How Would You Advise Someone To Choose The Right Hard Money Lender? - Br...

https://u109893.h.reiblackbook.com/generic11/the-storage-stud/how-would-you-advise-someone-to-choose-the-right-hard-money-lender-brandon-moulton/

For Brandon Moulton, when choosing a hard money lender you got the option of national vs. local. The national hard money lenders are supported by Wall Street. They typically offer a lower cost. They are the lower-cost providers but you need to meet their ratios. While the local hard money lenders can provide a more flexible offer, the process can be a bit faster due to their local knowledge and expertise. They may be less bureaucratic compared to national hard money lenders. When choosing a hard money lender you have to know the needs of your deal for you to make a great choice. To understand more about this topic continue watching this video.

Fernando O. Angelucci is Founder and President of Titan Wealth Group. He also leads the firm’s finance and acquisitions departments. Fernando Angelucci and Steven Wear founded Titan Wealth Group in 2015, and under his leadership, the firm’s revenue has grown over 100% year over year. Today,

Find out more at

https://www.TheStorageStud.com

https://titanwealthgroup.com/

Listen to our Podcast: https://thestoragestud.podbean.com/e/how-would-you-advise-someone-to-choose-the-right-hard-money-lender-brandon-moulton/

-----------------------------------------------------------------------

Fernando Angelucci (00:00):

Yeah, absolutely. So, you know, a lot of people that are watching this video and a lot of people that we work with, they always like to utilize hard money lenders and there's, you know, the space has been getting crowded recently with the amount of cheap money out there, funding these hard money lenders, you know, when someone's going to select a hard money lender, what are the decisions that are going to be facing? What type of things should they be looking for from the hard money lender to just almost like verify or vet that lender?

Brandon Moulton (00:42):

Yeah. So about five years ago, you touched on a point here, that it's become a pretty crowded space. Goldman Sachs bought a group out of California Genesis and that really legitimize kind of the industry, so to speak. And since then, it's been like you said, a pretty crowded space and competitive, but, you know, when choosing a hard money lender, you really got the option of kind of national versus local, right? So the national guys are all backed by wall street. They're typically going to be lower cost or lowest cost provider. Typically, but, it's still very much check the box even for hard money. And you know, you're still going to have to kind of meet their ratios and kind of check the box as I said. And then you've got local guys, that can provide some more flexibility, speed, know how, due to their local knowledge expertise and probably just being a little bit more nimble and not as bureaucratic. And then you've probably got another kind of layer of it. That is probably just, you know, a guy that's got a few million bucks that can kind of write a check on site and take a mortgage on the property. So, those are the kind of the three options I would say. So, you've got to kind of balance out, how your deal fits in into each bucket and what makes sense. And that timing also plays a role into it as well.

Fernando Angelucci (02:24):

Yeah. And I want to touch on a few points you had there. So, the first thing is, with those national guys would have noticed is the underwriting is very similar to if you were to go to a bank. So the speed is not usually there compared to say a local guy. And the underwriting is pretty onerous compared to say somebody that knows a local market. The second thing, I wanna touch on is, again, the importance of going with a local lender that knows the investment areas here in Chicago, in the areas that are primarily sought after for investment purposes. A lot of those areas are almost block by block and someone that is not headquartered in the area that you're investing in, may not know that, Hey, if you cross the street, all of a sudden the after-repaired values jump up a hundred thousand, or if you go on the other side of this park, then all of a sudden, you're in a completely different area, even though on a map, it looks like it's right next to it.

Fernando Angelucci (03:23):

But if you actually know the local area, you'll start to see those changes. And that's huge for us investors because we're always trying to invest kind of on the borderlines, right? Where a class A area bleeds into a class B area. So, you can buy at class B prices, rehab it, and then sell it at class A prices or C to B, what have you. So those are the two things that I noticed. And then the third thing is, you touched on these, what I call these mom and pop hard money lenders, right? It may be just some high net worth individuals, just him sitting behind a desk, and he's just turning his money over and over again. What I've noticed with those types of guys is, they usually get tapped out pretty quick, and they could only have a couple loans going at any given time. So, if you were relying on someone like that, you can get caught holding the bag with a contract that you're not going to be able to fund. So, talk to me about Renovo, give me an idea of like how you guys are funded and how much available funds you have? Every time I've talked to you, you've never had any issues with funding deals. You'd never had any issues with finding the money for a property.

Brandon Moulton (04:34):

Yeah. We've taken a little bit of different approach, to kind of the game here. And it's really taking the blend of local expertise and kind of having that community banker understanding and know-how, but, kind of cross-pollinating it with an institutional platform and the capital structure behind it. So, definitely a little bit unique in that regard that we have the flexibility and of the local guys, but with the the backing of the institutional guys.

Fernando Angelucci (05:09):

Yeah.