All Forum Posts by: Noah Swope

There are a lot of options to get into lending with little or no money, @Noah Swope.

One way is to become an affiliate of some of the larger lenders, which can easily be found through Scotsman Guide, the member directory at AAPL, or even on BP. Most will have a link to their affiliate program. Here, you act as a commissioned salesperson and get paid for the business you bring in which closes. Depending on their criteria and your borrower’s needs, you can and should represent many companies. I suspect many of those who call themselves lenders on this board are really affiliates.

If you have enough money for even just a few loans, you can hypothecate them individually or collectively. In this case, you re-lend the money that others are willing to loan to you using your loans as collateral. You’ll earn the spread between what you’re lending at and what you’re paying your lenders. Understand it might require a security exemption, which is something you should check with your attorney.

You can originate loans using white paper offered by many larger lenders. I personally find this approach deceptive since the borrower doesn’t know who their lender really is, but it’s legal and seemingly widely used.

Another option is to become a broker and originate loans for other lenders.

Once you become successful and show that you know how to make money by lending money, others will ask if you accept investors. If you know enough of them, you can form a syndicated mortgage pool and lend their money, taking your profit as fees. Local real estate clubs are a good place to meet like-minded investors.

Don’t try to do everything online. If you haven’t considered it, become a member of the AAPL and attend their convention. You’ll meet many lenders, lawyers, and service providers in all shapes and sizes. There will be lots of money and creativity in the room.

Do you have experience in real estate, either as an investor/flipper or working for a hard money lender or other such company?  Having a track record is really important for this business, especially for raising a pool of funds from investors that will trust you with their money in a risky business

The best answer for this is to pull up what the comps have done and what they're getting for rents versus what you're currently getting. 

Sometimes the answer is to not do anything if the comparable rents are not too far off from yours and you're getting close enough to them without any renovations. 

I'd also think of items that will decrease your cost over time if the strategy is to hold for a long period. Could be things like installing low flow faucets and toilets and replacing carpet with LTV in units and high traffic areas.

If the other comps have new appliances and painted brick and you're struggling to fill units and they're not, then maybe prospects do love those things and you should make those changes, but it all depends on what the potential new rents would be versus the upfront expense of accomplishing those tasks

The best answer for this is to pull up what the comps have done and what they're getting for rents versus what you're currently getting. 

Sometimes the answer is to not do anything if the comparable rents are not too far off from yours and you're getting close enough to them without any renovations. 

I'd also think of items that will decrease your cost over time if the strategy is to hold for a long period. Could be things like installing low flow faucets and toilets and replacing carpet with LTV in units and high traffic areas.

If the other comps have new appliances and painted brick and you're struggling to fill units and they're not, then maybe prospects do love those things and you should make those changes, but it all depends on what the potential new rents would be versus the upfront expense of accomplishing those tasks