Latest / Private Lending Insights / Private Lending Risks in 2026: Loan Defaults and Debt Fund Failures
Transcript
- [00:00:00] Rocky Butani: Welcome to Private Lending Insights. I'm your host, Rocky Butani. In this episode, I interviewed Kevin Kim, partner at Fortra Law. He's a securities attorney specializing in fund formation and mortgage fund advisory. Kevin was a guest on this podcast in 2025, and I always like having him and his partners on our show because they have such a unique insight into what's happening in private lending, and they're so generous with sharing that knowledge with our audience. [00:00:32] In this conversation, we talked about some of the trends that Kevin's seeing with his clients who are primarily balance sheet lenders that manage a mortgage fund. We spend a bunch of time talking about how private lenders that operate a mortgage fund can stay outta trouble. And this was triggered by the unfortunate collapse of Pacific Private Money, which is uh, lender in the San Francisco Bay area that has been around for quite some time and operated multiple private mortgage funds. [00:00:59] We finished off talking about for law's two annual conferences for the private lending industry, one of which is happening at the end of March in Las Vegas, and their other one is in Newport Beach in late August. I hope you find this episode to be insightful. Here's my conversation with Kevin Kim. [00:01:18] Alright, Kevin, thanks for joining me for this episode of Private Lending Insights. How's everything at Fortra Law and Every, everything with Kevin Kim? [00:01:26] Kevin Kim: All things good. All things good. You know, we're busy. Uh, the market is in a weird place, so, you know, we are so entrenched in private lending that when the market has any headwinds, we're being pulled in to help. [00:01:37] And so that's been fun to watch, but also stressful. You know, we wanna see our clients thrive, so they're facing some challenges. Um, personally, everything, I mean, couldn't ask for more. God, thank God, you know, everything's great. I'm healthy, my kids are growing. So, you know, fantastic times over here. [00:01:55] Rocky Butani: Well, let's talk about some of those challenges that some of your clients are seeing. [00:01:58] Mm-hmm. What is, what exactly is happening in the market right now? [00:02:01] Kevin Kim: Well, it's kind of a weird time. On the default side, I feel like defaults are up. Um, some are getting it worse than others. Texas is feeling at least west Western markets, Texas is feeling the brunt of it. Um, and I think that has to do with this, this all the volatility in the real estate values. [00:02:25] Um, clients are really getting, I guess a lot of clients are struggling trying to keep up, uh, with the competitive landscape. You know, the market has changed a lot past three years. So with how competitive is out there, many lenders are, are finding themselves having to say no to a lot of deals or finding a way to get to it, get to yes and, and get uncomfortable in their business model. [00:02:48] That's been kind of, uh, hard to watch. And they're, they're trying to figure things out, you know, and it's like, you, let's, let's do it together, you know? And it's, and that's been a challenge on the, on the positive side is more and more clients are expanding their footprints. Um, DSCR is a really, is a mainstay I think. [00:03:03] And so a lot of clients are really doubling down in that from origination standpoint, but it requires 'em to. You know, if you're just in doing loans in one or two states, it's not gonna be enough usually. So we're seeing an expansion in different marketplaces for that. But yeah, I mean the, the default rate, it's, it's starting to cause some stress and the increased amount of leverage people, lenders are giving, you know, I think is, it causes it to some degree, but yeah. [00:03:28] And having clients having to face that challenge head on is, is always a challenge. And, and we're not directly, I'm not doing the foreclosure work, but it's, it, we're navigating the strategies with the business and the investors and all that kind of stuff. Right. So, [00:03:41] Rocky Butani: interesting. And it seems like in the past several years, defaults have, have really not even been much of a, a topic. [00:03:48] It's, it, it's just been so low for, for so many lenders, for so long. Uh, what, what are, what are some of the challenges now? Is that, is that because values are dropping in certain markets? [00:03:59] Kevin Kim: Texas is primarily driven, it seems like, at least for value concern. Um. I think the local markets, and like this, you, you know, a Austin San Antonio, which is a kind of the, the hub of Texas private lending that, you know, value is just tanked, right? [00:04:15] I mean, home values just tank 25%. So, you know, you're underwater basically, if you're doing anything about 75, right on LTV. Um, it's not so bad here in California, although defaults are up in California, but it's not like, oh my god, you know, everyone's we're busier than we should be on foreclosure. But it's not terribly, uh, concerning. [00:04:37] So I, I don't know if there's a cause for it. I would just say, I would just say that, yeah, I think it's a product of also people pushing more leverage, right? And that, that's just a matter of how much capital there is supply demand, right? They're gonna push more risk and more leverage and that, and the institutions, they, they can manage that risk. [00:04:57] Um, but the, the smaller guys, you know, they're having to manage it themselves and it stings a lot more when it's your money, right? So. [00:05:04] Rocky Butani: Totally. And with, uh, Texas in particular, it's probably the easiest state to foreclose in with some of these defaults. Are most of your clients trying to work out, uh, the situation with the borrower or, or their foreclosures happening and the lenders are taking back these properties? [00:05:21] Kevin Kim: Yeah, taking back the properties typically. And it's just the values aren't there anymore. Right. So the longer days on market, the property's not moving, requires a good, a good amount of capital to invest in, you know, so that's been a pain point. We haven't seen the same phenomenon like other, I guess you can call 'em up and coming markets of the past five years. [00:05:42] You know, you and I have been around long enough to know, like Texas is, has, has been the darling for a long time. But Arizona also became quite popular and we're not seeing the same phenomenon in Arizona or, or in, even in Washington. I think Texas is a unique situation. Florida has the same problems as well, but yeah, we're not seeing a lot of like. [00:06:02] I would say, um, work, uh, workouts, I guess. I mean, the idea here is that the sponsor typically taking back the property and figuring it out, what to do with it, or they'll offload it up, you know, they'll offload it and find a distressed debt buyer or something like that. Um, but yeah, it's been, it's, I think that's been a one factor that's been causing some challenges for clients, for lenders. [00:06:22] And then overall just how competitive it is out there. You know, many, many, many lenders are, are saying it, it's, it's brutal out there. And they're saying, you know, the challenges on origination have been more and more stark as the, the national shops, the institutional shops are able to present a product that they just can't compete with. [00:06:42] So. [00:06:44] Rocky Butani: And speaking of that, I, uh, finished listening to your latest episode for your podcast Lender Lounge with Kevin Kim, where you interviewed, uh, the coup, the two founders or two, uh, principals of Ring City Capital. And, and that's an example, and it, it just keeps me, I, I keep thinking about this and I've, I've asked other people about this, is how are there enough potential loans out there for, for these lenders to fund so many, right? [00:07:10] Where you get, if you get these large national shops that are funding, you know, a billion a year, half a billion a year, uh, and, and in a market like now, there's not, uh, you know, it's not like there's, there's tons of foreclosures happening, uh, where, where there's, where there's so many houses out there to flip supplies. [00:07:28] Is, is still an issue. So where are these deals coming from? And it, it seems like the bigger guys are, are, are just taking up most of the, the market share. And then the smaller lenders are, um, are, are not closing as many loans as as years pass. [00:07:43] Kevin Kim: That's what the, that's what it feels like. Right? That's the fascinating part is like, that's what the feelings are. [00:07:47] But if you look at the, the, the market data, it's not bearing fruit, like the, like all the different, you know, there's a lot of 'em now. So I think there's like three or four different like, uh, uh, data platforms that aggregate industry data and they're still sitting on about, you know, 20 to 30% market share, the top, you know, like 10% top 10 ranking. [00:08:08] So it's very watch this opposed to something someone said along, I think Eric Abramavich said this on a panel one time, like the vast majority, oh actually correct me as I'm corrected. It's John Beam. John Beacham of his, when I interviewed him. The vast majority of these deals are still being done under the table. [00:08:23] Right? And so, and we're starting to see a little bit of this with all this wholesaling that's happening nowadays. And you see it there. And so, you know, it's still, it's still a very weird market in that respect, like finding deals in our industry. It's, I, I don't know. I, I agree that there's probably a finite amount of opportunity. [00:08:43] Um, but that also goes to the point that you see a trend on the RTL side. People are really gravitating toward construction loans, right? And so that's where the opportunity seems to be because there's, you know, aging inventory is hard to get their hands on because A, wholesalers, b how competitive is out there, whereas, you know, spec home builders and, and, you know, new, new development seems to be picking up in volume at least. [00:09:10] And so. Yeah. That's where at least most of our clients are finding themselves. And the rest of 'em are just saying, listen, we're, we're gonna have to play ball with how competitive it is, how institutionalized things have gotten. And I'm starting to feel like we're heading into the world of mortgage banking, and it's, it's making me a little bit nervous. [00:09:29] Rocky Butani: Definitely. Uh, and, and so, so last year it seems like the major concern for most lenders was fraud from the borrowers. Um, do you still see that this year, or do you think it shifted and, and uh, lenders have figured out a way to mitigate that? [00:09:44] Kevin Kim: Yeah, I think, I think the lessons were learned really quickly. [00:09:47] The beautiful part about our industry is like, when something happens, that dramatic word spreads really fast. And, you know, the t the, and at the institutional level, the, the TPR shops, they get really, they jump on it really fast, right? And so, so that's really good. From our industry, we react pretty quickly. [00:10:05] Um, you know, with all the, you know, the, the big scandals, right? Everyone talks about the, the Baltimore scandal and the Florida scandal. I'm like, I, I get that, but that's really more of a vendor management issue than anything else, right? And so like, when it comes to vendor management, I think a lot of folks and underwriting issue, right? [00:10:22] So I think a lot of folks have really took a second look at their operations and all things being equal. Now with all these new NCE in rules coming out and going permanent, like, I think the rules are gonna make you, like, these new rules are gonna make lenders really pay attention to doing all the right necessary steps. [00:10:41] Know your borrower, you have to do it right. You know, getting all that data on the borrower identification, doing OFAC check, but also like making sure that you're not. Part of any kinda weird potential fraudulent schemes, right? So, because now if you don't, if you don't, well, you know, Vincent's supposed to hear about this, right? [00:10:59] So that's one of those things where I think in, I don't love that kind of regulation, but by virtue of it happening, I think it's, it's overall gonna, everyone's gonna get a better, in a better position from that perspective. And I don't, I don't think it's really anyone's fault, per se, they just really tried to do their business as well as they could. [00:11:19] But that goes to like, when you're overly competitive, you can, you make cut corners and that's where mistakes get made right? And this happened to be a big mistake. I think people will learn pretty fast. Um, now I'm, I'm more worried about like, really strange angles for fraud out there. Um. You know, there's a lot of random schemes out there that we have to be very cognizant of. [00:11:41] You know, if you're, if you're more of an aggregator type or you're buying loans, you really have to be careful about, you know, making sure those assignments are, you know, properly done. And, you know, you're not being defrauded by our originator. If you're originator, you gotta really make sure that your borrowers are, are bringing you the full story and you're doing all your KYC and you're monitoring the use of proceeds. [00:12:02] And there's a lot of, you know, funny business going on out there. So it's, it's important, but I think our industry moves pretty fast. So that's what I like about our industries. You know, we're fast paced and people learn their lessons pretty quickly. [00:12:14] Rocky Butani: Yeah. And so fraud seems to, a lot of lenders have, are aware of it now and, and they're able to, to catch a lot of them. [00:12:22] Um, there's, like you said, there's defaults are an issue now. Uh, are there any other concerns that lenders have or, or things that keep 'em up at night for 2026? [00:12:34] Kevin Kim: I mean, the running gag right now is we really need to put out position paper, like positions that we're not the same as private credit, right? [00:12:41] Like, 'cause now, you know, with the, with the whole BlackRock and blue out of, uh, yeah. Blue Owl scandal with their redemptions and their funds. You know, me as a fund attorney, like, and talking to clients, they're trying to figure out how to make sure their investors like, don't, they don't go running for the hills because it's not the same kind of lending. [00:12:58] Right. And so that's been a point of a point of concern for a lot of people. Um, lenders who are balanced, lenders are watching, you know, different funds because a lot of their investors are invested across different funds, whether it be the big public funds or private funds. And so they're really cognizant like, oh man, one bad apple can ruin the bunch, or. [00:13:19] You know, if they're worried about that, are they gonna come over here and start venting their concerns and that kind of stuff? So, um, but, but at the same time, like we're in our industry, we're not making business loans, right? We're making real estate loans. And so the borrower investors need to really understand, like, we are not the same thing as those guys that call themselves private credit. [00:13:40] We are real estate finance and it's completely different. And so, you know, it's, it's hard to justify that when you're just kind of, when you're all your marketing stuff in the past, we just said private credit, right? So, um, uh, but I think that most of our clients are pretty smart when it comes to. Making sure they educate their ambassadors and their borrowers. [00:14:01] And so, you know, I I, I don't see a lot of risk coming outta that, a lot of exposure coming outta that, uh, just, you know, an extra thing to work on, you know? [00:14:08] Rocky Butani: Yeah. It seems like a lot of fun managers have embraced the term private credit in the last five to six years. And, uh, uh, yeah. Uh, and it, but it's [00:14:16] Kevin Kim: so sexy, man. [00:14:18] It was like there was so much capital flooding into private credit, you know, like, uh. [00:14:22] Rocky Butani: And, and maybe, maybe it is still justly classified as as private credit, but that's such a broad term. I mean, even in any investor within private credit understands that there is, the majority of the private, private credit as I understand is, is corporate debt. [00:14:37] That it's, it's really big or mid-sized to large corporations that are, uh, getting debt from private equity firms. Then you have the small business finance stuff that could get securitized. Uh, then you've got our, the, our industry, which is real estate. Uh. You know, pri primarily mortgage funds, but also, [00:14:55] Kevin Kim: and those guys don't have collateral. [00:14:56] If you think about it, all they really have is like, you know, business assets. Maybe some, maybe some receivables, but really not a lot of collateral. We have hard collateral. So ultimately, and then a risk standpoint wise, I mean, just the, you know, they, they have to do, they have to justify that service through that service coverage through a bunch of cashflow equivalents. [00:15:18] We're looking at value, right? And so there are risks that we have, but I don't, you can't equate the two. They're completely different. [00:15:26] Rocky Butani: Yeah. And, and one situation that's been on my mind the last few weeks that I was really sad to hear about is the collapse of Pacific Private Money, uh, which is, which is, uh, been a, a long running private mortgage fund based in Marin County, California that's, um, thirties [00:15:42] Kevin Kim: of funds. [00:15:42] Mark had a bunch of funds. Yeah, [00:15:44] Rocky Butani: yeah. Yeah. And, uh, and so I don't know much about that situation. Um, you know, there's, there's only, there's been one or two news articles about it in the public. Mm-hmm. But what are your thoughts about, about what you've heard about that situation in general? [00:15:59] Kevin Kim: Well, I, this is kind of one of those things where. [00:16:05] Product of legacy, you know, so like, you know, legacy operators that never really invested in infrastructure when it comes to their funds, right? Like funds are, require its own infrastructure, right? And so the beautiful part about our industry, except before, like it moves so fast, people learn so fast. And you know, our industry has grown up so much and so has the fun side of things, right? [00:16:29] What once was, you know, you just kinda had one and you, you ran your accounting through some kind of software and you kind of just did things loosey goosey. That that was, that was the old, old, old ways, right? This is kinda like post recession type strategy. And over the years as people. As our industry matured, people started to mature with it, and the business approach started to mature with it. [00:16:56] So you see a lot more sophistication in the operations, more resources being driven to operate these funds, both from a vendor standpoint, but also from a legal and back office and all this stuff. Right. And I, I don't know that there was that level of discipline over there. Um, I haven't spoken with Mark in, in, in a while on his, in his strategy. [00:17:17] But, you know, other things that can be cause for concern, this is not commenting directly as to, to, uh, to Pacific Private money, but really in general, in our, in our industry, when you see funds end up in this situation, it's a product of really kind of, you see the sponsor, it's very sponsor driven, and he's really trying to, he's thinking in his head, he's trying to fix, fix a problem, but what he's really doing is making it worse. [00:17:46] Right. And so, and the question is, is like, yeah. I'm doing this, and, and they rationalize it that way, right? And so what's concerning about that is, well, there's a right and a wrong way to do things, right? And so just 'cause you're doing it to, 'cause you think it's beneficial for the fund or for its investors, it may not be the case, right? [00:18:06] And so you see that a lot with multiple fund situations or move assets are being moved around, they shouldn't be, or, or, you know, loans are being done in a weird way and they're transacting with each other without the right disclosures. And, and ultimately it, it, it's a, it's a, they forget what's a material fact. [00:18:22] And that's really important, right? Investors need to know if you're going to be transacting with your, with an affiliate to the fund, they need to know, right? It's a, it's an, it's a disclosure item. You know, are you, are you lending to yourself or an affiliate? Well that's a disclosure item. You know, are you buyer selling assets to an affiliate? [00:18:41] That's a disclosure item, right? Because if, if it was your money, wouldn't you wanna know that? Right? That kind of thing, right? So. These situations and it, it very rarely comes out of a place of like, oh, I'm gonna screw these guys over. It's not like that. It's typically from a place of the, A problem occurs and the sponsor being an entrepreneurial spirit is going to try to fix a problem. [00:19:02] And, you know, they, they run their fund docs through a, nowadays they run through, run it through an ai, it's like, it's written broadly. So they, they think they can do a lot of stuff. What's written and what you should do are two different things. Right? And so it's very important to think about, you know, when you run into a crisis Yeah, I, I, you got, you got the idea of digging yourself out of a hole. [00:19:25] It's typically not the answer, right? And so that's where I think a lot of folks go wrong. Um, and what ends up happening is, is, and this is not direct, I, I have no direct knowledge as to what Mark did here, but like I see a pattern in a lot of these cases where the sponsor. Does is not completely forthright with what's going on in the portfolio. [00:19:48] They're not lying, but they're omitting facts, right? And so what a lot of times sponsors forget is in under the securities regs, it's not just misrepresentation of material fact, AKA lying, but it's also the omission of material fact, right? The intentional omission failing to state, right? So you are required to disclose not just, so, not just tell the truth, but also to disclose those, those items. [00:20:13] And that's where things get a little bit hairy. 'cause people forget that they have to do that. [00:20:17] Rocky Butani: Pacific Private Money, um, been around for a long time. In fact, they were one of the first private lending companies I did business with when I started Private Lender Link. And, and this was back in 2012, uh, the fund manager that Kevin's referring to as, uh, Mark Hanf, um, who I always thought was a good guy and, and, uh, had had a good experience doing business with him. [00:20:39] Uh, so when I first started working with him, this was before he had started a fund, and it was, you know, his capital was trust deed investors and, and he grew quite fast. He was really good at marketing and, uh, and then he launched the Pacific Private Money Fund. Uh, and that seemed to have been successful. But, um, what Kevin was mentioning is that, is that, uh, he had started a few other funds that were, that had different, uh, strategies and different, uh, different strategies in terms of origination. [00:21:08] And then there was one that was, uh, more geared towards selling loans to the secondary market. Uh, as far as I know. Um, so, so there were just multiple funds that were being operated and, and Kevin that's what you were referring to, right? Where you're um, when, when you mentioned the multiple funds earlier. [00:21:25] Kevin Kim: Yeah. And so it's multiple fund, whenever a sponsor has multiple funds, the important thing is like they have to disclose how are they gonna be completely separate? Are they gonna interact together? And if they are gonna interact together, let's, let's make sure we disclose it, right? Because that's a material fact. [00:21:39] Otherwise, you could be accused of commingling, right? So you don't wanna do that. And you know, you're getting paid on both too, so you really should be very transparent about those issues. There's other issues that come, you know, out of this fact pattern, and a lot of this is not public knowledge, but like in this particular case, the challenging issue seems to be that there was also a product of like, this increased really negative situations in the portfolio itself, right? [00:22:04] And so making bad loans, right? And so, you know, and that, and when it comes to losses in a portfolio, it, it's almost like it's a snowball effect, right? If you start seeing losses, your inclination is to make sure that you, you prevent, you prevent exits from the fund. But if you don't do that in a very well thought out manner, it, it can lead to more stress because the investors are now going to riot and they're going to, you knows, a rattle with lawyers and they're gonna call the regulator and then the regulator to come looking. [00:22:32] And, you know, and, and what people don't know is state regulators are actually the first place they start with, and those regulators, they get a complaint with enough words in it, they're gonna start sniffing around. Right. So from my perspective, it's almost easier to have a cri, it's almost easier to not, not necessarily pull that ripcord out, even though you may think it's an emergency and really have that sounding board network. [00:23:03] Right. And I encourage people, like, it's not just someone like me, it's also someone like. For example, a colleague in the field, uh, a vendor, you know, maybe an accountant. Like just idea, idea, idea. Think about the best way to go about this. 'cause what I've noticed in crisis management is if you're too oblique about things and you're just like, this is how it's going to be, and you just kind of do it that way. [00:23:26] I don't, investors react in a very, you, you can't predict how investors are gonna react. And so you, your investor, if your investor relations game is not well thought out and you don't have the disclosures to back all this up, they're going to lose their minds. And then if you're open-ended, what's even worse about this is that if you raise money into a fund, knowing you had losses coming, well now we've got a bigger problem because you omitted that information from this guy who's coming in, right? [00:23:55] So he's gonna face a loss right away. So these investor relations issues come with, you know, not just, I would say it's not really a, it's not really a legal thing, but it is. Your docs say one thing. But that's not the end all, be all right. You really should think about what's the best practice in here from a investor psychology standpoint. [00:24:15] And, and I don't love the, you know, um, I call it oblique, but like the more like, kind of like you shall not pass kind of approach. I don't, I don't like it. I think it's, it, it creates more problems in the long term. [00:24:29] Rocky Butani: Most mortgage funds, um, have annual audits. You know, you get a third party accounting firm that, that does an audit of a fund. [00:24:37] Um, you know, from, I, I wasn't too familiar with, with the, with the Pacific Private Money Fund and in the last five plus years. Um, but, but news report says that it was around a hundred billion dollars. Um, when you have that much under, under management, obviously you're having annual audits done, but, [00:24:55] Kevin Kim: well, it's a question mark. [00:24:56] Yeah. I, I'll tell you, this goes to kind of the legacy, right? The market's changed, right? Like a lot of the older funds. They've gotten, they, you know, they, they what once was okay not to do audit because you were small. Right? Markets was small. It, legally speaking, they're not necessarily required. Like, it's one of those things like, okay, eh, and also it's a matter of being cheap, right? [00:25:17] Like, I don't wanna do it. It's, it's expensive and, you know, you'd be, you'd be surprised how cheap our industry can get, you know? And so people will use that excuse and not do it, right? But today for us here at, for we're, we tell folks whenever we do a fund payable stakes these days is audited financial, third party admin. [00:25:38] And it's not because of the law. It's because this will put you in the best position to submit to legitimacy, right? You will be able to demonstrate you are a legitimate outfit with third party vendors that are auditing you and will doing your accounting at all times. And yeah, it costs money. I get that right? [00:25:58] But. This is kind of one of those things where like, okay, let's, let's look at all the top performers in the fund world. They all have these things. In our world, in our industry, they all have it, right? At least audited financials, right? I don't care whether the law requires it or not, they have it, right? So that's one of those things where like, that's where we've, our industry's grown up a lot in a lot of ways. [00:26:20] And so, you know, if a client tells me they don't wanna do it, I'll tell 'em, Hey, it's best practice. It's recommended, I recommend it, but it's your call to make Right. You know, but the law does not necessarily require it, it only requires it if you're, like, if you've got non-accredited. Right. [00:26:36] Rocky Butani: Non-accredited investors, you mean. [00:26:38] Um, but [00:26:39] Kevin Kim: yeah, [00:26:39] Rocky Butani: but, but as an investor, I mean, I, I, I always think about this when I hear about fund managers that don't want to pay for an audit because of the expense. I mean, that must make it hard to raise capital. I mean, at, if I was a fund investor, I mean, you know, I'd look at a fund saying, oh, we don't have audited financials. [00:27:00] Why the hell would I wanna take that risk and invest with a fund that doesn't have any Yeah. Sort of accounting oversight. That's, that's insane to me. [00:27:06] Kevin Kim: Well, that's where like, you know, the, uh, there's always this like kind of fund manager that relies on what, what I call cult personality. Right. And they're not as concerned about the fundamentals. [00:27:17] And you know, there's a lot of those out there, and a lot of 'em don't have audited financials. And I agree with you. Like I wouldn't. Personally, I, right. And I do this for a living, right. And so I don't care how good the sponsor is. A Yeah. Like you said, like if they're so cheap, they can't even pay for audited financials. [00:27:36] Like, come on. Right. Like, you, it, it airs to poor, like not legitimate. Second, I think that it's also like, it's ki to me it's, it's table stakes. Like it's, you know, every single fund out there that's made it, they all do it right. And sure it's expensive, but don't I, the investor deserve that. I, that's how I look at it, you know? [00:28:00] Rocky Butani: Yeah. And even if, uh, let's say a fund does have, uh, annual audits, uh, you know, whatever, whatever situation that could cause a fund to collapse, um, or, or take on losses that technically could happen within, within the 12 month period of, of the next annual audit, right. What, how do you, how do [00:28:20] Kevin Kim: investors, I mean, like a lot of folks think that like, you know, losses are a four letter word, right? [00:28:26] And it's like, I get that, or it's like, sign of, of the oblivion or the apocalypse. I'm like, no, hold on. Like, first of all, if your investors are unaware that a loan can take a loss because the foreclosure happens and the property tanks in value or whatever, right? That's, that they may not be the right investor for you. [00:28:42] Right? If you are thinking that a loss on a loan is, is the end of the world, I, I, I, I'm sorry to tell you, the law of large numbers tells you that you are going to have one. It's going to happen, right? It's a question of how you manage it, right? And so how you manage investor expectations, how you manage reporting, how you invest, how you manage the communications, you know, invest. [00:29:02] I've, I've found that investors are typically remarkably forgiving as long as you, they understand that you are, you have a plan and you have a very well thought out one, and it's been disclosed and you fall best practices. They typically are very forgiving. Um. What I, what I, where I do find problems to arise is they, you know, sponsors hide the ball. [00:29:22] Right. And they hide the ball by trying to cover it up. Right. I'm gonna, I'm gonna cover this up. I'm gonna, I'm gonna figure out a way out of this, dig myself out of this hole. Right. I, I, I, I never, it never works out, you know? [00:29:33] Rocky Butani: And, uh, this situation with Pacific Private money is still, I mean, there's still ongoing investigations. [00:29:39] We still don't have a ton of information about it, but, um, but just the, the collapse of a, of a fund, um, in our industry. Have you seen mm-hmm. Uh, several other cases like this? [00:29:51] Kevin Kim: Yeah. Over my years I've seen a few ha few times happen. Very rarely. Is it because of the portfolio, right? Almost never. Right. It's, it's usually sponsor driven, bad choices, kind of, uh, what we call running from the law. [00:30:14] Right. Um, not being forthright and getting in front of it with the, with the regulators. Um, because regulators are typically not, they're typically not trying to like, bring out, like, they don't want to bring down an indictment, right? They're not usually interested in doing that because like as I, I worked for the, when I worked for the commission at, at, on the enforcement desk, I remember that all the attorneys would complain about the fact that like, DOJ is coming and taking our case away from us, they don't like it. [00:30:42] Right? They would rather just resolve the case through a civil settlement. Right? So, but it's good for their, their, their careers too. So, you know, it, it's a question of how you, how it's sponsor driven, right? Like you have to really think about how you're going to approach this. I think the other issue that we find in ca in cases with, with fraud, I mean with funds, is the sponsor takes way too many liberties with the, with the, with the business, right? [00:31:08] And so, I mean, extreme cases, right? So you have extreme cases where. Outright securities fraud happens. Right? So, and that, that's still liberties, right? It's, it's not a pon the scheme per se, but like it was never disclosed that this fund could go out and buy marketable securities, right? But the fund managers did it anyway, right? [00:31:27] Like, okay, well that's not allowed in the document set, first of all. Second of all, you shouldn't have done that with all the necessary compliance in place. So that kind of stuff has been, and then that leads to an investigation. And then, and, and then if the sponsor doesn't get in front of it and try to solve it, they could end up in the situation where not only are they being, you know, sued into, into oblivion by their investors, sued by the regulator civilly, and then eventually DOJ, right? [00:31:52] So, and we've seen it, right? It's, it, there are folks in our industry that are serving time now, right? So that, that we're in our industry, are now serving time, right? So there are other situations where it's more sponsor driven, but like really bad ideas in their marketing. Where they're equating it to certain types of investments that are just no, like, you would never do that. [00:32:17] It's like almost common sense failures, but you know, it, I dunno where it comes from. We, you know, where they equate it to like, I don't know, like a CD or a, or a, or like a 401k pension, pension driven strategy or something like that. Um, yeah. But the, the majority of these cases typically resolve around, revolve around investors losing their minds and calling the regulator because the sponsors facing headwinds in the portfolio did some bad stuff. [00:32:46] Now the investors are locked down and they don't know what to do. Right. And so, you know, I, I, I've been there a lot, but very in my, in my in cases that I've dealt with, it almost never let leads to a regulator. We're getting in front of it early, right? Yeah. And so we're, we're shutting the investor down. [00:33:04] We're getting him, we're resolving with him as fast as we humanly can to make sure that the regulators are gonna stay off our backs because we're, we're trying to avoid that as fast as possible. [00:33:14] Rocky Butani: And any fund manager out there that's, that wants to be more transparent with, with, uh, potential investors, I mean, what else can they do to, to show that, that, hey, our, our books are clean, besides an annual audit. [00:33:28] Are there anything else? Is there anything else that they can [00:33:30] Kevin Kim: Yeah. Yeah. And this is where I, I'm working on a piece on this right now. Right. So, um, what I would consider best practice from, uh, investor. I guess transparency standpoint, A audited financials. B, periodic reports, right? So usually quarterly reports, right? [00:33:50] And this is not the investor statement, right? The investors are gonna, are gonna get a monthly or quarterly statement about their account, right? That's different. A report, right? And say, Hey, this is what's going on in the portfolio. This is going on in the market. This is what's going on. You know, here's a, here's a data sheet about what our portfolio is comprised of. [00:34:08] Here's where our default rate is. Here's where our plan to address that is here. Know the headwinds the fund is facing here, the wins the fund is facing. Wins have the fund. Fund is being able to achieve that kind of report is pretty much a standard practice in public markets. And so if you're not doing it, your investors are basically on an island, right? [00:34:29] And there are funds I would call them, they've been around forever. They do that perfectly right? Newsletters go out, all that information. Financials go out every year. You know, and then they, they even go so far as to do like webinars with their investors, to educate them what's going on. And then they also have, you know, kinda a hotline, right? [00:34:49] And it's like, investor has questions call, like, we'll happily walk you through stuff and teach you stuff, right? So that's a pretty common practice today. Um, but a lot of times sponsors get busy and so they, they, they haven't built the processes around that. Uh, I strongly encourage that. They do. We, we consult on that, you know, that's the thing with us. [00:35:08] We, we'll consult with that after the fund is launched. And that's kind of part of the usual package with us. [00:35:13] Rocky Butani: You know, if a fund manager puts out a quarterly report that's internally, they're generating that report, how do you get third party verification on, on their accounting, their books to see if money's been moved around? [00:35:24] Uh, is there anything like that? [00:35:26] Kevin Kim: Yeah. This is where this is a big issue. Yeah, for sure. On the accounting side, this is why I love the idea of third party fund admin today. It, it didn't use to be necessary, you know, until this tax rule change funds in our world, were just an operating company, accounting, you didn't really need it. [00:35:45] You just make, you know, just do that. And, you know, it's not, it was actually pretty easy to do. Right. Today, investment company accounting is the standard. It's, it's not followed by everybody, right? But it is the standard. And so to do that correctly, you really need to be an expert. And so I think today, third party fund admin is pretty much also, I consider it to be table stakes. [00:36:08] It's quite competitive in that landscape. So it's, you can get a good deal, um, from all the different vendors out there. Obviously you get what you pay for. So the, the, you know, the really cheap ones are gonna not be that great, right? But at least you have. A licensed CPA, basically firm doing this for you and monitoring your accounting, doing your p and l, making sure the distributions are correct. [00:36:35] That's huge. Making sure your fees correctly accounted for. And you know, this has been an issue where, like, I've seen it come up in, in go and regulator actions because if you incorrectly calculate things you could end up with, like not over distributing or under distributing. Right. And so over distributing could lead to a loss. [00:36:56] Under distributing means you didn't, you know, you, you didn't pay them enough and they expect it to get certain dollars and they didn't. Right? So, pretty important. [00:37:04] Rocky Butani: And with the, the fund admin, uh, if, if, so that's done on a monthly basis, right? You have a fund admin, uh, company that, that reconciles the books on a monthly basis and then they generate a report, and then the fund manager then gives that report to the investors. [00:37:19] Is that how it works? [00:37:20] Kevin Kim: Well, it's not a report, right? So the thing of the, the, the third party fund administrator to basically be the replace a controller in a business, right? This person, this company is going to do a number of things. They're gonna maintain the p and l, they're going to make monitor expenses, they're gonna make sure that the distributions are calculated correctly on a timely basis. [00:37:38] They're going to make sure your fees are charged correctly. Um, there's no report that they produce per se, that that leads to the statements, right? But, and then that leads to the, um, financials and tax returns. But you have a third party professional. Doing the actual funds, bookkeeping and accounting on the day-to-day. [00:37:59] And then they're also helping the accountants do the K one and the audit, right? So that responsibility is so important because it has to be done correctly. And so investors really appreciate it when there's just A-A-C-P-A running that as a third party because they have their own duties and obligations under their license. [00:38:19] So it's really, really useful. [00:38:21] Rocky Butani: Going back to this case with Pacific Private Money, um, you know, having a hundred billion dollar fund that collapses and, and you have tons of these investors who, who are gonna incur huge losses with the, the funds they invested. Um, do, do you see that cases like this make the case for investors to, uh, to go more towards the note investing? [00:38:47] Vehicle instead of a fund. And, and that could be an argument that, Hey, look, I don't wanna invest in your mortgage fund because, you know, I've heard the cases like this. I'd rather invest in, in a, in a note individually or a trust deed. Does that, I mean, is there a potential risk of that happening at scale? [00:39:05] Kevin Kim: I wanna say no. But it, and it's not a self-serving, no. I mean, being fund counsel, it can, can obviously be taken as self-serving. But I still think, see, note investing is tricky, right? So if you're talking about like whole note trust deed kind of investing that opportunity is dwindling, right? And so with the market being what it is, if I'm a lend, if I do, if I'm a lender relying on trust deed, I'm probably gonna start looking at the secondary market unless I'm doing like seconds or weird commercial loans, right? [00:39:34] And so the pickings become smaller from a trust deed investing standpoint. The other, and also you're directly exposed to the loan. I still feel that's kind of scary. Um. On the flip side, on the fun thing, on the fun side of things, it's, it's just a question of picking the right horse. And so investors really need to think, ask themselves, am I picking the right horse? [00:39:56] Right? And yeah, sure. There might be situations where, um, these situa, these you may feel, you know, that you're being taken advantage of by the sponsor. If, if you're an investor, well, that's a question of, okay, well how, what's their investor relations team look like? Right? Are they actually a, a, a going concerned business, right? [00:40:18] Are taking, are they taking this seriously? These are questions that you can, and it's, and it's also a question of character, right? So there's a personal component to it too, but like, there's a lot of stuff that you can check the box on when it comes to like the back office side of things. Um, it's, it's weird because investors in the fund world, their prereqs are almost irrelevant in my eyes, right? [00:40:42] A lot of them have prereqs of like, oh, X number of years. Uh, track record. Okay. That's pretty relevant. Um, no leverage. That's irrelevant, right? Leverage is, is not a bad thing if done right. You know, they, they have to have, they have to be doing, um, certain kinds of loans only, right? Okay, well that's not a good idea. [00:41:00] 'cause what the market changes. Like sometimes they say, you know, um, I see like they must have certain types of tools in place. Like, um, I, I met an investor will only look at things with a certain type of investor portal. I'm like, this isn't irrelevant. Right? What's more relevant is like, who's their auditor, right? [00:41:22] Who's their third party fund administrator? You know, I don't wanna be selfer who's their attorney? You know, uh, who's their, you know, what kinda loan, like what's their track record on the lending book, right? Like, do they a tape, they can show me what's their default rate? What's their fault rate last year? [00:41:37] Right? You know, how many funds do they have? You know, that's, that's a, those are really important questions to ask, right? So what if I get asked the diligence of fund and it's not a client, I get really in the weeds on that stuff, right? It's, it's not about, you know, leverage or not, you know, you know. [00:41:58] Rocky Butani: Yeah. [00:41:59] And speaking of, of having multiple funds, um, it seems like this is common with, with fund managers as, as they, they have a fund, they might start another one. Um, you know, obviously you get into cases where it could be that, that the, the fund that they've started, the second one that they've started is, is completely different in terms of what they're originating from the first one. [00:42:21] But tell our audience, what do you see, uh, what situations do you see that fund managers typically start, uh, of second or third or fourth fund? [00:42:29] Kevin Kim: I like that kind of setup, right? So I get a little bit nervous when the two f if there's multiple funds and they all kind of share the same mandate, right? It doesn't make any, why would you do multiples there? [00:42:38] What's the answer? They're both open-ended, like, I don't understand. Right? So generally I prefer it when fund one is signed for, let's just call it vanilla, RTL Fund two is designed for say, commercial real estate finance. Some clients even go so far as to do it geographically, which is kind of interesting, right? [00:42:58] I don't have any opposition to that. Um, other clients will do it like, you know, vanilla standard performing loan distress strategy. And that's becoming more and more common, right? What are we gonna do with our distress, right? And that's a really good idea because distress can be profitable in the right structure. [00:43:15] So, you know, that's a good idea. A lot more opportunistic stuff, right? Like the high risk stuff. The high leverage stuff. Like that's a good idea. But if they're the same kind of mandate, I just don't. You know, I just don't know why they would do that unless there's like, there is a good reason to do it that way. [00:43:31] Levered versus unlevered portfolio. That's a good reason. Right. Um, 'cause there are some investors that are still allergic to leverage. I understand that rationale. But yeah, it, it, there has to be a justifiable reason. Separate the two and very, very, like, if you're going to have them co lend on a deal or transact with each other, you better disclose that. [00:43:53] Yeah. It's important, you know. [00:43:56] Rocky Butani: I've heard of cases where there's fund managers that have their, you know, their core fund has a hundred plus investors, then they start another one that has one or two very large investors. And it, it's not an opportunity that's available to, to the, you know, I guess smaller, uh, you know, uh, with respect smaller investors. [00:44:18] Yeah. [00:44:19] Kevin Kim: Yeah. I, I, I, I, I advocate that all day long. That's a smart idea. Yeah, because the big investor is very rarely gonna wanna be commingled with the other LPs. They're typically gonna want something different. The issue you're into there is allocation risk, right? Because if you don't disclose the allocation policy and you don't, you're not clear as to where the loans are gonna go. [00:44:38] You can be accused of breach of fiduciary duty, you know, omitting material facts, just fraud. You can do all that kind of, again, those kind of hot water. So be very transparent about how you're going to transact there. And if you're going to co-ran colen through these two vehicles, be very transparent with all the parties. [00:44:54] Rocky Butani: And switching to some of the, the newer funds that are starting these days are, are there, um, are there any, uh, new strategies or any new situations that are causing people to start funds? Um, that's, that's sort of a trend these days? [00:45:11] Kevin Kim: I would say the same reasons are still the major reasons, right? So I need to, I wanna get leverage fund makes the most sense. [00:45:18] I, you know, I need to be able to be a direct lender. I want to balance it. Discretionary. I don't like doing trusted anymore. Fund makes the most sense. Uh, you know, past kind of five-ish, ten-ish years. Uh, I want to maximize profits and loan sale. Okay. Fund makes the most sense there, right? 'cause leverage is gonna be too expensive on repo. [00:45:37] Um, but over the past year or so, right? I would say distressed right is kind of a good reason right now. Uh, but we've been hearing a lot. And distress, not necessarily in the context of complete NPL non-performing loan strategy, where you're just like, it's almost like I'm gonna foreclose on everybody and just own a bunch of real estate. [00:46:03] I mean, we get some of those, right? But the vast majority of it is like, okay, there's a lot of room for weird transactions, bespoke transactions, uh, reperforming distressed debt lender, last resort kind of situations to be opportunistic here. That's a common thread right now. Um, [00:46:22] Rocky Butani: what about the secondary market, uh, uh, strategy where, where they're just gonna, they're just gonna have a fun so they can close the loans and then sell 'em and, and that's the only strategy [00:46:33] Kevin Kim: that's been around for a while now. [00:46:35] Yeah. Gestational. Yeah. So I wanna maximize profits from loan sale, right? I think that's a good reason to go into a balance sheet model in our industry. And it's different from non qm, a lot of folks. Think that they can just kind of run off like a repo line, right? You, you could do that, but those are very expensive lines of credit and they're very high risk because you've gotta buy it down after 30 days, right? [00:46:58] So usually a discretionary balance sheet layered on with some more conventional leverage is gonna be more profitable in the long term. Um, so that's a very, very common reason to do it. Now, the challenge there is, you know, it's harder and harder for sponsors to justify that structure because every secondary market player now is offering a suite of services, right? [00:47:24] And so they'll table fund you, they'll buy it, they'll lever you, they'll, I get that right? But one of the things that's oftentimes forgotten, uh, is that you know that they're not always going to be there. You will be, and your borrowers are gonna expect you to perform so, or they're just gonna go to the next line down the street. [00:47:45] So yeah, that's a very good reason. But it's been around now for about six years, six, seven years. It's kind of a pretty commonplace strategy. Um, I like it a lot because, you know, it, engineers are very, very healthy, return for the investors and sponsor per se. So. [00:48:04] Rocky Butani: All right. With that, let's just take a quick break and we'll be back in one minute. [00:48:08] Support for this show comes from Four Casa, an amazing data platform for private lending and real estate investing private lenders. Note buyers, capital providers, real estate investors used for CASA in a variety of different ways. You can see which lenders have funded which loans. You could see which real estate investors have gotten funding or sold a property or purchase a property. [00:48:32] You can see loan assignments to know where the loan was sold to after funding. Many people use forecast as a prospecting tool. I personally use it to vet lenders and for general market insights. It's become an essential part of our business and I just wish I had access to it sooner. We published some of Forecast as data on private lender link.com. [00:48:51] When you do a search for lenders, you could see the top 20 lenders in each market. And we've also added, uh, the top real estate investors in each state and for some of the metro areas. Visit for casa.com to schedule a demo and please mention that you heard about them from Lender Link and the Private Lending Insights podcast. [00:49:10] We're back with Kevin Kim Fortra law. Uh, so Kevin, uh, you have a, a conference coming up, uh, at the end of this month. Um, so tell us a little bit about, uh, the for conference, um, for, for this one and, and the one coming in the fall as well. [00:49:26] Kevin Kim: Yeah, so we, I mean, for those of you who've been to our conferences, you guys know we do two a year, right? [00:49:33] Are, and we've, we swapped them a couple years ago. So now we're going with our Vegas event, going to be in the springtime. So at the end of the month, uh, March 30th to 31st, we're going to be at the Cosmopolitan Hotel in Las Vegas for two days of private lending, networking, and education. Um, you know, we're really excited this year because we're going back to the Cosmo when we first started this show in Vegas. [00:49:56] Um, and this will likely be, I'm not, don't quote me on this, but we're really looking towards other venues because Las Vegas is getting a little stale. Um, but we also have another show coming up in the summertime in beautiful Newport Beach, right Fashion Island. Uh, and that's going to be in August, uh, August 25th to the 26th at the Vea Hotel in Newport Beach. [00:50:19] That's a great, great venue. You're right there in Newport Beach, right there in Fashion Island. The beach is, you know. Five minutes away, we got multiple great golf courses. So it's, it's becoming actually more popular than our Las Vegas show actually. And well at both of 'em are, you know, multiple days, but lots of education, lots of networking, and, uh, all the top players in our industry show up. [00:50:42] Uh, we've gone outta our way this past this year for our Vegas show. Uh, I've invited a few real estate clients of mine in the fund formation world to come speak to y'all from so you guys can learn from a borrower's perspective. And these guys do a lot of volume and are, uh, I value targets by a lot of the big shops. [00:50:59] And so I hope you guys are nice to them. But it's a very, very good show, I think, and Ruby and her team have really, really worked hard this year. So, uh, if you haven't signed up just yet, please, please sign up. [00:51:12] Rocky Butani: What about the, the numbers? How, how many people have you, uh, gotten to come out to the last two? [00:51:16] Kevin Kim: Yeah. Yeah. So I think Vegas, we're expecting close to about, you know, I think the usual number we're shooting for is around five, [00:51:22] Rocky Butani: 500, [00:51:22] Kevin Kim: uh, 500, not 500. And then, um, you know, Newport Beach, it's, it's hard to say, we're always, we're always shooting for about 500. That's kind of the usual, uh, sweet spot. But Newport Beach is shaping up to be a very, very good show. [00:51:36] So I think either, either way you're gonna have, you're gonna be able in a room with a lot of networking opportunities. But, um, both events we target right around, right around five, you know, [00:51:44] Rocky Butani: and you get, uh, you know, if we've been doing your, your conferences for several years now, you know, you get, get a lot of new entrants coming in, uh, and attending them. [00:51:53] You have, you have some veteran lenders that attend from, from your repeat attendees. What do you hear from them as far as what they like about the conference and, and what value they get out of it? [00:52:06] Kevin Kim: Yeah. Well the number one thing I think is they get a lot of value out of is just the quality of the execution of the event, right? [00:52:12] It's a very well put on event. You know, Ruby is a seasoned veteran and a pro at doing this, and I think she puts on a fantastic event, very well run, right? Very well organized, and the content is very intentionally curated. We don't do pay for play, right? So we are doing this intentionally to serve your interest as lenders. [00:52:31] So we are very cognizant of how to put together the best panels possible. So the content is typically a very, something that we're very proud of, we get a lot of high marks on. Um, and the other thing I would say is just the, the quality of the networking. 'cause the, the two, two perspectives, right? The first perspective is gonna be who's in the room, right? [00:52:50] So, uh, we are fortunate enough to have relationships throughout the industry and throughout the country where it's valuable for everybody. Um, on the flip side, because of, because of our footprint, we're able to bring in. New lenders, new sponsors, and in this situation, some borrowers, and that's been valuable to a lot of our clients as well. [00:53:11] So I think that's a very important, we're, and we're always asking, you know, how can we do better? And we're always trying to make it improve slowly but surely that goes to even, you know, swapping the dates, right? We, we, a lot of folks are having trouble with Vegas in the summer, so we swap the dates, right? [00:53:28] So, uh, and we're always, we're always trying to make it better for our audience and wanna make, make everyone walk away knowing that they, I'm well spent right away from their business, away from their families. And that's what means a lot to us. [00:53:41] Rocky Butani: And, uh, for anyone who's curious, tell us about the, the layout. [00:53:45] You have one room, that's the exhibit hall, and then are you doing just one session, uh, at a time in, in a, in a speaking hall? [00:53:53] Kevin Kim: Yeah. And it goes back to the idea of content curation, right? So, you know, we tried the multiple tracks route. It, it's just not a fit. You know, when you do a huge, huge event like a PL right? [00:54:04] When you're doing like, you know, a thousand people, 1200 people, a PL has multiple tracks, and that works, right? Because you have different, but in our industry, in our, at our shows, it it's, it's about 500, 600 people at most. And what we found was the common threads are always gonna be, we're gonna get a lot of questions over the years, over the, of doing work, right? [00:54:25] And there's gonna be common threads that we're seeing that need to be addressed, and it's good for everybody. And so we're trying to keep it really straightforward as well. Um, and, and also because we're not doing, we're not doing kind of pay for play spon, uh, sponsor speaking kind of arrangement. We're inviting the speakers. [00:54:41] Like, we're literally like Nema, myself, Ruby. We're, we're figuring out the panels who will be a good fit and we're asking people to speak. And so that's, that has. A lot to do there too. Right. So that leads us to typically doing one track of panels. We added an extra day for education because a lot of folks who are smaller want more, uh, actual education. [00:55:02] And so we're doing a lot of that, um, on the, on the day before the main day, before the welcome reception. That's how we do our events. Yeah. And for our new attendees, we typically go out of our way to make sure that they, we do a pre-conference zoom meeting to help them navigate the event to make sure that, okay, here's who I should go talk to if I need anything. [00:55:23] Here's what I can expect to be in the ex in the exhibit room, you know, and, and they can communicate to us, this is what I'm looking for. And then we can pree them for the show. [00:55:34] Rocky Butani: Nice. And, uh, and so you mentioned earlier that you're exploring alternatives to Las Vegas. Uh, we don't want to have you spill any secrets here, but, uh, but just if you could just tell us, are you planning to stick to the Western US for, for both of your conferences? [00:55:50] Kevin Kim: Hard to say. Yeah. It's hard to say. I mean, at one point someone even mentioned like, um, um, you know, other, other countries and I was just like, well, no, no, no, no. That's just not possible. It's too much work. Right. But I think right now we're, we're still in the exploratory phase, you know, we're, you know, we've, we've, we've been contemplating, you know, the southeast in Florida, we did an event in Florida many, many moons ago. [00:56:15] It's relatively easy to pull one off. Miami makes it really easy on people to do an event there. Um, you know, Scottsdale's a very popular venue, but we've also been entertaining other venues like, you know, uh, someone brought up Chicago, right? Someone brought up Utah. So like, we haven't landed that plane yet. [00:56:30] It's very challenging for us to, to. Do it like that because we want to make sure that it's a good location and we do not want there to be challenges to getting there. So we have to, we have to make sure that, okay, are there, are there flights from the various locations direct? Is it the airport easy to get to? [00:56:47] Is the hotel big enough? Is the, you know, do they have enough room for our guests in the hotel? Like it that's gonna be, all these factors play into it. So it takes a little bit longer for us to do things, but when we do 'em, you know, usually it's a good venue, right? So. [00:57:01] Rocky Butani: Definitely, yeah. You have to make it convenient for, for people to fly in. [00:57:04] And, and I think there's select locations around the country that cater to that, like Dallas, um, Denver's an interesting one 'cause it's such a major hub and airport, but it's a small market lending wise. Right. [00:57:17] Kevin Kim: We thought IIIN Denver for that reason. I, I'm not a huge, you know, it's, it's, it's cool, but you know, I feel like people would just kind of run away and go ski all day, you know, so, [00:57:26] Rocky Butani: yeah. [00:57:27] I dunno, I dunno, I, I always liked, uh, Texas as, as kind of a central, you know, location within the, within the United States that everyone can fly to. Uh, not Austin 'cause they don't have enough flights, but maybe Dallas. Um, it could be a good location that, that's very central. [00:57:42] Kevin Kim: I've done, uh, several, like a couple of events in other, other conferences in Dallas and I really like the city from a conference standpoint. [00:57:48] Uh, there's a lot of good hotels that are big enough and it's easy to get to. That's really important. And you can do a lot of business while you're there. Right. So it's important too. [00:57:56] Rocky Butani: Yeah. And there's tons of people that can drive there, right. With, if you're in any of the, the big Texas metro, uh, areas, it's all a three hour drive, maybe four hour drive for, for a lot of people. [00:58:07] So, uh, but on the other hand, I love Scottsdale. That's one of my favorite locations, but [00:58:12] Kevin Kim: it is for me as well. The golf there is just unparalleled and, and you know, I love the golf, so it's, it's a good place to be. [00:58:17] Rocky Butani: Yeah. Yeah. Okay. Alright, well, we'll, uh, we'll, we'll be, you know, bugging you to keep us posted on that. [00:58:22] Of course. Well, [00:58:22] Kevin Kim: we'll announce Ruby, Ruby will make sure to make a, make, make it public and let everyone know. But we're, we're, we're, we're exploring different locations for next year. Um, but know that Newport Beach will be on the calendar and it's already all scheduled. And I think that, you know, this March is our biggest show and August is gonna be the Newport and we're really looking, looking forward to both. [00:58:41] Rocky Butani: Okay. And just to recap, the, the Vegas conference is gonna be March. 30 and 31. Mm-hmm. Uh, and then, and then the Newport Beach conference is gonna be in late August, right? [00:58:53] Kevin Kim: August 25th to 26th. [00:58:55] Rocky Butani: Excellent. All right. Alright, Kevin, that's all I had on my list for today. Um, thanks for taking the time for this and look forward to seeing you at, uh, your conference in a couple weeks. [00:59:06] Kevin Kim: Yeah, man, it'll be great to see you again. Thanks for having me on the show. [00:59:09] Rocky Butani: Alright, thanks Kevin. Take care. And that's a wrap for this episode. Fortra Law is listed on the services section of PrivateLenderLink.com. I put a link to their profile in the description. Kevin Kim is a securities attorney and his specialty is private mortgage funds. [00:59:26] His firm for law is 100% focused on private mortgage lending. They have a variety of practices to serve all aspects of the business for private lenders. Kevin also hosts a podcast called Lender Lounge with Kevin Kim, which was an inspiration for me to start the Private Lending Insights podcast. I'm a big fan of his podcast and highly encourage you to check it out. [00:59:48] I hope the content of our conversation was valuable to you. Thank you for tuning in and listening all the way to the end.