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Private Lending in New York City with We Lend · Private Lending Insights

• [00:00:00] Welcome to Private Lending Insights. I'm your host, Rocky Butani. In this episode, I interviewed Solomon Suleymanov from We Lend, and this episode is really all about New York and New Jersey. We lend is a lender that's based in New York City. That's where most of their lending is done. They also lend in New Jersey. [00:00:21] They do lend in other states, but the majority of their loans are in the New York metro area. We talked about some of the current trends for real estate investing in New York City at this time in May, 2025. We talked about we lends loan programs, their guidelines and pricing, uh, LTVs, uh, a little bit about the company's history and their capital. [00:00:44] And then we also talked about some of the challenges for lending and real estate investing in both New York City and in New Jersey. Let's get started. Here's my interview with Solomon from We Lend Solomon. Thank you for joining me for Private Lending Insights. How's everything at We Lend in New York at this time? [00:01:06] Hey, Rocky, thank you so much for having me here. It's always a pleasure seeing you and, and, and being on this podcast. Um, I watch, I think almost every single episode that you put out and I always learn something new there. So thank you so much for doing this. Um, to answer your question about the New York City market, I mean, uh, it's still extremely competitive. [00:01:24] Um, there's still a lot that's going on. You know, there's still inventory shortages here and a lot of competition, as you may imagine being in New York. So there's a lot that's happening here. And is, uh, most of your activity in, in New York City in the seven boroughs or the, the five boroughs? Yeah, so it, well, I mean, it could be six boroughs because sometimes we joke about, uh, Miami being the sixth borough of, uh, of New York City. [00:01:49] Uh, but yeah, so a majority of our book today in New York is centered around the five boroughs. Um, so yeah, a lot of that down here. Okay. And, uh, what are some of the different trends you're seeing, uh, with the deals you're doing in New York? Is it, is it heavy rehabs? Uh, is it, uh, more condos, more mixed use? [00:02:10] Tell us a little bit more. That's a really good question. You know, recently we've been seeing that there has been a, a shift with our borrowers. So they're getting to projects that require a lot heavier rehabs or even conversions. So a lot of conversions today where guys are buying these townhouses and rather than, you know, having an after repair value of three or $4 million, they are converting these condos. [00:02:36] And each of these condos has an ARV of one and a half to $2 million. So you'll have, rather than having one townhouse, now you have four condos. With, you know, one and a half to $2 million ARVs, which means that it's a lot easier for them to be able to liquidate these properties, which is also nicer for us because now, you know, rather than having one townhouse worth 4 million bucks now as a lender, you know, there, there's four pieces of property, there are four condo units that we also understand that will liquidate a lot quicker than a $4 million home. [00:03:05] So that's the, that's the recent trend that we've been seeing in, in the market here today. And does that generally take a lot of time to get permit approvals for? So if it's, if it's a seasoned sponsor and someone has been in the industry quite, you know, a while, and especially the New York City industry, uh, in the New York City real estate market, they'll understand how the DOB works. [00:03:26] And generally speaking, it probably will take you anywhere from like 60 days, uh, 30 to 60 days for you to get some sort of approval, uh, when you have the plans and, and all that already set in place with your architects. So, um. It's not easy. It's definitely doable, and if you're seasoned. It's a lot quicker. [00:03:42] Can you give us an example of, uh, the numbers on, on a deal like this? Uh, they, you know, what, what, what's a per a purchase price for one of these, uh, one of these townhouses, and then how much are they spending to build it out into four units? I. Absolutely. So, I mean, look, you know, with inventory being tight in New York City, these purchase prices keep climbing and climbing. [00:04:01] So that's why a lot of these investors just had no choice but to shift into converting these properties into condos. Um, so on average, you'll probably see an acquisition price of roughly around like a million to one and a half million dollars and a construction budget of nearly a million bucks. Um, so you're looking at all in two and a half million dollars just on the acquisition and the construction cost. [00:04:25] I'm not even accounting interest. I'm not accounting broker fees, uh, mortgage recording tax, any of those closing costs. So you're, they're in at it for two and a half million to start, but the after repair value is great. Right. On a deal like that, you're probably looking at three condo, uh, units. Each condo is probably gonna be bringing them roughly around one and a half million dollars per sellout. [00:04:47] Right. So do the math right there. Right. They're, they're, they're making a lot more money now on the exit than they actually would if they were just to have a regular, uh, townhouse. So. And if there was a regular townhouse, uh, are there, are there just not, not enough buyers or is the motivation more that, that they could just make a bigger profit when they divide it up? [00:05:07] So. I feel like it's more the former than the latter. I feel like there's a lot less buyers now that have, can come in and say, Hey, you know, I'll, I'll purchase a $4 million house, rather than, you know, someone coming in and say, Hey, you know, this is a million and a half. Great area. I love this market. You know, let, let's get rolling because look, you know, are there $4 million buyers in New York City? [00:05:28] Absolutely. Just takes a lot. I don't wanna see a lot longer, but. Definitely longer for you to find a $4 million buyer than a one and a half million dollar buyer, right? That pool gets so much tighter. Um, and it's a lot longer for the developer, the, the, you know, to sit in that project and have all those, you know, monthly interest payments and, and other overhead that they're like, you know what, this makes a lot more sense just getting these types of, uh, uh, deals done. [00:05:52] And in what parts of New York City are you seeing a lot of these conversion deals? So these conversion plays, a lot of it is in the Manhattan area, uh, along with the, uh, the Brooklyn area. So there's a lot of, a lot of activity in the Brooklyn market. Um. And for people that are watching and, and you know, some borrowers and investors that are watching, if you wanna enter into the Brooklyn market, good luck. [00:06:16] It's a very competitive market. It's a definitely a, you know, who knows who market because. E everything goes pretty much off market there. Right. There's very few deals I probably have seen that we're selling on market because before the property is even able to get listed on the market is where you get snatched up by the, the pros in, uh, in the New York City real estate industry. [00:06:36] So, and is there a major price difference between Brooklyn and Manhattan? There. There is a very big price difference. It really also depends on what part of Manhattan you're looking at. Manhattan's so huge, right? You have upper Manhattan where you have Harlem. The price range there is definitely a lot lower than you would see in the Upper East Side or on the upper West side, um, or even in the financial district, right? [00:06:58] So Harlem was also. I would wanna say about 15 years ago, you know, it was a rough neighborhood. 15 years ago, you probably would be able to purchase a townhouse in Harlem for around, I don't know, $600,000 or $700,000 in today's market. Um, and as is property that's not even been renovated yet, you're probably looking at one and a half to $2 million. [00:07:18] And what's the, the big attraction to Brooklyn versus Manhattan? So the, the price point is definitely one of the bigger attractions in the Brooklyn market, but it, Brooklyn market is also hip. Right. You know, when I was growing up, um, it was just Williamsburg and then that shifted over into Bushwick, uh, Bedford Stuyvesant, uh, Clinton Hill, prospect Heights, et cetera. [00:07:41] So it's, it's definitely been shifting in those areas, but I. It's very hip. There a lot of young, you know, people living there. Um, so I I I feel like, you know, they, they feel like it's a lot more hip than Manhattan. But also the biggest thing is the price point, right? Like you can go into the Brooklyn market and you can purchase a brownstone building, uh, fully renovated for anywhere from two and a half to like $3 million. [00:08:04] Uh, where if you place that same building in certain parts of Manhattan, like the Upper West Side or the Upper East side, and they're easily going for 15 or $20 million. Sure makes sense. What about other parts of New York City, uh, let's say getting into Long Island? Do do, does anyone do con conversions there or are those gonna be more standard rehab projects for a single family? [00:08:26] I. It's a good question. I, I would say majority of that would be standard rehab. We do still see some people doing some expansions there not necessarily conversions, so what they're doing is either they're, you know, going and doing a vertical expansion or a horizontal expansion, just blowing up the property and just adding more square footage to it. [00:08:45] But generally speaking, in the Long Island market, you're probably seeing, you know, generally SFRs. So single family homes. That are just being renovated and, or, you know, they're adding square footage to it. So a lot less of, uh, the conversion play in, uh, in Long Island probably. I, I, I don't even have, I haven't even seen any conversion plays in Long Island, truthfully. [00:09:04] Okay. Sure. Makes sense. 'cause it's, uh, you know, it's, it seems like new Long Island is not typically the, the place where, where you've got just a lot more condos. It's, it seems like it's more single family Correct. On the island. Right. Okay. Correct. And you have a lot more, I mean, look, there, there are pros and cons to it, right. [00:09:21] And Long Island, you're, you're buying a single family home, but you have a nice lot size where, you know, you, you have kids running around, um, in the New York City, like in the boroughs and in Brooklyn or in Manhattan. They're, the loss sizes are very minimal. Uh, maybe you can, you know, invite some friends out to do some barbecue, but that's, that's pretty much it. [00:09:40] Um, it's more of a concrete jungle than anything else. Is there anything in particular you're hearing from real estate investors over the last six months as far as any pain points or any challenges? So the pain points and challenges, I mean, listen, the, the, the number one challenge I feel like, you know, everyone's having right now is the tariffs, right? [00:10:00] Unfortunately. Uh, and along with the inflation, right? In the last six months, everyone was complaining about inflation and the cost of material going up, the cost of labor going up. And now some investors are not even able to get some of their shipments over to the United States because of the tariff war. [00:10:17] Right. I, I have a very good example. A friend of mine is building about 150 units in Brooklyn, and he had a shipping container of, I, I forgot what the material was in China, and that was put on pause because, you know, the, the, the tariffs started, uh, the tariff war started and he's like, listen, I, I'm into this project and. [00:10:37] I don't even know when I'm gonna finish now, because I can't even get my shipment. So he's trying to figure out the logistics there, whether he's, you know, he'll be able to find a loophole to get that, that shipment out. But I, I think, you know, with everything that's happening now, uh, with, you know, the US and the China's having, having more talks together, uh, I feel like his shipment's probably gonna start coming out now. [00:10:56] But that was probably the, the two main pain points for, uh, investors and developers for sure. And do you hear of any investors that are just waiting on the sidelines because of the current condition, or, or they're just worried about, uh, whether they're gonna be able to get materials in the first place? [00:11:14] So if you asked me the same question about a year ago, I would say absolutely. Um, I feel like in today's market, right after the elections, right after the November elections. All of the guys, all of our seasoned sponsors, borrowers, they all came outta the woodworks. Um, and they all just started buying up left and right. [00:11:32] Um, and some of them were just pretty smart. They were buying up before the elections were, you know, uh, were done because they felt like all the, the prices on properties were gonna be skyrocketing, so. Um, I wouldn't say a lot of these guys are on the, still on the sidelines. There are some guys that are still on the sidelines, and that's not really because of the tariffs or the, the, uh, you know, the cost of labor going up, but it's more because of the competition that's out there that's driving up these prices, um, and, and this in, in these markets. [00:12:02] So, so, ha Have you seen the prices gone up in, in the past six months, or let's say since the election? On acquisitions for these borrowers? I would probably say it's been pretty steady in, in the New York City market. I haven't really seen it going up that much. Alright. It, uh, it, it's a bit early in, in this whole process or, or cycle, so, so, we'll, we'll see how that goes. [00:12:27] Yeah. All right. Uh, and then tell us about some of the, the typical loans that you're doing. Is it, is it mostly rehab? Are you doing anything ground up? Are you doing rental loans? Tell us a little bit more about the, the loan type mix. Absolutely. So, I mean, of course we're doing a lot of fix and foot loans, but um, ground up has been really ticking up and I'm sure, uh, everyone else listening knows that already. [00:12:50] So we, we've been funding a lot of ground up, uh, recently as well. And it's also in the New York City and in the, uh, in the Jersey market as well. But I would say more in, in New York City than Jersey, um, than anything. So. Yeah, we, we are founding ground up and a lot of these are boot, uh, boutique, uh, condo buildings where these guys are building, you know, three to six condos, uh, ground up. [00:13:12] And, you know, I speak to them sometimes and I say, you like, Hey, you know, do you like building ground up more than just coming into a regular fix and flip? And they say, absolutely. And I ask why. And they're like, listen. I know what I'm dealing with. I'm literally dealing with raw land and I'm just building everything up, you know, and I, I have no issues. [00:13:30] I'm not breaking down walls and, and finding out there are termites and I have to cure that and, and fix that. He is like, I know exactly what I'm doing to these projects, so I I I have no issues. Um, which is, I completely understand. And you're pretty much working from like a, a clean slate, which is great. [00:13:45] Um, another program that we, we have as well, and we're, we're very proud of having is, um, our, our, um. Foreclosure bailout program. So it's our rescue program for investors and developers that are currently in loans with their lender, uh, that are currently in a maturity default or a payment default. Uh, we are able to explore those, uh, deals, take a look at 'em and see if it's a fit for us, and we're able to refinance them, uh, on these projects as well. [00:14:11] Um, you know, a lot of times these investors come to us and say, Hey, you know, I've been having so much trouble with my tenants because they're not paying. Um, you know, and, and in turn I'm not able to make my mortgage payments. You know, are you guys able to help me out and, and, uh, and refinance me? And, you know, they're at the tail end of getting these tenants out and evicted. [00:14:32] Um, we, you know, look at a deal, we analyze it, we like it, and then we were able to refi them out to, to help them out. And they're pretty much, you know, one, they're, they're no longer paying that default interest, right. In New York City's. 24.99% default interest. Um, and two, we're saving the property from going into foreclosure and, and we're saving all their equity in those deals. [00:14:51] So, um, I, I really love doing those loans. I mean. Are we funding every single bailout that comes to us under the sun? Absolutely not. We are very, you know, we, we pick and choose, uh, what deals we're gonna do, and that's only in specific markets. And a majority of those would probably be in the New York City market and, and parts of Jersey as well. [00:15:11] Um, and, and very few parts of Florida. Um, another, another program that we have of course and everyone else most likely has, as well as the DSCR program, right? The debt service Coverage ratio program where we're able to refinance, um, our borrowers up to 80%. Of the As is value on those properties, or if they're purchasing the property, we're also able to give them, uh, financing up to 80% of their purchase price. [00:15:36] So, alright. Let's go back to the, the ground up projects. Yeah. In, in New York, uh, are, are, are your investors. Uh, finding that they, they just buy, let's say a, a townhouse and then they, and then they tear it down and then they build, or, or are there already, uh, vacant land parcels out there that, that they're acquiring? [00:16:00] So I would wanna say about, I. 70 or 80% of the time it is vacant land. Um, and then they just build from ground up in the event that there is a building on it. And if they feel like they can get more, they can squeeze more juice out of the deal, they'll demolish the building and build a ground up. But a majority of the cases, you know, if the building is already existing, they'll probably just add a floor to it or maybe two they'll do a vertical expansion. [00:16:23] And in the case where it is a vacant lot, uh, and you're lending on that project, does that need to be fully approved, shovel ready, or do you participate in the land acquisition? That's a good question. So what we do require for ground ups is pre-approved plans. I mean, listen, you know, we wanna understand what the, what our borrower can build there, right? [00:16:45] Like if it's in the New York City market, we understand how it works. And listen, we've built ground up projects ourselves in the past, so we know how it works and we understand how the zoning works here. But we definitely would wanna see pre-approved plans. So we do finance the land, but we also would wanna finance the, the construction component to it as well. [00:17:02] Okay. And are, are most of these ground up projects that you're funding, are they more in Brooklyn versus Manhattan, or are they on Long Island? What parts of the city are, are most of these ground up projects? Definitely more in Brooklyn than they would be in, uh, in Manhattan or out in Long Island. We have funded a few, uh, loans out in Long Island for ground ups. [00:17:24] You're looking probably way out east, you know, somewhere in the Hamptons, um, where you know, the developer's buying a nice piece of raw land and they're building a luxury single family home. Uh, so those projects we've definitely completed before and they were great success for our borrowers. Um, I. They, they bought the land at a really good price. [00:17:42] Um, and they, they were, you know, they know what they're doing, so they built a building ground up and then they, they sold it off. And listen, you know, for ground ups there's so much less, a lot less competition than your typical fix and flip, right? Because there are two things that come into play. One, when a lender is lending to an investor, they wanna make sure on a ground up, they wanna make sure they have some sort of experience, right? [00:18:04] So right there off the bat, first time, you know, real estate investor is not able to even get into their ground up project because they have no experience. Um, and two, of course is that the, um, the, the developer is a lot more experienced. They know what they're doing. So for them, you know, uh, the turnaround time should be a lot quicker than, uh, than, than for like a first timer. [00:18:27] Sure makes sense. And, uh, let's go back to the foreclosure bailout program that you mentioned. Um, are, are these typically cases where it's a maturity default, or, or is, is it a payment default Most of the time. So right now I. Right now I'm seeing a lot more maturity defaults than payment defaults. About a year and a half to two years ago, I saw more payment defaults than maturity defaults. [00:18:52] And I feel like the reason why we're seeing more maturity defaults today is 'cause a lot of these guys, they have their loans that are coming due and they're not able to refinance out of them. So they have no idea what to do. Um, and they're, they're their lenders just calling the mortgage and just putting them into default. [00:19:07] Um. Two years ago, it was the opposite, right? They were not able to make the payments because, you know, their, their tenants weren't making payments for whatever reason. Um, and, you know, they, they, they got stuck in that, in, in those projects. So, um, I would say today, in today's market, definitely more maturity defaults and payment defaults. [00:19:27] And take us through, uh, a sample scenario and, and, uh, with a foreclosure bailout, it, this is essentially just a, a refinance bridge loan, right? Where you're, you're just giving them more time where they can either complete the project or, or sell the property or refinance into a longer term loan, right? [00:19:45] Correct. So a very recent project that we financed, um, that was a bailout, was in, um, in, in Brooklyn. This operator owned the. These pieces of real estate for, I would wanna say about 15 years now, 15 or 20 years. It's a portfolio. So it was a combination of some residential and some commercial buildings. So a few brownstones along with a few, you know, six to eight unit properties. [00:20:12] Um, a few of them were. Had no issues. So they, they were, he was paying on time for those deal, uh, for those mortgages. Um, but there, there was a few that he unfortunately fell behind because the tenants stopped making payments and then he started having liquidity issues 'cause he no longer could, uh, make those payments without them paying him. [00:20:31] So we gave them a, um, a bailout loan or a 12 month loan, um, at a 65% loan to value. Um. And they, they, so what their game plan is today is, uh, they're going to be, uh, refinancing all these properties. So he's working on, you know, cleaning up what, what's inside of the properties today, which is, of course, tenants that are non-paying. [00:20:56] So he's, he's in the process of evicting all of them. Um, once that's all complete, he's going to, of course, get new tenants in there and he's gonna refinance with a, uh, with a, a different lender into a, into a longer term loan. Got it. And, uh, and is there a, a maximum loan to value threshold that they have to meet in order to, to qualify for a foreclosure bailout, refinance. [00:21:20] So we're, we're always capped at 65% of the as is value. Um, many cases, you know, people have to bring money down. Um, but yeah, 65% is where our cap is. We, we don't want to exceed that. And I mean, listen, we also do understand that we're taking a risk here. Uh, by lending on these assets because these borrowers, you know, are non-performing today to begin with. [00:21:43] Um, but we, we do like those assets, so we are, you know, like, hey, let's, let's, let's refi them out and give them this loan. Um, but yeah, many times people do have to come with cash to closing. And in, in the case of, uh, the one that you just explained as far as, uh, someone having a portfolio, obviously you can cross collateralize and, and take multiple properties on one loan. [00:22:08] Uh, but when you, when you do that, in that case, does it always have to be in first position on all of the different assets? Yes. So we always have to be in first position no matter what. Even if we're doing a cross collateralization, we have to be in first position. So if they do have existing debt, uh, we have to pay them off to be in first. [00:22:26] Got it. Yeah. Alright. And let's, uh, switch over to, you mentioned DSCR rental loans. Is that even something that's common for you being in, in New York City? Uh, do, I mean, do properties even cash flow over there? I. So in New York City, that's a really good question and I, I get this question asked a lot. In New York City, it's not more of a cashflow game for these rental properties, it's more of an equity play. [00:22:50] Because if you're holding onto real estate in New York City, within five to 10 years, that equity grows. I. I would probably, I don't wanna say by a hundred percent, but in some areas it's probably gotten even past that. Uh, when I initially got into the real estate industry, it was around 2012. Um, people were buying up brownstones in Bushwick and Bed-Stuy for pennies on dollar 400,000, $500,000, $600,000. [00:23:17] Um, they would fix 'em up and they would sell 'em for a million, a million and a half the same property today. It's worth double, it's worth $3 million. Um, so in New York City, it's always the equity play rather than the cash flow play. So a lot of these deals, they debt service to a point where it's a one-to-one ratio, where it's, you know, their monthly payment, let's say hypothetically, is $5,000. [00:23:42] They're, they're covering that monthly mortgage payment with the rent that they're collecting, uh, minus the taxes, and of course the insurance. So it's a one-to-one there. I mean, all of these loans in New York City that are DSCR, they're typically just gonna be a lower LTV than, than your, your, let's say in other states, people try to max out and, and get up to 80%, 75%. [00:24:05] So in New York City is a, just generally a lower LTVI. So you'd be surprised. So what a lot of these people do is they purchase these properties that are distressed. They force appreciation, they stabilize it, and then they refi out into these DSCR loans. So they're building equity, uh, right off the bat when they're purchasing these properties. [00:24:24] There's already equity in there. Once the, the property is, is complete with the construction. So a lot of these people are actually able to take anywhere from 70 to 75% cash outs on, on these deals is. I would wanna say probably three outta 10 times. Uh, they're probably not cashing out and it's probably just a rate and term refinance, but seven outta 10 times these people are cashing out and they're walking away with cash. [00:24:49] I mean, listen, especially like four years ago, five years ago, when rates were so low and we were closing the SCR deals, I can't even believe I'm saying this right now, at a 3% or three and a half percent rates. People were cashing out like crazy. Um, but even in today's market, right, people are still cashing out, um, not as much as they were a few years back, but there's still a cash out component that's there. [00:25:12] And a lot of these DSCR loans that you're funding, are they for properties that you funded the rehab for? That's a good question. So not all of them, but I would wanna say six out of 10. Yes. Yeah. Great. Okay. So there's, they're building in enough equity when they, you know, when they rehab and add value to it, that, that the DSCR numbers make sense. [00:25:34] Exactly, exactly. So yeah, they, they, they do that. Um, I, I forgot what rule that is. I don't know if that's the, uh. I dunno if that's the 1% rule. The 70% a ar ARV rule. There, there, there's a rule to it. There, there's a rule that some of our guys play by, um, and that's all they play by and, you know, they're, they're, they're building their portfolio and it's working, uh, very well for them. [00:25:58] So, yeah. Great. And how about multifamily or are you doing, uh, any multi-family deals where there's more than five units? We are, so we're still financing multifamily projects. Um, we are very skeptical of those, those deals today, and I'm, I'm sure you understand why there's so much that's been happening in the past few years where, you know, the, unfortunately the, the rates coming up, um, destroyed the cap rates on these multifamily buildings and these mixed use buildings as well. [00:26:25] Um, we wanna make sure that we're lending to seasoned operators that when it comes to multifamily, I mean, listen. Owning at least one or two multifamily buildings is huge for us, right? It's very important 'cause we wanna make sure that they understand how the multifamily game really works. Um, but we are still lending on multifamily, whether it be a value add, uh, or A-D-S-C-R, we're still doing both. [00:26:46] Um, is there a maximum number of units that you'll consider? So in today's market, I mean, look, you know, we, we have a, a very seasoned borrower that always borrows from us and they buy up a lot in Connecticut. Um, and I'm not gonna say what part of Connecticut is because they probably would wanna kill me. [00:27:03] Um, but they're buying 50 or 60 unit buildings. Value add. Um, you know, we're, and we're, we're giving them, you know, the acquisition and we also give them the, the, the rehab as well for those. Um, and then they go and they, they, you know, they refi out with like an agency lender. Um, so I would wanna say anywhere from like 50 to 60 units, this is where we would go. [00:27:22] The sweet spot. Today's market, truthfully though, you're probably looking at around like 20 units to 25 units, depending where you're at. Okay. And what's your maximum loan amount? So our maximum loan amount today is roughly around $5 million. Got it. Yeah. And, uh, let's go back to, uh, well, speaking of DSCR and um, uh, and interest rates, uh, obviously DSCR rates fluctuate quite a bit, but at this time in, in May, 2025, what are your interest rates for short-term loans, uh, for most of the deals you're doing in New York and New Jersey? [00:27:56] So our rates today are starting at 10 and a quarter. And of course there are adjustments when, you know, a person wants higher leverage if they, you know, based on their experience, et cetera. Um, so 10 and a quarters are starting rate for our fix and flip and our bridge program, uh, for our DSCR program, you're probably looking around like 7% or seven point a half percent. [00:28:15] I mean, listen, it, it fluctuates on a daily basis. You know, we're, we're going based on the, the five year treasury unfortunately. And yeah, it's, it's fluctuating every single day. So I, I'd probably say seven to seven and a half. And on the short term loans, uh, minimum 10 and a quarter. What would be the high end of that? [00:28:33] The high end, you're probably looking at 11%. Okay. Or Yeah, that's quite reasonable. It is very reasonable. And the New York City market, we are super competitive when it comes down to, I. Leverage and the rate. So a lot of borrowers love us. They keep coming back to us. Um, and they also start sending referrals over to us as well, because they have a lot of friends that are in the industry too, and they're paying, you know, north of 12% or whatever it is. [00:28:57] And, you know, they, they reach out to us and we give 'em a white glove service, get 'em to the finish line within seven days. Um, sometimes even less. I, I had a scenario where I had a really good friend of mine. I can't believe he did this, but he tried going to another lender, um, who offered him a hundred percent financing and the day of closing the lender said, Hey, I'm sorry, but you gotta put 20% down. [00:29:19] I'm not able to, you know, achieve a hundred percent financing. Um, that was on a Friday afternoon. He calls me on Friday night and he says, Hey, listen, this is what happened. That lender, you know, dropped the ball. I'm not closing with them, you know, what are you able to offer me? So I, I gave him the terms and I literally got him to the closing table on Monday. [00:29:39] But he literally had everything, he had the appraisal, he had his, I mean, I already knew what his track record was, the appraisal, the contract, um, the insurance, the title, everything was there. I got onto the closing table on Monday. He never called that, that, that lender back, that lender I know to this day still trying to get his business. [00:29:56] And, uh, speaking of leverage, what is the typical maximum leverage when you're dealing with a rehab or value add project? So, rehab, value add project, we're at 92 point a 5% of the total cost of the project. Um, so that's where we're at right now. In terms of the ar LTV, you're looking at 75% and on the, the loan to cost, is there a certain amount, uh, minimum that they'd have to put down on a purchase? [00:30:20] Yeah, there is. So it's 10% minimum down that they have to put up. Um, and of course that, that's based on the, the experience tier, right? Like the more experience they have, the less that you gotta put down. Nice. All right. Sounds good. Uh, next up I wanna talk a little bit about your company and capital, but let's take a quick break and we'll be right back. [00:30:41] Support for the show comes from Ross Diversified Insurance Services. All real estate investors and all private mortgage lenders need insurance. More specifically, they need the right insurance partner. For over 35 years, ROS Diversified has been the trusted partner for over 3000 property investors and 500 lenders throughout the United States. [00:31:00] If you are a real estate investor, ROS Diversified can help you. Whether you're managing a single rental property or a large portfolio of rentals, and if you're a lender, Ross Diversified can protect you with forced place insurance for when a borrower's policy lapses. Or with REO insurance. In the case of a foreclosure, they offer competitive rates and hassle-free claims assistance licensed in all 50 states. [00:31:23] Ross Diversified understands the unique challenges of real estate investing and provides customized solutions To safeguard your assets, visit their website, ross diviv.com to learn more and request a quote. That's R-O-S-S-D-I v.com. Please mention that you heard about them from Lender Link and the Private Lending Insights podcast. [00:31:45] We're back with Solomon from We Lend. So Solomon, tell us about We Lend, uh, the company. Tell us about your operation and, uh, some of the, the stats as far as how many loans you funded and, uh, the dollar amount for sure. So, I mean, to date we funded north of 1600 loans. Uh, we've seen over 5,000 applications, so. [00:32:08] We definitely are picky when it comes to originating loans because we wanna make sure we're originating good loans and good deals where borrowers are actually able to execute on these properties and are able to exit out of it, making money and not losing money. So 50, over 1500 loans. Um, I. To date, I would wanna say we, we funded north of $650 million, uh, nationwide across many, many states. [00:32:31] I'm very proud of that, very proud of our team as well. I mean, we have a team of roughly around 30 people today that's, you know, between our originations team, that's between our backend team, where we have our underwriters, our processors, and of course our asset managers as well, and, and our funds. So, yeah, we, it's, it's a really nice. [00:32:52] Uh, nice team that we have going and it's, it's an awesome culture as well. Amazing. Uh, I remember when we first met in 2018 at a Gisi conference in Dallas, and it was, it was you, it was Moses and Ruben. And, and you had a booth right across from me. And, um, that was your first year in business, I believe. Yes. [00:33:12] And that was seven years ago. And it's, uh, yeah, it's been been great to watch you guys grow. Thank you so much. It's been great seeing you grow as well. I mean, you're, you're doing so many things. It's, it's an amazing, again, I'm being dead serious. I watch every single episode that you put out and I always learn something new, so it's, it's amazing. [00:33:29] But yeah, it's funny, we were just talking off air. How, uh, you're the first person to interview me. When we, when Scott started in the industry, and yeah, it was just the three of us. It's, uh, it's amazing to see how much we've grown, uh, and how much we've developed ourselves, um, and, and how much we've, we've done with the company as well as, so. [00:33:46] And you mentioned that, uh, you've also done a bunch of real estate developing, uh, on your own. Was that before you started We Lend or around the same time or end? During, so that was before uh, we started We Lend. So it was initially, uh, Moses and Ruben that were on the acquisition side. My life was supposed to be completely different. [00:34:09] It was either gonna be, um, uh, being a pharmacist or, or being in, in, uh, in, in tech, like computer science. So that, that was my major in school was computer science. Um, I. Then, you know, one day I was like, you know what? Because they were always reaching out to me like, Hey, you know, come join us. Let's do something. [00:34:27] So I think it was like 2012 or 2013, um, you know, I reached out to Ruben and Moses. I was like, guys, I think I'm ready to come into real estate. Um, and at that time, you know, they were wholesaling properties. I. In, in the New York City market. Um, and I, I got in, I, you know, I don't wanna say I was an introvert, but I definitely hated cold calling. [00:34:47] I hated all that stuff. Um, and I was just thrown into the water. It's like either you sink or swim, and I figured it out. You know, I, I started door knocking on people's homes. You know, I've had guns pointed at me. I've had people spit at me. I had people curse at me. Uh, I went through all that stuff. I had people, you know, on the phones, curse at me, hang up on me, whatever it was. [00:35:08] Um, but yeah, I mean, listen, we, we, we did a lot of, um, uh, uh, fixing and flipping in, in the New York City market, so a lot of it in Brooklyn, Queens, um, you know, in Staten Island, in the Bronx as well. Um, a lot of lessons learned, a lot that we've been through, that we understand what our borrowers go through today as well, and we're able to sit there and we're able to adjust and help them out for, you know, whatever they need us to do for them. [00:35:36] But, uh, yeah, I mean, listen, you know, 2018 came around, you know, numbers started to get a lot tighter than, than they were, uh, you know, in the previous years. And we sat down and were like, all right, you know what? We, we have to figure something out. And, uh, Moses and Ruben went to, um, I. To the pit bull conference. [00:35:55] And, uh, as Ruben always says, you know, we walked in as private real estate investors and walked out as private lenders. So they, they, they learned how the, the, uh, private hard money game works. Uh, we always wanted to be a, a private lender as well, because at the time when we were, uh, fixing and flipping and developing, we were taking out hard money ourselves as well, and. [00:36:16] Our hard money lender was always getting paid at the end of the month, whatever it was. If we're making money, if we're not, he was still getting his monthly payments. If we're making money on the deal or losing money on the deal, he was still getting paid. So we're like, Hey, you know, this is a great part of real estate and we definitely wanna be a part of that. [00:36:32] And, you know, they, they went into pit bull, walked in as private, uh, real estate investors and walked out as private lenders. Um, from 2018 to today, you know, we funded north of 650 million in loans across, you know, 15 or 1600, uh, uh, loans as well. And it's, um, we, we never turned back. Um, to answer your question, you know, are we still, you know, fixing it, flipping today? [00:36:56] I mean, look, you know, there are times where our borrowers come to us and say, Hey, you know, we're cash strapped, or, you know, we are, we just have too many projects that we can't take 'em on anymore. They bring over these projects to us and we, we do a JV with them, and then we, we come in and we bring our knowledge and our experience and, uh, we, we flip those properties with them. [00:37:13] So, yeah, we still do that today. Nice. And, uh, tell us about the capital behind We Lend. Uh, you guys have a fund, um, are you selling to the secondary market? Tell us a little bit more about capital For sure. So we have a 5 0 6 C Reg D debt fund. Um, so it's our own personal capital in our fund, along with friends and family and, and other investors as well. [00:37:35] I. Um, we have a hybrid approach in our fund today where we're originating loans and then we balance sheet 'em, but we're also originating loans and we trade it to the secondary market. So in today, I would wanna say around roughly 70% of our loans, if not more, are balance sheeted rather than us trading it. [00:37:52] When, initially, when we, we started the fund, I would wanna say, you know, 80 or 90%, if not more, were all traded. So now our approach is, hey, we want to be able to balance sheet our loans rather than trading it to the secondary market, um, and be the actual decision makers in these deals, right? Because at the end of the day, when you're trading to the secondary market, you need to make sure you're checking off the boxes for, for the secondary market and for, for those loan buyers. [00:38:19] So, um, we definitely like balance sheeting a lot more. There's a lot more pros to balance sheeting, but there's some risk, you know, a lot, some cons to it as well, right? You're, you're taking, uh, you're taking on more risk. Um, but again, you know, uh, our strategy since inception has always been to originate good loans only. [00:38:37] So, thankfully, knock on wood to date, you know, we have zero principle loss. Uh, we're still raising money for our fund today. Um, and our investors are reaping the benefits from our returns, and they're all loving it and they're reinvesting, so we're doing something right. Amazing. And what about servicing? [00:38:54] Do you typically service the loans yourself or is that, uh, outsourced? So we're, we're currently, we're co servicing with, with a few servicing companies, so FCI and a few other guys as well. How do you mitigate the risk in New York where, you know, most lenders don't lend in New York because the foreclosure takes forever and it's, it's just too difficult to foreclose in case a, a bar default. [00:39:16] Uh, have you had to deal with any foreclosures and how do you mitigate that risk? I. So, you know, we, we've been personally in the real estate industry for, at this point over 10 years. We understand how the foreclosure process works. Uh, we used to buy properties at the foreclosure auction or before they would en even enter into the, into the auction block as well. [00:39:36] So we know it's not an easy task to get a property into foreclosure, uh, status. Um, to date, we have not foreclosed on any of our borrowers in the New York City market. Thankfully. Um, again, you know, we're centered around originating good loans. Um, so to date we haven't foreclosed on any of our borrowers. [00:39:54] Generally speaking, what, what happens in the event our borrower does start having issues with payments, we walk, you know, we have 'em come into our office and try to figure out a resolution for them. Um, look, you know, in New York City takes roughly around three to five years. It's a foreclose. Um, we understand that we have, you know, liquidity on the side to make sure that we're able to withstand that once a loan does go into default, to be able to, um, uh, withstand that issue with a foreclosure and, and be able to, um. [00:40:24] Foreclose on it in the event that we need to, right? So we understand how the foreclosure works. We have attorneys, um, ready to begin foreclosure proceedings in the event that we, we have to, but also ourselves, we understand, uh, the, the foreclosure process in New York City. We also understand, uh, the, the process in New York City with how SROs work, how rent regulation works. [00:40:47] I feel like a lot of lenders are also afraid. Afraid of coming into the New York City market of the rent because of the rent regulation laws that we have here. So we always are staying up to date with the rent regulation in New York City. It's not easy. It's not tough. I mean, listen, in the past couple of years, um, you know, with these new laws coming into place, a lot of properties, a lot of multifamily properties have lost, I would wanna say. [00:41:09] 50%, if not more of their value because of these rent regulations. And our thing always is whenever we're lending is, hey, we wanna make sure whatever property that we're lending on, there's value in it. Even in the event that we need to go and foreclose on it within three to five years, we know that there's gonna be, uh, uh, equity in that property. [00:41:28] So I feel like a lot of these lenders that are not lending here don't really understand how it works in the New York City market. So they just stay far away from it. I don't blame them. If I was not from New York to begin with, I probably would wanna stay as, as well. So, yeah. Uh, do you find a lot of cases where, where tenants just stop paying and, and they're relying on, on New York being pro-tenant, so they, they just stop paying and, uh, and that, that has, its, its, uh, consequences for, for your real estate investor borrowers? [00:41:59] Yeah. I mean, we, we have a loan out today with a borrower that is very seasoned. He purchased this property on the auction block, it was an as-is purchase, right? You're not able to go inside these properties. I mean, listen, majority of the time these guys still go in, uh, and these properties are vacant, but he got a really good deal. [00:42:18] He bought the property with unfortunately, a squatter in there. And, uh, the squatter's taken him to court now. And, you know, uh, they're, it's a battle. They're, they're going back and forth. The squatter's coming, you know, uh, the squatter is. Represented by the city of New York. Um, and they're just, you know, they're, they're doing whatever it takes to, to stay in the property as long as they can. [00:42:41] Uh, they're filing all these crazy motions and, and whatnot. I mean, listen, we personally, were trying to evict a tenant in one of our buildings in Brooklyn for five years. It took us five years to get her outta that building. Five years. Not five months, five years. It's crazy. And we we're looking at it, we're like, wow. [00:43:01] Like how are these mom and pop uh, investors able to withstand this? They're not, you know, a lot of these people are starting to default on their mortgages because a portion of their mortgage is getting paid by their tenant. Um, and, you know, going back to our, our, our investors and our borrowers. They, they have no choice but to make their monthly interest payments. [00:43:23] And, you know, I, I jump on calls with them like, Hey, listen. I'm like, why don't you offer them some cash for keys to get them out a little quicker? Sometimes it works, sometimes it doesn't because these people are like, Hey, you know what, I know how long it's gonna take for this person to get me outta here. [00:43:37] I will stretch this as long as I can. Um, and, you know, sometimes they, they succeed. Um, there are times where our borrowers are in the loan for a little bit longer than 12 months, uh, because of these squatters. Um, you know, we, we extend their loans because we understand what the issue is, and we also understand that there's still value, there's still equity in the property, right? [00:43:58] Because they're purchasing these properties with, with squatters in it, at a discount, right? They're not buying it at market, they're buying it at a discount. So they, they understand that it's already priced in, um, and probably will take them, you know, an additional six months to get 'em out or whatever the case is. [00:44:12] So, um, in this scenario here. It, you know, we, we gave them an extension. It took 'em an additional four months to get that person out of there. Once that was done, it was like, um, you know, uh, you know, starting at the race there, for them to be able to go into the property, demolish it, start the construction and throw it on the market. [00:44:35] And in a situation like that, that's unfortunate for, for the borrower, uh, or the, the property owner. Um, whenever you try to work out any of these deals, is it, does it include the possibility of, let's say, deferring the loan payments and, and saying, Hey, we're gonna give you an extension, and you just, you just have to pay it? [00:44:54] The, the balance at the, you know, at the end of that four months or whenever the issue is resolved. No, the, the, they have to still make those monthly payments. And it's funny that you mentioned that because I literally got a phone call from one of my borrowers this morning and he said, Hey, you know, are you able to defer my payments? [00:45:12] Um, and I was like, listen, I'm sorry I, I wish I could, but the monthly interest payments needs to be, needs to be, uh, paid. No, we don't, we don't defer payments. Alright. And uh, some of the issues that you experience in New York City as far as foreclosures or, or tenant laws, is that really confined to New York City? [00:45:32] Just to the five boroughs? I. So there's a lot less landlord tenant cases in Nassau and Suffolk than there is in the New York City area. Right? In New York City, there's so much more. So there's a huge backlog for New York City rather than in Nassau and Suffolk. Right? So that's why I feel like in Nassau and Suffolk, it moves a little bit quicker than it does in New York City, uh, which works in the favor of the real estate investor or the property owner, uh, to, to evict those non-paying tenants or squatters. [00:46:00] And, uh, how much longer is New York than Suffolk or Nassau County? Uh, if, let's say New York could take four or five years as, as Nassau Suffolk, maybe one year or two years or less. Yeah, I would probably say Nassau Suffolk probably a year. And there's a really interesting case study. Um, well, it's not a case study, but this lady inherited a property. [00:46:24] Her parents' property, they passed away, so she inherited it. The property obviously is vacant. She walks in there one day and she finds, you know, a, a whole family that's already living in the property. And she's like, who are you guys? Like, Hey, we're, this is our property. You know, we, the, the landlord gave us the lease, et cetera. [00:46:43] She's like, I'm the owner, the previous people that were living here where my parents and they're no longer alive and this is my property. And she called the cops to get 'em out. And they provided the, you know, the Nassau Police Department with a, with a lease and they said, Hey, sorry, you gotta take this through Landlord Tenant Court. [00:47:00] Um, this caught so much traction. She called every single new station out here in New York and they all covered it. And, you know, they, they were able to get those people out of there. Right. But she's one of lucky few, right? There's so many other people that aren't lucky enough to, to be able to do that. Um, and they have to deal with, you know, the court and it would take them up to a year in Nashville and Suffolk to get to get somebody out. [00:47:23] If you're lucky, you're maybe six months. Um, but yeah, that's where it's at. And in New York, good luck. Three to five years. And how about Westchester County? Do you do, uh, any lending out there and is that a whole lot different as far as, uh, some of these issues that you see in New York? So we do land in Westchester. [00:47:41] I have yet to see any issues with squatters in Westchester, but I would probably say it, it'd probably be similar to the process in Nassau and Suffolk County for sure. Definitely not like New York City. New York City is like its own beast. I. Uh, how about New Jersey? Um, you mentioned that New Jersey is, uh, an area where you're starting to do a lot more loans and look and expand into. [00:48:03] Um, uh, tell us a little bit more about some of the lending you've done in New Jersey and which parts of Jersey and, uh, anything else you could tell us about that state For sure. I mean, you know, we, we lent through a lot of, uh, a lot of our borrowers from New York City that during COVID, they moved into the market in New Jersey. [00:48:23] And started buying up a ton of those properties because the demand was. Not living in New York City, right? You want space, you people wanted land. They wanna be able to go outside and have their, their personal space rather than being cooped up in a, uh, you know, uh, a townhouse in New York City or in a condo building in New York City. [00:48:42] So, um, the demand was for more homes, single family homes with large, uh, backyards, et cetera. So, uh, what a lot of our guys started doing is they started going to the foreclosure auction, started buying up those properties. So I have a really good property. That we financed in Jersey City for a borrower that purchased it and did a, uh, a vertical expansion. [00:49:04] Um, and, and he converted it. I, I believe it was like a two family home. He converted it into a single family home, a luxury single family home. Really beautiful. Set the tone for the neighborhood, um, and, and sold it for a really nice profit, um, that was in Jersey City and another property was in, um. This was in Marlborough, New Jersey where, you know, a borrower was purchasing a, a single family home, fully got renovated it and, and then sold it, um, for, for a really nice profit. [00:49:35] So, uh, I mean, listen, we're we're lending all over New Jersey, Essex County, Monmouth County. Um, we're, we're all over. Uh, so I mean, look, the, the, the jersey market is great. Uh, we understand it very well. Um, we also also own some real estate in Jersey as well, so. We understand that market pretty, pretty well, so, uh, there's a lot that's happening there. [00:49:58] Well, most of the activity is gonna be in northern Jersey, close to New York. I. Or New York City. But, um, what about the rest of, of Jersey, like the south, let's say Camden County, close to Philadelphia, uh, Atlantic City, or any of these areas desirable for you to London? So, we'll, we'll still lend, we saw a scenario recently in Atlantic City where the developer was purchasing, I believe it was like a hundred by a hundred lot. [00:50:24] And he was gonna be developing townhouses there. So we're, we're actually in talks with that developer now, uh, we're giving him terms on a ground up. Um, in Atlantic City. So people are still moving there, people are still buying there. Um, Atlantic City is not just only for gambling, but people do still live there. [00:50:42] Um, but obviously there are pockets right there. Depends on like what pocket you're in. I mean, there's some good pockets, there's some bad pockets, um, but we're still lending in Atlantic City in Camden. We're also lending in Camden as well. Um, Newark is also pretty, um, pretty upbeat right now, and then people are, are flocking to, to, to buy. [00:51:00] So. And it seems like, uh, Atlanta County, ocean County, from what I've heard or or spoken to lenders in the past, not a lot of lenders are excited about that area, but it, it is a lot of beautiful coastline that you have there. I'm, I'm just surprised that there hasn't been as much development there, and it's not even that far away from the populated areas or the, uh, you know, the, the, the areas where you have lots of jobs. [00:51:27] Um, but, uh. Uh, any thoughts about, about Ocean County or just the, the, the, the entire coastline of New Jersey in general? I know one part of that area that's, I mean, I don't know how close it is, but deal. Deal is where all the people in New York City, predominantly the Syrian Jews. That live in Brooklyn, go to for summer. [00:51:52] Um, so those are all their summer homes in deal, New Jersey, and there's a lot of action that that's going on down there. Um, and if you know you're not part of that community, you're probably not gonna be getting those deals there. Um, because everything again, goes based on word of mouth and everything's like off market there. [00:52:10] Um, so I know that part of Jersey right where, where you're talking about, I, I don't know how far off that is from, from those areas. But I know a deal is really hot. And again, it really like, jersey's a little bit different than, than in New York, um, because it has certain pockets where it does really well and certain pockets where it's like really tight. [00:52:29] I mean, if you look at New York, you can probably say the same thing about New York as well. 'cause New York is also huge. Um, so I, I really don't know much of on, on those parts, but I know deal New Jersey is, is really hot. All right. So yeah, try to do more deals and deal. Yeah. Yeah. It's, listen, it's so tough because a lot of Syrian Jews and they only wanna work with their own, uh, Syrian community. [00:52:52] So yeah. Hearts are break into. Sure. Makes sense. Uh, and, and how about New Jersey's, uh, regulatory environment? Do you have some of the same challenges as you do in New York City and Jersey as far as, uh, long foreclosures and, and uh, uh, pro-tenant laws? So they definitely do have pro-tenant laws and I, I would wanna say the foreclosure process is probably a little bit quicker than it is in New York. [00:53:18] I feel like it's quicker anywhere outside of the New York City area, but it's somewhat similar laws in a jersey and, and uh, and in New York. So they are definitely not as pro-tenant as we are here, but it's definitely pro-tenant. Uh, but definitely a lot easier to, to, to get somebody out for sure. Um. And the foreclosure process will probably take you anywhere from like six to 12 months, I would wanna say. [00:53:42] Uh, not as, not as long as, uh, the New York City market, um, the, the, the foreclosure auctions at some point, you know, during COVID were so busy impact out, there's just a lot of guys just coming in there and just buying up these properties because these, these properties are going on the auction block, like, you know, hotcakes. [00:54:01] So. And, uh, within New Jersey, at least the deals that you've done, uh, are they a lot of ground up construction versus rehab, or are you doing any conversions there? Tell us about some of the deals you've done in Jersey. So in Jersey, I. There is a few ground up that we have, uh, finance, not as many. I, I would wanna say there's more properties that are being rehabbed. [00:54:25] Um, and maybe, you know, they're, they're, they're converting it from maybe from a two family to a one family. Um, but definitely a lot more rehab than, than ground up on, on our end in Jersey for sure. Yeah. Alright. Sounds good. Um, well thanks for all that insight. Uh, that's all I had on my list. Uh, was there anything else that I might have missed or anything else you'd like to add? [00:54:46] I. No, I, I think you, uh, you hit everything, uh, every single pointer that we needed to, as always. Um, Emmy, listen, if, if somebody's looking, you know, to, uh, to reach out to us, you guys can reach out to us via any social media platform. Um, I. We Lend LLC or info@welendllc.com or you guys can reach out to us directly at 2 1 2 7 7 7 7 7 8 0. [00:55:13] All right. Excellent. Well, thanks for your time, Solomon. Appreciate all the, the information and, uh, we'll hope to see you soon. Awesome. Thank you so much for having me, Rocky, and, uh, can't wait to see this. Yeah, sounds good. And that's a wrap for this episode of Private Lending. Insights we lend is listed on private lender link.com. [00:55:33] I put a link to their profile in the description. You can also do a search on the site and you can find them listed in New York, New Jersey, and a few surrounding states. Their profile's very detailed. You can learn all about their lending guidelines and you can find their contact information. You can call them. [00:55:50] Send them a short email form or a long loan request form. When you reach out, please mention that you found them on Lender Link and heard about them on the Private Lending Insights podcast. I hope you found this episode to be insightful. Thank you for tuning in and listening all the way to the end.