Quote from @Stuart Udis:
One thing many who enter the alternative lending space fail to consider is who is their target borrower? Why will they decide to borrow from you over the thousands of other banks and alternative lenders out there? The more established borrowers with a track record likely have their banking relationships in place so how to you earn their business? They are most likely going to be the better borrowers, with greater success rates on execution along with likely having access to better deal flow and thus the better collateral. Often times those who enter the alt lending space wind up with novices as their customer base with poorly located collateral and limited experience. Sure the underwriting can be done in a way to ensure the LTC is low but do you really want to own that asset in the event of a default? Sometimes it makes more sense to invest through a debt fund that has operation systems in place and most importantly relationships with more established borrowers. I am not here to endorse any particular established alt. lender, just something to be mindful of.
You bring up some great points that I have been giving a lot of thought to. Because I have been an active Realtor for so long, I do have a bit of an advantage with knowledge and relationships with flippers..but I will be spending my time finding ways to keep my money moving and that time might be able to have a higher ROI if I keep doing what I already know. The truth is though, I am ready to shift my focus and evolve a bit professionally after so long doing the same thing. I believe in the beginning I will get a lower return doing this myself, however education is always paid for somehow, right? I will see how it goes after a year and if it is far more noisy than I imagine, then I will shift plans... it's a possibility. But for now, I am ready to give this a run myself.
