Met with the founder recently after he randomly connected with my via LinkedIn. Somewhat of an odd bird, met him at his company office under the premise of a simple meet & greet, and ended with him pseudo recruiting me to join company as an originator for commercial real estate bridge loans.
I've spent all 8 years post undergrad in acquisitions, so while debt has always seemed interesting, it seems that moving from institutional equity investing to middle-market bridge lending (their average loan is about $4 million, per what he told me) would in many ways be a step backwards from where I'm at currently. I didn't want to shit all over his overture to me, so I wanted to get back to him with some fairly smart questions regarding how I would possibly be coming out ahead making a move to this firm.
He did articulate comp structure would be $75k base with 10% cut of origination fees.......seems like I'd need to do a shit ton of originating to equal out what my current base + bonus comes out to already. Is this structure in line with how other private middle market bridge lenders comp their originators? The other issue which kinda concerned me is that he told me they originate about $225 million per year in commercial RE loans, partially due to capital constraints (they sell about 75% of what they originate so they can recycle capital). Seems like there would be a cap on how much originating one could even do in that type of environment.
Hey ckrasner1, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:
I hope those threads give you a bit more insight.
Interesting dude but I think it’s a no go. I think the capital constraints are an issue
Pm me if you have questions
Thanks, just sent you a PM
Middle market bridge space is getting crowded. Unless you have a good warehouse line or are executed through a CLO, you prob won’t compete much on rates
I have heard this from many in the private lending space, it generally comes down to rate and my impression is Arixa hasn't adjusted to where other private lenders are.
I was told that for CRE loans they are pricing high 7% to mid 8% for 12-18 month terms, 75% LTC and 75% of the rehab budget.
Because I am in the institutional space, I honestly have no idea as to whether middle market borrowers would find those terms attractive enough to actually scale volume. Any thoughts?
At a $4MM average loan size and receiving 10% of the origination fee, that's $4,000 per loan if the average origination fee is 1%. That doesn't seem attractive after 8 years of acquisitions.
i don't know, with that math if you do 1 loan a month you tack on $48,000 to your salary. That 10% is probably negotiable so if you can get him up to 20% I think you have an intriguing offer. Timing is everything too so if you think this small lender is in the growth stage and you make the move, you could find yourself at a higher level sooner than if you stayed at a larger shop. On the flip side...equity rules
Even double that 75K base + 100K bonus (highly variable) you're only at 175K and the guy has 8 years of experience post grad. I assume LA would be similar to NYC in terms of compensation which means there are plenty of easier ways to make 175K as a 30 year old acquisitions professional.
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