Originate Report - February 2019

FEBRUARY 2019 THE OFFICIAL MAGAZINE OF GERACI

Cities to Watch:

Dallas, Texas

Anthony GERACI On Jumping in Feet First

Also Inside

February: BLOCKCHAIN & Real Estate Implications of the DYNAMEX DECISION

ARMANINO Industry Spotlight:

Rocky Butani

Private Lender Link

Foundation Foreclosing on

JUNIOR LIENS

www.originate.report 1

2 Originate Report | February 2019

contents FEBRUARY 2019

Features

14 The Dynamex Decision: Implications for CA Lenders Utilizing 1099 Contractors

8

Kevin S. Kim, Esq., Geraci LLP

18 Junior Liens Who Choose to Foreclose Edward Brown, Pacific Private Money

20 Blockchain & Real Estate: What’s it All About?

By Henry Elder & Paul Monsen, Digital Asset Advisors

20

Who to Know 6 Profile

nthony Geraci on Confidence, Emotions, A and Jumping in Feet First Charles Peckman, Originate Report

8 Generosity Report

Armanino LLP’s Armanino Foundation Max Berger, Originate Report

10 Industry Spotlight

22

10

Rocky Butani, Private Lender Link

In Every Issue

21 Industry Job Watch

22 Cities to Watch

Dallas, Texas

Charles Peckman, Originate Report

24 Upcoming Events 26 Loan Home

14 www.originate.report 3

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4 Originate Report | February 2019

CEO Geraci LLP

ANTHONY GERACI Anthony@Originate.Report Vice President Geraci Media

RUBY KEYS Ruby@Originate.Report Editorial Director

MAX BERGER Max@Originate.Report

Letter from the Editor

Relationship Manager

DAVE ALARCON Dave@Originate.Report Art Director

PAM HUBER Pam Huber Designs

CONTRIBUTORS Max Berger • Edward Brown Henry Elder • Kevin Kim, Esq Paul Monsen • Charles Peckman

FOUNDING UNDERWRITERS

MARK HANF President, Pacific Private Money

ORIGINATE ONLINE www.originate.report

GERACI ONLINE www.geracilawfirm.com Interested in advertising in Originate Report? Please reach out to Dave Alarcon at Dave@Originate.Report For Advertising Submissions, Article Submissions, and Inquiries contact Submissions@Originate.Report

ORIGINATE MAILING ADDRESS

Welcome to our February Edition of Originate Report!

As always, thank you for reading the latest edition of Originate Report and supporting the great companies who write and advertise with us each month.

Continuing with our Technology Trends theme, this time we are excited to feature the Non-Conventional Lending Exchange from Anthony Geraci, an investing platform that makes it easy to learn, connect, and invest/sell. Our Industry Spotlight for this month is Rocky Butani, the founder of Private Lender Link, an easy-to-use online directory of private lending companies that makes it easier than ever for you to make deals.

This month, Geraci Media and the American Association of Private Lenders (AAPL) will be co-hosting the Fund Manager Forum on February 21-22 in Washington D.C. This conference is tailored for business leaders, fund managers, presidents, and CEOs in the non-conventional lending space, and is an opportunity for serious industry players to learn from the best and streamline their businesses. Register now at geracicon.com/conference/fund-managerforum-2019/ and use the code “ORVIP” to receive $200 off your registration!

We hope you find value in this month’s articles. If you would like to contribute content or advertise with us, do not hesitate to reach out!

Max

Max

Max Berger Originate Report Editorial Director

Geraci LLP 90 Discovery, Irvine, CA 92618 PHONE (949) 379-2600

GERACI CONFERENCES www.geracicon.com

www.originate.report 5

is still an answer I give, especially when the law isn’t clear, but what I try to do is add business sense into my legal advice as well. For example, I’ll say “it’s not clear, but you have an 80 percent chance you’ll be fine.” I try to give my clients all the information, but at the end of the day, it’s the client’s decision. My job and the job of attorneys is to advise.

PROFILE

OR: I can imagine it was difficult to set out on your own – did you face a sense of apprehension when you started your own firm?

AG: I told my then wife at the time, “I don’t know if I’m making the best decision or the worst decision, but we’ll find out.” At some point, you prepare as much as you can and then you have to either jump or not.

Anthony Geraci

On Confidence, Emotions, and Jumping in Feet First

By Charles Peckman, Originate Report

A

nthony Geraci, the CEO of the company that bears his name, certainly has his hands full. When he is not running his law firm, Geraci LLP, or his newly-launched media company, he focuses on the Non-Conventional Lending Exchange, which allows lenders and investors from across the financial sector to exchange information and build connections in the financial sphere.

Despite the many tasks he faces on a daily basis, Geraci (both the man and the company) continues to look forward. By the year 2025, he wishes to grow his firm to 3,000 clients. In addition to receiving a Super Lawyers Rising Stars ranking (which is only given to 2.5 percent of attorneys nationwide,) Anthony also coaches his son’s baseball team.

The Non-Conventional Lending Exchange, Geraci’s brainchild, breaks down investing into three different categories: learn, connect, and invest/sell. Rather than using sanctimonious language geared towards experienced investors only, Anthony’s marketplace allows investment novices to break into the space and offers articles on how to get started. Geraci discussed his career, company, and the role of technology with Originate Report.

Originate Report (OR:) How did you get involved in

6 Originate Report | February 2019

the non-conventional lending space, and what led you to start Geraci?

Anthony Geraci (AG:) Like all great things, I just kind of fell into it. I wish I could tell you that I had this master plan, but I didn’t. It was my first job out of law school, and I cut my teeth doing non-conventional lending from 2005-2007 and then started Geraci. There are a lot of factors that led to the formation of Geraci – I always knew I wanted to go out on my own. I had been an entrepreneur on and off for a number of years, and had some success; funny enough, I started off doing book signings, and I used to be a career book dealer. One of the rarest books I owned at the time was a first edition Mark Twain, one of his earlier works.

I fell into the non-conventional lending space, but I always wanted to start my own firm and my own company. That’s just who I am as a person. At the time, I’ll admit I didn’t know if it was a good decision or not. I was leaving a firm where I had been successful to start my own, which was a new adventure with no guarantees of success. And then, in 2007, I started Geraci with a focus on non-conventional lending, because that’s what I knew. I had enough confidence in myself, which I think is really important, and I knew my logic and reasoning was sound, so I figured I could add value to my clients by being cheaper than my competition. Many lawyers have the mindset of “it depends,” but today especially, clients want definite answers. Of course “it depends”

OR: Is there any particular reason you think clients, especially now, are searching for more concrete answers to their questions?

AG: I think people want direct answers period. The whole answer of “it depends,” to me, doesn’t give clients peace of mind, which is our brand promise. If you call me and I answer “it depends,” are you any closer to finding an answer to your question? If I was a client and I didn’t receive any further guidance, that would frustrate me. I think attorneys owe their clients more directness. I think clients now are being more demanding, and they have the ability to do so – as technology keeps progressing and processes become automated, I think people have the right to be more demanding of their attorneys.

OR: So you mentioned how technology plays a major role in your industry – and practically every industry now. How does technology tie into the ever-changing nature of the non-conventional lending space?

AG: Technology is really the centerpiece of it. But at the same time, I hope the central goal minimizes technology – our goal is to create a community of likeminded individuals who get together and exchange ideas, but also do business together. To me, that’s the epitome of everything; you have to know the people you like and the people you identify with. I view non-conventional lending like any other industry – ultimately, the technology is there to aid in the conversation and aid in conventions, rather than be only about the technology itself.

There are a lot of companies right now that are really trying to automate the space with varying degrees of success. To me, I don’t think this space can be easily automated as far as evaluating properties, for example, because at the end of the day that evaluation is just an opinion. I don’t care how much technology you surround an evaluation with, at the end of the day it’s all about what people are willing to pay for it. If that’s true, then how can technology work? Like I said, what we’re trying to do differently is put people together and create a community of like-minded people. Other technology platforms are just there to do business, whether they’re buying loans or selling loans. The human component is so crucial to the buying side of things, and a lot of people say buying something is all about logic, but I don’t think so. To me, buying something is emotional, and there’s an emotional attachment to everything. When you’re buying a house, for example, there are so many

intangibles there, and I don’t even think an appraisal

everybody else is that we really want to educate people.

you look forward to the challenges you will face on any

context in which people buy a house. I could probably

the firm. There’s a learning component, but there’s also

AG: My job now is to really educate our people on

can be subject to automation because of the emotional give you 50 different factors that impact those decisions.

How do you automate that, or judge how one property

is better than another? I don’t think you can. And that’s

why I think there has to be a human element because otherwise, you’re going to miss the bar. Time will tell if I’m right or wrong, and we’ll see what happens to these crowdfunded platforms in the next few years.

Automation is here to stay – the question is what can be automated. I think that’s what we’re going to find

out in the next few years. Can you automate a backend process like automating loans? Absolutely you can.

In that case, you’re asking the same information of the borrower because the law demands it. Processes like

that are becoming fully automated, and no one is real-

ly focusing on that, because that’s where the efficiency

That has always been our strong suit and our core at a community component – if people talk about what concerns them, I think that makes the non-conventional lending community even better.

“What we’re really trying to do is connect with people. We...also realize how time is valuable to so many people – even if someone can’t make it to one of our conferences, we want to mirror the impact of getting together and exchanging ideas everywhere.”

of the lender is going to come into

vice our clients from the firm. What I’ve found is many

together by our Vice President of Media and her team,

what we do, because frankly, we deliver every time. In

at the core of our conference series. Our learning is put

and she listens to what our clients want to learn. We ask our clients “what do you want to learn, and what topics

do you want to add to your business?” And we take that information and go out and find those people. Our goal is to get our conference attendance up to 500 attendees,

and I think the market will demand and welcome it.

People want to connect, of course, but people also want to raise money. We’re there to help our clients in any way we can.

OR: It seems like Geraci is involved in a number of

– even if someone can’t make it to one of our confer-

and human relations to a certain extent with your con-

Non-Conventional Lending Exchange is all about. Yes,

it’s there to do business, but what differentiates it from

All of that being said, we still ser-

We want to make connections, and that’s really the idea

ple. We do that physically with our conference line, but

and exchanging ideas everywhere. That’s really what the

being borne out now. Geraci Me-

different entity.

2007, with some operations start-

ences, we want to mirror the impact of getting together

created that two or three years ago, and I think it’s

greatest extent, so that’s why it’s a

start to see what we experienced in

we also realize how time is valuable to so many people

we do was going to need a separate company, and we

sional can service our clients to the

at the top. I think we’re going to

AG: What we’re really trying to do is connect with peo-

ferent vision. We realized the media aspect of what

lawyers, but a true media profes-

of the consolidations that we see

apart from its competition?

AG: Geraci Media is going to have a similar, yet dif-

it’s almost like you can only sell to

not a fan of, I would say, is some

non-conventional lending space, and what sets Geraci

Can you tell me how that came to fruition?

different products. With a law firm,

to blow right past you. What I’m

OR: So how is Geraci using technology to improve the

too – recently, you launched the Geraci Media Group.

created, along with the demand for

the sand, the competition is going

onboard.

OR: The work you do sounds varied. Geraci is varied

So that’s why a different entity was

pen, and if you put your head in

to grow the bottom we’ll be able to bring more clients

really where I spend most of my time.

sions are implemented is different.

ment. Automation is going to hap-

and get them excited about it. I think if we continue

help our people answer different questions, and that’s

are similar, but the way those vi-

it’s a “join-or-die” type of move-

they can learn more about the space and what we do,

frees me up to dream of what’s next, and I also get to

component; of course, their visions

ourselves, and to be quite honest

the first place. It is generally circulated to brokers so

my day-to-day responsibilities at the firm vary, that

align completely with the media

be automated. We’re harnessing it

and that’s part of why Originate Report was started in

to hold people accountable to that vision. Even though

ci Law Firm wouldn’t necessarily

is focusing on what can and cannot

we’re trying to encourage new people to enter the space,

new ideas and focus on our strategic vision. I also have

At some point I realized that Gera-

being said, I think the main point

our perspective – is we’re helping grow the bottom, and

anymore, I oversee our management team and think of

of different services for our clients.

a lender who is less efficient. That

of consolidation, but what’s different – at least from

what’s going on. Even though I don’t practice much law

dia is going to provide a number

play and could be a value-add to

ing to go out of business because

given day?

different industries: obviously the financial sector, law,

ference series. Do you find your work diverse, and do

people do one project with us and then fall in love with the next few years, I see Geraci continuing to execute and continuing to grow and really be a market leader,

not only in the services we provide but really in the non-conventional lending space itself. In order to do

so, we’re going to continue to innovate and execute on whatever our clients’ needs are. The question is, “what’s

going to happen if we experience a recession in the next few years?” If that happens, we can’t turn to anyone else

but ourselves and our clients and ask what they would like to do. We have to decide, with the help of our cli-

ents, what services we are going to offer in a downturn – we’re looking at different services we can continue to offer our clients based on where the market is going.

CONTACT: For more information about Anthony, Geraci LLP, Geraci Media, or the GeraciCon Series, visit geracillp.com www.originate.report 7

GENEROSITY REPORT

More Than Meets the Eye:

Armanino LLP

Dominating Both the Business and Charitable Industries

By Max Berger, Originate Report Some of these charitable organizations are Armanino LLP clients. All grant recipients are selected from grant applications submitted only by employees and partners of Armanino LLP.

Dollars for Doers—Incentivizing Positivity

The Dollars for Doers program enhances the volunteer contributions of individual team members by providing grants worth $10 per hour for time spent in service at a qualified charitable organization. At the end of each quarter (or the year), team members, comprised of staff and partners, who volunteer at qualified 501(c) organizations will submit a signed statement on the nonprofit’s letterhead verifying the volunteer hours completed to the Armanino Foundation. At the end of the year, the Armanino Foundation will send that organization a grant reflecting the hours worked. The Dollars for Doers grants will be provided at two levels per calendar year. The minimum amount per year = 25 hours for a grant of $250. The maximum amount per year = 50 hours for a grant of $500.

W

hat do you get when you take one of the top 25 largest independent accounting and business consulting firms in the United States and commit it to a dynamic initiative to assist charitable organizations focused on creating a positive impact on the lives of individuals in local communities? Few charitable organizations fit this unique blend of altruistic and commercial success; however, Armanino Foundation has proven that these seemingly diametrically-opposed goals can be successfully aligned—all it takes is a creative take on the traditional community partnership model made possible by a comprehensive organizational culture of passion, inclusiveness and generosity.

The Armanino Foundation embodies a spirit of positivity and optimism—utilizing its resources to nurture its partnerships with over 100 reputable charitable organizations focused on bettering the surrounding locale.

Since its inception in September 2016, the Armanino Foundation has raised over one half million dollars and has repurposed those funds via grants and volunteer vacations in close coordination with its charity affiliates in an effort to accomplish community-oriented goals.

The foundation empowers Armanino’s team members to give back to their community based on their passions

8 Originate Report | February 2019

through community service, donations and leadership.

Staff and partners from all of Armanino’s major offices and remote locations comprise the Grants Committee, Volunteer Vacations Committees and the 4-member board that implement the Armanino Foundation mission.

To accomplish its mission, the Armanino Foundation focuses its charitable giving and activities on the following four areas: • Education • Health & Social Services • Animal Welfare • Arts

The Armanino Foundation is primarily a grant-making organization. The Grants Committee evaluates recipients to ensure they meet the following prerequisites: • In good standing with the IRS and related governing authorities; and • Provide services or programming in either education, health and social services, animal welfare or the arts

Dollars for Doers Example: Employee A works at a local free health clinic for 25 hours/year, earning a $250 grant to the nonprofit.

Volunteer Vacations—Spreading the Love

In addition to coordinating charitable giving, the Armanino Foundation organizes Volunteer Vacations. Volunteer Vacations take the concept of the firm’s Great Give event beyond a single day and extends its community-building goodwill across the globe and for a longer time frame (for example, 3-7 days at a time). The Armanino Foundation recognizes that many of our team members are looking for alternative ways to give back locally and globally. This unique program is open to all employees and partners, as well as their family and friends, in all offices and remote locations.

Armanino Foundation team members have completed Volunteer Vacations in Dallas, TX; Catalina Island, CA; Maui, HI; Orlando, FL; and Houston, TX. In 2019, you’ll find Armanino Volunteers traveling to Portland, OR and Chiang Mai, Thailand, too.

Learn more at www.armaninofoundation.org.

CONTACT: Armanino Foundation | armaninofoundation@armaninollp.com | (925) 790-2656 | armaninofoundation.org

www.originate.report 9

SPOTLIGHT

Industry Spotlight: Rocky Butani

Founder & CEO, Private Lender Link

10 Originate Report | February 2019

R

ocky Butani is the Founder & CEO of Private Lender Link, Inc., an online marketplace for the private hard money lending industry, based in Silicon Valley. Rocky manages business development and marketing for the company. He launched PrivateLenderLink.com in 2010.

Originate Report: What are some of the biggest challenges that Private Lender Link faces?

Rocky Butani: One of the biggest challenges we have had is keeping up with the demand from companies that want to be listed on our platform. Although our process of onboarding is highly automated, we need to go through a vetting process for each lender or service provider that we add. This takes time and effort, but it keeps the quality of our profiled companies at a higher standard. We are not in a huge rush to add every single private lending company in the country. While our priority is to give borrowers & brokers lots of lender options, we try to strike a balance.

The plethora of capital in the market has helped create many new private mortgage companies over the past 4 years. The increased competition has driven down the number of quality borrower leads for all lenders in our industry. We too face a similar challenge of generating more quality leads for the 150+ lenders on our platform. However, with the recent addition of multiple marketing campaigns, we are seeing our lead volume and quality expand. Most of our marketing is inbound, meaning people search to get to our website, but we are now starting to invest in outbound marketing to target experienced real estate investors and mortgage brokers that will continually use our platform to connect with lenders.

“To keep up with the ever-changing trends in web technology, we have completely rebuilt our platform from the ground up 3 times in the past 9 years.”

Another challenge we face is constantly upgrading and improving our website to provide a better user experience. To keep up with the ever-changing trends in web technology, we have completely rebuilt our platform from the ground up 3 times in the past 9 years.

PrivateLenderLink.com 3.0 is more robust, highly automated, and includes many subtle features that users intuitively need. Our web development team has grown 10 fold since the early days, and handles everything very efficiently, enabling management to focus on business development and marketing. We never run out of website projects. Some are minor design improvements, while some are major features that require lots of planning and development hours. Due to budget limitations, some of our site upgrades have to be scheduled further out than I’d like.

It seems like a lot of people think Private Lender Link is a tech startup in Silicon Valley with venture capital

funding. That assumption couldn’t be further from the truth. Early on the decision was made to not take on any debt or investor capital to fund the company, and 9 years later, that has not changed. Although venture capital might have ramped up our growth, we have been able to grow organically and move in the directions that respond to the needs of our users. We don’t have any pressure from investors, only the pressure on ourselves to provide the most valuable service in the private mortgage industry.

OR: What motivates you on a day-to-day basis?

RB: The pursuit of success and wellness keeps me motivated on a daily basis. I love my business and really enjoy what I do for a living. Nothing in our business is redundant, and there are many exciting accomplishments to look forward to every day.

OR: What is something that most people don’t know about you?

RB: Most people don’t know that I grew up in Africa. I was born in San Francisco but raised in Lagos, Nigeria from the age of 1 to 15. My father initially moved there from India shortly after graduating college. At the time there were enormous business opportunities there; most of my extended family was involved in some sort of trading business or international finance. Being raised in a community of entrepreneurs had a lot of influence on me.

Rocky Butani, Private Lender Link

I attended a private American International School and moved to the San Francisco Bay Area in 1995. After living in a third world country, I feel extremely grateful for the life I have today and feel very lucky to be an American citizen. In Nigeria, we lived in a nicer part of town and enjoyed an upper-middle-class lifestyle, but it was still a new, undeveloped country with a lot of unrest.

OR: What are some of your goals for 2019?

RB: Our main goal for this year is to double our website’s traffic. We have a number of marketing campaigns planned to help achieve that goal. We have mostly relied on inbound marketing, but we now have to advertise more, using some of the same platforms that our lenders also use to advertise.

Our video marketing campaign is working well and helping to convert leads on our site, but this year we plan to do more interviews about various industry topics, in addition to promotional videos. Now that we have the video machine running smoothly, the next big thing is podcasting. I’m planning to launch our first podcast in March. I personally do most of the video & audio recordings when I attend industry events or visit a comRocky Butani: Continues on pg. 12

www.originate.report 11

Rocky Butani: Continued from pg. 11

pany’s office. This year I’d like to visit more lenders’ offices, especially in cities or states that I’ve never been to.

With the latest version of our website release last year, we built a “deal portal” which allows our site visitors to post a Loan Request which is viewable only to lenders.

We haven’t advertised it much because it needs a lot of work. This year we will invest in improving the system and plan to have it ready for prime time by the Summer.

OR: How has your company vision evolved from Day One to today?

RB: When I first started the company, I thought we would only be a directory to connect borrowers & brokers with private lenders. The lender directory is still the main function of our platform, but we are evolving into a “marketplace” which connects all types of players in the private lending industry. I’d like to build up Private Lender Link to be a platform that every single person in our industry can use in one way or another.

OR: Who or what has been your greatest influence in business and why?

RB: Some of the lenders in my network with over 15 years in the mortgage business have been my greatest influence. The mortgage business can be quite turbulent and requires a lot of resilience. I have learned a lot about business from these veteran lenders and continue to be inspired by them.

12 Originate Report | February 2019

OR: How have you seen Private Lender Link grow and expand in the last few years?

RB: We have added many lenders to our platform over the past few years and will continue to add more. Last year we started promoting industry service providers, and a few weeks ago we officially expanded into the capital side of private lending with the launch of our new Capital Directory. Also, in the past 2 years, we have sponsored a lot of conferences, and that has helped grow our network of lenders and service providers.

OR: What is one piece of advice you have learned and carried with you throughout your life?

RB: Be patient. Success is a long hard road.

OR: What is your approach to staying relevant in the industry to ensure your company’s longevity?

RB: My approach to staying relevant in the industry is to continually innovate, provide value, market and build more relationships. I feel that our video marketing efforts are quite innovative and provide value. Our upcoming podcasts will provide even more valuable content. We are essentially a marketing company and have to continually market our business on a daily basis.

Marketing our business, in turn, provides marketing for all the companies listed on our platform.

Lastly, attending and/or sponsoring industry events is one of the best ways to stay relevant. I personally love to attend conferences and network with people; it can

be expensive and exhausting, but it’s a very important part of our business.

OR: What initially drew you to the private lending industry?

RB: The main thing that drew me to the private lending is how nichey it is. I used to run a commercial property marketing consulting business, and a few years in, I found it difficult to carve out a niche in such a broad arena. In 2009 I started to think of a new real estate related marketing business to start. I wanted to only generate leads and not get involved in any property transactions. I learned about private/hard money lending from a magazine article and was immediately intrigued because I had never heard of it. I did some research and realized that there were no good resources for the general public to find reputable private lenders.

The handful of online directories I found had virtually no useful information about each lender. The lack of competition was a perfect fit for me, given that I was a one-man operation with no capital. I did some test marketing to generate leads for a few lenders and discovered that there was a huge demand, so I started to build a website with a small number of lenders that agreed to participate. PrivateLenderLink.com was launched in late 2010.

CONTACT: PrivateLenderLink.com (650) 226-4277

Revenue diversification

Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial

TODAY’S MARKET OPPORTUNITY: •

•

•

100 billion dollar non owner-occupied investment space SFR ’s 1-4 Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial Diversify product offering and add new revenue opportunities you may be missing out on Legally compensate your most prized relationships (Realtors) for referrals

WHAT TO LOOK FOR IN A BROKER + CAPITAL PARTNER RELATIONSHIP: • • •

Concierge across product offering with underwriting, training, service and support Dedicated call center for loan origination support and fund control Marketing materials provided including product tear sheets, pitch decks and web banners

In today’s market, refinancings have limited availability and there’s not much new housing inventory to lend against. For mortgage Brokers, this means the obvious; there are a lack of transactions in the market to profit from.

For shops that are only doing refinance or traditional mortgages, opportunities only come around every 5-7 years. You’ve got to have a big client base to have volume. With financial products across SFR ’s 1-4 Fix N’ Flip, Bridge, Refinance, Ground Up & Small Balance Commercial, the sales cycle is faster, there is significantly higher recurring business, and a few lenders have teams dedicated to helping you succeed.

BROKERS, PARTNER TODAY

Think of it as a new product offering which results in the diversification of your potential revenue. All of this is well within reach, and much easier than you may think.

The NON-O/O investment space is a 100 billion dollar industry that has come full circle since the last market downturn. Over the last decade private lending has been growing, and the comeback of property investors is at an all-time high.

Here’s what it takes to do these types of loans and a good private lender will handle these things for your Brokerage…

• • • • • • •

Review and process loan applications Document collection Facilitate Appraisal Coordinate Title & Escrow Complete underwriting Facilitate Funding Pay you

Traditional Realtors and Mortgage Brokers have the misconception they need an NMLS license to be a lender in this product space. The main point in dealing with a private lender is while they primarily fund SFR’s, these loans are governed under commercial guidelines.

Thus we are not governed under RESPA, TRID or TIlLA. These loans are funded only into business entities allowing 7-10 business day closings and can pay anyone under a Brokerage license a referral fee or commission on the HUD at closing.

There are two avenues a Brokerage launching this type of product to Real Estate professionals can expect to see. You can be a Correspondent Partner (the lender would fund in your name)

http://triumph.capital/brokers

or an Origination Partner (the client would see the lender’s name on the HUD). Most deals are funded under a single set of product guidelines allowing training, underwriting and servicing to be easily understood.

CORRESPONDENT PARTNER (CP): You look and feel like the lender, a complete white-label product.

ORIGINATION PARTNER (OP): Traditional Broker + lender relationship, lender shows on HUD. A full concierge service for Broker partners handling everything from A-Z is an entirely new model for private lending and Mortgage Brokers / Real Estate professionals. Working with a direct lender enables Mortgage Brokers to keep the lion’s share of the profit and have the potential to earn from the yield spread as well, all while monetizing on much more frequent lending transactions, instead of the normal 5-7 year customer lifecycle.

There many private lenders chasing this strategy and it’s safe to be wary of who to work with.

While choosing a partner, look for someone who understands the business and has a strong reputation for closing transactions. You’ll also need support with marketing materials. Having the right documents and product tear sheets (one-pagers) for conversations, trade shows, etc. is helpful in positioning the opportunity with your existing book of referral business from Realtors.

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www.originate.report 13

FEATURE

The Dynamex Decision:

Implications for CA Lenders Utilizing 1099 Contractors

By Kevin S. Kim, Esq., Geraci LLP

I

n a lengthy, 82-page opinion concerning Dynamex Operations West, Inc. v. Superior Court of Los Angeles handed down on April 30, 2018, the California Supreme Court repudiated the Borello test for calculating whether individuals should be categorized as either employees or independent contractors as applied to payment guidelines established by the state’s Industrial Welfare Commission (IWC). The Dynamex decision significantly favors a more worker-centric precedent that has the potential to disrupt the current independent contractor marketplace. Specifically, the Court adopted a new standard that presumes that every worker is an employee as opposed to a contractor and shifted the burden to any corporation designating a worker as an independent contractor to proving that the categorization is justified per the recently-adopted “ABC test.

14 Originate Report | February 2019

Litigation Recap

Dynamex is a national same-day delivery company that, before 2004, considered its California-based drivers as employees. In late 2004, however, Dynamex reclassified these individuals as independent contractors in an attempt to cut operational costs. Subsequently, in April 2005, former employee Charles Lee filed suit on both his own and similarly situated Dynamex workers’ behalf, claiming that the corporation’s reclassification of its drivers constituted a violation of IWC wage order No. 9 that applies to the transportation market in addition to multiple provisions of the Labor Code.

These violations, Lee alleged, meant Dynamex had taken part in unfair and illegal business operations under Business and Professions Code § 17200.

During the ensuing litigation, the trial court relied on precedent established in the 2010 Supreme Court case Martinez v. Combs—which designated three alternative

interpretations of “employ” and “employer” as applied to the wage order—to certify a class action. The Martinez decision ruled that the act of employing had three differing definitions: (1) to control the hours, pay rate or working conditions; (2) to suffer or permit to work; or (3) to engage, subsequently manifesting a common law employment agreement. Importantly, the Martinez holding applied a joint employer examination—a fundamentally disparate issue from the issue as to whether an individual qualifies as a worker or independent contractor as a preliminary matter.

Dynamex responded with an appeal arguing that the Martinez definitions (2) and (3) were inapplicable to this categorization, proposing instead that the multifactor analysis developed in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989) should be used to determine employment classification status. The Court of Appeal ruled against Dynamex’s position, ruling that Martinez applies to both joint employer and employee/contractor analyses and that the Borello test was not controlling in matters concerning IWC wage order requirements.

The California Supreme Court granted certiorari in order to settle the debate as to the distinction between employee and contractor designation in the wage order market. The Court first made clear that the widely misconstruing workers as independent contractors negatively impacts those individuals as well as Dynamex Decision: Continues on pg. 16

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Dynamex Decision: Continued from pg. 14

competing entities and the public writ large. Accordingly, the Court proceeded to explain that the Borello decision required that the underlying remedial legislative objective of any employment statute must always be considered in deciding the classification of an employee. The Court also rejected Dynamex’s contention that Martinez applied solely to joint employment issues and that Borello’s “right to control” analysis is controlling. Therefore, the Court held that an individual should be considered an employee if the employer: (1) controls wages, hours or working conditions; or (2) suffers or permits work; or (3) engages, and thus creates a common law employment relationship. Still, the Court acknowledged that employment definition (2) from Martinez should not be interpreted literally as doing so would implicate individuals traditionally considered independent contractors such as plumbers and ultimately blur the common understanding separation between employees and independent contractors. Thus, the Court curtailed the scope of Martinez’s second definition by implementing the “ABC Test.”

Per the ABC Test, an individual is considered to have been “suffered or permitted to work” and thereby considered an employee in wage order matters unless the employer establishes: (1) that the individual is not controlled or directed by the hiring company regarding the performance of their work; (2) that the individual completes work outside the usual course of the given company’s business; and (3) that the individual is customarily performing an independent trade, occupation or business of similar nature as the work completed.

Importantly, all of these stipulations must be met for the employer to rebut the presumption that an individual is an employee.

Implications for California Lenders Utilizing 1099 Contractors

The Dynamex ruling is an important one for the many California-based lenders who currently use 1099 contractors in their everyday business operations.

The issue as to whether a given individual should be categorized as an employee or independent contractor carries significant weight for the worker, corporate entity and general public alike. If an individual is considered an employee, the hiring entity shoulders the burden of financing Social Security, state, unemployment, and payroll taxes in addition to offering worker’s compensation insurance and abiding by the multitude of state and federal laws applicable to wages, hours and working conditions.

Significantly, there is still some question as to whether the ABC test is applicable to wage claims that do not originate from a wage order. For example, reimbursement filings for business expenditures such as gas and toll fees that are not covered by a wage order and are recoverable solely per Labor Code § 2802 may still fall under the purview of the Borello test. Regardless, any corporate entity doing business in California that classifies workers as independent contractors should

16 Originate Report | February 2019

immediately consult with their legal team to reevaluate the employment status under the ABC Test analysis and recategorize any individuals as necessary in order to remain compliant under the existing wage order statutory scheme. Such entities should pay particular attention to stipulation (2) of the ABC Test—as it is a notoriously difficult standard to establish for companies that rely on independent contractors to produce an essential product or service. For example, a lender might be able to successfully categorize a marketing/ customer support specialist as an independent contractor as the services they provide are distinct from the lender’s usual course of business—as opposed to a CPA or investment planner whose functions are inherently tied to the core lending industry services. This preventative measure will ensure California lenders mitigate the risk of costly litigation as this issue continues to develop.

In the meantime, it is important for California real estate brokers with 1099 contractors on their books to note that regulatory agencies and courts generally weight the totality of the employment circumstances in order to determine whether a given individual qualifies as a worker or independent contractor. Generally, these compliance entities focus on three main areas of the employment relationship to make a final determination:

ONE: The degree of control the employer exercis-

es over the worker’s behavior and work results (i.e., who controls training, where and when the individual conducts work activity, what equipment they use in the course of business, etc.)

TWO: The extent of control the employer maintains

over finances (i.e. Does the employer exercise majority control over the individual’s earnings or losses?)

THREE: What is the relationship between the par-

ties? (i.e., Does the individual get benefits and is it an ongoing, long-term relationship?)

Additionally, for lenders and brokerages that utilize the services of loan officers, originators or agents that they are consider classifying as 1099 independent contractors, the IRS publishes a convenient 20-point checklist such entities can reference in order to guide their employee designation analysis:

r Must the individual take instructions from your

management staff regarding when, where, and how work is to be done?

r Does the individual receive training from your company?

r Is the success or continuation of your business

somewhat dependent on the type of service provided by the individual?

r Must the individual personally perform the con tracted services?

r Have you hired, supervised, or paid individuals to

assist the worker in completing the project stated in the contract?

r Is there a continuing relationship between your

company and the individual?

r Must the individual work set hours?

r Is the individual required to work full time at your

company?

r Is the work performed on company premises?

r Is the individual required to follow a set sequence

or routine in the performance of his work?

r Must the individual give you reports regarding his/

her work?

r Is the individual paid by the hour, week, or month?

r Do you reimburse the individual for business/travel

expenses?

r Do you supply the individual with needed tools or

materials?

r Have you made a significant investment in facilities used by the individual to perform services?

r Is the individual free from suffering a loss or realiz ing a profit based on his work?

r Does the individual only perform services for your

company?

r Does the individual limit the availability of his services to the general public?

r Do you have the right to discharge the individual?

r May the individual terminate his services at any time?

It is important to remember that no one question or characteristic of the employment relationship is definitive. The circumstances of every relationship within the employment context vary significantly. For example, there may be more of an appearance of exclusivity and control from a government regulator’s perspective by the employer if a licensed salesperson is designated as a 1099 contractor, but tied exclusively to a broker.

Such a borderline designation could be deemed a violation of employment regulations and result in administrative and financial penalties. Thus, mortgage companies and brokerages should consult with experienced employment attorneys to help guide their ultimate determination if there is any degree of uncertainty.

ABOUT THE AUTHOR:

Kevin Kim is an experienced corporate and securities law attorney with Geraci Law Firm, dedicated to providing reliable and innovative legal solutions.

Mr. Kim focuses his practice on real estate matters, focusing on private placements and other alternative investments for private lenders, real estate developers, and other real estate entrepreneurs. His work includes seeing that clients are compliant with the applicable securities laws, structuring strategic partnerships, and creating innovative solutions. Mr. Kim’s securities and corporate practice also includes preparing complex private and public securities offerings for alternative investment platforms for clients throughout the United States and abroad. CONTACT: k.kim@geracillp.com (949) 379-2600 | geracilawfirm.com

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FEATURE

Junior Liens Who Choose to Foreclose

By Edward Brown, Pacific Private Money

M

any lenders opt to only fund first

mortgages because they believe that second mortgages are too risky, but is

that always the case? Not always. Not

all second mortgages are equal.

Many private lenders may choose to fund a junior lien where the first mortgage is relatively small in compar-

ison to the second. For example, a $200,000 second behind a first of only $40,000 on a property worth

$500,000 would be an attractive loan to fund for many

lenders, especially if they can command a higher interest rate due to the fact that the loan is in second position.

However, if there is a foreclosure in the future, the second will somehow have to deal with the first mortgage.

This can be troublesome if the first is very large; espe-

18 Originate Report | February 2019

cially if the second is relatively small in comparison to the first. Why?

In looking at a foreclosure, a lender has to strategize. In

the second is $200,000 and the first is the foreclosing

party, the first would most likely credit bid its entire

$800,000 [it does have the right to bid less than what it is owed, but, if the value is reasonably higher than what

is owed to the first, it will normally credit bid what it is entirely owed. The times where the lender bids lower

than its entire principal balance is when the lender does

not want to own the property and is willing to take a loss just to get the loan off of its books, or the value of

the property does not substantially exceed the balance of the first mortgage].

the case of the second mortgage, it is imperative that the

Any bidder at the auction/trustee sale would need to

nothing left over from the foreclosure to pay the sec-

should any bid exceed $800,000 if the bidder wants

first does not foreclose out the second as there is usually

ond. In California, the foreclosing party gets to “credit bid� its loan. This means that it can simply bid [at the auction/trustee sale] what it is owed. Non foreclosing parties need to come up with cashier’s checks in order to bid. This can be a potential hardship for the second mortgage if the first is the foreclosing party.

For example, if we look at a situation where the proper-

ty has a value of $1,400,000, the first is $800,000 and

come up with $800,000 at the auction itself or more to be the highest bidder. In this instance [where the

first mortgage is the foreclosing party], the second is

not allowed to credit bid its $200,000 balance. It would

need to come up with the $800,000 to pay off the first and its $200,000 second mortgage in order to be made whole. True, the second would just get its $200,000

back because that is what it is owed, but, unfortunately,

in this case, since it was not the foreclosing party, it has to come up with cash just as any other bidder. Only the

foreclosing party is allowed to credit bid.

the time being, the second

strategy in place. The second wants to be the foreclosing

and then does not any

For this reason, it is important for the second to have a

party in most instances, driving the bus, so to speak.

Borrowers usually go into default for two main reasons.

First, they stop making payments to the lender. Second,

the lender’s loan is due, and the borrower has not refi-

starts its own foreclosure,

more payments to the first and allow the first to start its own foreclosure?

nanced or sold the property. In the case where payments

Let’s look at an example

to “cure” the first. One can usually do that simply by

play out; in our previous

have not been paid, junior lien holders have the right

making the payments to the first. Since foreclosure in California normally takes three months and 21 days,

one strategy is for the second to cure the first and start its own foreclosure.

However, this may be cost prohibitive, especially if the

first is large and the arrearages on the first are a few

months. When the first files for foreclosure, junior lien holders are to be notified. This gives them notice, so

they can have the opportunity to cure the first. The sec-

ond then files its own foreclosure [either because the

borrower has probably also not made payments to the second mortgage or because most loan documents state that if a borrower is in default on any mortgage associ-

ated with the property, its loan is also in default whether

or not the borrower has kept the second current with payments].

“In looking at a foreclosure, a lender has to strategize. In the case of the second mortgage, it is imperative that the first does not foreclose out the second as there is usually nothing left over from the foreclosure to pay the second.”

One strategy for the second lien holder is to cure the first as soon as possible to allow the second to be the foreclosing party. That way, the second would be allowed to credit bid its loan, but would not eliminate the

first; it would have to take the property subject to the first and have to deal with them post foreclosure. However, what happens in the case where the second pays

just enough to get the first to stop its foreclosure for

and see how this might

example, the property was worth

$1,400,000,

the

first was $800,000, and the second was $200,000.

Let’s presume that the borrower stopped making payments on both the first and second mortgages. Both loans have a

maturity date five years

in the future. If the first files foreclosure, the sec-

ond could cure the first

by making only one mortgage payment to them. While

If there is enough equity in the property, either the

after 30 days, the point here is for the second to make

the liens, or the second [the foreclosing party in our ex-

most lenders will not immediately file a notice of default the first mortgage cancel or delay [even temporarily] its foreclosure, so the second mortgage can start its own foreclosure for two main reasons; it puts the second in

a situation where in the first does not foreclose out the

second, and it allows the second to credit bid its loan at the time of the trustee sale.

Now it is true that, if the second does not make any

more payments to the first [other than the one to get the first to stop its foreclosure], the first may start a fore-

closure again, but, the first’s foreclosure will be after the

second mortgage has completed its foreclosure, buying time for the second to deal with the first [or sell or refi-

nance the property] if the second is ultimately the high bidder at auction. If another bidder outbids the second, the first would get paid, the second would get paid, and the owner [borrower who defaulted] would pocket the difference.

property will receive a high enough bid to pay off all of

ample] should be able to flip the property fairly quickly

or decide to keep the property, as they would be the new owner. If they choose not sell the property, they

should very quickly discuss with the first some sort of agreement to either refinance [a new loan to the second

who is now the owner] or make payments for a period that will allow time for a new lender. The above information is for discussion purposes only and, as always,

one is advised to discuss real estate related issues with a qualified real estate attorney prior to any legal action.

ABOUT THE AUTHOR: Edward

Brown is in the Investor Relations department at Pacific Private Money in Novato, Calif.

CONTACT:

(415) 883-2150 pacificprivatemoney.com

www.originate.report 19

FEATURE

Blockchain & Real Estate: What’s it All About?

By Henry Elder & Paul Monsen, Digital Asset Advisors

B

lockchain technology is equal parts derided and full of promise. It offers a revolution on the order of the internet, but like the early internet, the blockchain is poorly understood and can be used by anyone - legitimate business people and criminal elements alike. The technology has the potential to open up borders for international real estate investment, create liquidity for previously illiquid positions, compress transactions from a multi-month process to weeks or days, end the tyranny of wire cutoffs, and offer many other efficiencies. Unfortunately, up until 2017 the blockchain was a largely unregulated place, with many scams, frauds, and crimes utilizing the lack of oversight to flourish.

From 2009 through the end of 2017, the blockchain industry grew to nearly $1 trillion by market cap, then experienced a significant contraction as regulators stepped in and popped the bubble. This bear market in cryptocurrency prices, combined with regulatory scrutiny, has had the welcome effect of “washing out” most of the low-quality projects from the industry, and has allowed

20 Originate Report | February 2019

regulated services to emerge with practical applications in the field of real estate.

First, a quick explanation of what blockchain is. The internet operates by a network of computers (including yours!) sending data back and forth. The blockchain allows you to send data back and forth that is provably unique. Uniqueness is necessary in order to digitize anything of value. If you purchase a digital certificate entitling you to ownership of Gold Bar #1 in a vault, you need to make sure that the seller of that certificate didn’t sell 1,000 other certificates of ownership for Gold Bar #1. With the internet, you need some trusted intermediary to verify that there’s only one ownership certificate for Gold Bar #1 in existence. The blockchain does this automatically, by maintaining an auditable, immutable trail of every data transaction that occurs on the network. The transactions are grouped into “blocks”. It’s this record of transactions that makes up the “blockchain”. Some blockchains have been doing this without failure for over a decade, and transfer billions of dollars on a daily basis. This part of blockchain technology is

called the “protocol layer”.

The protocol layer allows many of the cumbersome, manual, paper-based processes for value transfer to become fully digital. What this further allows for is the creation of software on top of the protocol layer with simple and easy-to-use interfaces and experiences for digital transfer of ownership, including across borders.

This opportunity is being applied across various segments of the real estate industry, including title, escrow, residential purchases, commercial investment, investor management, and compliance.

On the residential side, startups have been innovating since 2015. Velox.re implemented one of the first experimental pilots of title on the blockchain, working with the Cook County Recorder’s office to test the process of registering a title on the blockchain and effecting a transfer. Propy, another blockchain startup, is building a combined MLS and online transaction platform to streamline more of the residential sales process. Propy picked up where Velox left off, and has been working

with three counties in Vermont to register residential titles on the blockchain. Meanwhile, the core Propy transaction platform has facilitated millions of dollars worth of residential real estate transactions, all across the world. HouseHodl is another startup, which is using the value-transfer mechanism of the blockchain to create innovative new escrow solutions that could reduce the costs and risks of the escrow process. Brokers such as The Crypto Realty Group have built a foundation of acceptance by buyers and sellers for using cryptocurrencies such as bitcoin to purchase homes.

In 2018 we saw the first commercial real estate transactions move onto the blockchain. Slice.market “tokenized” one of the first commercial properties in the country, taking a $5 million LP equity position in an NYC ground-up development and legally endowing ownership into blockchain-based tokens. Those tokens were then sold to international investors, which not

only paved the way for more international investment into US real estate, but also offered liquidity to the token holders that a typical LP equity investor wouldn’t enjoy. By the end of 2018, tokenization was in full swing, with Elevated Returns tokenizing the St. Regis resort in Aspen, Propellr tokenizing a condo project in NYC, and Harbor tokenizing a student-housing project in South Carolina. Companies such as Open Finance Network are providing blockchain-enabled trading systems to trade the tokens, creating liquidity in even the driest parts of the real estate capital stack. Each of these projects has broken new ground in terms of removing frictions that are traditionally inherent in the transaction process, creating streamlined new investor-management systems, and most importantly, refining and perfecting the compliance and secondary-market liquidity tools that will upend how the market perceives real estate liquidity.

As we move further and further from the wild days of 2017 towards regulated, compliant solutions, the promise of blockchain only grows greater. The pilots of 2015

through 2018 have demonstrated many of the potential efficiencies that blockchain can bring to our industry,

and larger deals are coming down the pipeline with major institutional players seriously considering the technology. Ultimately, widespread adoption is a prerequisite to realize the full effect of blockchain’s benefits. For

many in the blockchain field, the focus this year will

be on education and outreach to traditional real estate stakeholders. Blockchain is not a threat to most business

models - it’s a huge opportunity to seize the future by

understanding and adopting these innovative tools that are being built. We built solid momentum in 2018. Will

2019 be the year of mainstream blockchain adoption in real estate?

ABOUT THE AUTHORS:

Henry Elder (left) specializes in asset tokenization, blockchain strategy, and project management through his company, Digital Asset Advisors. He is the Director of Origination & Investment for Slice, a revolutionary commercial real estate tokenization platform (www.slice.market) and an Advisor to the International Blockchain Real Estate Association (www.ibrea.network). He has been internationally recognized for his work, speaking at conferences and working with companies throughout the United States, Europe, Middle East, and Asia.

Prior to founding Digital Asset Advisors, Henry worked at Latitude Real Estate Investors, a real estate private equity fund; George Smith Partners, a real estate investment bank; and ValueAct Capital, a hedge fund. He has arranged and underwritten over $1 billion of investments across the real estate and technology sectors.

CONTACT: Henry@daa.ninja | 323-763-0292 | www.digitalassetadvisors.io

Paul Monsen (right) is a Co-Founder of Digital Asset Advisors, a full service blockchain and emerging technology consulting firm. DAA works with companies at various stage from seed to large revenue across a variety of industries including real estate and finance, saas, human resources, entertainment, and agriculture. His experience facilitating some of the very first crowdfunded real estate transactions has positioned him as a leading figure in real estate technology and security token offerings. He serves as a board member of the Marquette University Blockchain Lab and is the lead of the Silicon Valley Blockchain Society Los Angeles Chapter.

CONTACT: paul@daa.ninja | C: 323-207-5829 | www.digitalassetadvisors.io

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CONTACT: paulcleary@money360.com | www.money360.com

www.originate.report 21

CITIES TO WATCH

Cities to Watch:

Dallas, TX

By Charles Peckman, Originate Report

Klyde Warren Park, Dallas TX.

22 Originate Report | February 2019

T

he ninth most populous city in the United States, Dallas, Texas, which sits in the heart of Dallas County, was initially established because of the construction of major rail-

road lines through the area. Like so many cities built

during the mid to late 19th century, the railroad gave

Dallas the opportunity to trade goods such as cattle, cotton, and later, oil. Today, Dallas has a robust econ-

omy and is home to several industries – within its city limits, nine Fortune 500 companies have major offices.

This city is also diverse concerning ethnic and religious backgrounds and has the sixth largest LGBTQ+ population in the country.

Must-see locations

Although Texas may be associated with large cattle and

Dallas, Texas

seams with rich, American history. This history ranges

• Major industries: Defense, financial services, information technology, and telecommunications • Minimum wage: $7.25 • Cost of living: 1.08x greater than the rest of the U.S.

Economy:

even larger ‘cowboy hats,’ the city is also bursting at the from the positive – George W. Bush’s Presidential li-

brary, to the somber – the site where John F. Kennedy was assassinated in 1963. Regardless of your political

from nationally-recognized acts, and a slew of unique

Sixth Floor Museum at Dealey Plaza covers the as-

unofficial entryway for music groups looking to make it

leanings, there is much to see on a historical front. The

sassination of an American President but also creates a portrait of a country in the midst of conflicts at home and abroad.

The Dallas Museum of Art is packed full of some of the most well-known names in art: Cezanne, Chihuly, O’Keefe, and Van Gogh. You will surely be able to lose

yourself amongst the 22,000 pieces in their collection.

Outside of history and art, there is still plenty to see and do.

Located only eight miles from the heart of downtown, Texas Horse Park allows visitors and residents alike to

feel like a cowboy for the duration of their ride on one of the park’s horses. If you’re really looking to play the part, visit the famous Wild Bill’s Western Store and buy yourself a 10-gallon hat.

Nightlife

Dallas’ diverse background gives way to its action-packed nightlife. The majority of Dallas’ night scene can be

found off the highway, guiding visitors with a neon sign – Deep Ellum Texas, as it is called, was once a ware-

house district, but is now home to some of the hottest clubs in the state. The Curtain Club, a two-level bar and music venue, boasts an outdoor patio, live music

cocktails. The Door, another music venue, is Dallas’

big – similarly, Louie’s Dueling Piano Bar offers music

of a different kind (yet equally enjoyable, of course.) If bands – and jazz – aren’t necessarily for you, the city’s

dance clubs will surely tire even the most experienced dancing feet. Le Vu Discotheque has been rated as one of Dallas’ best dance clubs, with disco-goers routinely coming back for more.

Dining

If you were to attempt to summarize Dallas’ culinary scene, you would most likely label it as diverse. From

Housing:

• Median household income: $67,382 • Median home price: $201,500 • Home price change: 13.4 percent increase (past 12 months) • Homeownership: 54 percent • Median rent price: $1,325 (for a two-bedroom, 1,040 square foot apartment)

Job Market:

• Forbes List: Best places for business and careers #6 • Unemployment: 3.5 percent • Job growth: 2.6 percent increase (past 12 months) • Loan originator average salary: $77,738

classic Italian eateries to the latest and greatest in gas-

Attractions

course, given its location, Dallas is known for its barbe-

Wildlife Center takes up a sprawling 1,800 acres and is

tronomy, there is a litany of options to choose from. Of

Located southwest of Dallas on US 67, the Fossil Rim

que – Pecan Lodge, which has over 3,000 positive re-

home to 1,000 endangered species. With more of these

views, serves a wide variety of barbeque-inspired dishes.

Another Dallas-area mainstay for Texas-style barbeque,

Lockhart Smokehouse BBQ, serves their rendition of

barbeque counter-serve, for those travelers who want their fix on the go. Because the city is close to the Mex-

ican border, there is also a wide range of offerings of Tex-Mex food – with its stylish décor and tradition-

al Mexican menu, Meso Maya Comida Y Copas has

served thousands of patrons during its tenure in the Dallas area.

species going extinct every day, the Center is home to groundbreaking research in the field – on top of that, all of the animals can be viewed from your car window.

Similarly, the Dallas World Aquarium houses scores of species, both of marine life and birds. In between riding

horses and taking part in the city’s vibrant nightlife,

take the time to peruse the upscale retailers at Highland Park Village, which houses world-renowned names

like Cartier, Ralph Lauren, and Dior. On top of that, the location is also known for its unique architecture.

www.originate.report 23

UPCOMING EVENTS

Upcoming Events Don’t be left out! Showcase your upcoming event here!

Contact a.carter@geracillp.com for more information.

California Mortgage Association Winter Seminar February 7-8 • Newport Beach, CA californiamortgageassociation.org/events/

Fund Manager Forum 2019 February 21-22 • Washington DC www.geracicon.com

Non-Conventional Investor Club 2019 April 5 • Los Angeles, CA www.geracicon.com

The Broker Exchange 2019 May 9-10 • Dallas, TX www.geracicon.com

Captivate 2019 August 21-23 • Las Vegas, NV www.geracicon.com All event dates subject to change. Please visit conference websites for agendas and details.

24 Originate Report | February 2019

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www.originate.report 25

LOAN HOME

Help Make Dreams Come True TYPES OF LOANS

AN LO

UM

M

XI M

MU www.atgcapitalfunds.com bobby@atgcapitalfunds.com Tarzana, CA

400K 3.5M √

√

√

√

√

√

√

√

65-70/ 12-18

√

√

√

√

√

√

√

√

√

Direct Lender

Fidelity Mortgage Lenders, Inc.

www.fidelityca.com psteigleder@fidelityca.com Peter Steigleder (818) 422-8879

Helvetica Group

www.helveticagroup.com loans@helveticagroup.com (310) 575-3301

50K 15M

Direct Lender

www.jcap.net info@jcap.net (949) 236-6600

√

√

√

√

√

√

√

√ 55/30 √

√

√

√

√

√

√

√

CB Real CALBRE 00388229

100K 10M √

50K

5M

√

√

√

√

√

√

√

√ 75/30 √

√

√

√

√

√

√

√

*All 50 States

√

100K 50M √

√

√

√

√

√

√

√

√

√

√

√

√

75/2

√

√

√

√

√

√

√

√

√

√

√

√

√

√

AL, AK, AR, CA, CO, CT, DE, FL, GA, HI, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MO, MS, MT, NE, NH, NJ, NM, NC, OH, OK, PA, RI, SC, TN, TX, VA, WA, WV, WI, WY

√

√

√

√

√

√

√

90/30

√

√

√

√

√

√

√

√

2019

Direct Lender

AK, AZ, AR, CA, CO, CT, DE, FL, GA, IL, IN, AI, KS, KY, LA, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, OH, OK, OR, PA, RI, SC, TN, TX, UT, VT, VA, WA, WV, WI, WY

Let Lenders know you found them in Originate Report!

Are you a lender? Advertise with Originate Report’s Loan Home and be seen by 35,000 industry professionals each month.

Contact our Loan Home director at dave@originate.report or (949) 629-3961.

26 Originate Originate Report Report || February February 2019 2019

√

Rev. 01.14.19

www.lockettnhomes.com Info@lockettnhomes.com

√

* AZ, CA, NV

Direct Lender

Lockett-N-Homes

√

CA, TX, WA

Direct Lender

JCAP Private Lending

√

* = states lending in

ATG Capital

MA

MI

NI

LENDER

$ Co mm LO AN Co erci ns al $ um e Br idg r e Co rpo r Ac at io qu ns/ is T No ition rusts tes s a / L nd ega Pu De l E rch ve ntit lop ies Re ased me ha nts b Bla / Re nk mo e d Se t Lo eled an co s / Re n no Jo d M va int ort ted Ve ga g Fo n tu e s rei r e g s Ot n Na he t io r na ls MA XL oa nCh urc to-Va lue he La s (% nd / Te (B mp ) / MA Au are les XT tom / C / erm o Sy Re otive mm nag (yr erc og s tai l ial ues ) /L En (Sho ot) ter p ta s/ Ga inm Strip e sS Ma nt lls Le tatio ) isu ns re Ho (G sp olf it C Mi ality our s xe d-u (Hot es/ M Re se els) ari sid Pr na I o nd e ) Ra ntia per t ustri ies al nc l In he ves Se s a t lf-s nd men t t Re orag Farm Prop sta e ert s ies u Of rant fic s e

Let lenders know you found them in Originate Report!

TYPES OF PROPERTIES WE LEND TO

TYPES OF LOANS

TYPES OF PROPERTIES WE LEND TO

MI www.pacificprivatemoney.com loans@pacificprivatemoney.com (415) 883-2150

150K 5M

√

√

√

√

√

√

70/30

√

√

√

√

√

√

Direct Lender

www.patchofland.com originations@patchofland.com (888) 250-2216 Sherman Oaks, CA 91403

Redwood Mortgage Corp. www.redwoodmortgage.com RMC@redwoodmortgage.com (800) 659-6593 San Mateo, CA 94402

Sandstone Capital, Inc. www.sandstonecapital.net josiah.p@sandstonecapital.net Josiah Puder (310) 909-8555 Ext. 1040

Sunset Equity Funding www.sunsetequityfunding.com lending@sunsetequitygroup.com (833) 786-7381 Los Angeles, CA 90010

√

√

√

√

√

√

√

√

√

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85/2

√

√

√

√

√

100K 10M

√

Direct Lender

*65% For commercial and mixed-use and 70% for multi-family and residential investment. 5 years (custom terms are available)

100K 10M

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

65/5*

√

70/5*

√

√

√

√

√

75/5

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

CA, CO, HI, TX, WA

√

√

√

√

√

√

√

√

√

√

√

90/2

Direct Lender

2M

√

* CA

Direct Lender

50K

√

AL, AK, AR, CA, CO, CT, DE, FL, GA, HI, IL, IN, AI, KS, KY, LA, ME, MD, MA, MI, MS, MO, MT, NE, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, TN, TX, VT, VA, WA, WV, WI, WY

Direct Lender

50K 50M

√

√

√

NATIONWIDE EXCEPT ALASKA, SOUTH DAKOTA, NORTH DAKOTA

√

√

√

√

√

90/2

2019

www.zincfinancial.com office@zinc.net Tom Valentino

3M

Rev. 01.14.19

Zinc Financial Inc.

50K

* CA

SFR

Patch of Land

√

* = states lending in

Pacific Private Money

XI M

NI

LENDER

MA

MU

M

LO

AN

$ U Co mm M L O AN Co erci ns al $ um e Br idg r e Co rpo r Ac at io qu ns/ is T No ition rusts tes s a / L nd ega Pu De l E rch ve ntit lop ies Re ased me ha nts b Bla / Re nk mo e d Se t Lo eled an co s / Re n no Jo d M va int ort ted Ve ga g Fo ntu e s rei r e g s Ot n Na he t io r na ls MA XL oa nCh urc to-Va lue he La s (% nd / Te (B mp ) / MA Au are les XT tom / C / erm o Sy Re otive mm nag (yr erc og s tai l (S ial ues ) / En ho L ot) ter p ta s/ Ga inm Strip e sS Ma nt lls Le tatio ) isu ns re Ho (G sp olf it C Mi ality our s xe d-u (Hot es/ M Re se els) ari sid Pr na I o nd e ) Ra ntia per t ustri ies al nc l In v h Se es a estm lf-s nd en t t Re orag Farm Prop sta e ert s ies u Of rant fic s e

Look for this Lender’s Ad in this issue of Originate Report

Direct Lender

AZ, CA, CO, IN, MI, NM, OH, TN, TX, WA

www.originate.report www.originate.report27 27

PROVIDING PEACE OF MIND As a full service law firm that caters to the private lending industry, Geraci’s team of bankruptcy, banking and finance, litigation, securities, corporate, and real estate attorneys has provided our clients with peace of mind for over a decade.

Let us deal with the legal side of your business—so you can stay focused on what’s really important.

Geraci Law Firm | 949.298.8050 | www.geracilawfirm.com 28 Originate Report | February 2019