Private Bridge Lending Business

futureREmogul's picture
Rank: Gorilla | banana points 504

Hey guys, so my boss is looking to start a private bridge lending platform (basically going 50/50 with someone who already has one in a different city), but I am really looking to be aggressive and help originate as many deals as possible.

I am curious to learn.....what type of investors/principals/companies are more likely to consider bridge loans? how to market the bridge lending platform? do I reach out to mortgage brokers? Linkedin? basically what could I do to help this bridge lending platform be as successful as possible.

All advice is very appreciated

Comments (8)

Jan 3, 2019

Start with brokers - they control borrowers.

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Jan 4, 2019

who are the type of borrowers who will use a bridge instead of a traditional loan

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Jan 3, 2019

Borrowers who are pursuing opportunistic / special situations / discounted note payoffs / note hypothecation

Jan 4, 2019
futureREmogul:

Hey guys, so my boss is looking to start a private bridge lending platform (basically going 50/50 with someone who already has one in a different city), but I am really looking to be aggressive and help originate as many deals as possible.

I am curious to learn.....what type of investors/principals/companies are more likely to consider bridge loans? how to market the bridge lending platform? do I reach out to mortgage brokers? Linkedin? basically what could I do to help this bridge lending platform be as successful as possible.

All advice is very appreciated

quick close, quick access to capital, ease of execution.

Jan 4, 2019

I've probably closed 50 private money deals.

You're going to create an email based marketing system. That's how most private money lenders and lenders of all types reach brokers. You basically need to be able to close on up to $5mil or so in under a few weeks. There are still some blood suckers out there offering expensive money. They're charging 10% + 2pts or more. Then there are other shops like I deal with that are basically 7.99 - 8.75% depending on the deal. I use a private lender that only charges 1.5pts and will issue a 5yr note versus the industry norm of 12mo. It's a great product.

Find out what your niche is. You have to have one. Maybe it's 85% LTC on rehabs or some something. My buddies niche is 5yr notes. There is a huge private lender in Ca and their niche is 60ltv, close up to 20mil in three weeks at 7.99%. They get nice clean big deals.

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Jan 4, 2019

Thanks for the input man.

What index do you know to charge for bridge loans?

Is it prime, 10 year? What have you typically seen to be the most common?

Jan 4, 2019

You're thinking like a bank. I've seen one private lender in 25 years be tied to an index. Most just kind of have a yield they desire. I do know this, I know one lender that keeps 50bps of yield for the cost of servicing. Servicing pays the bills when volume is down.

Loan servicing and property management, it's not sexy but the revenue nearly always shows up.

Jan 4, 2019
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