Considering A Private Loan? Here's A Crash Course On Private Lending
In this episode, Nate Trunfio shares a wealth of information on the domain of private lending.
Find Nate at https://limaone.com/nate/
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Transcript
Tom:
Greetings, and welcome to The Remote Real Estate Investor. On this episode, we have Nate Trunfio of Lima One Capital. This episode, we're going to cover a lot of materials focusing specifically on portfolio loans. All right, let's do it.
Awesome. And welcome to the podcast Nate. Thanks for jumping on.
Nate:
Hey, thank you guys for having me. honored to be here.
Tom:
All right, so before we get into the main content, let's start with a little bit about your background.
Nate:
Sure, yeah, I'll try not to bore too many people here. My career in life has been spent in all things real estate related, and specifically financial services and lending, younger ish type of guy. So graduated college in the mid 2000s, and got right into the residential mortgage lending world sort of conquered a lot of that through becoming a top sales producer, than stepping into the management came very early on. So some great learning lessons as a leader and manager, 24 years old, managing people twice plus my age, and then really just continued on that path through just growing and climbing the ladder.
The residential lending space serves a huge need, but it's a lot of red tape and a slower sales cycle than what I was looking for. So I jumped out of residential lending into alternative b2b, ran to different private debt funds there that led to another big need of small businesses in dire need of capital, especially today in this COVID world. And then I found my happy home and private lending over the last four years was the president of a smaller company, prior to now being at Lima One where I run all the sales and marketing and throw my hat in the ring of just a lot of other areas just to help the business grow.
And my sort of inner inner driving question is always How can I make myself others people process and things better around me, and that's what just keeps me ticking every day and has led me throughout the journeys and stops in my career.
Michael:
I feel like we're about to interview a Swiss Army Knife of residential real estate investing, this is gonna be super exciting.
Tom:
So when you started, was it more in like traditional residential lending versus private capital?
Nate:
Exactly, yeah. So learn through the red tape and all the rigmarole but you know, it's important in that world to be very knowledgeable and all the nuances if you want to be successful. But yeah, so when I was getting into financial services, it was very much a refi. Boom. So it was mainly focused on refinances to homeowners predominantly their primary residences, certainly to del purchase as well, with that got me you know, introduced to financing and real estate in general.
Michael:
Were you involved in that space during the 08-09 housing crisis, Or did you exit prior to then?
Nate:
That's when I got it right around there. So it was a great welcoming to all things, real estate,
Michael:
And you still managed to become a Top Producing salesperson during that time?
Nate:
Yeah, man, look, I certainly don't have the looks for those on video. I'm not, I'm not the smartest guy in the room. But my nack is I just I grind. I work hard. You know, I think that's the lesson to anybody younger in their career. You know, you don't have to have all the skills, knowledge and experience to be a top producer and anything. You just have to work your tail off.
Michael:
Yeah, that's great advice.
Tom:
That's fantastic. So let's learn a little bit about more about Lima one right now. So I've been to several conferences and somewhat familiar but for audience who have not heard of Lima, one capital?
Nate:
Yeah, absolutely. So Lima, one capital is a premier private lender in the top three to five in the nation, we lend in 46 different states, our sole purpose and mission is to provide financing solutions for real estate investors, because we know that the residential realm just doesn't suit investors who need to move quickly. They need different products than you know, traditional financing. And so that's exactly what we provide.
So we lend on all things related to different real estate investment strategies. It's fix and flip new construction, single family rentals on a single asset level as well as large portfolios. And then last but not least also multifamily. You consider us to be a private lender, most people will call it hard money. although in reality, I'd liken it to a lot more soft money. It's not hard money like it used to be. It's become somewhat institutionalized. And at least by that I mean that Wall Street has has an appetite for it, which is allowed us to drive down the cost of capital in terms that we provide out to investors.
So you know, we are a very big player in the space and again, we help numerous different types of real estate investors, whether it's their first deal, they do 100 deals a year, they buy, you know, 200 unit multifamily complexes to five unit complexes. I mean, no matter what shape and size you are, no matter what your investing strategy is we should have a financing solution for you.
Michael:
Awesome. is one of the 46 states Alaska or is that on the no go list?
Nate:
That is on the no go list, if I recollect.
Tom:
Contiguous. Michael, you gotta be contiguous.
Michael:
I know. I know.
Nate:
We're in Hawaii though.
Michael:
Oh, yeah? Oh, man. All right. Let me know when you guys are up in Alaska.
Nate:
Will do yeah,
Michael:
I'll be your first client!
Nate:
We'll fix and flip some igloos.
Tom:
I think you kind of answered my next question I was going to get into is the customer profile that you guys serve. So but it sounds like all over the board from individuals to funds, if you guys have like predominantly like more in one area are really pretty spread all over the place.
Nate:
Yeah, I mean, we're pretty diverse. Our core client is somebody that sort of graduated to real estate investing full time. But it's not to say that we don't finance a lot of people that are doing it is sort of a second job or supplemental income or creating additional cash flow on top of their W2 jobs, you know, our products in a process or they're designed to move quick, without a ton of paperwork, we don't collect tax returns on any of the products that we have, just to put that in perspective. And certainly, that's a mainstay in residential lending.
So we look at things a little bit differently. And we're customized to make sure that we can provide investors with what they need from a product perspective, but just as importantly, a process as well.
Tom:
How about if I'm buying through a self directed IRA, and with that type of a product? I can't get traditional lending, because I'm buying it with LLC? Do you guys do a lot of work with that type of customer?
Nate:
The short answer is yes. The lending to somebody who's purchasing through an IRA can be a little convoluted we, we absolutely have solution for it. But yeah, I mean, that that's definitely one of the corners of our customer segments that we service, most of the time you find people with that sort of investing strategy to be, you know, have a W2 job or retire from their W2 job in our investing is, you know, for long term cash flow purposes. So we absolutely service that as well, as you know, people that are using combination of that strategy of IRA, verse raising their own private money for their own equity, among many other different types of categories of our customer profile.
Michael:
You mentioned that you guys are private capital lenders, but also been classified as hard money. What would you say is the difference between the two? Because people are categorizing number one, as both? You know, should somebody go Google private money? Or should they go Google hard money? How do people know where to go look for those types of d…