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The Private Lender Podcast - Keith Baker 10th August 2020
PLP 110 – The Fastest Way To Start Private Lending With Paul Lamnatos
00:00:00 00:38:53

PLP 110 – The Fastest Way To Start Private Lending With Paul Lamnatos

PLP 110 | Private Lending

 

What is the easiest way to start private lending? We have learned from one of our previous episodes that the most passive way to do this is to lend your money to other lenders and let them do all the hard work for you. While this lending to lenders scheme certainly is an easy button, you still have to perform your own due diligence when doing deals. In this episode, Paul Lamnatos, Chief Lending Concierge and Managing Partner at BlinkLending, joins Keith Baker and gives us a ton of tips and advice on how to proceed in these deals. Make sure you settle down, take notes and learn how to make money in private lending – in a blink.

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The Fastest Way To Start Private Lending With Paul Lamnatos

I'd like to thank you for sharing your time with me. I hope everyone is doing well out there in this COVID. This is going out sometime in August 2020 and I'm already getting ready for my kids not going to school at least until January. Poor me. In episode 108, we had Jason DeBono on from NuView Trust. He discussed the most passive form of private lending and that is lending your money to brokers or hard money lenders and let them do all the heavy lifting. I call it the easy button as if there was such a thing. As a private lender, you still need to perform your own due diligence, but you don't have to worry about finding the borrowers. You don't have to worry about finding the deals. They facilitate that for you.

I had the privilege of speaking with Paul Lamnatos from Blink Lending, who delivers a ton of value. Read this when you're sitting down because he drops a lot of great value nuggets, knowledge nuggets, bombs, whatever you want to call it. He funds his own "hard money loans," but then he sells the notes to private lenders, like you and me. Get this, he guarantees his loans, which is something I never do. Enough of my jaw wagon, let's get down to the brass tacks into the interview with Paul Lamnatos.

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I am stoked to have Paul Lamnatos from Blink Lending with us on the show. Paul, welcome to the show.

Keith, I'm happy to be here. Thank you for having me.

The pleasure is mine. Full disclosure, Paul and I have known each other around the Houston real estate investing community for a few years. I met him when he was over at with Zeus and readers know that. Paul has done something rather interesting and spectacular and he's gone off, got his own, he's got BlinkLending.com, where if you need a mortgage, a refi, the conventional, give them a look. There's also Ink Lending and that is what I want to talk to you about and the model that you have, because you're not a hard money lender, you loan out funds and then sell the loans to private investors, private lenders. Is that correct?

Yeah, that's right. You'll often hear private money, hard money lending. What's the difference between the two? Depending on who you ask one might say 6 and 1/2 it does or the other or tomato or tomato. At the end of it, I define it as where are you getting your capital from? Are you getting it from financial institutions like hedge funds, banks do lines of credits, or are you raising the money privately through your own funds and through your network of funds? Meaning people that have money sitting in an IRA account or a 401(k) or idle checking, savings account money. All of our funds are privately raised funds and because of that, we hang our hat on the private lending side of things like that better than hard money lending sounds better.

The easy button for becoming a private lender is to loan your money to someone who's already loaning it out a hard money lender or like yourself you're funding loans and then selling the loans to the private investors. You're doing all the hard work. For me, having someone else doing the work, you might become skeptical, but this is what you do. This is your day in and this is your day out. You’re not accounting for the oil and gas company and then flipping houses on the night. This is your gig. I'm happy you came on because I want to talk about your process. When you're looking at a deal, someone says, "I've got this awesome flip. I can be all-in for only 80% LTV." Walk me through that.

First, when you win, “I’ve got this awesome deal,” my brain went to, "I don’t want to hear about it. What's your credit score? How much money do you make? How much money do you have in the bank?" I like to say I'm a private lending investigator. I've even given myself an acronym, a CIA private lending agent. A CIA that has been on our federal guys, but I feel that at the same time we investigate as they do as private lenders. The acronym, CIA, is a reminder to me to always ask about Credit, Income and Assets. There's not one that's going to be an absolute crusher. If let's say credit's bad or income's bad, if you don't have assets, you're not a client for us. That 80% deal you're talking about, even if it's 60%, 50%, and the client has less than $20,000 in their checking savings account, accessible money, they're not a client for us. The reason for that is I want to prepare before things go bad. Why do things go bad in loans? People don't have funds to pay them back. Before I'm lending my money, I have the ability to look at their bank statements, not ask them how much money they have, but to request their actual bank statements. When I get their bank statements, they’re not just looking at the first page and how much money is in there. Let's go through and say, "How's your money coming in and out?"

You might have $80,000 in your bank account, but if you had a $78,000 deposit from PPP, that tells me that you're running a business with a $2,000 average balance. What is the average balance of your bank account? CIA is always check Credit, Income. Those two won't give me a note, they'll adjust my terms. Credit to me is someone's numeric representation of their ability to do what they say they're going to do. When I'm negotiating terms or discussing a transaction with someone, as a private lender, my number one concern is getting my money back. It's not the return on my money I'm interested in, it's the return of my money. That's a famous Mark Twain quote. At least that's where I found who said it or maybe it was somebody else, but the point is I want my money back. When I've eaten off the left side of the menu, when I haven't bought a new pair of shoes that I wanted, when I didn't get the tie clip or the cufflinks or the car, whatever sacrifices that I've made along the way to save every nickel and dime I have. When I go and lend it out, I love that sign you have behind you, "My money, my terms." I'd be shocked if next time you're looking in the back here, you don't see something like that because that's it, it's mine. I get to lend it out. Income, the reason I look at that, Keith, is because what's an exit strategy?

[caption id="attachment_2974" align="aligncenter" width="600"]PLP 110 | Private Lending Private Lending: Credit is someone's numeric representation of their ability to do what they say they're going to do.[/caption]

 

If there's someone who is a W-2 engineer, W-2 CPA or they're self-employed but have conventional qualified tax returns, meaning I can refinance them into a conventional loan, I love that. That tells me if they're wanting to sell the house and the market doesn't go as they like, I have a safe gap, exit strategy, and then I can refinance them out into a conventional loan. Being a fully licensed insured and bonded mortgage company, we have access to the same loans the big banks do, we do them at lower rates, much faster turn times and we don't charge their junk fees. Another program that we have access to is for the real estate investor who takes advantage of all of his God-given American tax write-offs as he should and is coming and saying, “Paul, I've got an 800-credit score. I’ve got a property that's cashflowing. Don't penalize me because I take advantage of my tax write-offs. What other programs do you have?” If we have an exit strategy to get them out, then that makes us feel good too.

It all starts with credit and then it loops around to the assets. I'm big fans of skin in the game. Our process, "Keith, you've got an 80% deal. That's great. We're going to lend up to 70% of this transaction. We need you to bring 10% of the cost of closing." For the person that qualifies for conventional financing, we'll go up to 75% of the after-repair value. The reason for that is terms are based on risk. If the risk is high, the terms are high. If the risk is low, we can get lower terms. When someone qualifies for that, we can give 75% because we have the ability to refinance date. Not to go into all these numbers back and forth, but that's where we would have started bringing cash and skin in the game.

Let's unpack a few things. Number one, you mentioned my number one pillar on the show is a return of investment. That is my primary concern. If I loan $100, I want to make sure I'm getting that $100 back before I get the 105 or the 110 or anything else. That's my pillar. I love that. I love the fact that you said that to skin in the game. That's where the, "My money, my terms," comes into play because we've seen people at Expos and whatnot, I'll teach you how to get private money. You don't have to put any money into the end of the deal. I'm always shaking my head. I'm like, "No." I have done deals like that. When I've loaned at 25% loan-to-value, all day long I was like, "You need closing costs? You’ve got them." I will do it but I would consider a normal 60%, 70% LTV deal. I want to make sure you can float that loan for 90 days and pay the first, draw yourself for the repairs before we started coming back. A lot of similarities and because I copied mortgage, hard money, and private lenders. It's all the same game with the different flavors, but I love your acronym of CIA, Credit, Income and Assets. If you ever see Paul speak, he has a presentation on the CIA. It's a lot of fun to go through because let's face it, money, insurance and lending, those things are boring.

When you find somebody who has to have some passion about it and some energy to it, one, it helps pass the time. Two, it also helps your learning process, the enjoyment. I'm being entertained. I'm not learning. That you're going to retain a lot more coming through that. Return of investment all the way skin in the game. We're going to set up a link later on for the show. I'm going to put and give it PrivateLenderPodcast.com/ink. If you would like to learn more about the private lending side and how you can get involved with Ink Lending. I know Paul a while he's quite active. If there is an easy button, this is it. I know COVID and everything else is going crazy, but your business is plugging along. Let's try to connect some people and hopefully you’ve got the Lender Nation that can learn something and it will be mutually beneficial for everyone. I was stubborn and talked to a lot of hard money lenders and mortgage people before I started private lending. 

I was one of them.

Let's say someone like me who’s stubborn, I'm going to do it my way. I know you're an investor and a lender yourself. How do you go and look for borrowers as a private lender?

I don't know if you'd call it old school, new school, it seems to recycle itself. I enjoy getting to meet somebody face-to-face. I like paying attention to the mannerisms, how are they carrying themselves? How are they talking? As a potential client, someone I'm lending money to, feel how they carry themselves as to how they're going to manage the funds that I'm releasing to them. It's going to show the judgment of who are they going to hire for their contract, which that's a big thing for me blatantly. We changed something in that any client that we're going to lend to, we want to meet face-to-face coming to our office, even though it's COVID going on. If someone may be against it, let's do a Zoom as you and I have, but we want to meet our borrowers and clients. The other part is if they don't have the experience, we're okay letting first-time investors, whether they're fixing and flipping or buying and holding, but we want to see what their contractor’s experience is. What's the relationship with the contractors? Is the contractor insured, bonded?

Do they have a business phone number? Do they have a website? How can we verify the contractor? What I've noticed is first and foremost, the reason you have defaults, in 2008 when I was around, there were a lot of bad loans done, but here's the bad loan that was done. It had nothing to do with the 580-credit score or the adjustable-rate mortgages. No one put any money down. You don't put any money down, you don't have any skin in the game you can walk away from. We didn't talk about the theme of this but what's coming clear from it is the verifying the skin in the game and asking the questions. Getting them to bring money to the table takes care of foreclosures. The other part is bad contractors. If I could have skin in the game and verify their contractor, I feel safe and I sleep well at night with my money being lent out. Also in Houston, we require all of our houses, all of our loans to carry flood insurance. You don't know. When we're doing private money loans and we're not getting our money from banks and hedge funds, we don't have to lend our money based on somebody's opinion of value because that blows my mind.

It blows my mind how people will lend money on a third party a payment to value. It's your $100,000. You're going to hire that guy to tell you what the house is worth. You better get good at running comps yourself or get good at getting a team that can do it for you. At 1:00 we do the final pre-funding walkthrough. Before we fund a loan, we walk through the house. I used to look at houses two weeks before closing. You get the contract, then you go out to it the next day. I realized that when I went there, the people that were selling the house are moving out. They've been out of the house for ten days. The air conditioning units are gone. Let's look at the property right before closing to make sure that nothing has changed.

Another thing I did that saved my time. I realized when I was looking at deals early, if we have a title issue, if we have insurance issues, the client changed their mind. Here I am spinning my wheels at the time. I have been going out and looking at the property myself, and it gets me familiar with it. When you're asking a question of, “How to get involved?” Get out there. I know it's difficult with the events, but there are tons of Facebook groups. The 713Houston Facebook page is awesome. Landon has done an amazing job with that page. I know you're on the page. I'm on the page. There's been real estate. The point is even though we can't go to a Quest Trust and do a live event, we can still meet people online with it. I'm sorry I don't want to go off on a tangent with skin in the game, flood insurance, verify. I want our insurance policies for twelve months. In God we trust and everyone else you verify.

[bctt tweet="When you're doing private money loans, you don't have to lend your money based on somebody's opinion of value." username=""]

In God, we trust all of this has to pay in certified funds. 

On draw process. I want to mention that because I came across a cool little trick about private lenders I like to pass on. We put a minimum. You have to be $15,000 work in rehab before you request the draw. Why I like that is because, from a safety standpoint, we’re doing 70% of the ARV or 75% if you qualify for long-term conventional financing, the first three deals, you're bringing 10% of the cost to closing. I love how as lenders, we have all these rules and all these exceptions that go in there. My rules are this, my exception is for the first three deals, you’ve got to bring 10% of the cost to closing. We do things that other private lenders don't do. We're not charging interest on money they haven't gotten. The rehab budget, we don't charge them money on that. We also don't charge them money for drawer inspections. When we go out to inspect to release funds, we're not charging $125 or $250 for that. We're also not charging wire fees, when we wire clients' money. We're also not charging them payoff fees to generate a document that tells them how much they owe us. That's asinine. Something else, we're not charging them extensions. All of our clients get two free 30-day extensions. We don't have any pre-payment penalties or minimum interest. If you get in and out of a deal in seventeen days, you pay us seventeen days of interest. That's it. I hate the two-story bill.

The story you get at the beginning of what your bill's going to be? The second story you get when you get your bill like Sprint. I hate them. $69.99 a month should be $69.99, not $82.17 or whatever they get me with. We stay away from that. Because we stay away from that, we attract the client that is okay bringing 10% to closing. After all, if I'm going after someone who’s got 720 credit scores, $100,000 in the bank, which there are many clients out there. By the way, let me backtrack. I'm debating on staying in Harris County, I see these other guys, they want to open sixteen offices in another state, we have almost five million people in Harris County. How many loans can you do? Your geography and in that five million people, you have many great borrowers. When there are only many loans to do, why not do it with great borrowers? They recognize bringing money to closing gets the better terms because if their risk is lower, they can turn to me and say, "Paul, you're asking me to bring you money to closing. Why don't you charge me less interest in points?" I get that. That's a valid request and it makes sense on both our part. They brought 10% to the closing, here's the cool trick on the rehab. We have them and all of this, as it's called upfront, is you have to do $15,000 of rehab work before making your first draw.

I did that because I started getting phone calls after they do $4,000 worth of work or they do the electrical rough, or they do the plumbing rough. I don't want to make time for all that. Because we don't charge interest until they've received the money, you can get an accounting nightmare, $4,000 on Tuesday, $6,000 on a Wednesday. The $15,000 helps us selfishly, but when they've put 10% of costs down and they've coughed up $15,000 of their own money before I give them any funds, how likely are they going to walk away from that deal? We're close to 200 transactions and we've only had one foreclosure. That foreclosure I know what I did wrong and we don't do that now.

Please elaborate if you would because I love talking about mistakes.

I'm a fan of not doing loans when the rehab budget is more than 50% of the purchase price. If someone's buying a house for $100,000 and you need $60,000 in rehab, I don't like that deal. If that same deal that needs $60,000 in rehab is a $300,000 purchase price, I like that deal because 60% and 260%, but $60,000 to $300,000 is 20%, you know in a small house when the rehab’s big, what work are you doing here? Are you moving walls? Are you adding square footage? Do you have to do a roof foundation? As you know the longer a deal takes and the bigger the rehab is, the more likely something can go wrong. We want to stay away from those. Have I broken my rules? I'll do it again, you know what happens. I won’t break that one though. Not the one that led to the foreclosure. Ninety-nine percent of what we do is common sense, 1% is real estate. That deal, the client didn't have any money. The rehab budget was 200% of the purchase price. He had ten other loans out that I didn't know about. He cheated on his wife so his wife left him, took all of his contractors. Maybe it was such a nightmare. At the end of it, we made $17 maybe but we didn't lose money, which is the important thing.

That’s the hard knocks. I remember it once when I was working in the oil field, I screwed up and I cost the oil company. I was working for a service company and I ended up costing them about $500,000 in downhole tools because I didn't check some measurements. After getting five different phone calls from five different managers, the top one I've told them, I was like, "I'll bring my laptop and my ID badge, I screwed up." He's like, "You're going to let it happen again?" I said, "No." They didn't fire me. I was like, "Are you kidding me?" I learned a valuable lesson from that. I like the fact you said 99% of what you do is common sense, 1% is real estate. I love that. Going back to losing that $500,000 I had the same heart dropping the gut feeling as I did when I did a second lien for $30,000 and it went long. I made money. I didn't lose money, but the opportunity cost of those extra eight months, I try not to dwell on that because there were some smoking deals for some people that we both know and trust. Nonetheless, it's $500,000 to someone else's money or $30,000 of my retirement. I still had that same pit in my gut feeling. I appreciate you saying, "You're 200% in and you've only got one foreclosure." I'm not good at math that's less than 1%. I believe it is.

You're doing better than the big banks and everybody else in the funds there. There's so much I want to unpack here, but getting out there in COVID does make it tough, but I love the fact that you go to the property before you release the funds. I recommend when people start off, do it in your backyard and with permission from the property owner, don't just show up, and, "I want a loan on this. I’ve got rights." No, you don't. You said, get it set up, go to the property. I say see it, touch it, smell it. Try not to taste it if you can, but you want to go and see what you're putting your money into, for sure. I'm not on the lending side, but Landon and I, we purchased a house and we sold it on our financing then we foreclosed, and then we started getting some rent for it. I was like, "Let's keep doing that." A couple of months ago, I went out and took a look at the property and I told Landon, "We're getting rid of this thing." It's making money, but all I see is a liability.

Even though we have insurance, we have an entity, why deal with the headache? We're going to take some cash. We've already made money on the house and it's paid for itself 1 or 2, we didn't pay anything for it. It's going to work out well, but at the same time, get rid of that liability, don't deal with it. It’s like you said, that distinction that you made that you don't want to make time for the frivolous work as well. I don't want to make time for extra liability on my money or anything else. Back to Houston, Harris County, flood insurance, I’m right there with you. We're watching the news at the same time when we came up. Every loan I'm going to have, it's going to have flood insurance after Harvey. Good on you for that one too. If $400 or $500 is going to break a deal for somebody, it's not. 

[caption id="attachment_2975" align="aligncenter" width="600"]PLP 110 | Private Lending Private Lending: The longer a deal takes and the bigger the rehab is, the more likely something can go wrong.[/caption]

 

Not my client.

This is good as we're touching on many things here. This is my fault for being scatterbrained. You talk about you broke your own rules and it goes back to that old saying, "Methods are many, principles are few, methods always change, but principles never do." If you have that foundation of, "This is what I'm going to loan on." Maybe it's, "I'm only going to do deals at 55% of ARV all in or 60%." Wherever your parameters are, set those. Not to say that they won't change over time, but as you know, real estate investors are persuasive, convincing and they love to get lenders to go outside of our comfort zone. We're like, "This is where I'm growing." No, as a lender, you want to be comfortable. You want to sleep at night. I don't care if I'm boring. I don't care if I'm plain vanilla. It's my money, my terms. This is why we get along and it's a good thing COVID is happening because we'd be a couple of bottles into scotch. 

I’ll tell you when and why I made that mistake, my one foreclosure. It was within my first five deals close to well over $100 since then, and I was deal horny. That's a term I've stolen from Shenoah Grove and from Nate Hare. I wanted to do a deal so bad that I said, "I'm going to do a deal." Here came this guy and I was like, "Sure, all the numbers check out. ARV is there. It's wonderful." I go home. I brag to my wife. I closed the deals, a few $1,000 that I made. It was a big mistake that I'm glad that I learned early on. The reason I asked to share this with you is because if you're reading this, you're a private lender. You're thinking about jumping in, don't do it because you’re deal horny. Forgive my term there but that hits home with what it is. Don't jump the gun. How many dinners did you not order what you wanted to order? How many times did your wife want to order a $14 glass of wine, but you made her order the $9 glass of wine because you're saving money?

You're going to throw it away because some schmoe that you met at a networking event talked you into lending your money. Stop with this 12 and 2 craps that private lenders do. You need to know, what is their credit score and how much money they have? If you're reading this going, "I don't care because all I care about is the deal," try this hat on. If you know that their credit's bad, if you know that their income's bad, if you know that their assets are bad, are you still going to lend to them? Don't you think you can charge them 14% instead of 12%? Don't you think you can charge them four points instead of two? Selfishly, if you're going to lend on the deal anyway, get their profiles so you can get accurate terms with it.

Horny is not a bad word. My kids are sleeping right over there. That's fine. They can hear it. They've heard. I told you an oil field story. I didn't curse. They heard a lot worse from me. Don't worry. I love the fact that you brought that up. When I worked construction many moons ago, there was a saying the dispatcher had was like, "Do something, even if it's wrong." I understand that from a productivity standpoint, get the wheels moving but when it comes to lending, no. I would rather have my money sit idle, which is a terrible thing than put it into the hands of somebody who doesn't know what they're doing or someone's going to lose my cash. That's the preservation of principal. It’s like you said, the return of investment. That's my number one. Deal horny, Shenoah Grove and Nate Hare use that.

You’ve got to give credit to where you hear that.

I have not invented anything in my life. I've reworded. I'd like to think I've had an original thought, but maybe I haven't, who knows?

Where I've gotten with that, Keith, is my wife tells me that, "Come up with great ideas that someone's already implemented." I'm like, "Wouldn’t this be great?" She's like, "You can get that on Amazon." I have let that go. What I do now is when I get a good idea, I will double down and implement it like no other. Did you watch GI Joe as a kid?

Yeah. Knowing is half the battle. 

They told us that as a kid like, "Knowing is half the battle." I know to get my wife flowers on Valentine's Day. If I don't do it, what does knowing do anything? The guidelines, I love what you said about having your guidelines. I call them our buoys. We have our buoys that we know we stay in here and every now and then, you can go outside of your buoys, but you don't go too far outside of them. If you are new, hitting the easy button and reaching out to a hard money lender or private money lender that sells their notes as we do, that's a great way of doing it and then asking a lot of questions. I'm upfront with people that buy notes from us. It's like, "Keith, one day, I want to pay you 5% interest." That does not excite you at all. We're going to pay you 9.5%. My goal is to get you to 5%. Your goal is to learn as much as you can from me so you can fire me, and then you can charge 12%. When I'm paying you 9.5%, because I'm charging the client 11%, 12%, I'm making that 1.5%, 2.5% spread for managing the deal, for fully guaranteeing the deal, so the client doesn't pay you. I pay you.

[bctt tweet="We guarantee our loans." username=""]

Do you guarantee your notes? 

All of them. Kelsey, who is sitting at the desk a few seats away from me. We're going to have all of our private lenders paid on July 31st. We're going to pay every private lender before we even get a check from a borrower. We do that every month. A private lender never hears a story. You're never going hear from me, "Keith, you know that deal we have on Sesame Street? The guy went on vacation and then he got back. His wife forgot to send the mail but the check is in the mail." You don't hear that. We take care of all that. That's why we asked for the spread. We put on the monkey suit and go out and qualify the deals and we'll listen to the guys tell us about this wonderful deal they have in any percent or whatever it is. When we will vet that, we fully get title insurance, hazard insurance, builder's risk initially because we don't want their workers slipping on a ladder and then turning around and we're liable for all that stuff. Surveys, we don't close deals unless we have a survey. It blows my mind that a buyer of a property is going to buy a house. You don't even know what you're buying. The survey says what's your buying. We want surveys. Not only do we want a survey, but we want a T-19 endorsement.

For private lenders out there, when you're doing a deal, ask for a survey. If the buyer's going to tell your borrower is going to tell you this, "The seller doesn't have one." That's because they don't want to go back and make it painful for the seller to ask them. You say, "Mr. Borrower, Mrs. Borrower, no problem. We're going to need to order one from titles. It can cost you about $400 or $500 or you can go back to the seller and try to get it from the seller." They have a choice. Do they go back to the seller or do they pay the $400, $500? Either way, I'm getting the survey. When we have a survey, title company. Make sure you add a T-19 endorsement to the survey. What's the T-19 endorsement? It's the added insurance. You know how you get an insurance policy or you're never insured for what you need insurance for? That T-19 endorsement gives you insurance for what you need insurance for on a survey. Ask for it. We go through all. The way where we've learned this is, one, experience, I'm going on several years in the industry but the other part is being a fully-licensed, bonded insured mortgage company, I get to see what big brother lending does. What's FHA doing? What's VA doing? What's Fannie Mae doing? What's Freddie Mac doing? When this disruption happened because COVID came out, we didn't change our guidelines, not one bit.

We paused for a few days, gathered our thoughts and said, "We have our clients. They're all 700 credit score, six figures and liquid assets. They're all bringing 10% or some type of skin in the game unless they’re a repeat client." When they’re repeat clients, we're not going above that 70%, 75% model. Please don't take away that your repeat client will lend you 85%. If you find a home run deal, we'll even roll in your closing costs. We want the relationship. Within that, we're able to keep our terms and our guidelines the same because we're always conservative to begin with. How do I get my money back? Hopefully, some of this stuff has been helpful for lenders. I love that you called the Lender Nation. That's great.

I don't know where I got that from, but it's a long story nobody cares. That's what I want. I want to create a community where we have each other and not just crowdfunding, but a community. The more digital we get, the more human interaction we need, I believe. We can go onto the whole Kafka thing. I almost see I'm getting way ahead, my Liberal Arts degree is coming out. The T-19 endorsement, I want to say that is Texas-specific. They maybe call it something different in other states or do you know?

I don't know, we lend in God's country of Texas.

Why lend anywhere else? The pond is big enough here to fish from.

Our laws are great. From the private lender side, they protect us. Could you imagine doing the loan and then having to wait twelve months?

That's why I won't lend in New York. There's no way. I don't care if it's 10% LTV. I don't want to wait two years.

It's the opportunity cost because they're not waiting. Even though it's a 10% deal, it's how many times can you turn that money and to wait for what? It's not worth it. We’ve got to go. We’ve got to keep going.

[caption id="attachment_2976" align="aligncenter" width="600"]PLP 110 | Private Lending Private Lending: When you're doing a private lending deal, ask for a survey.[/caption]

 

This deal horny 99% common sense. I'm wanting the flood insurance and skin in the game. You're preaching, I don't sing, but I'm the choir and that's for sure. The CIA, Credit, Income, and Assets. I like that, you do look at credit and so do I. That goes all the way back to Chris Funk. He handed me a package of printouts and said, "Here you go. I pulled my credit score. This tenant sued me so I've got a judgment here. I'm a landlord." That doesn't have a judgment. If you do it long enough, someone's going to game the system. My first landlording venture, they did game the system and they got four months of free rent out of me. Chris gave me everything, it was credit. It wasn't a DPS, but it was a background check and he's like, "Don't take my word for it." That's where I came up with. I went and I took what he gave me. I did my own due diligence. Credit is huge because as lenders, we want to loan to somebody who will cut their own throat to make us whole. They know that if I cut my throat and I take a huge loss but I made good on your loan, you'll loan to me again.

Anytime, any day.

However, if you have nothing, if I had no skin in the game and I'm like, "I lost this. It didn't cost me anything, just my time." I learned a lot. That's when my kids’ knuckles and kneecaps, I send my children out. I don't foreclose. I collect. If you're interested in learning more on the private lending side and maybe buying some loans from Paul, please go to PrivateLenderPodcast.com/ink. If you're in the market for a conventional or refi because rates are dropping like flies, go to BlinkLending.com. Paul, thanks for coming on. BlinkLending.com if they want to be a borrower. If they want to be a lender, PrivateLendingPodcast.com/ink. Are you on social? Where else can we find you? 

I have Facebook, LinkedIn and email at Paul@BlinkLending.com. My cell phone is (281) 221-7383. Call and text me. Nacho, he's the one borrower that we have foreclosed on. Not only when you get foreclosed on, you have a lender that's not going to lend to you again, but you’ve got him telling every lender out there what a horrible borrower you are. Stay away from that guy.

Tell Nacho I said hi before I go off. Paul, thank you. I look forward to speaking with you. Stay safe. One of these days, we'll see each other at another networking event and we’ll have some ouzo. Who knows? 

I look forward to that. I love ouzo.

You take care. 

---

There you have it. How about that? Catch me outside. I hope you took notes and implement those value bombs that Paul dropped on us. Things like the minimum draw amounts, mandatory skin in the game. All these things are mechanisms, vehicles, processes, that'll help you stay safe. As he said, 99% is common sense and 1% is real estate. I loved it. That’s going to do it for this episode 110. I’d like to thank Paul for coming on and sharing his story and his knowledge. If you'd like to connect with him and learn more about his lending models, please go over to PrivateLenderPodcast.com/ink. Paul will be happy to speak with you and discuss his lending models. I don't charge for the show, but I'd be extremely grateful if you’d help get the word out and increase awareness by leaving me an honest rating and review over at iTunes, Google Podcast or whatever platform you're using. That is a fast and simple task and a small price to pay for the value you heard. That's the truth.

In addition, help other people find out about the show, especially if you're trying to develop your own private lenders for your deals. This is a free resource for them. Please share and help build the Private Lender Nation for all your real estate deal needs. I'm going to sign off, but before I say goodbye, please wash your hands. Forgive that asshole in front of you. Remember, this too shall pass. Lord, I hope so. I wish you safe and successful private lending. I'll catch you on the next episode.

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About Paul Lamnatos

PLP 110 | Private LendingPaul Lamnatos is Chief Lending Concierge/Managing Member at Blink Lending. Known to many as “Paul the Greek,” the fourth-generation Real Estate Investor is a renegade in his field. With commercial and residential properties both domestic and abroad, Paul truly understands the ins and outs of real estate investing.

In 2003, Paul became a Licensed Residential Mortgage Loan Officer, and after 15 years of corporate lending and more than $250,000,000 in loan originations, he decided it was time to open a lending company driven by one simple yet refreshing principle: to provide a full-service mortgage lender by the investor for the investor.

With this founding doctrine and first-hand experience in mind, his company offers both short-term private money loans, and long-term traditional and non-traditional financing to service the seasoned pros, the eager beginners and everyone in between. He is a leader and a doer, and knows firsthand how overwhelming the investing process can be.

Paul has strong Greek, English, Dutch and Texas roots that have helped shaped his professional and personal life, but it’s his strong ties to his Greek roots and qualities that set him apart. Coming from a close-knit family hailing from Santorini Island, it’s the same fun loving, reliable, social and proud traits from his Greek upbringing that Paul invites into his work life.

Paul takes immense pride in his near 20-year career as a Licensed Mortgage Loan Officer & Broker, but it’s the names you won’t find on his business card that brings about the biggest honor: husband and dad. Like many of his clients, Paul works hard at the office so he can invest in his family’s future and spend more time at home. He’s also found delight as a self-proclaimed “Husband of the Year” and “Son of the Year,” before happily sharing the latter title with his younger brother.

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