Shelby Reed, CEO of Minnow Loan, shares some insights about real estate investing and hard money lending in Missouri – current trends, challenges for investors, lending landscape, etc. Watch the video or read the interview transcript below.
Lender Link:
What are the dynamics which are driving real estate investment activity and hard money lending in Missouri?
Shelby Reed:
One of the biggest driving factors that is affecting the real estate investing activity here throughout the state of Missouri is the lack of inventory that is on the market and lack of inventory in general that is available to our real estate investors to purchase. Typically throughout the state of Missouri, especially here in the Midwest, we have a pretty stable housing market. You won’t see our prices flex up and down as severely as you will see in a state such as Florida or Arizona or California. Our prices remain consistently stable. However, because of this lack of inventory right now that we are seeing, we are seeing that directly impact the prices on the buy side, the sales side, and as well as our rental market.
Lender Link:
Are there any particular cities or neighborhoods in Missouri where you’ve seen a lot of activity?
Shelby Reed:
We are seeing real estate investment activity throughout the state of Missouri. We always see a little bit more in our major metropolitan cities such as St. Louis and Kansas City. However, we are seeing investment activity and receiving loan applications and funding on some of these loan applications throughout the state of Missouri.
Lender Link:
What is the hard money lending landscape like in Missouri?
Shelby Reed:
Throughout the state of Missouri, there are a few different lending options available to the real estate investor to fund their projects. One of those options is your traditional local community banks, and then the other option is to work with a hard money lender. We have a handful of hard money lenders that work throughout the state of Missouri. However, a lot of these lenders are nationwide lenders and are not local here to the state. What makes Minow loan so different is that we are true local lenders here throughout the state of Missouri. We are located in the Midwest, in the Columbia area.
Lender Link:
How do you differentiate yourself from the competition in Missouri?
Shelby Reed:
What makes us unique is that we are loaning out all of our own capital, so that allows us to have our own underwriting process that we do internally and that therefore we can talk with the borrower and really understand what makes up this deal. Why do you wanna do the deal, what are the positives of the deal, and then what are the constraints and what do you need from a lending perspective? Having our own internal underwriting department and our own internal underwriting process really gives us that unique advantage when we’re lending out our own capital.
Lender Link:
What types of hard money loans do you typically fund in Missouri?
Shelby Reed:
We fund all different types of loans here at Minnow loan, but the majority of our loans are your traditional fix and flip your bridge and your fix and hold. Lately we’re seeing a big influx in our real estate investors wanting to fix and hold and rent out long term. Even though we’re seeing these higher prices in our areas, we’re still seeing our investors not wanting to do the flip. They wanna keep it, they wanna hold it, and they want to then rent it out. We have been able to successfully take some of those products and some of those borrowers and loans and convert their bridge or their fix and flip into a long-term DSCR product, which really gives that investor many, many options to build their portfolio.