American Association of Private Lenders (AAPL) Conference Review

[Jeff S.]

I just returned from the American Association of Private Lenders conference (AAPL) in Las Vegas and thought I’d write a review. If you loan your own money, perhaps run a fund, fractionalize, or otherwise accept money from others to lend, this is the organization for you and I can’t recommend it more highly.

The AAPL was created by a small group of attorney’s and hard and private money lenders in an effort to provide education, lobbying, organization, and adherence to a code-of-ethics to the non-institutional lending community. You can call this hard or private money, but no one seems to differentiate or care.

The AAPL has a small certification program and is rapidly expanding to provide at least an educational floor to the industry. Higher-level education and certification will follow. Those in attendance included a number of individuals who have never done a deal to fund managers with tens to hundreds of millions of dollars or more under their control. I’ll share that I was concerned before I attended, but I can tell you I was very comfortable at this event. Some material was over my head, some I could have taught, but the majority was very helpful.

The day before the official start of the conference was dedicated to a basic lending educational program. The speakers included a lending attorney a securities attorney, a fund manager, and an extremely experienced investor who also runs a fund. The topics included application processing and funding, underwriting, collections and foreclosure, building a successful private money business, private lending laws, securities, and the JOBS Act.

Aside from this information, was the unfettered access to some heavyweight attorneys that day and through the rest of the conference. I know I easily received my conference cost back in lending and securities attorney time. It was also nice to hear others ask questions I never would have thought of.

Day one began with a keynote address by Dr. Christopher Thornberg, a local economist here in southern California. Chris gave his take on the state of the economy, interest rates, and the housing market. I’ve heard him before and he sometimes drives me crazy, which he says is his intent, but I always enjoy him.

The rest of the day included presentations by a group of distressed note sellers, with specific recommendations on strategies and their intermediate outlook for this market, as well as presentations on the use of technology in lending, legal structures and asset protection, Dodd-Frank/CFPB, and alternative financing.

The alternative financing discussion was interesting because there was a presentation by a bank that loan's money to HML's that loan to flippers. Their rates are low (~6%), but so was their LTV and minimum loan requirements. There was also much discussion about how the hedge funds are buying up non-performing notes, what they're doing lately with their SFH portfolios, as well as where the flipping industry is heading.

Then came the best part; the evening reception where we all got to meet and get to know each other. I hung out with Don Konipol for a while. If you can’t tell by his threads here, Don is not only very knowledgeable but also a riot. Attendance ranged from newbies who have never done a deal to some huge fund managers. Everyone would give you time. Many of us shared our lending criteria and also recommendations about growing our businesses. I liked that some of us have similar lending criteria while others thought the other was crazy!! For me, it was validation as well as some new ideas. I liked that.

The next day included a presentation by Eddie Speed, on the note market. Unfortunately, he went very fast and was hard to follow at times. Then, in another room, a number of lending attorneys shared war stories with specific recommendations on how to avoid litigation. (Do any of you use a 1003 Residential loan app for a business purpose HML?)

I find that attorneys have all the ammunition to scare the daylights out of everyone because that’s all they see and do. In reality, when they asked the room who had ever been sued, only two people in very large room of very active investors raised their hands. Here too, was an opportunity for more legal advice from those in the trenches.

The last presentation I attended was a basic presentation by Equity Trust on SD retirement plans. Frankly, it was a bit too basic for most of the crowd but others and I were able ask some harder questions. The conference ended that evening but there was an additional free note seminar the next day by Eddie Speed.

Eddie has obviously been there and done that and did not disappoint. It was clear however, that the intent of this seminar was to get you to sign up for one of his three-day seminars. When we asked one of his helpers if the three-day seminar included access to his outsourcing references (i.e. the Rolodex you need to really follow his teachings) we were told informally that for this you have to sign up for mentoring, which was never mentioned, to the tune of between $20k to $30K. The specific response was, “Why would we give that out for an $800 seminar?” Is it worth it? Who knows?

On the whole, if you loan or want to loan, I can’t recommendation the AAPL more highly. You don’t have to be a member to attend the conference but I was so impressed and appreciative, I’m glad I became a member as well, just to provide my support. I also walked away with a 2” stack of business cards from some heavyweights I can now call.

Jeff