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I never thought I would make such a rookie mistake, and I’ve never relaxed any underwriting procedures to loan applications, but I still underestimated the impact of lending to a friend.One deal was brought to me by a friend. They were flipping a small building on the West Coast, but the market wasn’t good, so they didn’t finish flipping it on time to sell, and they needed working capital to hold for a bit. When they reached out to me, even though we hadn’t been in contact for over a decade, the good memories from our good old student days... Continue reading

This story is true, and it’s really just a big rant. It’s full of pitfalls in due diligence, and most people would indeed fall for it. If it weren’t for our years of being cautious and wary of pitfalls, we might have fallen for it as well. Why do I say most people would fall for it? Because based on the data, this deal looks very standard. First of all, there are no issues with the area—it’s a small upscale neighborhood with good liquidity. Secondly, there’s no debt whatsoever, no first mortgage, which eliminates various steps in underwriting. Furthermore, although there’s... Continue reading

Continuing from the last post, I think private lending is a way to really understand local consumers quickly. I mentioned before that I couldn’t really understand why people would borrow like this before I started doing it, but after doing it, I deeply felt what Jen said about it being genuine. Before doing it, I couldn’t figure out this issue and felt like it didn’t make sense, like many people’s initial reaction. They’re buying houses here; how come they still need to borrow money at double-digit interest rates? The truth is, they really do, especially locals. Only about 5% of... Continue reading

I usually don’t complain about lenders, after all, without lenders, the unused quota every year would go to waste, and without us, lenders wouldn’t get double-digit return. But there’s one encounter that’s still fresh in my memory, I’ve only experienced it once, and I hope to never experience the same thing again 😂This person was introduced by other lenders, and we thought they should be a normal person, not too extreme. We followed the usual procedure, and explained how each step works. Generally, our principle is to be straightforward and factual, so the funds go directly to trust accounts, lawyer... Continue reading