About Steve Replin
Clients hire me to help them start and grow their businesses. Launch30.net
Through my decades of hard money lending to entrepreneurs and small businessmen and women, I can assist new and growing businesses find the capital they need in order to realize their dreams. The assistance that I’m particularly pleased to provide are in those situations wherein all available resources have said “no” to a borrower in need.
Funding is needed in many circumstances that have nothing to do with starting or growing a business also. I view the business of hard money as being divided into two basic areas: a) opportunity funding which is the start and grow variety of capital needs; and b) problem resolution funding.
Business cycles are one of the most constant and dependable economic changes upon which you can depend. That which is great now will ultimately turn into something that is not so great as you allow the cycle to run its course. Growth cannot continue to occur unabated without an opposite reaction to occur sooner or later.
“Greed will ‘NEVER’ disappear”
Hence, in an “up-cycle”, prices rise to a point when the average buyer can no longer afford the average property. It is at, or near this point in cycles, that something has to give. Because properties are increasing in value at a rate much greater than the cost of capital (interest rates), buyers of properties are encouraged to buy, focusing only on the low monthly payments and the rate of appreciation that will never end (really?).
What they should be looking at, however, is who is going to be the last person in the game of musical chairs to buy properties at ever-increasing and unrealistic prices? Sooner or later, something must give, and the other side of the cycle emerges. The length of time that it takes for the down portion of the cycle to run its course varies but in general, it is until the excesses are drained from the pricing of these properties. In this period, many highly leveraged “investors” regret all the debt that was easily available and of which they took advantage hoping to take advantage of continually increasing prices.
I’m always amazed at one aspect of watching these cycles repeat themselves. when people lose everything, they swear that they will never let this happen again to them. They have learned their lessons in a big way. No more out-of-control borrowing to buy rapidly inflating property no matter what, they say to themselves. If, however, you actually believe that the memories of the average person is that long, you are completely misreading the sentiment of investors (in all asset classes including real estate, art, equipment, inventory, and most other items of tangible personal property).
What you can never change (note the absolute word “NEVER”) is GREED! It will never disappear from the human condition.
Foreclosure? Yes, it’s a bad word. This word represents the worst nightmare of highly leveraged (read: greedy) investors. It is a fancy term for “I used to own this property but because I failed to see what I was doing at the time accurately, and I thought the game would never end, now it’s merely a memory.”
This is time when capital is needed to resolve problems, avoid foreclosures, rehabilitate businesses that have been hurt by carrying a great deal of debt with decreasing cash flow with which to service the payments.
Money is the root of business. When you need it, there is rarely enough time to casually shop around from bank to bank. This is the true value of hard money’s ability to review, accept and close loans quickly. I’m excited to be able to be a provider of this help to those in need.