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Show Summary
In this conversation, Michael DeAngelis, founder of EquiQuest, discusses the niche of hard money lending in Long Island. He emphasizes the importance of local knowledge in lending, the dynamics of the Long Island real estate market, and acquisition strategies for investors. Michael also explains the permit process for construction and the standards for finishing homes in the area. He concludes with insights on future projects and how to connect with his team.
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Investor Fuel Show Transcript:
Michael DeAngelis (00:00)
Yeah, great question. So this is interesting, and I love large scale numbers. So if you look at a lot of industries, even the industry where I spent a lot of corporate time, we tend to see like an 80-20 rule. So there’s a lot of very, very big brand lenders out there that lend nationally at huge velocity where they’re getting abillions of dollars in business. So the opposite side of that is really where 80 % of the business resides with small operators like myself in niche markets.
Dylan Silver (02:08)
Hey folks, welcome back to the show. Today’s guest, Michael DeAngelis is the founder and managing partner of EquiQuest, a Long Island based private hard money lender, working with both borrowers and co-lenders to fund Long Island real estate investors quickly and efficiently. You can find them at equiquesthardmoney.com. Michael, thanks for taking the time today.Michael DeAngelis (02:28)
Yeah, thanks so much for taking the time to have me on. I really appreciate it.Dylan Silver (02:32)
Now we were talking before the show and as a hard money lender, you’ve niched down into Long Island specifically. And this is really an area where I haven’t spoken to too many people, if any, who focused on this niche. Walk me through how you identify, know, we’re gonna niche down into Long Island and this is gonna be our bread and butter.Michael DeAngelis (02:53)
Yeah, great question. So this is interesting, and I love large scale numbers. So if you look at a lot of industries, even the industry where I spent a lot of corporate time, we tend to see like an 80-20 rule. So there’s a lot of very, very big brand lenders out there that lend nationally at huge velocity where they’re getting abillions of dollars in business. So the opposite side of that is really where 80 % of the business resides with small operators like myself in niche markets.
So although there’s some very large lenders nationally, they only actually make up about 20 % of the overall commercial lending volume across the United States. I’m part of a mastermind group that actually
is based on the model that I’m actually operating off of, which is being a really high hyper-focused local lender that knows the market inside and out and is a true resource for real estate investors in the market. So there’s folks like me throughout the United States.
Dylan Silver (04:08)
You know, when we talk specifically about lending, one of the things that I’ve always thought, and I guess until this point in time, I wasn’t sure if there was any level of validity to this idea, is that as the lender, or as someone who is working with lenders, if the borrower defaults, you’re gonna end up having to take over the deal, or the people that you’re brokering the deal for would have to take over the deal.And so you really want to have some level of, I would think, granular knowledge on the area because if all else fails, you or the people that you work with are gonna have to take this deal over. But as I’ve spoken with so many folks on the show, I’ve realized that’s not always the case in the lending space. you in many times have lenders who really have no…
boots on the ground, haven’t walked those roads or driven those roads, and they really don’t have that granular knowledge in that area that they may be lending in.
Michael DeAngelis (05:50)
Yeah, that’s a really good point. I got to clarify up front. Although I have the knowledge and everything to take over a project, that is absolutely a complete opposite of what my intention is. My idea would be to help anybody that’s borrowed really exit the deal gracefully, profitably. But for sure, having that local knowledge, and I think that’s really one of our strengths. So we like to look at.the finance of the deal, right? So when we start underwriting, we’re underwriting and the way we look at it is we’re the co-pilot to the real estate investor, because we do like working with new real estate investors and helping them through their first five deals, right? So the point there is that we’re helping them with the finances from that lens of being local just like they are. And then we’re looking at that for the
reason of never really having an issue that there’s ever a default.
Dylan Silver (06:50)
Work with them, yeah, mean it’s a partnership. Now when we talk specifically about Long Island real estate, if we look at let’s say single family fix and flip for instance, I’m imagining these are not the cheapest acquisition costs in the country. And it’s gonna range of course, but for someone who’s looking to do a fix and flip in Long Island, what’s a typical acquisitions price that you’re seeing?Michael DeAngelis (06:51)
And we do that because we’re local. Yeah, exactly.Yeah, so anywhere from three to seven hundred thousand dollars. And that’s just purchase price, you know, for a property. Our average loan is increasing just about every month at this point because of the velocity we’re seeing on Long Island. Our average loan, and keep in mind, we’re funding a big portion, sometimes 100 percent of the purchase price in construction. So our average loan is about
Dylan Silver (07:23)
Okay.Michael DeAngelis (07:45)
$425, going all the way up to a million dollars.Dylan Silver (07:47)
Now, when we’re talking about an acquisitions price of $300,000 up to $700,000, what are these exits looking like? I’m imagining they’re close to or over a million dollars.Michael DeAngelis (07:57)
Yeah, that actually is the sweet spot right now in Long Island. Those bread and butter, you know, six to seven, eight hundred thousand dollar homes. They’re starting to shrink down. There’s a lot of competition. A lot of people want to be in that in that space. But the stronger operators that have taken the time to really learn the business or operating any kind of velocity or really look into buy the houses that are going to exit.seven figures or more. There’s more profitability there. There’s more opportunity for acquiring homes at that ⁓ larger seven figure ⁓ exit number. And it’s what I feel, one of the sweet spots. I think I talk about it on a couple of social media posts.
Dylan Silver (08:42)
When we talk about a seven-figure exit, is that something where it’ll sell in 30 days? that the goal? Or do you have to factor in some level of holding costs because maybe a seven-figure deal isn’t going to sell in 30 days?Michael DeAngelis (08:42)
Yeah.Yeah, when we say seven figures, we’re really talking about just north of millions. So it could be one one, one seven.
Michael DeAngelis (09:40)
know, two to, you know, $10 million. These are, you know, family homes that, you know, there’s a demand for. So, yeah, that’s really the reality of the Long Island market right now.Dylan Silver (09:52)
Now, for folks who are looking to move to Long Island, I’m imagining most of the homes that people are buying are going to be homes that are pre-owned rehab homes. Is there a lot of new construction happening or is there any new construction happening in Long Island?Michael DeAngelis (09:53)
Now we’ll you guys later.Yeah, there is a little bit of new construction and it looks a lot like teardowns and rebuilds to that, again, seven-figure home that folks are looking for. There’s very little tracks of rural land. If you go to some of the more rural areas, but it really is individual lots and teardowns. It’s very, very limited for sure.
Dylan Silver (10:30)
Now I do want to pivot here and ask you about acquisition strategy for investors who are looking in Long Island specifically. Now when you have an area with a population density like you mentioned, you also mentioned you might have some tear downs. Do you have investors who are specifically looking for let’s say tear downs? Do you have investors who are specifically looking for distress property or?Is it a mixed bag where folks are getting these properties and these leads from?
Michael DeAngelis (10:59)
Yeah, it is a mixed bag, but I’m definitely seeing a heavy trajectory of tear downs because again, the demand. So, you know, that is really where a lot of folks are focused right now. A lot of folks that I know when I started really dedicating the large, large majority of my time in May 2020 to this business, you know, was a lot of folks that were focused on fix and flips. Now they’ve pivoted.and really focus on teardowns and finding, you know, the individual lots that are, you know, available out there on a limited basis. Yeah.
Dylan Silver (11:33)
Yeah, I mean,when we talk about tear downs, this is, you know, ground up construction. This is a different ball game, right? And so I’ve seen this, I’m a Texas licensed realtor. I’ve seen this where you’ll have, you know, a situation where someone might have a fix and flip background, but now they’re getting in a new construction. There’s a, there’s a different, this is a different skillset. It’s a different, there’s a learning curve there, right? And so I’ve also seen that, you know, you, you do have to either partner with someone or be prepared that there will be some level of,
Michael DeAngelis (11:55)
Yeah.Dylan Silver (12:02)
learning curve because when you’re dealing with a fix and flip, typically you’re not laying the foundation. You’re not framing the home, right? And so these are different arenas that people are playing in. And I think throughout the country, whether it’s due to aging inventory or in areas outside of New York where you might have some vacant land, more ground up construction, there does seem to be more people getting into teardowns and new construction throughout the country.Michael DeAngelis (12:29)
Yeah, so the big thing there is, yeah, some people partner with folks. It’s very, very common. But the other thing that I think is really important is to have an expediter on speed dial. Because really, biggest, in New York, the biggest issue, on Long Island, I should say, the biggest issue is getting the permits.and getting the permits approved so you could start construction. So an expediter is really, really powerful. And then building in contingencies to your construction plan, right? So 10 % overage, really, really common. mean, we are getting a heck of a winter here in 2026, you know? So a lot of delays in pouring foundations, putting roofs on. So it hasn’t been easy. that buffer.
is really, really, really important when doing deals on Long Island.
Dylan Silver (13:21)
Now you mentioned expediter, I haven’t heard this term before. This is someone who’s gonna help people through the permit process.Michael DeAngelis (13:27)
Yeah, absolutely, positively. We have a lot of layers of government in the Long Island market. Yeah, this is somebody that, you know, that’s their full-time job, that’s their business, to ⁓ navigate permits at the local jurisdictions of government.Dylan Silver (13:46)
Now, I know that people are definitely supposed to pull permits, right? But in some markets of the country, you’ll see people not pulling permits and kind of like, shoot first, ask questions later, let’s get this flip done as fast as possible. Whenever you’re doing a ground up construction though, for sure, you’ve definitely got to pull permits. What’s the typical timeline looking like when people are doing a flip or doing ground up construction with the permit process?Michael DeAngelis (14:55)
Yeah, so the permit process, again, expedited is really, really critical. And it’s one of the questions I asked during the underwriting process. So those that are really, really dialed in are signing a contract to buy land contingent on the fact that a permit will be issued, right? That’s ultimately what we want. But to answer the question, you could go anywhere from three to six months before your permit is issued.So in that time frame, you’re doing a teardown, you’re working with your architect, but it could be three to six months.
Dylan Silver (15:29)
Okay, so that’s got to factor in the arithmetic for sure.Michael DeAngelis (15:32)
Yeah, know, it can go lower than three months if somebody really truly is dialed in, has their process is dialed in as well.Dylan Silver (15:41)
Now, is there also a seasoning period out there? Do you have to hold the property for a certain period of time before you can list it on the market?Okay, so you can bring it right to market. I do want to pivot a bit here, Michael, and ask you specifically about what folks are doing as far as finishing in Long Island. You mentioned that these homes are not super high-end luxury, but if someone is paying $800,000, $900,000 for a home, what do you typically see as being the standard flip product? I’m not imagining that it’s like HGTV level, but I’m also thinking it’s better than what most people would consider rental grade.
Michael DeAngelis (16:16)
Yeah, no, it’s definitely higher than rental grade. So, you know, it is pretty amazing. You know, that seven to eight hundred thousand dollar house, which is really now like kind of the middle of the middle of the road, you know, all along the island. The finishes are not, you know, it looks great, but they’re not high end by no by no means, you know, you would expect laminates. You wouldn’t really expect, you know, any kind of high end flooring might be some nice finished moldings.but you’re gonna get your white cabinets, maybe some granite tops, but nothing on the high end. Once you go north of $2 million, then things really, really change where high ends are coming in for sure in terms of the finishes, faucets, and things of that nature.
Dylan Silver (17:06)
Also too, once I’ve heard this from actually ⁓ a lender is that once properties cost more than $2 million, it’s harder for buyers to secure traditional financing. I believe that that may be an informal rule with the banks that $2 million is like a cutoff point where this is now a trickier deal. So are those deals when they’re more than 2 million, are those sometimes trickier to move?Michael DeAngelis (17:32)
Yeah, they are. It’s a really good point. And you’re pretty deep into the jumbo mortgage at that point. But you’d be surprised. And I’m not saying, but Long Island, people that are going to buy a $2 million house, you’d be surprised how much cash people are putting into those. they’re exiting another property that they had a lot of equity in. There was some upside there.Dylan Silver (17:53)
Yeah.Michael DeAngelis (17:55)
or they’re just a very successful business person, you gotta realize Long Island, big part of Connecticut, big part of New Jersey, these are people that are working in New York City and they’re making good money, right? So they can support that house either with large down payments or the funds to pay very large monthly payments.Dylan Silver (18:25)
We are coming up on time here, Michael, any new projects that you’re working on and then also what’s the best way for folks to get in contact with you or your team?Michael DeAngelis (18:34)
Yeah, so the new projects we’re really working on is getting the word out that we’re on Long Island. So my goal this year is to really let everybody know that it’s either thinking about being a real estate investor or as a current real estate investor that we’re out here hyper-focused. We want to mentor people that are starting out. So that’s our primary goal. We’re starting to create some new products that, because we’re small and we’re agile, that we’re starting to shrink down a lot of time that people are in.projects in loans, tremendous cost savings by looking at how many days you have the funding deployed. And in terms of folks getting a hold of me, pretty big social media presence. So ⁓ it’s ⁓ Mike ⁓ underscore Deangelis D E A N G E L I S underscore. That’s my handle on Instagram. EquiQuest and my name. You can find me on LinkedIn.
in Facebook, but probably the easiest way is just to go to equiquesthardmoney.com and learn a little bit about us. You can schedule a 30-minute consultation if you want to enter the business and learn about funding. can apply for a loan immediately. We have links to social media there. That’s the easiest way for folks to get a hold of us.
We’re really interested in working with ⁓ Long Island investors and we feel like we’re the most hyper-focused Long Island lender out there. Clearly the Nationals lend in to Long Island. There’s lots of Long Island lenders. They lend on Long Island, but also regionally and nationally. We feel like the only ones that are here on Long Island that are just doing Long Island and we feel like that’s kind of our superpower.
Dylan Silver (20:14)
Mike, thank you so much for coming on the show today. Thanks for taking the time.Michael DeAngelis (20:18)
My pleasure. Thanks so much.
