Why Focus on Hard Money Lending as opposed to other types of loans?


When I first entered the Real Estate Business with Coldwell Banker Commercial (CB) in 1989, I heard a saying about focus that I still apply to our business today. “It’s Better to Be an Inch Wide and a Mile Deep than a Mile Wide and an Inch Deep.”  This quote suggests that specific knowledge, expertise and a niche focus are keys to success.  At CB this mantra meant that I needed to start my commercial brokerage career by learning a “farm” area and becoming an expert in that farm. An effective broker’s path to success was to get to know every street, every building, every owner and every tenant in that farm, become an expert, and develop those relationships into commercial real estate brokerage transactions.   Focus and discipline in the Hard Money and Trust Deed Investment business today remains equally important.

Here are 5 reasons how a clear focus and a defined niche benefits our brokers, borrowers, lenders and investors:

  1. Goals and Roles:  Specific and tangible goals are a critical part of our Business Plan, loan origination and Trust Deed Investment process.  These company goals trickle down to specific individual goals and roles that help our team members stay focused.  Whether the task is marketing, financial, servicing or processing, everyone knows their goals and roles. 
  2. Loan Programs:  Knowing that our specialty is in business purpose and investment bridge loans helps us determine what fix and flip and fix and rent loan programs to develop.
  3. Lending Opportunities from Rehabbers, Brokers:  When other participants in our mortgage lending industry know exactly what Mortgage Vintage, Inc. does (business purpose loans) and sometimes more importantly what we don’t do (owner occupied purchase loans), this recognition facilitates solid and consistent loan submissions.
  4. Systems and Workflow: The entire Mortgage Vintage, Inc. ecosystem is designed from the ground up for finding, originating, underwriting, processing and servicing private money loans.  Our web-based applications, networks, social media, hardware, software and website infrastructures are designed to originate and fund the best Trust Deeds in the Industry.
  5. Compliance: Dodd Frank, Reg Z (TILA), Reg X (RESPA), High Cost, SAFE Act, and other Federal, State, Civil and Business regulations apply to Private Money Lending.  These rapidly changing regulations and guidelines must be strictly adhered to.  A focused approach to this specific hard money lending niche makes compliance to the ever changing regulatory and legal environment possible.  This compliance allows borrowers and lenders to feel secure that they are entering into a transaction that has correct documentation, terms and conditions.

There are many paths to profits and losses in California Real Estate.  The key is to not spread your efforts too thin and instead to become an expert in a niche.  Our niche and focus is Professional Hard Money Lending and Trust Deed Investments.  What is your niche?