Private Lending Secrets: Boost Your Real Estate Success Today

Dylan Silver (00:00.972)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show I have Bryan Perry, who is the chief operating officer of Builder Funding LLC in upstate New York, believe. Bryan, welcome to the show.

Bryan Perry (00:17.212)
Thanks so much for having me, I appreciate it.

Dylan Silver (00:19.37)
Absolutely. I’m from not exactly your neck of the woods, but I said before hopping on here that whenever you’re in Texas, which is where I’m in, kind of the East Coast states get grouped together. So whenever I have a fellow, you know, Pennsylvania, New York, New Jersey, and I’m from New Jersey, it’s always good to see one of my own on here. How let’s start from the top, though. How did you get into the real estate space?

Bryan Perry (00:46.502)
Yeah, so 15 years ago I started off in banking. Right out of college I did primary owner occupied mortgages. So I spent some time doing mortgages and then became a licensed banker. Worked at Key Bank for a number of years and then got into commercial lending.

So I did commercial lending through credit unions and I kind of made a transition from banks over to credit unions and had some leadership roles at the credit unions and then a few years ago I started the real estate development path and that included my own fix and flips, starting my real estate development company, my construction company and then now adding the private lending and my

real estate license.

Dylan Silver (01:36.642)
Very exciting and lots of different areas that we can touch on here. As a realtor myself and as an aspiring single and multifamily investor, I’ve done wholesale deals up to this point in time. I tend to think of kind of the path, if you will, of a real estate investor as someone on the outside looking in. I did a lot of networking and a of reading, probably too much reading and a little bit of analysis paralysis before getting in.

Then I started doing some wholesale deals, got a real estate license. Now I’m looking at doing my first short-term rental or maybe a fix and flip if we can find a deal with the right margins. You had maybe a similar path, but it also sounds like different in some ways. What would you say has been kind of your growth path along the real estate entrepreneurial route?

Bryan Perry (02:23.376)
Well, I really thought about what it is to be a real estate developer. In real estate investment, real estate development, fix and flip, they’re all kind of…

very similar but my goal is really real estate development scaling taking on larger deals and what does that entail so after I did you know my first few flips and I’m a second generation flipper and lender my mother did mortgage lending while I was growing up my father was flipping one house this summer while I was growing up so I always had these things you know in my life and it’s funny how you know I found those were the things that I ended up loving and wanting to do

life, being in dirty houses and finding lending opportunities. So it’s been an interesting path and an interesting journey. But lately over the last two years, I really wanted to understand what it would take to

you know, qualify myself as a real estate developer. And that’s when scaling started to happen and bringing in partners and understanding more about, know, not just doing the work, fixing the house, but listing your own house, right? Like every bit of that equity that you own is valuable. So how do you retain the most equity? How do you build a brand? You know, so those are things that I’ve been really focused on, which has led to all of these different

different businesses and partnerships that I have now going on. You know, and I want to expand on all of those things and really become a trusted advisor and friend to investors who are just starting out, have questions. So that liaison part was important to me too. And as a lender, I think that’s where my strength is, that, you know, bring any deal to the table. I’m going to go through immediately, look for deal killers. I’m going to, you know, give you realistic cashflow.

Bryan Perry (04:22.704)
expectations, help you understand the lending process. In central northern New York, private lending is not really something that’s broken through and I used it personally to start and doing fix and flips myself and I just think it’s a wonderful product and I now have access to you know the private lending world and I want to bring it to market here in central and northern New York and then also tap into the roots of where Builder Funding LLC came from which is New York City.

Dylan Silver (04:31.15)
Hmm.

Dylan Silver (04:51.896)
You know, I think about hard money lending and private lending out here in Texas. And there’s so many different options. Seems like maybe a different landscape out there. But also, as far as I’ve heard, I don’t have personal experience. It is slightly more challenging just to be a real estate investor out in the East Coast. The deals, of course, are costlier, right? And then, of course, cost for materials. And then, you know,

labor, is just kind of a little bit more expensive, right? And so it sounds like, if I’m hearing it correctly, that there’s not as many maybe hard money options as there are out here in New York.

Bryan Perry (05:35.61)
Yeah, that’s that’s absolutely the case and it depends on the market. So right now, you know, being in Syracuse, you know, we’re still finding properties for acquisition at 50 to $60,000 multi units that are in distress, you know, need a lot of work. So, you know, the cap rate and ARV on those are still very good. Rents are good in Syracuse. And I think a lot about, you know, the markets that you’re in are contingent upon what’s going on, the market factor. So,

Manufacturing is a huge micron. don’t know if you’re familiar with what’s going on in Syracuse, but the micron facility has pledged $100 billion investment over 20 years. They haven’t even broken ground yet, but they’ve attracted investors. They’ve attracted businesses. I’m excited to see if we can bring some manufacturing to cities near you, what that can mean to the real estate market as well.

Dylan Silver (06:31.736)
Let’s talk about lending as a whole and then also building a business in this space. You have a background working with banks and then as a developer having done flips, right? So you understand many sides of this business, but then also for folks who are starting any kind of venture, diving into it, of course, you’ve got to build clientele and you’ve got to build that trust and then you’ve got to tap into their warm network. What has been the process?

Bryan Perry (06:38.735)
Mm-hmm.

Dylan Silver (07:00.63)
like for you, Bryan, with builder funding, getting it off the ground.

Bryan Perry (07:06.748)
well you know i started joke have you heard the have you heard the einstein joke and sign goes to heaven you’ve heard that joke clean joke so albert einstein goes to heaven is waiting at the pearly gates and i have his mansion ready and uh… says that you’re gonna have to wait in the dormitory has four people that he meets and the first person he meets as uh… mister einstein have an iq of a hundred eighty and einstein says wonderful we’ll talk about mathematics and then the next person he says that the over i have uh…

Dylan Silver (07:12.718)
I like the premise. Let me hear it.

Bryan Perry (07:36.668)
I have an IQ of 150. And Albert says, well, that’s wonderful. We can talk about physics. third room meeting meets says, I have an IQ of 100. And we’ll talk about arts and literature. And then the last person has an IQ of 80, walks up and says, I’m sorry, Mr. Einstein, I only have an IQ of 80. And he says, well, where do you think interest rates are headed? So I think that.

speculation on interest rates, you know, the dumbest person in the room is speculating on what’s happening with interest rates and I thinking, I’m thinking that’s keeping a lot of people on the sidelines, historically seeing interest rates lower than they have been ever. And there’s these people out there that are just speculating, well, if interest rates come down, I’m ready to hop back in. Right? So I just think that they need to get rid of that mindset. Real estate, you have real asset value.

you know, and it’s going to be a hedge against inflation. It’s always going to be a good investment. So how do we encourage those people to get off the sidelines? They have this want to get into real estate investment, but they might, it might just be a little bit of hesitation with what’s going on with, you know, market volatility and

You know, I just don’t know, I guess the best way to reach those people and get them off the sidelines and back into real estate because honestly, deals are still cash flowing. Interest rates are still great. I’m not going to speculate whether they’re going to go up and down. I’m not going to make that mistake. But what I will tell you, you know, throughout time, real estate is a solid investment, you know, so, you know, and we still have wonderful rates. I mean, my 30 year fixed on a cash out refinance, 80 % loan to value is as low as 6%.

You know, so rents are going to be good to service that debt and you can still find good properties, good ARBs. So I think you got to focus in on the deal and get off the sidelines and get people excited about real estate again.

Dylan Silver (09:29.666)
You know, and to your point, Bryan, when I think about, you know, volatility rates, the thing that has stayed at least out here where I’m at, right, Dallas area, lived in San Antonio for five years before Dallas. You might see home prices go up and down. Like for instance, right now, we’re kind of seeing a cooling off, right, at least in Dallas, where you have kind of these expectations from two years ago, three years ago, where homes were practically doubling in value.

And now you’re seeing maybe a little bit of a pullback in that kind of coming back down to earth. But it’s not like rents are getting cheaper. I haven’t seen rents go down. So if people are worried about, you know, well, the price of the home. Well, if you’re going to fix and flip it right then sure you might that that might not be a strategy that can necessarily work in every case. I’ve heard a lot of flippers specifically out here in Dallas say the margins are less.

But if you’re looking at a long term buy and hold or a burst strategy and you’re looking at what, well, what, can I do here? I mean, the rents aren’t getting any cheaper. The rents are not getting any cheaper.

Bryan Perry (10:38.204)
Yeah, the burr strategy is wonderful. And one of the things you can do to mitigate, that’s why I have, you know, Perry, Perry contracting, um, Perry construction. It’s, it’s because, you know, any sweat equity that you can put into the home yourself, you’re paying yourself an hourly rate, rate right there, you know? So I think that that’s important when you’re talking about margins is trying to, trying to put some of your own work in there, having and building relationships with, with friends. And, uh, it doesn’t necessarily have to be workers. You don’t know, you know, a lot of people are interested in

and can paint and can lay flooring and some of this stuff is not rocket science. It’s just hard manual labor and quite frankly I find it fun. So I mean that’s one way to mitigate against the margins is doing as much work as you can yourself but that’s also time consuming and I understand that hurdle. yeah, think you’re hit the nail on the head. Rents are not going down so we’re gonna look at each property like from a cash flow perspective, not from an interest rate perspective but from a

cash flow perspective. that’s, think, really where we bring our strength and build our funding just years and years of experience, understanding, you know, your rents, understanding how to put together a net operating income.

you know forecast on a property and really you know always be optimistic but I would say capital expenditures are the things you want to focus on you know maintenance but once you have a good idea of what that’s going to be you can kind of understand okay is this deal profitable should I jump on it or should I go on to the next one

Dylan Silver (12:11.884)
Are you looking at primarily lending on single family, multi family? Are you looking at helping looking maybe developers and multiple properties at once? What’s your avatar?

Bryan Perry (12:24.134)
So again, I’m not trying to limit myself. As a real estate developer, I want any and all deals. We don’t do single family owner occupied. So we’re not in that space. It’s just investment property. So multi-families, we can do one to four. I also have lending for five to 10. I can do lending all around the country with the exception of four states. It’s non-QM lending.

right is what we offer so we do the burr model which would consist of an upfront fix and flip loan and we’ll do 90 percent of the acquisition 100 percent of the rehab costs contingent upon experience we’ll look at experience and then we we exit our exit strategy would be either the sale or the refinance i really like the refinance because again rates aren’t that bad as low as six percent even some lenders that might go lower for 30 years fixed

You so you can get out that cash that you put in, you have that after rehab value, that ARV that’s heightened by the work that you put in, that sweat equity that you put in, or the builder that you hired to bring in and do that, and still a very solid plan. I’ve also been a part of a little bit of a different model where we buy, rehab, and manage. So I’ve worked with a property management company here in upstate New York, and they are buying

rehabbing and selling and then they manage their property for a fee so they get that fix and flip amount and then they get that property management side of it as well the income from the property management services so a lot of different models.

Dylan Silver (13:55.17)
You know, I’ve seen, I’ve seen developers now, I’ve talked with some, at least out here, who are looking at keeping the properties and then renting them out. It’s amazing, right? So we’re talking about building, you know, lots and lots of homes out at once, which of course, for people who are unaware of this, it’s not like the city’s paying for the homes, the builder is paying for the homes, which is a huge investment, massive investment, which usually they need to…

recoup that fairly quickly. can’t just have it sitting out there. So they would go in and sell these properties and that’s how they would recoup their investment. But I’ve spoken to a handful of developers, at least out here, who saying, when we can afford to, we would like to actually hold on to these properties and rent them out.

Bryan Perry (14:39.544)
yeah, and what are you doing there when you do that? You’re building equity in a real estate portfolio, which is I think the next level, right? So fix and flip might be the first level that you get into, but eventually, and in banking for number of years, I can tell people that are listening that the wealthiest people in their personal financial statement are people that own equity in real estate. I think most people in general have this goal of like, want to be a millionaire on my personal financial statement. How do I get there?

quickly as possible. You know, it really consists of owning equity in real estate. It’s going to be one of your largest assets along with your retirement savings. So how do you do that? You know, how do I become more efficient at that? You know, I think that’s the journey. Those are the people that we’re trying to talk to and explain this to is that it is possible, but holding those properties, every single debt payment that you make is an increase in equity.

on an amortization schedule it’s kind of a slow process right because we’re interest heavy at the top but you know there’s there’s tools there as well if you can make one extra principal payment a year all right you start to skip down that amortization schedule start to apply more principal than interest to the payment faster you could take a 30 year loan and cut it to 22 years by one extra principal principal payment per year so how powerful is that if I can make two

And we’re not talking about something that’s real hard. A lot times you’re talking about an extra $2,000 a year you got to apply to a 30-year mortgage to really cut down. Oh yeah. So amortization of debt is very interesting. You know, and I’ll encourage you is if you’re looking at lending to look at how interest is allocated at the top and how it’s reduced and then how any subsequent principal payment can actually greatly increase your equity much quicker.

Dylan Silver (16:10.85)
Yeah, I didn’t know that.

Dylan Silver (16:33.672)
Bryan when I’m thinking about the the hard money lending private lending space, I’m also thinking somewhat selfishly myself Looking at getting my first fix and flip my first short-term rental and I’m gonna be going in with with partners and I’m thinking, know Well, we’re gonna need access to some type of lending We don’t we don’t just want to you know, put put our put our cash into this you would like some type of funding for people who are maybe new to this and you’re evaluating them and you’re looking at the deal

What are the the the core areas which you’re evaluating if someone’s a new relationship So maybe they’re a first time flipper and also it’s the first conversation that you’re having with them

Bryan Perry (17:15.386)
Yeah, I just tell them that we’re no income verification. that’s what I love about private money because the deal killer so many times on traditional lending is we’re looking to cash flow the person and not the property. But we don’t need to do that in private lending. So we got to have a good credit score. Get your credit score up over 650.

you know how much skin in the game how much money of my my own do i have to put in while we really look at at least three months of reserves what reserves that’s p i t i principal interest taxes and insurances so if you look at that individual property you wanna have at least three months of its the reserves and you gotta have at least ten percent down like i said if you’re a brand new flipper you might not be able to get a hundred percent of the rehab value as well but we can still find you something that’s gonna work

you and that’s when you start playing with the numbers you might want to get pre-qualified pre-approved before you start looking at properties you know so if you bring a property to me I say listen the parameters here aren’t working because you’re brand new but these are the properties you want to go after these are the margins here that you’re going to need to come up with the down payment the reserves exactly how much you have to have it’s not insurmountable you know and then

Even if you don’t have that, can do what you’re doing, bring in some partners maybe that have that capital that you’re looking for to offset the down payment and reserve requirements. So there’s a lot of different options, syndication, real estate investment trust, all these different things that you can do to start investing in real estate. But I think for the simplest form to get started, to fix and flip, have a few thousand dollars setting aside and you want to invest in real estate, that’s a great start.

Dylan Silver (18:37.635)
Yeah.

Dylan Silver (19:00.45)
When people are doing the traditional route and they’re looking at a home for themselves, right? They have to have, I believe, the money in their account for a set period of time. If they’re doing a syndication though, and it’s kind of buddies or maybe it’s an informal joint venture, right? You have a buddies coming together and they put money together and they, let’s call it three or four months of PITI and they’ve got the credit.

Bryan Perry (19:14.628)
Yep, yeah, a joint venture.

Dylan Silver (19:24.886)
Is that something that you look at, meaning like they just got the money together? Would they have to have kind of a long track record together or can it be something where they did this relatively recently?

Bryan Perry (19:35.736)
absolutely relative. So we do a lot of to be determined LLC. So there’s a concept in place and we have basically what you’d want to do is create an entity that’s going to own that property and you’re going to have ownership in that entity. You know, somebody, it might be if there’s three, it’ll be 33 and a third, you know, so 33.3, 33.3, 33.4. And we actually only require one of those owners to be the personal guarantor. You know, so that’s, that’s a huge benefit to the traditional lending.

If you have over 20 % ownership in New York State, typically you also have to be on there as a personal guarantor. So private money has that benefit as well. We don’t have the strict guidelines. We just need one personal guarantor.

If you’re a majority owner, or 50 % or more, then that probably should be you. But that’s a great question. We do that all the time. We could take the application and get things started while you’re creating your LLC. Typically, I don’t know how it is in Texas, New York State, it’s gonna take you a couple weeks because you have to do the articles, publish it, and kind of wait a little bit, register it with New York State. So there’s a process to creating an LLC that’s a little bit time consuming, but that’s definitely where

want to go in that instance is create that LLC.

Dylan Silver (20:52.152)
very interesting. I think hearing you talk about this, I’m thinking about all these areas, which I’m amazed I haven’t heard this previously because I’ve spoken with so many different people. But now that I’m looking at it myself and and exploring, know, how does exactly hard money lending work? It really does seem to be different based on the the the individual and the company that you’re talking to. No two places are really alike. And because it’s it’s not as

It’s not like this has been as common or as well known for 50, 60, 70 years and in places like where you’re at, there’s not as many options. Each individual lender is truly different.

Bryan Perry (21:34.46)
Yeah, and each loan is a fingerprint or a snowflake. That’s what makes it so exciting. Every property address, every cash flow situation, every business, each one of them has to be looked at individually. And again, going back to private lending, we can do that looking at the property individually and not the person or the borrower as much. And that’s what’s exciting about it for sure.

Dylan Silver (22:01.496)
Bryan, we are coming up on time here. Where can folks go to get ahold of you?

Bryan Perry (22:04.156)
Okay.

Yeah, so our website is MyBuilderLoan.com. My personal email is Bryan, b-r-y-a-n at MyBuilderLoan.com. And my phone number, 315-778-3413. Give it a ring. I work all day and night. I’m excited to answer your calls. mean, that’s one of the deal killers is unresponsiveness. So I’m going to be responsive if you reach out to me. I’m anxious to look through any of your deals, excited to talk about

how I think I could help. So please give me your ring and we’ll walk through it, no deal. Too small or too big, we do have some minimum loan amounts around that acquisition. It’s gonna be tough to acquire stuff less than 50, $60,000, so you’re gonna wanna be looking to acquire properties above $60,000 and have some rehab in there. But other than that.

you know we’ll go up to millions and millions of dollars in lending and and we’d love to hear from you I’d love to talk to you and help you with your next deal

Dylan Silver (23:07.63)
Bryan, thank you so much for coming on the show here today.

Bryan Perry (23:11.288)
Yeah, I really appreciate you having me, Dylan.