandatory components, Adonis has successfully replicated his process and opened an office in 10 major cities, in 9 states with over 45 employees on staff; and is currently working to franchise Lockett-N-Homes and become only the second national real estate investment franchise company in the nation.

Originate Report: How did you get into this industry?

Adonis Lockett: I initially became interested in real estate back in 2008 when buying was in a frenzy and was the thing to do. I was up one evening watching a late night informercial by a “real estate guru” and after a very compelling pitch I decided to look further into investing. After some basic research, I realized that a crash was inevitable and decided to wait before getting involved. When the market bottomed out in 2010, I purchased and sold my first flip.

In 62 days I made more in that transaction than I did in a year as an engineer. I decided days after that I was going to pursue real estate full time. In the late summer of 2011, I quit corporate America and my job as a rocket propulsion test engineer to start my own investment firm and pursue real estate full time. Since then I have opened 10 offices in 9 states, flipped over 200 homes, and have over 30 employees that comprise what is now Lockett-N-Homes.

The company consists of several departments to include: wholesale department, real estate brokerage, mortgage brokerage, Fix and flip division, SFR and multifamily holdings, and hard money lending.

OR: What is your favorite part about what you do for a living?

Lockett: The most rewarding aspect of what I do is always the finished product, whether it is the final product of a full renovation, the satisfaction of funding an investor’s project while they grow and sustain their real estate business, or the joy and excitement that comes with watching a new homeowner closing on their first home. The journey can be turbulent, but the end result always makes the effort worthwhile.

OR: What sets Lockett-N-Homes apart within this industry?

Lockett: The humble beginnings. Lockett-N-Homes was created because as an investor, wholesaler and buyer, I saw several gaps of service and efficiency that I believed should be included with the investor experience.

As these needs were constantly not satisfied with the service I was provided, I wanted to create a company that accommodated those missing elements. For example, when I was purchasing wholesale deals, agreeing on the project’s ARV with the wholesaler was often a challenge. I decided to launch the private lending division to alleviate buyers of that issue. Not only would we provide the wholesale deal for them, we would lend on the numbers being advertised. This assured buyers that we stood behind our product and numbers (the wholesale deal itself) but also solved the issue of them potentially not being able to find financing. Since every real estate transaction has several moving pieces, I wanted LockettN-Homes to drive the entire user experience. On the investment side of the business, our wholesale division provided the deal itself, our lending division would fund the deal, and once the renovation was complete, one of our agents would list the deal on behalf of the investor.

An entire ecosystem was created for investors to take advantage of.

OR: What is one way that you have learned to be innovative in your career?

Lockett: My degree was electrical mechanical engineering, and my job during and post-college was systematic failure analysis, process improvement and implementation of preventative actions to avert further and repeat failures. As such, innovation seems to be innate for me.

For a real estate project I am working, I walk into the house and I can see the finished product in moments.

I innovate from the end product or service I want to achieve, then build backwards to its origin. Once the initial outline is created, I circle back to the process itself, and lean the operation up to the most optimal and efficient method that does not reduce quality in the service provided or the product. Once deployed and after several test cycles, I will evaluate the process both in segments and as a whole, and do a critical assessment of each aspect of the transaction. Where improvements can be made they are implemented, and where we are performing nominally will be evaluated and see how we can copy what is working to other departments or processes that exist within the company.

OR: What has been your biggest professional accomplishment?

Lockett: I would not classify any particular transaction as my biggest accomplishment, but the belief in me that comes from my partners and employees. I feel most accomplished when the entire company buys into my vision of what Lockett-N-Homes can grow into. When my colleagues and the people I look up to ask for my assistance in helping them achieve their personal goals in real estate, that gives me the comfort of knowing that people believe in what I do and are confident I can assist them with their aspirations. That alone is my biggest professional accomplishment.

Adonis Lockett, Lockett-N-Homes

OR: What does the Easier Qualifier (EQ) Program do differently that sets it apart from other credit programs?

Lockett: The Easy Qualifier (E.Q.) program i s n ot a credit repair service. The E.Q. Program is targeted credit score improvement which we drive the client’s credit to a score that would permit a lender to issue a loan, while simultaneously ensuring no items on the credit prohibit the client from being eligible for a loan from a score and trade line perspective, both for investment and consumer loans. A common misconception about a borrower’s credit is that the score alone is the qualifier / disqualifier for their eligibility for a loan. It is often overlooked that for a consumer (conventional, FHA, VA) loan that even though the credit score is eligible for a loan, multiple collection accounts within the last 12 months, or multiple late payments to an auto or student loan may disqualify their eligibility, regardless of the ac-tual score itself. It’s the same concept with investment loans. Investors with a credit score at 780 sounds great, but when a lender identifies that the score is so high be-cause the borrower has only had one $300 tradeline in the last 10 years, it raises concerns about the borrower’s ability to perform with a responsibility such as a mort-gage, considering there is no evidence of their ability to do so. The E.Q. Program addresses all items that are often not considered when trying to qualify for a loan. A credit program created for investors, by the lenders that fund their deals.

OR: Who or what has been your greatest influence in business and why?

Lockett: My mother has been my biggest influencer in my personal and professional growth. She has inspired me to always challenge myself and would also say “Great people do great things, and just know that you can be one of those great people.”

With that, when I see people or companies that have grown into huge success stories, I often say to myself “I am capable of achieving such feats,” and I let the success of others influence my motivation.

OR: What is one piece of advice you have learned and carried with you throughout your life?

Lockett: The most important thing I tell myself and other people is to be informed. Know the intricacies of what you are looking to do before jumping in. I have made costly mistakes both financially and timewise that, had I taken the time to be informed, would have spared me a lot of heartache and financial challenges.

OR: If you could travel through time, where and when would you choose to go?

Lockett: I would go to the future. Not the near future, but the Star Trek distant future. I am a nerd at heart, so I would like to see us achieve warp speed and silly scientific notions like that.

CONTACT: LockettNHomes.com (888) 254-0097 | info@lockettnhomes.com www.originate.report 15

FEATURE

3 Factors to Watch in a Cooling Fix & Flip Market

By Robert Greenberg, Patch of Land

A

s recent housing price indexes suggest a slowdown in the housing market, fix-and-flip in-

vestors and the lenders that finance them will want to keep an eye on several factors

that could affect the residential real estate

investment market.

National home prices increased 5.6 percent year-overyear in September — the slowest

moderate. Comps in a fast-changing market can have

quarter and into 2019, the after repair value (ARV) that

even when the comps are for very similar properties.

to be overly optimistic due to the continued softening

a tendency to overstate the current value of a property,

2. Overly optimistic construction budgets

Construction cost increases over the summer were

unrelenting, and there’s no slowdown in sight. In the

fix-flip sector, the cost of construction materials and

was estimated at the beginning of the project may prove of the housing market. If a flipper cannot get a desired

sales price, the property may sit for a prolonged and unanticipated period, which will, in turn, make earning a targeted return on investment ever-more challenging.

It is important at this point in the real estate cycle to take softening housing prices and future price estimates into care-

monthly year-over-year gain since

ful consideration when estimating

January 2017. Housing prices na-

ROI and when considering how to

tionally are forecasted to increase

price a property.

4.7 percent between September

2018 and September 2019, according to CoreLogic.

Conclusions

While moderating price increases

three issues can create a dilemma

While the confluence of these for real estate investors and lend-

can be viewed through a positive

ers, one of these issues, in isola-

lens as it relates to affordability,

tion, likely won’t be a deal killer.

especially in high-cost states, it is

However, it is certainly possible

wise to be on alert to three key

that all three of these issues com-

factors that may affect the fix-and-

bined could come into play on a

flip real estate sector if the hous-

single project.

ing market continues to cool.

1. Appraisals based on inaccurate comps

If that happens, lenders and investors who aren’t factoring how

When home prices start to cool off, it is more difficult

labor are both on the rise. In addition, homebuilders

these issues will affect their deals could likely face some

price as comparables are frequently based on sales that

impact new tariffs on lumber and steel might have on

or all of the anticipated profit, which could lead to in-

for the comps to properly reflect the current market may have occurred three to six months ago, or possibly

longer. The same can be said of a hot housing market where there may be a limited number of recent comps.

In both cases, it can be difficult to determine a value

and rehabbers are still somewhat uncertain what future their construction budgets going forward, or whether a

new harder line on immigration from Central America The higher cost of construction supplies and labor can

Appraising a residential property isn’t an exact science

their properties at in order to maintain their expected

praiser’s familiarity, or lack of familiarity, with a partic-

ular market. Appraisals that are below or above an offer

price can derail a closing, and buyers and sellers will need to determine if an appraisal should be appealed.

Fix-and-flip investors and lenders need to keep an eye

on appraisal trends as the home prices continue to

16 Originate Report | December 2018

creased delinquencies and defaults.

and Mexico will further tighten the labor supply.

that keeps pace with a moving target.

and a variety of factors can be at play, including an ap-

financial impacts, possibly even the elimination of most

affect what price fix-and-flip rehabbers will need to sell

return on investment, and it could mean that profit expectations will need to be adjusted. It also means that flippers and their lenders will need to carefully assess

renovation budgets to make sure they adequately reflect the actual costs that are likely to be incurred.

3. Soft sales prices

As new fix-and-flip projects get started in the fourth

ABOUT THE AUTHOR:

Robert Greenberg is chief marketing officer at Patch of Land. He is responsible for branding, corporate communications, lead generation, marketing automation and managing integrated marketing activities. Prior to Patch of Land, Greenberg led the marketing efforts for B2R Finance, where he helped originate nearly $2 billion in real estate investor loans that led to the industry’s first-ever multi- borrower single-family rental securitization.

CONTACT: rgreenberg@patchofland.com

www.originate.report 17

FEATURE

Yield Compression Why are rates in California for alternative real estate financing declining in a rising interest rate market?

By Edward Brown, Pacific Private Money

T

he Prime Rate has been slowly increasing

[investors] because of the low rates that banks pay on

financing in the alternative sector in Cali-

has spooked investors.

over the past six months, but real estate fornia has actually decreased. Why?

Competition between private lending companies in real estate [also known as hard money lenders] has increased over the past five years. This has led to brokers

shopping around on behalf of their borrowers to get the lowest rates and points. Too many lenders have had

a tremendous influx of capital from the private sector

18 Originate Report | December 2018

deposits as well as the volatility in the stock market that Prior to 2013, the difference in rates charged by private lenders and the Prime Rate was about 5%. Although the Prime Rate stayed stagnant up until 2018, the rate dif-

ferential shrunk to about 3.5%. This yield compression was primarily due to the typical economics of supply and demand. There was too much of a supply of money

pouring into California by investors, as these investors

saw that real estate in California had not only stabilized [since The Great Recession], but had increased substantially, lowering the perceived risks of making private loans.

The default risk of making fairly conservative loans [less than 70% LTV of purchase] was minimized even further by an increasing real estate market. By the time the loan was eventually paid off due to refinance or sale of the underlying property, the LTV had gone down to as much as 40-50%. This was especially true in the fix and flip market for seasoned borrowers with good track records. Although real estate prices seem to have cooled off from the frenzy of buyers [especially those who continually paid over asking price], many of the larger lenders in the fix and flip market have gone as far as lending over 80% of purchase and up to 100% of the anticipated rehab. The amazing part is that these lenders are willing to lend their money out to these fix and flippers at rates as low as 7% and 1 point; this is unprecedented. Not only are these lenders taking more

earned by the lender’s Fund, but there is overhead that

needs to be subtracted as well as the preferred return promised to the investors of the Fund. A 7% preferred

return is not uncommon, but, the economics appear to dictate that a preferred return of closer to 6% may be on the horizon.

“Many investors have chosen to take the path of least resistance – location, location, location, and stay conservative by earning less than other states may provide, but potentially reducing the risk.”

If interest rates paid by banks to depositors stay rela-

tively low, then investors may not balk at a lower preferred yield; however, if the Prime Rate continues to

rise, one might believe that interest rates on deposits

at banks will follow. At some point, in order to attract investors, private lenders will have to increase the rates paid to their investors. The only way to do that would

be for these lenders to start increasing the rates they charge borrowers, as profit margins to the lenders have

been squeezed to its lowest level in many years. It will

be those lenders who can run their companies “lean and mean” who will have the advantage in this market and the one to come.

Outside of California, lenders have enjoyed higher yields, but that comes with the potential instability of the real estate market. Many investors have chosen to take the

path of least resistance – location, location, location, and risk than in previous markets, but they are doing so at

When borrowers shop around for California lenders,

conclusion that these lenders have a tremendous supply

the loan they need at favorable terms. Most of the time,

extremely favorable rates. One can only come to the

of capital that needs a home; especially those lenders

who have investors who are promised a preferred return [usually in a Fund vehicle]. In these cases, idle money is

a yield drag to the Fund and jeopardizes the payout to not only the investors but the profit to the manager as is typical in a mortgage pool Fund.

Idle money in a Fund is usually held in a low interest

bearing account at a bank awaiting deployment. These deposits need to be liquid, as most private lenders mar-

ket themselves as speedy – one of the advantages over a typical bank. In addition, their private placement mem-

orandums dictate that idle funds be held in an FDIC

insured account; thus, the low yield on these deposits to the Fund.

they may find two to five lenders willing to make them the borrowers enlist a mortgage broker who does the

shopping for them. Although the mortgage broker may have favorite lenders he/she works with, the broker also

knows that many sophisticated borrowers work with more than one broker, so it is the first one who can get the deal done who usually wins out. In addition, the bro-

ker realizes that some commission is better than none.

Many times, these brokers quote lower than normal

rates and points in order to secure the deal. What once might have been quoted as a 9.5% and 3 point deal is

now hovering around 8.75% and 1.5 points. [As point-

ed out earlier, certain fix and flip lenders are charging even less.] The lender usually charges points, so both the broker and the lender are earning less on each trans-

action because of the lowering of the points that have to be shared between them. Most of the interest rate is

stay conservative by earning less than other states may

provide, but potentially reducing the risk. Generally, stable California markets have severely reduced the risk

of loss of principal and, consequently, produced lower yields to investors/lenders. However, since a loss of 20%

of principal in one year means that one has to make 25%

the following year just to break even over the two year period, the prudent investor/lender might be wiser to accept a lower yield and not balk too much at a lower yield; thus the quandary of investing in California.

ABOUT THE AUTHOR: Edward

Brown is in the Investor Relations department at Pacific Private Money in Novato, Calif.

CONTACT:

(415) 883-2150 pacificprivatemoney.com

www.originate.report 19

FEATURE

Private Lending IRAAn Opportunity to Blend Tradition with Technology

By Clay Malcolm, New Direction Trust Company

primarily possible through the aforementioned online management platforms) and without any IRS-stipulated barriers that would prevent an investor from doing so,

IRA holders have full access to fractional debt offerings just as non-IRA investors do.

This growing class of lending companies qualifies indi-

viduals, businesses, and other such entities in need of

capital and issues loans per usual, but the debt is then offered in “pieces” to other investors online. For ex-

ample, if an issuing company charges 10% interest on

a $100,000 loan, they can then sell $1,000 portions to individual investors who may in turn receive 5%.

The company can earn interest while the investors help replenish their initial capital, the investors can tap the

private lending market without having to be industry experts, and both parties have the opportunity to profit from a consistent demand for debt.

“Traditional” Loan Investments

Prepare loan and security documentation – As mentioned above, there isn’t (yet) a viable way to initiate a lending relationship without standard documentation. If you lend with your self-directed IRA, you won’t have to sit on the sidelines or outsource this process. As the IRA holder, you would have the ability to qualify your potential borrowers, make final decisions on interest rates and loan durations, and oversee the generation of all applicable paperwork.

T

echnology has seemingly reshaped almost every facet of business. It wasn’t long ago that consumers had to dedicate several hours (at a minimum) to errands—picking up groceries, prescriptions, and other odds and ends, hopefully with enough time to get the kids to soccer practice by 5:30. Now you can do almost anything with the push of a button or the tap of a touch screen, and you can do it from almost anywhere with a halfway decent signal (including from the bleachers at soccer practice).

The world of investing has experienced a similar transition, with relationship-based arenas like private lending coming along for the ride. The popularity of lending with self-directed savings accounts like IRAs, 401(k) s, and health savings accounts has seemingly risen in tandem with the growing enthusiasm for seamless connectivity in alternative asset investing. Whether you’re 100% engaged in our society’s technological shift or would rather conduct business in a more traditional manner, private lending with a self-directed retirement

20 Originate Report | December 2018

plan affords you the flexibility to tailor a strategy in ways that may be otherwise unavailable.

Let’s examine a few possible ways that a private lending IRA can blend technology-based approaches with tried and true methods.

Technology-Based Loan Investments

Online IRA management platforms – A forward-thinking and technology-based IRA custodian can provide tools that you may have never encountered. Although you would still need to generate standard loan documentation (and security documentation, if applicable), a comprehensive online dashboard may allow you to direct a movement of your IRA funds to your borrower and enable your borrower to make payments online via ACH. Fractional debt – Those who want to capitalize on opportunities in the private lending space without originating loans themselves can dip their toes into fractional debt offerings. Through technological integration (made

Manage the transaction – In the same vein as our prior point, you’re able to manage the ongoing transaction on behalf of your IRA. If your borrowers don’t make their deposits online, you can accept payment checks and forward them to your IRA custodian for proper deposit.

You can also maintain direct contact with your borrowers and facilitate transaction adjustments if need be.

Your ability to find a suitable balance between these approaches highlights the power of self-directed retirement investing. You can choose the investment class

with which you’re experienced; engage with those investments in ways that satisfy your risk tolerance; and

earn tax-advantaged income away from the Wall Street roller coaster.

ABOUT THE AUTHOR:

Clay Malcolm is Chief Business Development Officer at New Direction Trust Company, a custodian of self-directed investment accounts that hold alternative investments.

Mr. Malcolm provides preliminary and continuing education to anyone interested in promissory notes, real estate financing, and other loan structures as assets in IRAs, 401(k) s, and other such tax-advantaged or taxable investment

plans. CONTACT: cmalcolm@ndtco.com | 877-742-1270 (Ext. 113) | www.ndtco.com

You have knowledge. You have ideas.

Let us showcase your voice.

Currently we’re looking for articles showcasing: Business Development • Fintech/Newest Loan Programs • Automation in Today’s Evolving Society • Upcoming Trends & Changes • Marketing & Outreach Essential Tools & Technologies • New Legal Issues and Regulations.

Another idea? We’d love to hear that, too.

Write for us. Email submissions@Originate.Report for more information.

www.originate.report 21

CITIES TO WATCH

Cities to Watch:

Chicago, Illinois

By Charles Peckman, Originate Report

“N

ow this could only happen to a guy like

tion around 2.7 million people, which makes it the third

Must-see locations

To Ol’ Blue Eyes, Chicago was his kind

and Los Angeles. The city’s founding was somewhat of a

no shortage of sights to see. If you are looking for some-

me…and only happen in a town like this.”

of town, and it’s not hard to guess why it was. Nestled

in the heart of the Midwest and in the shadow of Lake Michigan, this windy city is certainly one that won’t let

you down. Although the city is often associated with gangsters and crime (Al Capone merchandise can be purchased in every gift shop,) the city’s many eclectic,

diverse neighborhoods offer a refuge for every weary traveler.

As of the 2017 census-estimate, Chicago has a popula-

22 Originate Report | December 2018

most populated in the country, behind New York City natural affair, as Chicago’s location was critical for ship-

based trade. The city grew rapidly throughout the 19th

Do you have a few months? Because in Chicago, there is

thing educational, you can visit the Museum Campus, which houses the Adler Planetarium, the Shedd

century as it acted as a hub for industry and commerce.

Aquarium, and the Field Museum – “off-campus,” you

ies, with no industries taking up more than 14 percent

and Mondrian at the world-renowned Art Institute.

Today, Chicago is one of the most diverse business cit-

of the job market. Chicago is known as the Windy City,

can immerse yourself in the likes of Van Gogh, Picasso,

and it definitely lives up to this title – but throughout

If museums aren’t your bag, you can grab a Chica-

beautiful, albeit cold, winter days.

many sports teams, which includes baseball, football,

the year, the city experiences four distinct seasons and

go-style hot dog and a beer and take in one of Chicago’s

Chicago, IL Economy:

• Major industries: manufacturing, publishing, finance, and food processing • Minimum wage: $12/hour • Cost of Living: 18% above the national average

Housing:

• Median Household Income: $82,221 • Median Home Price: $324,900 • Home Price Change: 3.2%

hockey, and even soccer. Part of the magic of this city, however, is the fact that you don’t actually have to do

anything, as the sites are breathtaking all by themselves.

Nightlife

Once the day’s work is done, there is still plenty left to do in the Windy City – from cocktail lounges to craft beer and comedy hangouts to dance clubs, there is more than enough night life to go around in this Midwest

city. Chicago is home to the ‘World’s Best Bartender’ Charles Joly (this title was given to him in 2014 by

Diageo World Class), and countless bars. This city is at the epicenter of cocktail culture, and is even home to a

number of distilleries and breweries – the city’s unique, local flavor is seemingly infused into every drink you order. (Be sure to check out the Goose Island and Revolution breweries.)

• Home Ownership: around 60%

• Median Rent Price: $2,382 (for a two-bedroom apartment)

Job Market:

• Forbes List: Best Place for Business and Careers #66

• Unemployment: 3.6%

• Job growth: 13.5% increase from 2010 to 2017 • Loan originator average salary: $62,357

Outside of its bar scene, Chicago has a wide array of

narrow them down – but one thing is for sure, there

to your heart’s content – highlights include The Base-

all of the choices, you could always pick up a hot dog

nightclubs and dance clubs where you can bust a move ment, a live music cocktail lounge, and Studio Paris

nightclub. If you don’t feel like dancing, Chicago has plenty to offer from its comedy scene – Second City,

is something for everyone. If you’re overwhelmed by

from one of the amiable street vendors (just don’t ask for ketchup!)

which has sparked the careers of comedians like Tina

Attractions

leave you in pain from laughing so much.

Chicago has a number of places that you should see.

Fey and John Belushi, hosts comedy events that will

Dining

There are few cities in the world that rival Chicago in terms of its cuisine – hop in a taxi and eat authen-

tic Mapo doufu in China Town, or stay in the heart of

the city to sample the creations of Michelin star-ranked chefs. One restaurant that sits atop the culinary spectrum right now is Big Jones, Chicago’s most acclaimed Southern restaurant. This dining spot offers what locals

call the best fried chicken in town, and a crawfish etou-

fee that hasn’t changed since 1930. There are so many

amazing eating destinations, in fact, it is hard to even

Aside from museums and world-class sports teams, The sprawling State Street and Michigan Avenue of-

fer thousands of feet of storefronts, where you can buy

everything from a new watch to a scarf to ward off the winter winds. On a cultural note, the Chicago Archi-

tecture Foundation offers tours of the sprawling city

landscape. Their tour guides effortlessly spout off tidbits of information about buildings that have breathed life

into the city for decades. If you’re looking for more of a local flair, the Museum of Broadcast Communications exposes you to decades of written and visual communication.

www.originate.report 23

UPCOMING EVENTS

Upcoming Events Don’t be left out! Showcase your upcoming event here!

Contact Ruby@originate.report for more information.

Innovate 2019: The Up & Coming Trends January 14-15 • Newport Beach, CA www.geracicon.com

California Mortgage Association Winter Seminar February 7-8 • Newport Beach, CA californiamortgageassociation.org/events/

Fund Manager Forum 2019 February 21-22 • Washington DC www.geracicon.com

Non-Conventional Investor Club 2019 April 5 • Los Angeles, CA www.geracicon.com

The Broker Exchange 2019 May 9-10 • Dallas, TX www.geracicon.com

Captivate 2019 August 21-23 • Las Vegas, NV www.geracicon.com

All event dates subject to change. Please visit conference websites for agendas and details.

24 Originate Report | December 2018

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26 Originate Originate Report Report || December December 2018 2018

TYPES OF LOANS

MI NI MU M LO MA AN XI MU $ Co M mm LO e AN Co rci ns al $

u Br mer idg e Co rpo r Ac at io qu ns/ isi T No tion rusts tes s a / L nd ega Pu De l E rch ve ntit lop ies Re ased me ha nts b/ Bla Re nk mo e d Se t Lo eled a co nd ns / Re no Jo va int Mort ted Ve ga Fo ntu ge s rei g res Ot n Na he t io r na ls MA XL oa nCh urc to-Va lue he La s (% nd / Te ) /M m ( A Au Bare ples tom / C / S X Te rm y o Re otive mm nag (yr erc og s tai l ial ues ) /L En (Sho ot) ter ps ta / Ga inm Strip s S en Ma t lls Le tatio ) isu ns re Ho (G sp olf it C Mi ality our s xe ( H d o es/ Re -use tels) Mar ina sid Pr I o nd e ) Ra ntia per t ustri al i nc l In he ves es Se s a t lf-s nd men tor F ar t Pro Re a sta ge ms per tie ura s Of fic nts e

TYPES OF PROPERTIES WE LEND TO

LENDER

100K 10M √

www.helveticagroup.com loans@helveticagroup.com (310) 575-3301

√

√

√

√

√

√

√

√ 75/30 √

√

√

√

√

√

√

Direct Lender

JCAP Private Lending www.jcap.net info@jcap.net (949) 236-6600

50K

5M

www.pacificprivatemoney.com loans@pacificprivatemoney.com (415) 883-2150

150K 5M

√

√

√

√

√

√

√

√

√

√

√

√

75/2

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

70/30

√

Redwood Mortgage Corp. www.redwoodmortgage.com RMC@redwoodmortgage.com (800) 659-6593 San Mateo, CA 94402

Sandstone Capital, Inc. www.sandstonecapital.net josiah.p@sandstonecapital.net Josiah Puder (310) 909-8555 Ext. 1040

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

85/2

√

√

√

√

√

√

√

AL, AK, AR, CA, CO, CT, DE, FL, GA, HI, IL, IN, AI, KS, KY, LA, ME, MD, MA, MI, MS, MO, MT, NE, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, TN, TX, VT, VA, WA, WV, WI, WY

Direct Lender

100K 10M

√

Direct Lender

*65% For commercial and mixed-use and 70% for multi-family and residential investment. 5 years (custom terms are available)

100K 10M

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

65/5*

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70/5*

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√

√

√

√

√

* CA

√

√

75/5

√

√

√

√

√

√

√

√

√

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Direct Lender

50K 50M

√

√

√

√

√

CA, CO, HI, TX, WA

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√

√

√

√

√

√

√

√

√

√

90/2

√

√

2018

www.sunsetequityfunding.com lending@sunsetequitygroup.com (833) 786-7381 Los Angeles, CA 90010

3M

√

Rev. 11.29.18

Sunset Equity Funding

50K

√

* CA

SFR

www.patchofland.com originations@patchofland.com (888) 250-2216 Sherman Oaks, CA 91403

√

AL, AK, AR, CA, CO, CT, DE, FL, GA, HI, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MO, MS, MT, NE, NH, NJ, NM, NC, OH, OK, PA, RI, SC, TN, TX, VA, WA, WV, WI, WY

Direct Lender

Patch of Land

√

*All 50 States

Direct Lender

Pacific Private Money

√

* = states lending in

Helvetica Group

Direct Lender

NATIONWIDE EXCEPT ALASKA, SOUTH DAKOTA, NORTH DAKOTA

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28 Originate Report | December 2018