Originate Report - November 2024

TOOL S YOU NEED

To get where you want to be...

FA S T, R ELIAB L E, E AS Y & EFFICI EN T SINCE 2008

At Pacific Private Money, we strive to provide best-in-class alternative financing solutions for real estate transactions. Our team of experienced professional has built and earns a reputation for transparency, speed, and reliability.

Whether you are a self-employed borrower with a seasoning of funds and reserves issues, a real estate professional trying to provide their client with all the options available to them, or a mortgage broker who wants smart funding to achieve their client's goals, private money is a great tool that gives the borrower lending luxuries such as the ability to make cash-like o ers.

NOVEMBER 2024

6 Always Faithful to the Mission: How Lima One Scaled the Real Estate Lending Space By Carla Dempsey, Contributing Writer for Originate Report

FEATURE ARTICLES

20 Opportunity Drives Growth: Dominion Financial Services Expands Company with Wholesale Division By Carla Dempsey, Contributing Writer for Originate Report

CONTRIBUTED ARTICLES

14 Borrower Fraud is a Cost of Doing Business By the American Association of Private Lenders

28 Fraud Has Found Private Lending: Now What? By Thayne Boren, President of Sekady

32 Defying Expectations: How Beeta Lecha Turned Challenges into Success By Janet Moore, Contributing Writer for REIL Fund Services

36 The Marketing Manager Role for Private Lending By Rocky Butani, CEO of Private Lender Link

44 Navigating a Commoditized Market: The Family Office Advantage By Steve Corliss, Principal at 1892 Capital Partners

50 How to Keep Yourself Out of Court (and Away From Me) By Steven E. Ernest, Esq., Partner, Geraci LLP

54 The Power of Networking: Building Bridges in Private Lending By Dana Georgiou, Lending Luminary

56 Multistate Licensing Considerations for Private Lenders By Jennifer Young, Esq., Partner, Geraci LLP

PRIVATE LENDING TITANS

24 David Orloff, CEO, American Heritage Lending

PRIVATE

LENDING

TRAILBLAZERS

40 Zack Lofton - CFA, Founder and CEO, Loan Ranger Capital

INDUSTRY NEWS

64 Liquid Logics and Tower1 Announce Strategic Partnership to Provide Institutional Capital to the Private Lending Industry

ANTHONY GERACI

a.geraci@geracillp.com

Partner & CEO, Geraci LLP

RUBY BOULANGER

r.boulanger@geracillp.com

Vice President of Events

LYNDA HIGHT l.hight@geracillp.com

Creative Director

NICO ADOREMOS

n.adoremos@geracillp.com

Graphic Designer

MEGHAN SWEENEY m.sweeney@geracillp.com

Social Media Manager

CONTRIBUTORS

AAPL • Thayne Boren

Janet Moore • Rocky Butani

Dana Georgiou • Steven E. Ernest

Jennifer Young • Carla Dempsey

FOUNDING UNDERWRITERS

MARK HANF

President, Pacific Private Money

ORIGINATE REPORT www.geracilawfirm.com/originate-report

GERACI LAW FIRM www.geracilawfirm.com

CONFERENCE LINE

www.geracicon.com

Welcome to the AAPL Special Edition of Originate Report!

“Perseverance, secret of all triumphs.”

— Victor Hugo

Reflecting on the United States Marine Corps motto, "Semper Fi," which means "always faithful," we see how this principle extends beyond military service and influences civilian life. It represents values like integrity, discipline, loyalty, and courage—core elements embedded in Lima One Capital, founded by veterans John Warren and John Thompson. Their journey reflects that same unwavering perseverance. What began as a passion for flipping homes evolved into a successful lending business, demonstrating that staying faithful to one’s mission can drive remarkable achievements.

The French Author Victor Hugo's words, "Perseverance, secret of all triumphs," perfectly encapsulate Lima One’s evolution. From modest beginnings, the company has grown into a leading lender, upholding its values and vision. By staying true to these values, they’ve built a company that not only supports investors but also strengthens communities, proving that perseverance and faithfulness lead to triumphs both in and out of uniform.

As we conclude our final edition of the Originate Report, we celebrate Lima One's remarkable journey. Their focus on diversity and vertical integration has allowed them to thrive, even during challenges like the COVID-19 pandemic. Looking ahead, Geraci LLP remains committed to the lending industry and are excited to share new opportunities with you all, fostering strong neighborhoods and supporting investors, guided by the values instilled in us through military service.

Here’s to continued growth and a promising future—Semper Fi.

Always Faithful to the Mission

How Lima One Scaled the Real Estate Lending Space

By Carla Dempsey, Contributing Writer for Originate Report

Semper Fi.

The motto of the United States Marine Corps, which means “always faithful,” has become the very foundation of integrity, discipline, loyalty, and courage.

So, it only makes sense that when fellow service members and friends John Warren and John Thompson finished their tours with the Marines and agreed to become business partners in the real estate industry, the two would build a company that exemplified those same core values.

It was an interesting time for businesspurpose lending. There was a reason it was almost exclusively referred to as ‘hard money lending.’

Josh Woodward President and CEO Lima One Capital, LLC

Their initial interest was flipping homes, but while getting started in 2010, the two found a golden opportunity in the lending space in Atlanta, Georgia. Much as they had a calling to serve their country, the men also felt compelled to help investors find financing solutions and reach their goals. They wanted to be part of something that would foster strong, thriving neighborhoods. Soon after, they founded Lima One Capital, named after the pair’s call sign during their tour of duty in Iraq.

The following year, Lima One Capital moved its headquarters to Greenville, South Carolina. By 2012, the company was gaining traction as a top lender in Atlanta with $10 million in originations. It was at this time that Warren reconnected with Josh Woodward, whom he had met through a previous business venture while Woodward was still in college. Woodward had been working in corporate banking and was looking to pivot in his career. Woodward joined Lima One in 2013 as the company’s sixth employee and was responsible for building out the company’s financial infrastructure and, eventually, its inhouse servicing team.

“It was an interesting time for business-purpose lending. There was a reason it was almost exclusively referred to as ‘hard money lending.’ Everything about it was harder, from the loan terms themselves to the capital markets to the tools and technology,” Woodward said.

Always Faithful to the Mission: Continues on pg. 8

“By then, Lima One had originated $25 million in total and established itself with a track record of loans that were performing very well. We didn’t have the backing of a large fund or institutional investor group, so my job was to help raise money and grow our capital-intensive business while protecting our ownership and control. We gained momentum and started to expand.”

Over the course of the next decade, Woodward established his own track record within Lima One. So much, in fact, that in July of 2024, as the company closed in on an impressive $10 billion in lifetime originations, Woodward was named President and Chief Executive Officer of the company.

Hard Fought Battles

Residential Transition Lending (RTL) and Debt Service Coverage Ratio (DSCR) are common phrases in the industry today, but that was far from the case when Woodward joined Lima One. The company found itself facing the front lines of skepticism and fear of the unknown.

“Terms like RTL and DSCR didn’t even exist back then. We were building an industry and the terms to describe it from scratch. To be blunt, this was 2013 and 2014, people were still scarred from the great financial crisis, and the bridge lending industry had a scarlet letter on its chest,” said Woodward. “It was very hard to raise money into a business like that. You had to spend

a lot of time educating and trying to explain what a fix-and-flip loan even was before we could begin to tell our story. But formation requires repetition, so we told our story over and over again. We had some history, but not a lot. There was almost no one out there doing this type of lending on a regional scale, much less nationally, and the financial markets’ understanding of the ’hard money lending’ business was even more limited. That’s what we were swimming upstream against.”

Originating loans in that environment was labor intensive and challenging, but Lima One had the advantage of its founders’ military background—they brought discipline, execution, and attention to detail into underwriting, training, and team building, Woodward noted. That made a difference in the company’s ability to focus on writing good loans and building good teams— even when they didn’t yet have the scale to recruit nationally.

“It was not just convincing capital providers, but it was also trying to recruit people to come on board and do this unique work for this unique company,” he said. “It was difficult. There was a lot to threading that needle of ‘trust us’ when we were still a mostly unproven company at that time. We focused on hiring people with core competencies and training them on the specifics of our business.”

new no-rehab bridge loan to its portfolio of products. In that time, the company also grew to 15 employees and was named one of the fastest-growing companies in South Carolina. In the years that followed, the company was licensed across the country, grew the workforce to 50 employees, and added rental DSCR and multifamily bridge loan products to its suite of products.

Strength in Numbers

Momentum had been built methodically, and then the flywheel started to turn. Lima One carried out the steps needed to reach a goal that company leaders had established as critical to the business early on— vertical integration. One more piece of that puzzle fell in place by 2017 when the company launched an in-house construction management department. The move afforded Lima One the opportunity to handle rehab and construction draws as well as review all budgets before loans were closed. Now 100 employees strong, a year later in 2018 the company reached another milestone—it surpassed over $1 billion in lifetime originations, doubling that number in 2019 and adding $2 billion in originations every year after that.

The team’s strategy worked. By 2014, Lima One successfully added a

“What was the fuel to our fire? Some of it was good timing. It’s been a 10-year-plus bull market housing run, and we took advantage of that. But we also gained confidence in our understanding of the business

It was not just convincing capital providers, but it was also trying to recruit people to come on board and do this unique work for this unique company.

Josh Woodward

and our decision-making, and that allowed us to press for scalability. Then, with a proven history and strong people and process, we were able to start growing financially as well,” said Woodward. “Capital markets became more favorable as debt and equity providers as well as loan and bond buyers really started to understand our business and the asset class as a whole. We established a track record, hired great people, and our loans performed well. We turned a trade into an investible business.”

Not even a global pandemic could stop the momentum.

Woodward said the company’s growth allowed them to innovate additional loan types and features and create a full product ecosystem. In 2020, when much of the world struggled to stay afloat, vertical integration and sound partnerships carried Lima One.

Josh Woodward President and CEO, Lima One Capital, LLC

“We knew from the beginning that we had to build an integrated front-to-back process that was supported by talented and well-trained people and good technology from the start of the loan submission all the way through to the payoff. We also needed it all under one roof. Vertical functional integration allowed us to be efficient and really optimize the entire order of operations,” he said. “It allows us to have a quick feedback loop for our customers and for risk management and to respond to the environment quickly when we need to.”

Diversity Provides Agility

The ability to pivot is a critical advantage for companies, especially mortgage companies. Lima One’s growth in the real estate lending space was, in part, due to the importance company leaders placed on building out various avenues to be nimble and grow when others were blocked.

“Since the inception of the company, we have been big believers in the value of diversity. We have methodically innovated and developed new products which provide us a key advantage,” Woodward said. “Its diversity of products, diversity of channels, diversity of geography and customer base—those things combined give us multiple ways

to win. Had we been a monoline, one-product, or one-channel company we probably wouldn’t have made it.”

For instance, he noted, companies that were heavily reliant on rental loans when the COVID-19 pandemic hit struggled as those products weren’t an option for a while due to secondary market hesitation. During that time, Lima One turned to its construction, fix-and-flip, and multifamily lending products. Post-COVID, when rates went down and rental loans soared, the company was agile enough to return to those products in force.

“It not only creates multiple ways to win, but it creates durability. It allows you to be adaptable when the environment changes,” Woodward said. “Over the course

of our history, we have seen and can recognize the ebbs and flows. There have been years when fix-and-flip was our best product. Then, in other years, construction lending was our best product. My philosophy has always been, we can’t predict the future, so let’s not try to build a business that has to. Let’s build one that can thrive and survive no matter what comes our way. That plays to your favor over the course of time. That’s where we have been very successful.”

A vertical integration strategy has helped the company acquire feedback quickly on changing market conditions, like sudden fluctuations in interest rates. It has strengthened the ability to measure risk in realtime and adjust accordingly.

“That has allowed us to become a sustainable franchise,” he said. “And it has also been instrumental in opening up sales channels and has helped us identify the best customers and the best loans in the space and aggressively pursue those.”

Never Stop Learning

A diverse product offering enabled Lima One to continue growth following the pandemic, but leaders at the company viewed the occurrence as a time of reflection on how to better safeguard against such disruptions to business in the future.

growth, in times of turmoil, a thin or retracting secondary market for the loans could cause a great deal of hurt for companies solely reliant on an originate-to-sell strategy."

"When our loan buyers went away during COVID, we wondered how we were going to navigate. Fortunately, we dug our well long before we were thirsty. Because of our deep and long-standing relationships with our banks, warehouse lines, and equity partners, we didn’t feel the same level of pressure that many others did. With that said, we did realize that if COVID had gone on too much longer, and secondary markets were disrupted much longer, we might not have been able to sustain our business."

In a proactive effort to address this concern and continue expansion with secure and permanent capital to lend, Lima One entered a partnership with MFA Financial Inc., an investor and loan buyer with the company for several years prior. MFA Financial Inc. acquired complete ownership of Lima One in 2021.

markets firepower, in combination with the additional credit expertise, has allowed us to scale very quickly. Since then, we have also focused on making other parts of our business better. It not only allowed us to weather the storm, but the MFA acquisition really elevated us. We came out as one of the strongest lenders in the space.”

What Counts on the Inside

By the time Lima One opened its west coast hub office in Irvine, California, in 2022, the workforce blossomed to 300 employees. As a growing mid-market enterprise, a rich company culture has been born out of the same ethos established by the founders. It is a culture full of virtues that Lima One will always stand behind – discipline, teamwork, integrity, and accountability.

“We were almost exclusively a whole loan seller prior to COVID,” Woodward said. “While that strategy had its advantages in fostering

“They were a great partner previously, and now together we have been able to finance the business in a very efficient way. We don’t have to worry about dry powder to fund loans. We can originate as many good loans as we can find. It was transformational for us. We were no longer worried about how to fund our business,” he said. “We now have stability and security. Adding that capital

“No one magic loan product or sales channel or procedure or technology has made us successful. It’s the way we make everything work together and the combination of our people, technology, and processes that allows us to succeed. We do a thousand little things well, carefully coordinated and seamlessly executed,” said Woodward. “When you are in a business where you are competing against product specialists, you have to be excellent everywhere—otherwise we are going to be average, and that’s not our standard.”

Sometimes we make this whole business complicated. But it often comes down to great people who create and run great process.

Woodward said Lima One prides itself on being a company that values the opinions and suggestions of its employees. Humility goes a long way in this business, he noted, especially as the company expands and more diverse expertise and perspectives come into play. It is a quality the company embraces as it strives for continuous improvement.

“We really want to be an organization that lives out transparency,

teamwork, accountability, integrity, hard work, and excellence. That goes back to the military culture of our founders,” he said.

“To do that successfully, you have to look at what you are doing and constantly evaluate if there is something we can do better.

That is what ultimately creates excellence. We want to identify and close gaps. And I would like to think we have a little fun along the way.

That is the standard for us.”

A strong organization that relies on cohesiveness breeds resilience, Woodward noted. Lima One leaders understand there will always be problems to solve and an ongoing effort to build a mentality of tenacity. One of the things he reiterates to his employees at Lima One is that everything doesn’t have to be perfect to have a good culture or have strong values as a company.

“We just have to stay humble enough to recognize that we are not

Always Faithful to the Mission: Continued from pg. 11

Josh Woodward

everything we want to be,” he said. “There will always be new levels of excellence to achieve, and we are going to always fight really hard every day to get to that next level. That’s the fun and that’s the challenge.”

Forward, March

Following Lima One’s 2023 addition of a new loan origination system that streamlines turn times and enhances customer experience, the company now operates a platform that includes in-house underwriting, processing, construction management, and servicing.

Later this year, Lima One plans to further leverage the power of technology with the launch of a customer-facing portal that will enable investors to have more visibility and control of their loans with the company. The software will foster better communication, transparency, and convenience by keeping details in a secure, central location.

With a strong foundation in place, Woodward said going forward as the new CEO of Lima One, he intends to take a look back over the company’s progression in the last 14 years and consider how to reinforce that foundation even further for the next phase of growth.

he said. “ There may be parts of our business where we need to focus more in order to achieve excellence. A good company culture will always be something that we emphasize. We will make sure that we are pervading our core values in everything we do,” he continued. “As long as that value system is in place, I am confident that we will figure out the rest."

As for the real estate lending industry, Woodward is hopeful for a space that experiences stable conditions and allows those in the field to flourish.

“Sometimes we make this whole business complicated. But it often comes down to great people who create and run great processes. In the 11-plus years I have been here, I am most proud of the people who have started here and are still here. They have built careers here and are passionate about building this special and powerful company,” he said. “I am now blessed to lead and serve this tremendous organization. We have had a lot of success, but in some ways, we are just getting started. The best chapters for Lima One have not yet been written.”

“I would like to take some time to evaluate parts of our business where we might be good but not excellent,”

For more information, please visit: https://www.limaone.com/

By the American Association of Private Lenders

No one wants to admit they’ve been taken.

We’re in a catch-22: Get called to carpet by investors, capital providers, and other stakeholders by admitting how prevalent fraud really is, or own it as an industry so we can start the hard work to figure out the fix?

Let’s just say the quiet part out loud— the reality that this issue is now discussed at nearly every industry event, in every publication, and with some of the biggest names in our business calling for action, is a sign of just how widespread borrower fraud is in today’s lending ecosystem.

But we are still missing the mark. “Everyone” may be talking about fraud, but “no one” can pin a dollar figure estimate to losses, how many of their funded loans they’ve discovered to have elements of misrepresentation, or any number of other tangible indicators that would quantify prevalence and pinpoint what types of borrower

fraud are truly our industry’s biggest troublemakers.

Is it because we don’t know? Or because we’re afraid to say?

There are no easy answers, but like shrinkage in retail, perhaps it’s time to view—and quantify— fraud as a cost of doing business.

When it becomes another operational line item, it’s easier to discuss frankly, practically, and without a cloud of shame for being “taken.”

That isn’t to say we just shrug and move on now that we’ve allocated fraud “expenses” to the budget. We’re all about minimizing unnecessary operating costs.

Beyond the semantics of how we view fraud within the lending community, having a better understanding of the funds going toward this line item will also serve businesses well in being able to plan for it. Retail shops measure how much of their inventory goes to shrinkage, and price their stock to account for this loss. If private lenders do the same, fraud loses its bogeyman quality, and businesses are better equipped to limit impacts to their own and stakeholder profits.

Finally, it is only when we know what the real costs are and from where, how, and who they originate, that we can then also measure the effectiveness of any potential solution.

To Solve a Problem, You Have to Own It

Where is all this coming from, and why are we so opinionated?

During a hallmark panel on market projections at Geraci’s Innovate conference, leaders discussed a growing need to combat rampant borrower

fraud, highlighting this fraud class as one of their largest concerns for the industry. Panelists and attendees called for action from the American Association of Private Lenders, citing our standing in the industry as their preference to spearhead and organize next steps.

In response, we formed a Borrower Fraud Steering Committee to better understand the scope of this pressing challenge and to strategize a path forward for our members, the industry, and AAPL.

At the time of this writing, the member-led committee is scheduled to hold its inaugural meeting in October. Ahead of that, industry discussions of “We all know this is a massive issue …” have continued but left unsaid is, “… for our business, personally.”

Without quantifiers, fraud becomes a black box of a problem to solve. We inspire confidence in our various stakeholders by owning challenges with strength, candidness, and lack of stigma. And to beat a near-dead horse: To own it, we need to know how much of it we own.

A Quick Note on “But Not Me!”

Everyone is touched by fraud. There is no stigma in something that affects all of us to some degree. If you’re reading this and think you’re the exception: ignorance may

be bliss, but it doesn’t serve your business. (And, also: a bit odd that you’re still reading.)

Part of a Solution

A steering committee is just that— they help guide the process, but the buck doesn’t stop there. We only succeed with the buy-in of our larger community. To that end, while we heard the call to action to assist in fighting fraud, we have one in return: arm us with information and insight.

If you already track fraud losses, be willing to share, along with any solutions you’ve found to help mitigate. If you don’t track but could—allocate time and capital in your 2025 budget to start. If you don’t track and have no idea how to start, be candid about that too.

We need to know where lenders are at individually and at scale to set priorities and formulate realistic, actionable guidance that lenders of all sizes, experience levels, and capabilities can implement. Provide feedback via our public comment portal at www.aaplonline.com/ comments/ or stay tuned to our newsletter for open comment periods where we gather insight on specific topics and needs as identified by the Borrower Fraud Steering Committee.

Borrower Fraud: Continued from pg. 15

Finally, because borrower fraud occurs at the transaction level, it is with processes at the transaction level that it will be subverted. Just as fraud itself has a cost, its solution will also involve time, effort, and budget. The difference is, it’s on your terms and with the advantage of funding more deals with good-faith borrowers who seek to grow with you, not at your expense.

As individual businesses and a community, we must be willing to allocate resources toward fraud mitigation. We’ve taken a first step, but we cannot do it alone. We need you.

About the American Association of Private Lenders

The American Association of Private Lenders is the oldest and largest national organization safeguarding the continued viability and growth of the private real estate lending profession. Formed in 2009, the association identified needs for standardized best practices, ongoing support resources, and selfgovernance that perseveres today. AAPL’s membership includes private money lenders, mortgage fund managers, brokers, and service providers from across the United States.

The Borrower Fraud Steering Committee is not AAPL’s first foray into industry fraud defense. Fraud—

both what it looks like and how to combat it—is a frequent topic on AAPL webinars; in its trade magazine, Private Lender, and online article archive; and at its Annual Conference. Additionally, in 2023 the association launched the industry’s first business identity theft and credentialing scam prevention initiative to protect AAPL brand assets from usage by bad actors and to monitor for cloning of member websites.

For more information, please visit: https://www.aaplonline.com/

OPPORTUNITY

GROWTH drives Dominion Financial Services Expands Company with Wholesale Division

By Carla Dempsey, Contributing Writer for Originate Report

D

ominion Financial Services’ recent expansion into the Wholesale space came about much in the same way its parent company has progressed since it launched over 20 years ago scaling solutions aided by market opportunity.

“The business has not just survived but thrived over the last two decades. The ‘why now?’ as it relates to a Wholesale division is really a calculus of where the velocity of transaction activity is,” said Dustin Wells, the recently named President of the division.

The company is now poised to combine a proven track record of success in direct-to-consumer lending with a new venture into Wholesale lending.

Problem-Solving Moves

Dominion Financial Services is the lending arm of The Dominion Group, which also includes a rental property portfolio and property management company. The Dominion Group is one of the largest owners of rental real estate in Baltimore, Maryland, where the company is headquartered.

Founder Fred Lewis started the company in 2002 and was joined by his business partner Jack BeVier, in 2007. The nexus of the original company began with financing investment real estate and then grew into owning rental real estate. The financing came in the two parts of the transaction. First, in the fixand-flip or transitional rehabilitation of the property, and second in the long-term financing of the property

acquisition itself. Both Fred and Jack found it challenging to find lenders offering the type of residential transition loans, or long term cash flowing DSCR loans they needed.

“They were confident there had to be a better way, so they started to facilitate fix-and-flip and DSCR transactions because they saw the market need and opportunity,” said Wells. “They figured that if Dominion needed that product, there were others out there who were equally in need of the product. So, they began to provide both short-term RTL and long-term DSCR financing to those real estate investors that needed those types of loans.”

“There was a market need for a lender that understood the Debt

Service Coverage Ratio (DSCR), which involves cash flow, property analysis, and how to leverage that for lending and financial decisions.”

Following the Money

The consumer direct business model has been successful for Dominion Financial Services, which has grown to over one hundred employees and has provided over $3 billion in financing solutions including ground-up construction, multi-family bridge, fix-and-flip, and 30-year rental loans to real estate investors in all 50 states.

Wells said the company’s decision to now include a Wholesale division was a matter of market shift coupled with opportunity in aligning on the next avenue for growth.

We want to be in the Wholesale space helping serve the needs of a diverse client base.

Dustin A. Wells

President - Wholesale Division Dominion Financial Services

“There are more deals being facilitated with mortgage brokers today than there have been since 2009,” he said. “In fact, over a third of all mortgage transactions are facilitated by a mortgage broker today. This strategic move was to better align our real estate solutions with a new customer base, with that customer base being the mortgage broker.

Wells said now is the right time for Dominion Financial to expand as the demand to capitalize on investment real estate is high, and analysts expect the trend to continue.

“We see the growth potential and broader customer reach as we progress forward, and we want to be in the Wholesale space helping serve the needs of a diverse client base,” he continued.

Advantages of Wholesale Models

One of the biggest benefits of working with mortgage brokers is having access to local experts who are aligned with the area’s investor

market, including the realtors and builders, and the state of the local economy in their communities. Being entrenched in the community strengthens their ability to keep their fingers on the pulse of the rental markets. Wells said having those connections is imperative for Dominion Financial, who knows the Baltimore area well, but is looking for boots on the ground in other areas for further expansion.

Dominion Financial Wholesale is actively hiring for Account Executives and Senior Account Executive across the country. If you are interested in joining their growing team, contact Dustin Wells at dustinw@thedominiongroup.com.

Looking Ahead

Wells, who has worked in the real estate finance industry since 1998, said it has been an exciting time for Dominion Financial as the company enters a new era of growth. As the company embarks on their new venture in Wholesale lending, Wells has been working to complete the

first phase of implementation, which involves laying the foundational groundwork, including building out a technology stack to the broker base and establishing Dominion Financial’s Wholesale guidelines.

Already able to facilitate DSCR in all 50 states, the company is currently licensed in 19 states to serve a broader consumer Non-QM base and plans to roll out those solutions to brokers by the end of the year.

“We are excited to grow our sales team, our operational structure, and our workflow process,” he said. “We look forward to dialoguing with and growing relationships with brokers across the country to help them serve more customers with products that better serve those customer’s needs.”

Opportunity Drives Growth: Continued from pg. 21

PRIVATE LENDING TITANS

David Orloff

CEO, American Heritage Lending

David Orloff CEO American Heritage Lending

Q: Why did you choose Private Lending?

My decision to pivot was driven by my experiences with the conventional mortgage market, where fluctuating interest rates repeatedly disrupted our business. Each rate increase, even just 50 basis points, was devastating, often forcing layoffs and deeply impacting our employees’ lives. Despite understanding the situation, I struggled with the lack of control and recurring setbacks.

After facing these issues multiple times, I realized we needed a product less vulnerable to interest rate swings. Currently, while conventional mortgage rates range from the high fives to low sixes, our

private lending rates are between 10% and 12%. This stability helps avoid the extreme reactions seen in the conventional market when rates shift.

Q: What is your current role and what do you do day-to-day?

My primary role involves growing the company and ensuring its financial success. However, my daily focus extends beyond just business metrics. I feel a deep responsibility to our employees and clients, understanding the human impact of business decisions, particularly layoffs. Having experienced the personal humiliation of being laid off myself, I am committed to treating my team with empathy and respect.

I believe that strong relationships are crucial, both in the workplace and in life. The Harvard Study on Adult Development1, spanning nearly 80 years, reveals that strong relationships are key to leading a happy and healthy life, outweighing the importance of wealth and career success. This study, which emphasizes the importance of close relationships, reinforces my view that meaningful connections enhance life more than financial success alone. I aim to create an environment where employees feel valued and supported, as I’ve learned that helping others achieve their goals ultimately benefits everyone, including myself.

Q: What excites you about your role today?

What excites me most about my role today is seeing our vision from 2008 come to life. We’ve built a larger and more successful mortgage company than I ever imagined, thanks to a fantastic team that continues to surpass expectations. Their capability and dedication are driving us forward, and I genuinely believe we’re only at the beginning of what we can achieve. It’s not just about the impressive results, like becoming the fastest to reach $100 million in monthly funding volume, but also about the heart and culture that drive our success.

David Orloff: Continues

David Orloff: Continued from pg. 25

Q: Can you explain a time where you faced adversity or had struggles early on in your career?

Where did it all begin? How did these experiences mold and shape you into the leader you are today?

In November 2007, I had one of the worst conversations of my life. I had to sit my wife down and tell her I lost my job. I was a VP at LandAmerica, and they eventually filed for bankruptcy and went belly up. I had three kids and two mortgages. It was also tough because everyone in the world thought that my industry was responsible for the financial plight. Trying to build a new business during that time was probably a terrible idea, but that is what we did anyway. Justin Smith and I started a new mortgage company in March 2008, using our own capital. By November 2008, we had only funded a few mortgages, and nothing was working. I remember sitting on a park bench with Justin, our savings nearly depleted, struggling to cover our basic needs, ready to give up. It was a dark time. But eventually, we found a niche loan program that allowed us to fund our first successful loan in February 2009. This breakthrough, achieved through persistent hard work and incremental progress, laid the foundation for our current success. Sixteen years

later, it’s been a long journey, but I’m proud of the company we have built, brick by brick.

Q: Is there anything that you wish you could go back and tell yourself at the beginning of your career? If I could give my younger self one piece of advice at the start of my career, it would be to focus more on the journey rather than just the outcomes. Early on, I was overly concerned with securing highpaying jobs, but I now realize the importance of seeking opportunities that allow you to meet great people, learn new things, and grow. This lesson became clear to me after college when I moved to Hawaii and experienced life without a set path. I made just enough money to afford to keep me fed and surfing. Taking that time to surf, reflect, and explore my next steps helped me understand that taking the time to enjoy and think through your experiences is crucial. Even today, it’s easy to get caught up in achieving results and missing the chance to celebrate milestones. Like recently, we hit 100M in funded volume so we rented a dunk tank, put it in Justin’s driveway, and we all got dunked. It was fun, and we mailed these paper celebration popping streamers to everyone, so they could celebrate at home too. Stopping to acknowledge and appreciate these achievements, no matter how small,

Taking that time to surf, reflect, and explore my next steps helped me understand that taking the time to enjoy and think through your experiences is crucial.

David Orloff CEO

American Heritage Lending

while having fun is essential for personal and professional growth.

Q: Who is someone that has had a significant effect on your career and why?

The person who had the most significant impact on my career was my dad, who recently passed away. Despite being a dentist and far from a businessman, his influence was profound. Whenever I sought advice on job choices, business plans, or financial matters, he would always remind me, “I’m not a great businessman, but stay true to who you are. Be kind, humble, and do the right thing, even if it costs you money. You’ll come out okay.” His wisdom and values continue to guide me, and his memory brings a smile to my face.

Q: What has been your favorite aspect of being in private lending over the years?

My favorite aspect of being in private funding has been witnessing our resilience and growth during recent interest rate fluctuations. Over the past three years, I’ve seen a unique phenomenon: while conventional loan businesses struggled or faced downturns from 2022 to 2024, our private lending business has thrived with record growth. It’s been remarkable to see our sector adapt and excel despite broader market challenges.

Q: How do you make sure your company stays ahead in this industry?

We continuously innovate by developing new products and programs. By actively listening to the marketplace and our clients, we aim to deliver solutions that support their business growth.

Q: What advice would you give to someone who has just started out in private lending?

When I first became interested in private lending, I attended several conferences and trade shows. They were incredibly valuable for meeting people, asking questions, and learning the ropes. Educating yourself is really the best way to get started. Do that, and you will always do well.

Q: What do you enjoy most about your job?

What I enjoy most about my work is connecting with the amazing people on our team. One standout experience was when we flew everyone from across the country to our corporate headquarters. We call it the Roadshow, and have started doing it every summer. There were no work meetings or strategic planning—just pure fun and connection.

irreplaceable energy and deepens connections. It’s incredible to witness team members building relationships with others they wouldn’t usually interact with and hear how these new connections have profoundly impacted their lives. That’s what makes this work truly meaningful for me.

Q: Finally, what would you consider to be the highlight of your career thus far?

Reflecting on a specific memory, I remember back in 2020 and 2021, we aimed high, hoping to hit $100 million in funded volume, which seemed ambitious. I often joked that if we ever reached that milestone, I’d be outclassed, and they’d need a new CEO. When that day came, I was amazed and humbled by our success, and luckily, they still wanted me.

The highlight of my career so far is, frankly, today. Our company is more successful than ever, and I’ve had the privilege of working with some of the best people in the industry. If everything ended right now, I’d still consider this the pinnacle of my career. Future achievements would just be icing on the cake.

Seeing people in person after only meeting them virtually creates an

For more information, please visit: https://www.ahlend.com/

Fraud Has Found Private Lending: Now What?

By Thayne Boren, President, Sekady

Of the many challenges facing private lenders today, fraud has quickly moved to the forefront as one of the most difficult to meet. Wire fraud, bank fraud, appraisal fraud, invoice fraud, and seller impersonation fraud are becoming increasingly pervasive, posing significant threats to lenders and their clients. Financial fraud in the private lending sector has seen a sharp increase, with reported cases of wire fraud alone rising by over 50% in the past three years.1 These fraudulent activities can lead to substantial financial losses, reputational damage, and major operational disruptions.

And it's not only large lenders who are targeted by fraud. As small private lenders gain market share, they

are quickly becoming an attractive target for bad actors.

The Growing Threat of Fraud in the Private Lending Space

With large transaction sizes and complex payment processes involving dozens of contractors and vendors, the private lending sector is particularly vulnerable to various forms of fraud. Here’s a highlevel look at some of the most common types:

1. Wire Fraud: Fraudsters often impersonate legitimate parties to redirect funds into their accounts. This can happen during real estate transactions, loan disbursements, and other financial operations,

leading to significant financial losses—and it’s getting worse. The average year-over-year increase in fraud in small and midsized lending businesses was 14.5% in 2022, compared to 6 9% in 20212

2. Bank Fraud: This involves the use of fraudulent means to obtain money or assets from financial institutions. Tactics include fake bank statements, forged documents, and identity theft. The Association of Certified Fraud Examiners (ACFE) indicates that bank fraud cases have increased by 30% in recent years.3

3. Appraisal Fraud: Inaccurate or manipulated property valuations can mislead lenders about the true value

Technological Solutions

14.5%

The average year-over-year increase in fraud in small and mid-sized lending businesses in 2022, compared to 6.9% in 2021.2

Association of Financial Crimes

Investigators (IAFCI) highlights that invoice fraud has grown by 40% in the last five years.5

5.

To combat these challenges, along with increased internal vigilance, lenders need robust and reliable technological solutions to safeguard their operations. The list of software platforms such as this is growing, but few offer a comprehensive suite of services that address each of the unique challenges faced by private lenders.

Sekady offers a robust, easy-to-use solution to help mitigate the risk of fraud with:

4. Invoice Fraud: False or inflated invoices are used to deceive lenders, causing them to release funds based on non-existent or overvalued transactions. The International

Seller Impersonation Fraud: Seller impersonation fraud involves fraudsters posing as the owners of vacant or unoccupied properties to transfer funds from the sale into a fraudulent account.

1. Account Validation Services

(AVS): Account validation services verify the authenticity of bank accounts and other financial of collateral, leading to poor lending decisions and potential losses. Studies show that appraisal fraud was involved in 25% of mortgage fraud cases reported in 2021.

details provided by borrowers. This helps ensure that funds are being transferred to legitimate accounts, significantly reducing the risk of wire fraud before it starts.

2. Entity Validation Services (EVS): Entity validation services verify the existence and legitimacy of borrowing entities, helping prevent bank fraud and identity theft. This service includes checks on business registrations, ownership structures, and other critical details.

3. Rigorous Internal BSA/AML Compliance Programs: Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) programs, which include Know Your Customer (KYC), Office of Foreign Assets Control (OFAC), and Suspicious Activity Report (SAR) components round out a robust organizational compliance approach. These programs help ensure the utmost security standards are being upheld.

4. Real-Time Monitoring: Real-time monitoring enables lenders to detect and respond to suspicious activities promptly. This proactive approach helps in mitigating potential fraud before it can cause significant harm to lenders and their clients.

validation process and any potential red flags. These reports are crucial for informed decision-making and maintaining due diligence.

6. Secure Wire Instructions: Secure wire instructions are a critical component in ensuring funds are transferred to the right place, and stopping wire fraud before it even starts.

committed to staying ahead of the curve, providing the cuttingedge solutions that lenders need to thrive in a secure and fraudfree environment.

References

1. Business Wire. (2021). Financial Fraud in Private Lending Sees Sharp Increase. Retrieved from [businesswire.com] (https://www.businesswire.com).

5. Comprehensive Reporting: Provides detailed, live reports that give lenders a clear view of the

7. Platform Security: Secure, encrypted portals should exceed even bank-grade encryption of sensitive data. Sekady is also SOC Type 2 certified—adhering to strict organizational controls and security to protect sensitive information. Routine penetration testing and web application firewalls help make Sekady an industry leader in security.

8. Direct Payments: Paying subcontractors and vendors within a secure ecosystem helps mitigate fraud by ensuring they’ve been thoroughly vetted and verified prior to payment scheduling.

In an environment where fraud is a constant threat, private lenders both large and small need robust and reliable solutions to protect themselves and their clients. By choosing Sekady, lenders are not just protecting their financial interests—they are also safeguarding their reputation and building trust with their clients. As fraud continues to evolve, Sekady remains

2. 7LexisNexis. (2023). 2023 Small Business Lending Fraud Study. Retrieved from [lexisnexis.com] (https://www.lexisnexis.com).

3. ACFE. (2021). The 2021 Report to the Nations: Banking and Financial Services Fraud. Retrieved from [acfe.com] (https://www.acfe.com).

4. PwC. (2022). Global Economic Crime and Fraud Survey 2022. Retrieved from [pwc.com] (https://www.pwc.com).

5. IAFCI. (2022). Invoice Fraud Report. Retrieved from [iafci.org] (https://www.iafci.org).

6. FBI. (2020). 2020 Internet Crime Report. Retrieved from [fbi.gov] (https://www.fbi.gov).

Thayne Boren President Sekady https://www.sekady.com/

DEFYING EXPECTATIONS:

How Beeta Lecha Turned Challenges into Success

By Janet Moore, Contributing Writer for REIL Fund Services

We are no longer just surviving; we are thriving and positioning ourselves for big growth.

Beeta Lecha CEO, REIL Fund Services

Throughout her life, CEO

Beeta Lecha was told countless times her goals were impossible to achieve. Yet, on October 1, 2024, she celebrated the second anniversary of REIL Fund Services, her latest success.

Against all odds, Lecha defied expectations, turning her vision into a reality.

Balancing family responsibilities while pursuing a degree in accounting became one of Lecha’s greatest challenges. She met her future husband, Ryan, on their first day at the University of California, Santa Cruz, and the two connected immediately. They married in June, shortly after completing their freshman year, and welcomed their first child soon after, both at the age of 19. Despite warnings that she might be jeopardizing her future career, Lecha's resolve only grew stronger. “I had the attitude that you’re not going to tell me I ruined my life. I’m going to get my college degree, and I’m going to be a great mom!” she declared, her tenacity evident.

To balance motherhood and education, Lecha transferred to a junior college for a year and moved in with her husband’s parents. She then returned to Santa Cruz the following year. One instructor left a lasting impression on her. “He called me out in front of an auditorium filled with classmates, outlining what would be expected of me as a public accountant, including a 100-hour work week, as if I were not up to it,” she shared.

Instead of discouraging her, his words fueled her resolve. Lecha quickly rose to the top of her class and even became his teaching assistant. By the age of 25, she had earned her bachelor’s degree in accounting from UC Santa Cruz, secured her first job, and had three children.

to transition from a large firm to Spiegel’s smaller practice proved advantageous, as Jeff Spiegel served as a valuable mentor.

As an aspiring CPA, Lecha joined a large accounting firm. However, she often felt that her colleagues saw her as a mother first and a professional second. “I had that same determination—I’m going to be a successful CPA who also happens to be a mom,” asserted Lecha.

A few years earlier, during a temp position at the San Francisco Chronicle, Lecha met Suzy Cain, the CFO, who became both a friend and mentor. Cain’s ability to balance a successful career while wholeheartedly focusing on her children deeply inspired Lecha.

Lecha recalled one of her favorite memories of Cain: “It was during a car ride when she turned to me and apologized for the smell of old fish tacos, thanks to the soccer gear piled in the back seat. In that moment, I realized it was possible to balance both my career and being a parent.” She played a significant role in Lecha’s life, offering professional advice and encouraging her to pursue CPA licensure.

During her time at Spiegel Accountancy, Lecha became a licensed CPA, achieving a long-held goal. Choosing

Spiegel provided Lecha the flexibility to balance work and motherhood while pushing her out of her comfort zone. “I didn’t have much confidence before working with Jeff,” Lecha explained. “Jeff is anything but subtle. At conferences, he would literally nudge me toward people, encouraging me to engage in conversation. He’d say, ‘Beeta, join in and talk,’ pushing me to participate.” His encouragement transformed Lecha, helping her shed her selfdescribed extreme shyness.

Spiegel also taught her the importance of maintaining relationships. “I remember Jeff saying, even if a client leaves, always treat them with respect,” she elaborated. This advice has been invaluable in her own company. “Clients may leave, but they often come back,” she adds. Today, Lecha remains dedicated to being a respected resource for past, current, and potential clients in her industry.

She credits much of her current management style to her time with Spiegel, who motivated her and provided numerous growth opportunities within the firm. Setting her sights on becoming

a partner, she achieved that goal within six years. As a licensed CPA and partner, she led efforts to expand the firm’s fund accounting division.

After 10 years with Spiegel, Lecha decided to take a bold step and purchase the fund accounting division to start her own firm. It was a significant gamble, and she worried her team might not share her confidence. “They took a very big risk leaving a large, stable firm to spin off into uncharted territory,” Lecha admitted. Expecting some team members to leave after the announcement, she was surprised when they all supported the plan.

Lecha actively involved her team in every aspect of the branding process, even making compromises along the way. "I really wanted orange, but they preferred green," she shared. "I said, 'Let’s go with that!' After all, they were part of this risk, and I wanted them to feel involved." Despite lacking marketing experience, her Fund Accounting Manager, Justin Spears, demonstrated his dedication by staying up all night designing the first logo options.

that, even though we handle fund administration, we’re highly specialized in real estate and lending funds,” Lecha clarifies.

“We’re a bit different from other fund admins because we’re smaller and offer tax preparation alongside fund accounting,” Lecha explains. She takes pride in the flexibility REIL provides, especially to new fund managers that other firms might shy away from. “At REIL, we especially enjoy working with emerging funds because it gives us the chance to implement tax strategies that can help boost their yield,” adds Lecha.

What drives Lecha today is her commitment to her employees. “I want to be part of the team and create an environment where people are excited to come to work. I don’t want them waking up dreading the day,” she emphasized. As CEO, Lecha fully understands the weight of responsibilities that come with the role. “Anyone who’s led or started a company knows how heavy that responsibility feels. A lot of people depend on you, and it’s your job to keep the business running.”

identifying industry trends, seeking new opportunities, and filling gaps wherever they exist.”

Kaddah, when asked for a comment, highlighted two aspects of Lecha’s success. “First, Beeta is incredibly detail-oriented and has an unmatched knowledge of her field. Second, she’s learned to never quit. Everyone has doubts, but she’s learned to push through them.” He adds with a smile, “I’ve had my moments in my 20-plus years where I wondered, ‘Why am I in this business?’ But you persevere.”

Reflecting on her company’s recent milestone, Lecha says, “I look at how far we’ve come and what we’ve accomplished in two years. The company feels very different now. We have twice the number of employees and continue adding more clients.” She concludes, “We are no longer just surviving; we are thriving and positioning ourselves for big growth.”

As for the company name, REIL Fund Services, the team chose REIL, which stands for "Real Estate Investment and Lending," to reflect their focus. “We wanted to convey

Lecha values connecting with other CEOs, including her close friend Sam Kaddah, CEO of Liquid Logics. “Sam has always been there to offer advice, and I know I can rely on him,” she says. “He excels at

Beeta Lecha CEO REIL Fund Services

THE MARKETING MANAGER ROLE FOR PRIVATE LENDING

By Rocky Butani, CEO of Private Lender Link

Over the years, I’ve observed many private lending companies struggling with marketing. Some lenders face challenges in developing a successful marketing strategy, while others have a strategy but struggle with execution. Hiring or retaining marketing personnel is another common pain point. Marketing is undeniably complex. With so many strategies and options available, it requires a significant investment. Most private lending companies are small, often with fewer than ten employees, which makes hiring a full-time marketing professional less feasible.

Every company needs someone to oversee marketing efforts. This role is critical to the success of any lending business because someone must ensure the phone keeps ringing and

loan requests come in consistently. It's perfectly acceptable for the CEO, sales team leader, or operations manager to oversee marketing efforts, as long as someone is responsible for the marketing strategy. If there is a marketing manager, their role is to coordinate all marketing and advertising initiatives. The strategy and execution, however, can often be outsourced to third-party contractors who specialize in marketing.

Third-Party Agencies

For small lending companies, I recommend hiring a marketing consultant or agency to handle highlevel strategy and implementation. Pair this with a virtual assistant (VA) for daily tasks, like graphic design and social media management. While hiring a marketing consultant or

agency can seem expensive at first, consider it an investment. The initial costs may be higher in the first 6-12 months, but as the strategy matures and takes hold, ongoing costs will likely decrease. The consultant or agency should remain involved to provide oversight and fine-tuning. It’s difficult to predict the exact cost, as it depends on the scope of your marketing and advertising plans.

Finding a marketing consultant or agency with experience in private lending can be challenging, but it’s worth the effort. Fortunately, there is a growing number of marketing professionals who have transitioned into consulting after working for larger lending institutions. This is a great opportunity for smaller lenders to tap into the expertise of their larger competitors.

Alternatively, you can ask friendly competitors about their marketing partners or reach out to industry vendors for suggestions. Private lending trade associations are also excellent resources.

If you decide to hire a virtual assistant for graphic design or simpler tasks, expect to pay between $7 to $12 per hour. This means you can spend anywhere from $500 to $2,000 per month for a dedicated VA. Numerous companies specialize in matching businesses with VAs in locations like the Philippines, India, Mexico, and Colombia. We’ve had success working with Scale Virtually (scalevirtually.com), based in Chicago. Other companies in our industry use MOVE (moveyourbiz. com). While you can hire VAs

directly through platforms like Upwork or Fiverr, using a VA staffing agency offers many benefits, such as ongoing support, management, and quality control.

The approach outlined above is best suited for smaller companies with two to ten employees. As your business grows, it becomes increasingly important to hire a full-time marketing manager. While it might work as a part-time role for a smaller team, having someone fully dedicated to marketing is essential for growth.

In House Marketing

For larger lending companies with over 50 employees and hundreds of millions of dollars in loans closed annually, building an in-house marketing team, including a chief

marketing officer (CMO), is a logical step. These companies may not need to hire external consultants but could still benefit from using virtual assistants for certain tasks.

No matter the size of your company, having someone dedicated to the marketing manager role is essential. It’s crucial to the survival, growth, and long-term success of every private lending company.

Rocky Butani CEO

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PRIVATE LENDING TRAILBLAZERS

Zack Lofton, CFA

Founder & CEO, Loan Ranger Capital

Zack Lofton, CFA

Founder & CEO

Loan

Ranger Capital

Q: How many years have you been in Private Lending, and why did you enter this field?

I’ve been in private lending for 12 years. My journey began in commercial real estate banking, where I quickly grew frustrated with the rigidity of the traditional banking system. We were often funding less desirable deals that ‘fit in the box,’ while good deals that didn’t meet the criteria were passed over. Wanting a change of scenery, I pursued my CFA charter to open more doors and eventually discovered private lending. It was a huge breath of fresh air—an industry that operates on common sense, where good deals and good borrowers were valued above all else.

Q: Where did you get your start?

I got my start in private lending at an Arizona-based hard money lender. This first role allowed me to blend the rigorous safety measures and processes I learned from my corporate banking background, with the more streamlined and efficient practices of hard money lending. It was a great introduction to private lending, where I could see firsthand how combining these two approaches could lead to success.

Q: What is your current role, and how does that affect your company at large?

As the founder and CEO of Loan Ranger Capital, my role has evolved significantly over time. Initially, I was a ‘one-man band’ managing everything from sales, underwriting, capital raising to servicing from my one-bedroom apartment, which served as our ‘world headquarters.’ As the company grew, I hired my first employee, our COO Nik, who remains with us to this day.

Now, my focus is primarily on analyzing trends within Loan Ranger Capital as well as broader market trends. I believe in constantly refining and improving our systems, one of our core values is to be 1% better every day. Having a great team that excels at operating our systems allows me the luxury to dive into these areas and make the minor adjustments that keep us moving forward.

Q: How have you seen your company grow in spite of or because of current market conditions?

The market has definitely changed, but at Loan Ranger Capital, we like

to focus on what we can control. For us, growth has primarily been about enhancing our service levels. As more lenders transition to a primary note-selling model, there’s been a convergence in what they offer, leading to a race to the bottom for pricing. While we strive to remain competitive, we prefer to fight on the battlefield of service to preserve our margins—and we earn those margins.

When you call Loan Ranger Capital, a person always answers the phone. You get quick responses to emails, draws are processed swiftly, and payoff requests are handled promptly. We emphasize the human element in our services because our borrowers are real estate entrepreneurs who face a myriad of challenges, and price is just one factor in their decision-making process.

Q: What are some of your goals for 2025 and beyond?

As we look ahead to 2025 and beyond, one of our key goals is to expand our product offerings by launching DSCR products and we’re actively looking to build this team. While this won’t be a balance sheet product like most of our other loans, we believe this will allow us to cater to a broader range of our borrowers’ needs.

Q: What does success look like for you?

In our industry, it’s easy to define success numerically—whether it’s fund size, origination volume, or other metrics. At the end of the day, I define success by the people I can confidently say are in a better place because of Loan Ranger Capital. This goes beyond just my own family and includes our borrowers, who have been able to become small entrepreneurs in real estate,

our employees who have grown their careers, our investors who see consistent returns, among others connected to our business.

At this stage, success means growing our company, but only if all stakeholders are better off as a result of this growth. I want to ensure that I enjoy the growth and that it doesn’t become a never-ending battle to simply have a ‘bigger stick.’

Q: What is something most people don’t know about you or your company?

Since I already touched on our humble beginnings, something most people might not realize is the incredible culture we’ve built at Loan Ranger Capital. I know that’s a lame answer that everyone says, but I really believe it. We have the best team, hands down—they work hard, get things done, genuinely care about our clients, and have a great time doing it. We’re fortunate to have what I think is the best physical office around, located right on Lake Austin. Instead of an all-hands on Zoom call, on a Friday afternoon you can probably find our team celebrating the week’s victories with a ranch water on the lake.

Q: What steps are you or your company taking today to make an impact on the industry?

I view private lending as a big blue ocean—there’s room for many different players, each with their own niche. Rather than trying to influence the industry, I’d say we’re focused on making our own path. We see a great niche in the market for balance sheet lenders who can provide value far beyond just pricing. I believe this model has the potential to scale, but it requires a much more thoughtful approach than that of a

primary note-selling lender. We need to deeply understand each deal and become experts in the local markets we lend in. This makes scaling responsibly a slower process, but also a much more rewarding one. By taking this deliberate approach, we’re not only building a sustainable business but also setting a standard for how lending can be done with both precision and purpose.

Q: What piece of advice did you personally receive early in your career that has helped shape decisions you’ve made?

Early in my career, I was told: ‘It’s not the great storm that destroys the mighty oak tree. It’s the little bugs.’ This advice shaped my understanding of the importance of paying attention to every detail and constantly striving for improvement. It’s a reminder that stagnation is, in fact, deterioration. By continuously addressing the small issues and refining our processes, we ensure that our company remains strong and resilient. Sure, there are large storms (macro events), but taking our eye off the ball and not taking pride in the little details is much more likely to lead to one’s demise.

Q: Tell us about a person or organization you admire. How have they made an important impact on you, the industry, or the world?

A couple years ago, I may have said someone like Elon Musk or Jack Welch, but today it has to be my wife. She’s the strongest person I know and has been an unwavering support system throughout our journey together. She was there for the early days of Loan Ranger Capital, when the business was just a small operation, and stayed supportive through the challenges and scaling this into a $500MM fund. She’s given birth to our three children and stood beside me during the hardest time of my

life—when we lost our son, Wyatt last year. Her resilience and unwavering presence during that period were truly remarkable.

Q: Are you involved in any associations, networking groups, or the like that have influenced your career path?

I am actively involved in YPO (Young Presidents Organization), a global leadership community of executives and entrepreneurs. Being part of YPO has had a profound influence on my career. The organization creates a structure that goes beyond just networking. For me, it creates my own personal board of directors to help guide me through work, family and personal highs and lows.

Q: If you had a clean slate to start over and do anything you wanted to do, what would that be?

If I had a clean slate, I’d do it all over again. Nothing ever goes exactly to plan, and there have certainly been plenty of speed bumps along the way, but I genuinely love this journey. The challenges, the learning experiences, and the successes have all contributed to making this path incredibly fulfilling.

Q: What is the best advice you could give someone thinking about making a leap into Private Lending?

I’d say go for it! Take risks, go get it done, and create the life you want. There’s plenty of market share for everyone in private lending. The industry is vast and full of opportunities for those who are willing to dive in, work hard, and carve out their own niche. Don’t be afraid to take that leap.

For more information, please visit: https://www.loanrangercapital.com/

Zack

Navigating a Commoditized Market:

The Family Office Advantage

By Steve Corliss, Principal at 1892 Capital Partners

The lending industry has experienced a significant shift over the last two decades. What began as a straightforward transaction between individuals with surplus capital has evolved into a highly commoditized, competitive, and complex market. Gone are the days of handshake agreements. Now, borrowers face a market crowded with institutions, brokers, and white-label lenders, leaving them struggling to understand who a good fit is for what as they navigate the new market.

The rise of commoditization has forced lenders to prioritize scalability over individuality, leaving many clients searching for a more tailored, personal approach—one that family offices can uniquely provide, especially when deals require a more nuanced, specialized, bespoke solution.

The Evolution of Lending: From Personal to White-Label

The modern lending industry is almost unrecognizable compared to its origins. Originally, lending was based on individuals with extra cash who offered loans directly to borrowers. As the market grew and evolved, this personal relationship-based system became a highly systematized industry. The introduction of white-label lending models, where institutions rebrand and offer identical financial products, has only deepened this divide.

Today, too much of the lending market is a one-size-fits-all proposition. In this new wake of lending platforms operating on a white-label model, the market is now more accessible but has also created industry confusion for consumers.

With so many lenders offering nearly identical products, borrowers tend to make decisions based solely on superficial factors like interest rates without fully understanding who is behind the loan or the implications of standardized underwriting practices.

In this sea of sameness, understanding the makeup of your lender is more critical than ever. While many lenders are beholden to rigid guidelines and underwriting constraints, family offices continue to offer an alternative—a specialized approach rooted in personal relationships and flexible capital deployment. Here's how:

Family Offices: The Specialty Surgeons of the Lending World

Suppose the lending industry at large has become a "general practitioner"

handling routine financial needs. In that case, family offices are the specialty surgeons—the experts called upon when more tailored expertise is required. Traditional institutions provide straightforward deals that fit neatly into commoditized lending boxes, but what happens when the deal is complex, outside the norm, or requires a customized approach?

This is where family offices shine.

Though they may operate quietly in the background, their impact is undeniable to modern real estate needs. They bring a level of expertise, personal attention, and flexibility that mass-market lenders cannot match.

While family offices have historically taken a back seat in the larger lending landscape, their role is becoming

increasingly vital for professionals needing sophisticated financial solutions. Here's why:

Flexible Underwriting Practices

Unlike traditional lenders bound by standardized underwriting guidelines, family offices can structure deals based on relationships, trust, and intimate knowledge of their client's financial needs. They aren't bound by the same rigid formulas as banks and other lenders. This flexibility allows them to tackle deals that others may deem too risky or complicated. For example, a borrower with a unique real estate project may need help securing financing from conventional sources due to strict underwriting policies. However, a family office can step in with a tailored solution, given its deep understanding of the client and ability to act as both investor and partner.

Direct Access to Decision Makers

Family offices typically operate with a flat decision-making structure. Instead of navigating layers of brokers, go-betweens, and institutional hierarchies, borrowers have direct access to decision-makers. This means faster decision-making and more agile responses to evolving project needs. For borrowers, this can make the difference between securing financing quickly or losing out on an opportunity.

A Resource for Lenders and Brokers

Family offices aren't just a resource for borrowers; they're also critical partners for other lenders and brokers. Because family offices often use their own money and don't rely on brokers, they can offer liquidity and reliability when other funding sources dry up.

In a sea of commoditized lending, family offices stand out for their personalized, flexible approach, offering specialized solutions where traditional lenders fall short.

Navigating a Commoditized Market: Continued from pg. 45

In a lending environment where development capital has become increasingly scarce, many brokers and institutional lenders turn to family offices as reliable partners.

A Family Office Example: Expertise in Action

At 1892 Capital Partners, we embrace what makes family offices valuable in today's lending market. As a boutique direct hard money lending firm, we focus on middle-ofthe- lane funding, typically starting at $2 million and above—common for other family and or boutique firms.

Family offices will tend to lend to asset types they have expertise or interest in. Timberland is a prime example of a family office niche that may be willing to lend because they have expertise in forestry.

Some family offices are also willing to adapt because of broad expertise or interest in certain asset classes such as car washes, RV parks, or motel to multifamily conversions. They may differ by construction type. Some may specialize in garden-style multifamily, while others specialize in podium.

Family Offices Are Essential Players in Today's Market

As the lending world keeps modernizing, family offices are becoming the unsung heroes of finance— especially when your deal needs a little more TLC than those cookiecutter lenders can offer.

Family offices may have less experience requirements in return for lower LTV. They may provide a higher LTC if the end project has a lower LTV than typical. They may allow cross-collateral or non-recourse

in exchange for lower LTVs. Family offices have great flexibility and will often trade a lower LTV for some other underwriting requirement other institutional len-ders may require.

Commoditized lenders may dominate the headlines with their scale, but family offices remain an indispensable part of the market for those needing specialized, relationshipdriven solutions.

Steve

Corliss Principal

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How to Keep Yourself Out of Court (and Away From Me)

By Steven E. Ernest, Esq., Partner, Geraci LLP

My boss has told me a few times at conferences, “no one has figured out how to make money in litigation.” I’m assuming he meant no one other than me. Point taken. So, how can you avoid litigation, or ‘lawsuit proof’ your loan files? Let’s have a look.

The time to start is at underwriting. Fraud is WAY up since 2017, so ensure you know who your borrower is, that the collateral exists and is owned by your borrower, and that you’ve purchased the right amount of Title Insurance (we recommend 125% of the loan amount). Fraud is a bigger topic and will be the subject of a forthcoming article (teaser!).

Presuming you find yourself with a defaulted loan, one way to deal with it (not recommended) is to just let it go. You can make a forbearance agreement with your customer.

That means you and the borrower agree that you won’t enforce your rights now, and that the borrower promises (pinky swear this time) that he’ll cure the default over a period of time. This essentially waives your collection remedies (for a time) in hopes the loan will one day begin performing again. You want to ensure this doesn’t extend too long, or you may find yourself unable to

collect at some point (owing to the Statute of Limitations).

You can also modify the loan terms. This variety of ‘work out’ generally involves moving defaulted payments to the end of the loan, waiving fees/ costs/interest, changing the interest rate, changing the monthly payment, or extending the duration of the loan.

If you do this, IT IS ESSENTIAL that you notify all guarantors. They don’t have to agree, or like it, but they must be notified (otherwise you’ll forever waive your right to collect from them).

Perhaps your borrower is in a substantially worse position and can’t make any modification work. He just wants to walk away and toss the keys to you. This is a deed in lieu of foreclosure circumstance. This will get you title to the property (your collateral) and will avoid the costs and time of conducting a foreclosure. It also waives your right to collect any deficiency against your customer (not so against your guarantor—but again, remember to notify him beforehand).

Failing any of those prelitigation remedies, there is the time-honored practice of “saber rattling.” Ensure your contract has an attorney’s fee provision. So long as it does, and so long as you are convinced your position is correct, this strategy can work. “It sure would be unfortunate (for you) if I had to sue and enforce this contract pal, because you’ll have to pay my lawyer (and yours).” You see, all the fees and costs of litigation get added to the balance owed, so litigation becomes rather expensive for borrowers in default. This might intimidate them into consenting to one of the remedies listed above.

a signed contract? Is the guaranty signed? Is the Deed of Trust signed, and does it encumber the correct property? Is your account payment history sufficiently detailed that you could explain it to a golden retriever? If so, make a final attempt at “saber rattling”, and give the borrower one last chance; or have your attorney do it. A last-gasp effort might resolve this for you.

If you have to march down to the courthouse, consider at the outset your strategy; it may save you a tremendous amount. Bearing in mind the fees provision in your contract—which really means your borrower is paying for all this— combining remedies into one case will make the procedure cheaper. If you sue for judicial foreclosure and add breach of guaranty causes of action in it, by the end of the case you will have title to the property, a deficiency judgment against your borrower, and a deficiency judgment against all your guarantors. You’ll also insulate yourself from many of the borrower claims against you and protect from the anti-deficiency rules. You can also ‘double track’ these cases with non-judicial foreclosures.

will immediately cause your deficiency balance to attach to all real estate your borrower/guarantors own (and they cost less than $40). Bank levies can really ruin your borrower’s day (and get them to come negotiate payments with you). Same for wage garnishments.

Saving all that, you can use complicated methods (the extraordinary relief—also the subject of a forthcoming article—teaser2). These involve receivership, judgment debtor examinations, keepers (the till tapper), and other exotic remedies.

We are always available to you and excited to help strategize your plan. Doing so is the only responsible way to manage your asset. If you don’t know where you are trying to go, any road will take you there. All the best.

Do you have questions about how to approach a delinquent borrower? Geraci’s litigation team is here to help. Contact us today.

If litigation seems inevitable, have a careful look at your file. Do you have

Once you get finished winning, there are cost effective remedies (and others not so much) which will find their way to uniting you with your money. Record abstracts—those

Steven E. Ernest, Esq. Partner Geraci LLP

OF NETWORKING: BUILDING BRIDGES IN PRIVATE LENDING

By Dana Georgiou, Lending Luminary

There’s an old saying, “It’s not what you know, it’s who you know.” In the world of private lending, that rings true more often than not. Now, I’m not saying you should throw out everything you know about lending, but when it comes to growing your business, making the right connections can open doors faster than a perfectly executed term sheet.

As we gather at the American Association of Private Lenders (AAPL) Conference, surrounded by some of the brightest and sharpest minds in the industry, it’s the perfect time to remind ourselves of the importance of networking. In a field like ours, relationships can make all the difference between a deal falling flat or going through smoothly like butter on a hot biscuit.

Let’s walk through three key reasons why networking is more than just a good idea—it’s essential to success in private lending.

Relationships Build Trust, and Trust is Everything

Trust me on this one: lending isn’t just about dollars and cents. It’s about trust. Building relationships with colleagues, partners, and potential clients helps establish that allimportant foundation of reliability and respect. Studies show that 85% of jobs are filled through networking, not traditional job listings. Now, I know we’re not talking about hiring here, but this stat highlights one universal truth—people do business with those they know and trust.

When you’re in a lending relationship, trust makes all the difference. Whether it’s ensuring borrowers repay or collaborating with another private lender on a larger deal, those personal connections foster the kind of trust that helps keep both parties accountable and smooths out any rough patches.

A Strong Network is a Safety Net

Let’s face it—sometimes, things don’t go as planned. Deals fall through, markets fluctuate, or you find yourself at a crossroads wondering where your next opportunity might

come from. Well, having a strong network means you’ve got people in your corner to help you weather those storms.

It’s been found that 70% of people believe their network is vital to career success. In private lending, having a diverse range of contacts— fellow lenders, real estate professionals, financial advisors—creates a safety net. When one door closes, someone in your network might just open a window for you.

And let’s not forget that networks are two-way streets. As much as you benefit from your connections, offering a helping hand can come back to you tenfold. A reputation for generosity and collaboration is worth its weight in gold.

Innovation and Growth Happen Through Collaboration

AAPL brings us all together for a reason: we learn, share ideas, and come up with innovative ways to grow our businesses. Networking is the heart of collaboration. That’s where those magic “aha” moments often happen. Maybe it’s in a conversation over a cup of coffee, or during a panel discussion, but bouncing ideas off others is what sparks the creativity that keeps this industry moving forward.

According to Harvard Business Review, networking with diverse groups outside of your immediate circle improves your chances of coming up with innovative solutions by 60%. Fresh perspectives help you think outside the box, and that’s what leads to growth—both for your business and for the industry at large.

So, as you shake hands and trade business cards at this year’s AAPL Conference, remember that these connections are more than just surface-level pleasantries. They’re opportunities to build trust, form a support system, and collaborate in ways that will benefit your business long after the conference lights dim. I firmly believe you can’t make it in private lending without building relationships.

Dana Georgiou Owner & Consultant Lending Luminary

Multistate Licensing Considerations for Private Lenders

By Jennifer Young, Esq., Partner, Geraci LLP

Private lenders play a crucial role in offering financing solutions to real estate investors. However there continues to be uncertainty and misunderstandings about the licensing regulations for private lenders, particularly for business purpose loans (BPL) secured by real estate. Contrary to common belief, several U.S. states do require a license for BPLs. It’s essential to grasp the specific requirements, obligations, and complexities tied to licensing in each state to ensure success. This article seeks to clarify state-specific licensing rules, spotlight key requirements in certain states, and emphasize the importance of carefully navigating the licensing process.

The main challenge in many states is ensuring that the private lending company is properly licensed. Although states have different rules regarding usury, prepayment penalties, and other loan conditions, these can typically be addressed by adjusting the loan agreement. But, if a license is required, no lending activity can take place until the license is secured, effectively halting operations in that state.

What Type of Lending Activity Needs to be Considered?

Before entering a new market, you should understand each state’s licensing requirements for your company’s lending activities. Each state is different and may require a license for lending, brokering, and/ or servicing mortgage loans.

The rules can be complicated. For example, several states require a real estate broker license to act as a mortgage broker, even though lenders can originate loans in those states without a lender license. In California, you have a choice of licenses that present lenders with different lending authorities and restrictions. Additionally, each state presents an array of licensing exemptions that may apply to your activities. For example, certain states allow an unlicensed lender to fund a loan arranged through a licensed mortgage broker.

Which Entity Should Get Licensed?

When managing funds or multiple entities, determining which entity should hold the lending license is crucial. The right entity depends

on state-specific regulations and the structure of your business.

In California, where the California Finance Lenders (CFL) license mandates balance sheet lending, the debt fund or the lending entity that provides capital fund for the loan must obtain the license. This ensures that loan proceeds come directly from the licensed CFL entity, which serves as the lender of record.

Closing and funding loans through the fund manager or another entity without proper licensing could lead to complications and create regulatory compliance issues.

Which States Require Licensing?

Several states are well-known for their licensing regulations, including California, Nevada, and Arizona. These three states, as well as North Dakota, South Dakota, and Vermont, will require a license regardless of the underlying collateral. In addition, Idaho, Oregon, Utah, and Minnesota will also require licenses for BPLs secured by a 1-4 unit residential property. Additional states may require licensing depending on the type of property and borrower type. For example, Florida does not require a license if the loan is for a 1-4 unit residential property or the borrower is a business entity and the lender is an “institutional investor.”

Licensing applications will generally require foreign registration of the licensing applicant in that state, placement of a surety bond, and background/credit checks of certain owners and managers (control persons).

State-Specific Licensing Considerations

Some states enforce net worth thresholds and require brickand-mortar offices in the state. Additionally, states like California are known for having particularly long processing times for license approvals. As of 2024, it takes over 10 months for CFL approval.

1. Arizona

Arizona has one of the higher thresholds for entry due to its requirement of audited financials reflecting a minimum company net worth of $100,000. Additionally, Arizona requires both an in-state office location and a qualified individual who meets certain experience requirements and resides in Arizona to oversee the office.

2. Nevada

While Nevada does not require audited financials, it does require a brick-and-mortar office located in the state, as well as a qualified individual who meets certain experience requirements and resides in-state.

3. Utah

The Utah license requires an individual who has their Utah Lending Manager License and can meet experience requirements.

4. North Carolina

While not requiring a traditional license, North Carolina mandates a broker filing or registration for lenders who have made loans of

less than $1M in the previous year. This involves submitting a disclosure statement, a recent financial statement, and posting a $10,000 surety bond with the Secretary of State.

Additionally, states like Tennessee, Washington, and Texas impose additional obligations beyond licensure. These obligations may include exceptions, special rules regarding owner-occupied BPL, usury, or specific exemptions that must be adhered to.

Exceptions for Licensed Broker Involvement

Many states provide exceptions that allow lenders to operate without directly obtaining a license, provided they follow specific guidelines. California is a prime example of a state with stringent licensing requirements. Any private lender making a loan in California must have the transaction brokered by a California-licensed real estate broker (DRE Broker). This broker must be actively involved in the loan process, collecting information from the borrower and providing required disclosures. The intent is to ensure that borrowers are adequately represented, and the loan complies with California's Business and Professions Code and the California Code of Regulations. State regulators enforce this rule strictly, requiring brokers to actively engage with borrowers rather than serve as "brokers in name only." If a broker is listed on the documents

without handling disclosures or communicating with the borrower, lenders could face penalties during regulatory audits.

Several other states have similar broker-related exceptions for private lenders, such as Arizona, Oregon, and Utah, where the licensing rules parallel California's, requiring a broker to actively participate in the loan process.

Navigating License Applications

State-Specific Eligibility Requirements

As mentioned above, some states have unique eligibility requirements. For example, California requires the lending company’s net worth to be at least $25,000, while Arizona requires $100,000. In Arizona and Nevada, it is mandatory to have a brick-and-mortar office location and a qualified individual residing in the state. Although all states generally require a surety bond, the minimum bond amount varies from state to state.

NMLS – MU1 and MU2s

Any applications for state licenses as well as documentation or other required forms for licensing are filed through the Nationwide Mortgage Licensing System and Registry (NMLS). NMLS is a webbased platform that many lenders find to be complicated and not very user-friendly. Managing the requirements to maintain a license on NMLS can be time-consuming and extremely stressful. Each license application includes at least 2 separate NMLS applications:

(i) the lending company’s application (MU1), (ii) an individual application for each control person of the company (MU2s), and (iii) potentially a branch application for each additional office location; and all applications and records need to be linked in NMLS.

Financial Statements and Other Documents

As mentioned above, most states require you to submit your company’s financial statements, but the specific requirements of the financial statement vary between the states. While California requires an unaudited financial statement prepared, in accordance with GAAP, showing a minimum company net worth of $25,000, Arizona requires the most current CPA audited financial statement, and Minnesota does not require a financial statement to be uploaded. Additionally, document uploads require specific file names (which vary by state) and must be uploaded under different locations within the NMLS. For states that require electronic surety bonds, bond companies must also link the bond to the company account.

Business Plans

Most states require a formal business plan outlining the company’s products and marketing strategies. Depending on the state, there are additional state-specific business plan documents required, and certain states like California and Nevada each have their own business plan forms and requirements.

$25,000

$100,000

Organizational Structure, Management Charts, and Background Checks

Companies will need to provide their organizational structure and management charts, which is where most of the headache and confusion arises. Organizational structure charts generally need to include the ownership percentages of direct owners, indirect owners, and depending on the state, any other individuals who own a certain percentage of “voting shares” of the company. Management charts need to show all managers, officers, and directors of the company, including any other individuals who have control and authority over the company’s lending activities.

Getting this part right is crucial as it has a trickle-down effect on the rest of the application. Depending on the state, the individuals ultimately listed in these charts may be required to submit

to an FBI or criminal background check, fingerprint processing, and credit checks. For example, background checks are generally required for each executive officer or control person of the company, but California additionally requires a background check for any individual who directly or indirectly owns 10% or more of the company and has authority over the company’s lending activities. Arizona requires background checks for all individuals who hold 20% or more of the company’s voting shares, and Nevada requires this for holders of 10% or more of voting shares in the company. Additionally, Nevada also requires credit checks for such individuals. A careful analysis of a company’s organizational and management structure is critical in accurately completing any state lender license application.

Complications and Nuances

Timing for the entire application process depends on various factors,

including the time needed to compile and prepare all necessary statespecific information and documents, obtaining foreign state registrations needed, completing the MU 2 s, sponsorship approval of MLOs as needed, and of course, getting the correct bond in place.

Once the licensing application is submitted, the waiting time for a state to review the application may take 4-6 weeks or more. There may also be multiple rounds of followup items from state regulators before you get final approval for any state license.

Best Practices for Private Lenders

For private lenders looking to operate nationwide, understanding state-specific licensing requirements is essential. A clear grasp of each state’s laws, exceptions, and the proper structuring of company and/or Fund licenses is crucial for staying compliant and avoiding legal challenges. To confidently navigate these complexities, consult with an experienced BPL licensing legal professional to keep your lending operations compliant across all states.

Jennifer Young, Esq. Partner Geraci LLP

https://www.geracilawfirm.com/

Geraci LLP, Partner and Director of Litigation & Bankruptcy Steven Ernest, Esq. hosts segments such as Reel Law vs. Real Law, Steve’s Story Hour, and Courtroom Headlines, where he unpacks the fun, engaging, and legal parameters of what we see on TV, in the news, and on social media!

www.geracilawfirm.com • www.youtube.com/@westernlawman

Note Finance Solutions

INDUSTRY NEWS

Liquid Logics and Tower1 Announce Strategic Partnership to Provide Institutional Capital to the Private Lending Industry

Liquid Logics Announces New Partnership

Lee’s Summit, MO, August 19, 2024 – Liquid Logics, a leading provider of cloud-based loan management systems for private and hard money lenders, is proud to announce a strategic partnership with Tower1, an institutional asset manager specializing in U.S. residential real estate and mortgage strategies. The collaboration aims to bring institutional-quality capital and competitive pricing, previously available only to the nation’s largest lenders, to the entire private lending industry.

The partnership between Liquid Logics and Tower1 is set to revolutionize the private lending space by offering new opportunities for lenders to access reliable and streamlined capital. The collaboration will initially focus on Debt Service Coverage Ratio (DSCR) loans, with plans to expand into additional lending programs. Through this collaboration, Liquid Logics will now facilitate loans sales through both bulk offerings and flow programs, giving clients access to highly competitive capital with simplified guidelines to help them grow and succeed.

“The strategic partnership with Tower1 marks a significant milestone for Liquid Logics and our clients,” said Sam Kaddah, CEO & Owner of Liquid Logics. “By combining our advanced Loan Origination Software with Tower1’s institutional capital and expertise, we are leveling the playing field for private lenders. This collaboration will empower our clients with the financial resources and support they need to compete with the nation’s largest lenders, enhancing their ability to grow their businesses.”

Tower1’s vertically integrated platform finances residential real estate from construction through permanent financing alongside income opportunities through single-family rental (SFR) management. This comprehensive approach, paired with Liquid Logics’ customizable and secure software platform, will provide private lenders with unprecedented access to the tools and capital required to expand their operations.

“The key to helping smart and successful lenders grow into large originators is reliable, competitive capital,” said Ray Sturm, Partner at Tower1. “Tower1 and Liquid Logics are coming together to provide the industry with unprecedented access to loan programs typically reserved for the nation’s largest lenders.”

This partnership represents a shared vision between Liquid Logics and Tower1 to support the growth and success of private lenders across the country. By providing access to institutional capital, the collaboration is poised to create new opportunities for lenders to scale their businesses, reduce risk, and enhance profitability.

As a trailblazer in the private and hard money lending industry, Liquid Logics is renowned for its robust, customizable, and secure Cloud-Based Loan Management System. The platform offers a complete suite of tools designed to streamline and optimize every loan origination and management aspect.

Key Features of Liquid Logics:

• Fully cloud-based SaaS Loan Management System with Auto workflow

• CRM/lead pipeline integration

• Servicing, reporting, and closing document management

• Investor and private funds management with three fund and pool management structures

• White labeled private lending marketplace.

About Liquid Logics:

Liquid Logics is the leading provider of Cloud-Based Loan Management Systems designed specifically for private and hard money lenders. Known for its comprehensive, customizable, and secure platform, Liquid Logics offers the most advanced Loan Origination Software on the market, helping lenders streamline their operations, reduce risk, and increase profitability.

About Tower1:

Tower1 is an institutional asset manager focused on U.S. residential real estate and mortgage strategies. Through Tower1’s vertically integrated platform, the firm finances residential real estate from construction through permanent financing, with further income opportunities through SFR management.

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