Is it just me, or are we not talking enough about private lending?
Not Realeflow, of course…
We're definitely talking about it! In fact, this week, we welcomed Oliver Austria back to the REI Roundtable podcast for the second time.
Oliver is the co-founder and CEO of Triumph Capital, a direct private lender for residential real estate investors.
Watch this week's REI Roundtable episode below.
Or listen to the podcast here.
We're all pretty familiar with how bank lending works, right? Not to oversimplify, but when someone needs a property loan, they typically go to a bank and share their assets.
The bank wants some percentage of down payment (we'll come back to this), a credit score is determined, and the bank decides whether the loan is a "good" investment—or not—based primarily on those numbers.
For many real estate investors, this is the process they're going to work within. But, it can be stifling. It can also be limiting in a fluctuating economy.
On this week's episode of the REI Roundtable Podcast, Oliver talks about where bank lending falls short—and where private lending provides opportunities.
Watch the new episode on this page or listen to the podcast here.
Oliver brings some TRUTH about when writing the loan just doesn't make sense. He was an underwriter during the 2008 recession and walked away from that experience with the insight he used to build Triumph Capital.
With the market fluctuating, his insight is more valuable than ever.
Here's what he had to say:
It's created a lot of liquidity in the market, where you now have so many people that can go out and get these loans, but at the same time it's created this disconnect in the banking relationship, which really is a thing of the past.
Oliver talks a lot about how lending tends to swing too far in one direction or the other.
Before the crash, lending was done too freely—borrowers were getting larger loans with adjustable rates and no money down. Then, lending swung to the other side, where it was hard for investors to get loans on properties they planned to flip.
Now, Oliver says lenders are operating more in the middle… Which means real estate investors have more choices.
Let's break down private lending: When you're working with a private lender, you're typically paying higher interest rates… But, you're also getting larger amounts of capital, faster, and with fewer limits.
With private lending, you have to worry less about rigidity from the other side of the table. Private lenders understand the industry, they know a good deal when they see one, and best of all, they're going to work with you.
Because private lending is done person to person (not institution to person), there's a relationship that's formed between the borrower and the lender. If you're considering private capital, you want to hear how the private lender sees it, right?
Well here it is:
We take pride in the fact that we take a consultative approach to these relationships with our borrowers. We allow a second set of eyes. We have a whole team that reviews these deals from soup to nuts. And if the deal makes sense, great, we'll provide financing for it.
Oliver and Rob also agree that private lending ensures some natural and needed limits: If the deal doesn't make sense, a private lender isn't going to write it... Because sometimes the best deal is the one that you don't do.
There it is! "No" isn't always a bad answer… Sometimes it's the answer that saves your business, and a private lender is going to know when "no" is the only answer that makes sense.
But, with all the fluctuation happening in the economy right now, there are going to be plenty of opportunities to hear "yes." In this episode, Oliver talks about all the opportunities he sees for real estate investors to get active.
It's an amazing time to be alive, to be able to not only be a part of this space, but also have all the tools in front of us to be able to do this anywhere. I mean, real estate, as we know, is the number one wealth builder in this country. And for anyone to be able to just pick it up and not have to go to college for it and not have to go through extensive schooling through it, but still be able to find avenues for education and support system in the community around it, I think that's an amazing thing. You don't find that in every space or industry.
But you do find it from Realeflow! Like Oliver, we want you to LIVE FREE!
What is your strategy in the months to come?
Are you considering a move to the real estate investing industry?
Are you interested in finding a private lender?
Inspire us in the comment section below!
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