IR-2024SeptOct

Lending Edition in Partnership With

SEPTEMBER-OCTOBER 2024 | thinkrealty.com

FEATURE Dare to be ... Unconventional CREATE OPPORTUNITIES WITH INNOVATIVE FINANCING SOLUTIONS FROM A LENDER THAT SHARES YOUR VISION.

Etiam Scelerisque Mollis Enim in Pulvinar Etiam SED IN DIAM SED ERAT ELEMENTUM TINCIDUNT. PELLENTESQUE LACINIA MAGNA AC BLANDIT LOBORTIS. PRAESENT SED ENIM ERAT. To find private money you can trust, start with AAPL. AUTHOR NAME

Our members are the most-trusted private lenders in the business. They’ve pledged to follow the industry’s only Code of Ethics, enforced by the oldest and largest association for private lenders.

Find your next financial partner today at aaplonline.com/directory.

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Investor Review

C O N T E N T S

Finding Safe Money for Real Estate Investments I n today’s competitive real estate market, leveraging private money can be a game-changer

PAGE 4 Dare to be ... Unconventional Create opportunities with innovative financing solutions from a lender that shares your vision. CV3 Financial Services PAGE 10 How Interest Rates Impact Real Estate Investments An article series on navigating the private lending world Damon Riehl PAGE 12 Turning a Small Down Payment into Big Returns Leverage is a tool for growing your portfolio. Kiavi PAGE 14 The Smart Investor’s Guide to Rental Portfolio Loans Consolidating properties into one portfolio loan can unlock savings and simplify your strategy. Kiavi PAGE 16 Tackling Private Lending Here’s how Devon Kennard is scaling 42 Solutions with precision and professionalism. Shaye Wali PAGE 18 Looking for Funding to Flip Your Next Property Renovation Project? Here are four key questions to ask. Shawn Yerkes PAGE 22 What to Know About Mineral Rights Ownership Mineral rights ownership can offer greater returns than just equity appreciation. Derreck Long PAGE 26 Dominion Financial Services Launches Bridge Loan Program It offers 100% acquisition and 100% rehab financing for fix-and-flip projects. Dominion Financial Services PAGE 30 From Paper to Pixels: The Rise of Data-Driven Lending Platforms The shift to data-driven digital lending platforms is enhancing the mortgage process. Kiavi PAGE 32 Combatting Fraud in the Lending Industry Liquid Logics is working to prevent lending fraud with technology that reduces verification times and enhances security. Alex Kaddah PAGE 34 Customer Service as a Key Differentiator Exceptional customer service is an important factor as you consider a lender. Nicholas Froman PAGE 38 Understanding Commercial Property Loans Business owners must understand how commercial property loans work. Taylor Miller

for investors. However, ensuring that you find safe and reliable private funding is crucial. Here are some strategies to consider. First, it’s essential to establish a solid network. Building relationships with potential private lenders— such as friends, family, or local

LINDA HYDE PRESIDENT AMERICAN ASSOCIATION OF PRIVATE LENDERS

investors—can yield opportunities for funding. Attend local real estate investment groups and networking events to connect with individuals who are willing to invest in your projects. When reaching out, be transparent about your investment goals and how their support can help you achieve them. Another important aspect is due diligence. Before accepting any private money, thoroughly vet your potential lenders. Look for those with a solid track record in real estate investment. Request references and check to ensure they have a history of successful investments. This helps establish trust and demonstrates you are serious about managing their funds responsibly. Additionally, clarify the terms. Ensure all parties are on the same page about interest rates, repayment, and exit strategies. A well-documented agreement can prevent misunderstandings and protect both you and the lender. Make sure to discuss the potential risks and how you plan to mitigate them. Transparency is key; keep your investors informed about the progress of the project. Regular updates foster trust and confidence, making it more likely investors will want to work with you in the future. Finally, consider diversifying your funding sources. Relying on multiple private lenders can reduce risk and provide a more stable financial foundation for your investments. By building strong relationships, conducting thorough due diligence, and maintaining transparency, you can find safe private money that will help you scale your real estate investments effectively.

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INVESTOR REVIEW FEATURE

INVESTORS WITH VISION

SPONSORED CONTENT Dare to be ... Unconventional CREATE OPPORTUNITIES WITH INNOVATIVE FINANCING SOLUTIONS FROM A LENDER THAT SHARES YOUR VISION.

CV3 FINANCIAL SERVICES

I n today’s real estate market, you need to be able to pivot on a dime to seize opportunities as they emerge … or else they disappear. Whether you’re a real estate investor seeking the next big opportunity, a lender balancing risk and reward, or a broker navigating the complexities of today’s market, one thing is clear: Conventional wisdom is no longer enough. It’s time to embrace a mindset that challenges the norm, pivots with agility, and dares to be unconventional. EMBRACE THE CHAOS We all face the chaos of fluctuating markets, unpredictable timelines, and shifting demands. Rather than resist these elements, the bold see them as opportunities. The real estate market is a realm where

uncertainty reigns. Adaptation isn’t just a skill—it’s a necessity. At CV3 Financial Services, we understand that today’s unpredictable landscape demands partners who can think and act beyond conventional limits. We are here to help you turn chaos into opportunity. THE POWER OF UNCONVENTIONAL FINANCING Think outside the box. It’s a mantra that every real estate player knows well. Do you have flipped properties sitting unsold? Untapped equity in your rentals? Projects dragging longer than expected? Opportunities to transform a teardown into a dream home? These scenarios aren’t anomalies—they’re daily realities. And they demand a capital partner ready to say “yes” when others might refrain.

It is a matter of necessity to have diverse financing solutions at your fingertips for a myriad of scenarios— because today’s unconventional circumstances demand unconventional solutions. At CV3 Financial Services, we pride ourselves on being “Your Unconventional Lender.” Our innovative, flexible financing solutions go beyond the traditional DSCR and fix-and-flip options. We offer innovative, tailored lending solutions designed to meet the real-world challenges of today’s market. EQUITY RELEASE. Unlock the equity in your completed properties that are on the market. Cash out now to fund your next venture. CONSTRUCTION COMPLETION. Access the funds you need to bring projects across the finish line, no matter the obstacles.

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PORTFOLIO REFINANCING. Refinance your portfolio to improve cash flow, reduce costs, and free up capital for new investments. FIX AND FLIP. Leverage our specialized financing to turn undervalued properties into profitable sales with 100% rehab financing. DSCR. Choose short-term, interest- only ARM or 30-year principal-and- interest rental property financing with variable terms to fit your needs. PARTNER WITH A LENDER THAT DARES TO INNOVATE The real estate market is not for the faint of heart. It’s for the bold, the brave, and the unconventional. Innovative financing can help you adapt, thrive, and succeed in a dynamic market.

Embrace the chaos and thrive with unconventional lending solutions designed for today’s real estate challenges.”

BROKER PARTNERSHIPS THRIVE AT CV3

By partnering with us, you gain access to a wealth of resources and expertise that can transform your business. Let’s work together to offer the best possible solutions to your clients: 1. DIVERSE FINANCING OPTIONS. Every client’s situation is unique. We offer loans designed to accommodate a wide range of investment strategies. 2. FLEXIBLE PRICING. With competitive guidelines and no point/low point options, we ensure you can offer your clients the best choices. 3. EXPERIENCE MATTERS. With decades of experience, our team of experts handle all loan processing and underwriting in-house. 4. EXCLUSIVE MARKETING PLATFORM. Our broker marketing platform helps you grow your business, elevate your brand, and attract more repeat customers. 5. SCALE YOUR BUSINESS. Expand your clientele to reach real estate investors with unconventional financing options. 6. INCREASE CLIENT SATISFACTION. Our brokers report Customer Satisfaction Ratings of 98%. Higher satisfaction builds trust and loyalty and leads to more repeat business.

In a world where conventional solutions often fall short, being

unconventional is a strength. We’re not your typical lander—we’re partners in your success. Together, let’s embrace

the chaos, think outside the box, and dare to be unconventional.

unconventional approach can work for you? Navigate the unpredictable real estate market with creative solutions from CV3 Financial Services as your capital partner, and transform uncertainty into opportunity.

7. LOYALTY MEANS BUSINESS. Our “Inner Circle” customer loyalty program rewards you for continuing to trust CV3 with your business. Become an Approved CV3 Broker Today

(844) 721-3733 www.CV3financial.com/think- realty-unconventional

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Investor Review: INTEREST RATES

How Interest Rates Impact Real Estate Investments AN ARTICLE SERIES ON NAVIGATING THE PRIVATE LENDING WORLD

DAMON RIEHL

I nterest rates play a pivotal role in real estate investments. They influence borrowing costs, property values, and overall market conditions. As an investor, you must understand how interest rates impact your investments to make informed decisions. Let’s explore the effects of interest

There are two types of interest rates: 1. FIXED INTEREST RATES, WHICH REMAIN CONSTANT OVER THE LOAN TERM. 2. VARIABLE INTEREST RATES, WHICH FLUCTUATE BASED ON MARKET CONDITIONS. Central banks adjust interest rates to manage inflation and stimulate economic growth. Lower rates encourage borrowing and investment; higher rates aim to cool down an overheating economy.

borrowing costs, property values, and rental income cash flow. IMPACT ON BORROWING COSTS. Higher interest rates increase the cost of borrowing. When loans are more expensive, it can deter investors from taking on new debt. EFFECT ON PROPERTY VALUES. When borrowing costs rise, potential buyers may find it harder to afford mortgages, leading to decreased demand and lower property prices. INFLUENCE ON RENTAL YIELDS. Higher interest rates can lead to higher mortgage payments, reducing the cash flow from rental properties. Investors may need to adjust rental prices to maintain profitability.

rates on real estate and discuss some strategies to mitigate risks and capitalize on opportunities.

WHAT ARE INTEREST RATES? Interest rates represent the cost of borrowing money, expressed as a percentage of the loan amount. Central banks, like the Federal Reserve, influence these rates to control economic activity.

HOW INTEREST RATES AFFECT REAL ESTATE INVESTMENTS Interest rates impact investments in several key ways, including

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During the 2008 financial crisis, for example, interest rates plummeted as central banks tried to stimulate the economy, leading to a surge in property investments and refinancing activities. But what happens when interest rates rise suddenly? A sudden rise in interest rates can lead to increased mortgage defaults and a slowdown in property transactions. STRATEGIES TO MITIGATE INTEREST RATE RISKS Despite the potential volatility of interest rates, investors can mitigate their risk using the following strategies: DIVERSIFY YOUR INVESTMENT PORTFOLIO. Diversification helps spread risk across different asset classes, reducing the impact of interest rate fluctuations on your portfolio. OPT FOR FIXED-RATE MORTGAGES. Fixed-rate mortgages provide stability by locking in the interest rate for the loan term, shielding you from market volatility. REFINANCE EXISTING LOANS. Refinancing can help you secure lower interest rates and reduce your monthly payments, especially during declining rates. BUILD A CASH RESERVE. Maintaining a cash reserve allows you to manage higher mortgage payments or take advantage

Interest rates impact investments in several key ways, including borrowing costs, property values, and rental income cash flow.”

INVEST IN HIGH-GROWTH AREAS. Identify and invest in high-growth areas where property values are expected to rise, maximizing your returns as the market appreciates. LEVERAGE FINANCING. Borrowing at low rates allows you to acquire more assets and increase your overall returns. HOW OFTEN DO INTEREST RATES CHANGE? Interest rates can change frequently, often in response to economic data and central bank policies. Although predicting exact movements is challenging, staying informed about economic indicators and central bank statements can provide insights into potential rate changes. Interest rates significantly impact real estate investments, influencing borrowing costs, property values, and rental yields. By understanding these effects and implementing strategies to mitigate risks, investors can navigate interest rate fluctuations and capitalize on opportunities. Stay informed, diversify your portfolio, and leverage financing to maximize your returns.

DAMON RIEHL

Damon Riehl is the founder and CEO of Investment Property Loan Exchange. He has more than 35 years of lending experience in various asset classes, including commercial and residential mortgage, and small business construction lending. Riehl held top leadership positions as head of commercial lending for Ocwen Mortgage, head of unsecured lending for Citibank, global mortgage leader for GE Capital, and head of construction products at Fannie Mae. He is a member of the Harvard Joint Centers for Housing Studies. Riehl has built six de novo lending platforms and used that knowledge to build and grow Investment Property Loan Exchange and the fintech platform LoanBidz.com. If you want to start investing in your first property, one of the first steps is to work out a budget and your financing options. Our team at LoanBidz.com can help you figure out affordable options from the most reliable lenders for your exact needs.

of new investment opportunities without relying on borrowing.

CAPITALIZING ON LOW- INTEREST RATES In a low-interest rate environment, consider these strategies: EXPAND YOUR PORTFOLIO. Low interest rates reduce borrowing costs, making it an ideal time to expand your real estate portfolio.

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Investor Review: UNDERSTANDING LEVERAGE

SPONSORED CONTENT Turning a Small Down Payment into Big Returns LEVERAGE IS A TOOL FOR GROWING YOUR PORTFOLIO.

KIAVI

D espite rising interest rates, seasoned real estate investors often thrive by focusing on leverage rather than just low interest rates. Leverage, or using borrowed funds to boost investment returns, is essential for quickly scaling profits in rental or fix- and-flip properties without using large amounts of personal capital upfront. Although homebuyers typically use mortgages, traditional loans for investors require significant equity, potentially limiting further investments. However, lenders like Kiavi offer high-leverage products, requiring as little as a 5% down

payment, enabling investors to free up capital and increase profits faster.

and maximizing profits, especially if refinancing or other payoff methods are planned within three to 10 years. BENEFITS OF HIGH- LEVERAGE LOANS IN HIGH- INTEREST ENVIRONMENTS 1. MORE CASH IN HAND. High leverage means more retained

MAKING THE MOST OF YOUR EQUITY Consider a $100,000 investment property. Paying cash requires $100,000 upfront, while a typical short-term loan might need a 20-30% down payment ($20,000-$30,000). Kiavi’s loans, with a 95% loan-to-cost ratio or 80% after-repair value, can reduce the down payment to just $5,000-$20,000. These loans often require interest-only payments for a period, preserving cash

cash, allowing for portfolio scaling or other investments.

2. SPEED TO MARKET. High-leverage loans free up funds, enabling rapid movement to new opportunities.

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3. PROFIT AND FLEXIBILITY. Despite higher finance costs, the return on equity invested is greater with leverage, and refinancing remains an option as the market evolves. High-interest rates might deter some, but waiting for rates to drop could mean missing out on opportunities. Although high-leverage loans come with higher costs, they are still a viable strategy for investors looking to grow their portfolios.

GETTING STARTED Investors should ask the right

questions to maximize returns on investment properties. Loan types vary in terms, rates, penalties, and schedules. Kiavi’s platform allows investors to input property details to explore various loan options, including adjustable or fixed-rate mortgages. Leverage is a strategic way to scale a real estate portfolio and achieve high returns with minimal upfront investment, even in high-interest environments. As long as investors manage debt responsibly and make timely payments, leverage remains an effective tool for portfolio growth.

With more than $12.3 billion in funded loans, Kiavi is one of the nation’s largest private lenders to residential real estate investors (REIs). Kiavi harnesses the power of data and technology to offer REIs a simpler, more reliable, and faster way to access the capital they need to scale their businesses. Formerly known as LendingHome, Kiavi is committed to helping customers revitalize the approximately $25 trillion worth of aged U.S. housing stock to provide move-in ready homes and rental housing for millions of Americans across the country. NMLS ID #1125207

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Investor Review: LOAN CONSOLIDATION

SPONSORED CONTENT The Smart Investor’s Guide to Rental Portfolio Loans CONSOLIDATING PROPERTIES INTO ONE PORTFOLIO LOAN CAN UNLOCK SAVINGS AND SIMPLIFY YOUR STRATEGY.

KIAVI

W hen exploring financing options for rental properties, real estate investors often weigh the benefits of individual loans versus portfolio loans. Rental portfolio loans allow you to streamline all your rental investments into one neat package by combining your properties under one loan. This consolidation can offer better terms, including lower interest rates and reduced fees, making them advantageous for scaling up. By understanding how these loans are structured and priced, you’ll know how to make informed decisions. This means analyzing not just the surface numbers but also considering how the loan’s terms (i.e., prepayment penalties, liquidity requirements, underwriting requirements, and other loan covenants) can affect your long-term profitability.

PORTFOLIO LOAN (FOR A 10-PROPERTY LOAN) Processing Fee: $6,000 (estimated) Origination Fee: 1.000% By choosing the portfolio loan, Ethan sees a reduction in upfront fees, making it a more cost-effective option. INTEREST RATE SAVINGS Ethan stands to gain significantly from a portfolio loan due to its lower interest rates compared to single- asset DSCR rental financing. Even a modest 0.25% reduction could save him more than $10,000 in five years and $20,000 in 10 years, underscoring the substantial long-term financial advantages of opting for this type of loan. DETAILED FINANCIAL BREAKDOWN For both the individual and portfolio loans, Ethan’s loan amount is

Let’s look at rental portfolio loans and break down the math behind them using a real-world example so you see the benefits. ETHAN’S SCENARIO: INDIVIDUAL LOANS VS. PORTFOLIO LOAN Consider the following example to understand the math behind rental portfolio loans. Remember, this is an illustration, and your actual terms may vary. Ethan owns 10 rental properties. He’s considering a rental portfolio loan to consolidate his investments. Here’s a comparison of his options: INDIVIDUAL LOANS Processing Fee: $999 per property Origination Fee: 1.5% or $2,000, whichever is greater

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$1,000,000. However, the portfolio loan offers a lower interest rate (7.25%) than individual loans (7.5%), based on his individual portfolio, leading to lower monthly payments and significant savings over time.

STREAMLINING YOUR INVESTMENTS

ADDITIONAL CONSIDERATIONS

In addition to interest rate reductions that lower monthly payments, there are also cost savings from consolidating escrow/title fees, legal fees, appraisals, due diligence, and more. The portfolio loan streamlines these costs, offering a more predictable and manageable financial plan. Beyond cost savings, Ethan simplifies his rental property business with just one title policy, escrow, set of loan documents, and monthly payment for all 10 of his properties. Seeing the numbers laid out, Ethan realizes the portfolio loan is a no-brainer. The lower fees and the significant interest rate reduction translate to more money in his pocket, plus a simpler way to manage his expanding portfolio.

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Investor Review: SCALING

SPONSORED CONTENT Tackling Private Lending HERE’S HOW DEVON KENNARD IS SCALING 42 SOLUTIONS WITH PRECISION AND PROFESSIONALISM.

SHAYE WALI

D evon Kennard leans forward confidently in his chair as he talks about his passion for real estate. He’s focused, poised, and articulate. On his desk, there is no clutter—revealing something about the way his mind works. For Kennard, staying organized isn’t just a mindset; it’s his way of life. It served him well during his nine years as a linebacker in the NFL, where focus and discipline were the cornerstones of his success. Now, Kennard has traded in his jersey for his next play: real estate private lending. The average career length of an NFL player is 3.3 years. Although Kennard spent nearly a decade in the league, he understood the finite nature of the job and planned ahead. During his career in the NFL, he amassed a portfolio of over 20 rental properties to build passive income. After recently retiring, Kennard launched the Phoenix-based private lending business 42 Solutions, a nod to the number he wore on his jersey. The number carried with it a sense of identity and purpose. It’s a reminder of the professional standards he held himself to as an athlete, and now, as a businessman. Kennard started the way most lenders do. “I was using multiple spreadsheets, word documents, accounting software— my process was all over the place.”

After realizing that process was no longer cutting it, he looked at other software: “I looked at five separate solutions. Each of them had something to offer, but none quite matched my vision.” When Kennard came across Baseline, it immediately struck a chord. He could clearly see the system’s potential to save him time and freedom to focus on what really mattered—managing relationships. “Baseline is more than just a software for managing loans; it’s a complete solution designed for private lenders like me who want more than just spreadsheets.” Kennard had briefly entertained the idea of running a local lending operation, focused only on the Phoenix market. But the more he thought about it, the more he realized his ambitions stretched beyond local borders. Kennard’s ethos is clear: professionalism above all. He favors working with borrowers who are professionals, regardless of the markets in which they operate. Baseline has allowed 42 Solutions to scale without compromising Kennard’s core values and the experience he delivers to his borrowers, who expect their lender to be just as professional as they are. Now, with the assistance of a bookkeeper, Kennard can handle a growing multi-state portfolio of loans. Kennard recognizes that borrowers favor reliability and speed. One of his core

advantages over institutional lenders is that borrowers deal directly with him—he’s the decision-maker. That’s something borrowers appreciate when working with 42 Solutions. “People don’t want to jump through hoops to get an answer,” Kennard said. “They want to know that they’re dealing with someone who can give them a yes or no.” With Baseline running the back office, Kennard is already thinking about what comes next. “I’ve got big plans,” he says, hinting at his ambitions for growth. And with a book set to release later this year, it’s clear that Kennard’s journey is just beginning.

SHAYE WALI

Shaye Wali is the CEO of Baseline, a loan management software designed for the private lending industry. Before starting Baseline, he ran a private lending business and worked on the bond trading desk at Morgan Stanley. Wali graduated from Tulane University, where he was the captain of the nationally ranked NCAA Division I tennis team.

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Purpose-built software for real estate private lending.

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Investor Review: TALKING TO LENDERS

SPONSORED CONTENT Looking for Funding to Flip Your Next Property Renovation Project? HERE ARE FOUR KEY QUESTIONS TO ASK.

SHAWN YERKES

I nvestors continue to be active by market. According to a May 2024 article by Lily Katz posted on Redfin’s website (https://www.redfin.com/news/ investor-home-purchases-q1-2024), investor home purchases are on the rise, with investors accounting for roughly 44,000 home purchases in the first quarter of 2024. Considering this represents 19% of homes sold purchasers of residential homes, although the level of activity varies

in the first quarter, investors’ share of the residential home purchase market has grown significantly over the last decade. Their share was less than 10% as recently as 2010. A significant portion of these home purchases are made by investors looking to renovate the property and resell it for a profit, commonly known as a fix-and-flip project. As property investors know, selecting the right lender (like FMS Investor Financing)

for their renovation project can be critical in helping ensure on-time completion and maximum profits. Here are some key questions for property investors to consider in selecting the right lender: 1. DOES THE LENDER HAVE EXPERIENCE LENDING TO PROPERTY INVESTORS WHO WORK ON HOME RENOVATIONS? Financing provided for these investment property loans is different from more conventional residential

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lending. The loans are underwritten differently, generally based more on the income-earning potential of the property than on an individual’s income. Also, money is distributed throughout stages of the project rather than as a lump sum at the initial closing. Finding a lender that has expertise in this process can be key to long-term success. 2. WHAT FINANCING OPTIONS DOES THE LENDER HAVE TO HELP YOUR PROJECT STAY ON TIME AND, CRITICALLY, ON BUDGET? Investment property lending is typically more customized to the project when compared to other types of mortgage loans. Having an experienced lender with flexible product options can be invaluable for your projects. 3. WHAT ARE THE LENDER’S UNDERWRITING REQUIREMENTS, INCLUDING THE DOWN PAYMENT, TO GET APPROVED FOR THE LOAN? Investment property evaluation, from the lender’s point of view, and the way the financing is underwritten, requires a review of criteria that are different than those for a traditional residential mortgage to make the loan successful for both the investor and the lender. Again, working with an established residential investment property lender is critical. 4. DOES THE LENDER HAVE A STEADY SOURCE OF CAPITAL TO HELP YOU WITH ONGOING OR POTENTIAL FUTURE PROJECTS? With the recent interest rate challenges those in the residential lending industry have faced, several lenders have had to

Investor home purchases are on the rise, with investors accounting for roughly 44,000 home purchases in the first quarter of 2024.”

SHAWN YERKES

remove products and significantly change their underwriting requirements. Some have stopped lending altogether. Find a lender with a steady source of capital that has had success in all types of business cycles. FMS Investor Financing is your investment property lending solution. At FMS Investor, we have more than 50 combined years of experience in the industry, and we have been through multiple business cycles. We have been lending through both periods of growth and market contraction. FMS Investor has a complete set of lending products, from short-term fix-and-flip loans to longer-term DSCR rental loans, loans for new construction, and even portfolio mortgages for a bundle of properties. Finally, we are well-capitalized to handle demand as it is needed. Contact FMS Investor for that next fix-and-flip project or any other investment property needs you or your clients may have.

Shawn Yerkes is a long-time executive turned entrepreneur, who has learned the importance of treating customers and employees like gold, ensuring growth and return business. He spent many years in mortgage banking with Bank of America before moving on to renewable energy as a senior executive at Sungevity and Zenernet. In between, he was the Managing Director - Global Service Centers for IWG, the parent company of the short-term office space brands Regus and Spaces. Shawn has been involved with the Fay Group for the last two years, as he saw an opportunity to create groundbreaking businesses focused on the customer experience and, more specifically, the next generation of investor lending and insurance. Through FMS Investor Financing and Constructive Insurance, he strives to create a culture in which everyone—clients, colleagues, and vendors—are poised for success.

For FMS Investor Financing, all terms subject to credit approval. All loans must be solely for a business or commercial purpose and secured by a non-owner-occupied property. Products not available in ND, RI, UT, or VT. In CA, NV, and SD products offered by Fay Servicing, LLC d/b/a Constructive Mortgage Services. NMLS ID 88244. In all other states not previously listed, products are offered by Constructive Loans, LLC d/b/a FMS Investor Financing. Please visit www.nmlsconsumeraccess.org for additional licensing/registration information. All loans made and arranged in California pursuant to a California Financing Law License # 60DBO-82792. Rates, terms, and conditions are subject to change from time to time without notice.

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DARE TO BE

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Investor Review: MINERAL RIGHTS OWNERSHIP

SPONSORED CONTENT What to Know About Mineral Rights Ownership MINERAL RIGHTS OWNERSHIP CAN OFFER GREATER RETURNS THAN JUST EQUITY APPRECIATION.

DERRECK LONG

O wning the rights to depletable natural resources such as oil, coal, and natural gas, allows you to earn royalties passively. With proper due diligence and careful consideration of market conditions, mineral rights can be an attractive asset to own. However, mineral rights ownership is not always as simple as it appears. Here’s what you should know about the many details involved in mineral rights ownership: ▷ MINERAL RIGHTS OWNERSHIP OPPORTUNITIES. ▷ THE ADVANTAGES AND POTENTIAL RISKS PRESENTED BY MINERAL RIGHTS OWNERSHIP. ▷ HOW MINERAL RIGHTS OWNERSHIP COMPARES TO OTHER ASSET CLASSES.

MINERAL RIGHTS CLASSIFICATION

however, the mineral rights do not include air and water rights. Many people assume that mineral rights naturally come with a real estate purchase, but it’s common for U.S. properties to have severed mineral rights. Sometimes, a property can have two separate owners because previous property owners sold their surface property while keeping the mineral rights. A sticky situation may occur when surface and mineral rights owners don’t know the other exists. MINERAL RIGHTS INDUSTRY BACKGROUND Although mineral rights ownership can be lucrative, you must learn its unique language, rules, classifications, and negotiation protocols. Also, mineral rights laws vary from state to state. Even the process of finding out whether a property has mineral rights and ascertaining its value requires a mineral rights consultant, attorney, or broker. Eckard Enterprises has more than 35 years of experience in the U.S. oil and gas industry. Eckard focuses on educating qualified individuals on direct ownership of energy assets in the oil and gas space.

Whether natural minerals are sedentary or fluid, the industry classifies them by characteristics and functions. Each mineral rights classification comes with a separate set of contracts, tax implications, and conditions. The official government mineral right classifications are: ▷ LOCATABLE. Metallic and non- metallic minerals like gold, silver, hard rock, and feldspar ▷ LEASABLE. Energy minerals like oil, gas, and coal ▷ SALABLE. Minerals (sand, gravel, and dirt) sold in bulk at low unit prices ▷ METEORITES/NEW MINERAL DISCOVERIES. Can be more valuable than precious metals Owners must acquire mineral rights according to these classifications. If you purchase mineral rights, make sure you understand all the tax and regulatory requirements of the minerals’ classifications. MINERAL RIGHT ROYALTIES The task of excavating and extracting minerals from the earth requires a

HOW DO MINERAL RIGHTS WORK?

In the United States, mineral rights owners have legal possession and control over the minerals underneath their property. These rights give the owners the authority to extract any of the minerals listed on the original deed. Some of these minerals include oil, natural gas, and coal;

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WANT TO LEARN MORE? With the proper due diligence and professional help, direct ownership of mineral rights can provide consistent royalties. These royalty- generating assets can serve as a reliable source of long-term income in the form of monthly checks. Whether you have a long-term or short- term strategy, mineral rights ownership can be profitable. To learn more about opportunities for direct ownership of mineral rights and other oil and gas assets, contact Eckard today.

lot of money, time, equipment, and expertise. Even the exploration phase is a difficult, intensive project that requires a company with a proven track record in the exploration and mining of minerals. For this reason, the easiest and most efficient opportunity is typically to sell or lease the rights to a company that can extract said minerals. In return, mineral owners receive compensation in the form of monthly royalty checks from the mineral rights sale or income based on a lease or royalty agreement. The most popular option is to sell the rights to a mineral rights broker or a reputable company that mines the types of minerals on your property. With this arrangement, you can either sell your property outright or sell the mineral rights and keep the surface property. If you decide to keep the surface property, make sure the company’s plans for the property don’t conflict with yours. For owners who want to enjoy assets that generate monthly royalty checks and also maintain ownership of their mineral rights, leasing the underground property to an established mining company is a good option. This arrangement yields income from lease payments and royalties from the yield of extracted minerals. The leasing contract establishes specific time periods, the royalty agreement, and other conditions. Also, if you own both mineral and surface rights, an oil company may pay you a flat rate to retain future rights to drill on the land.

be aware of. Here are some important factors to consider before delving into mineral rights ownership: Mineral rights ownership has advantages that other asset classes don’t have. It provides flexibility, granting you the options to: ▷ SELL THE RIGHTS FOR A LUMP SUM. ▷ GENERATE CASH FLOW WITHOUT MANAGING LABORERS,

ASSUMING LIABILITIES, OR INCURRING BIG EXPENSES.

▷ SELL ALL OR PART OF THE ROYALTY AGREEMENT WHILE MAINTAINING OWNERSHIP OF THE MINERAL RIGHTS. ▷ RECEIVE A “LEASE BONUS” BY LEASING THE MINERAL RIGHTS TO AN OIL COMPANY. ▷ DISPERSE YOUR INCOME. Most of the risks in mineral rights ownership involve elements of the unknown. For instance, if the leasing company doesn’t find minerals on your property, you don’t get royalties. There is also the remote possibility of buying mineral rights that are being developed by a subpar exploration and production company. This type of arrangement can bring negative financial and legal repercussions. Royalty rates for minerals like oil and gas depend on current demand. As a result, a major drop in commodity prices will negatively impact the value of your mineral rights. However, you can considerably reduce the risks in mineral rights ownership through education and thorough due diligence.

DERRECK LONG

Derreck Long is a senior wealth manager at Eckard Enterprises. He served in the military from 2010 to 2014 and then attended college at Northern Arizona University, where he received a degree in global marketing. After graduating college, Long worked with the FBI, but then started researching how to become an investor. He started experimenting in notes and has been a private lender ever since. Long has experience with a broad range of notes, including equity appreciation, second- lien notes to the traditional first-lien and mineral rights in the oil and gas space. Long is active on a government relations committee, where he researches tax code and new bill/law changes at the congressional level.

ADDITIONAL BENEFITS AND RISKS

Mineral rights ownership comes with other positive and negative features to

thinkrealty.com | 23

DIRECTLY OWN OIL & GAS ASSETS!

We own over 7,000 wells across multiple basins in the United States.

24 | think realty magazine :: september - october 2024

Real Property

Monthly Royalties

Zero Ongoing Expenses

Zero Ongoing Liabilities

DID YOU KNOW THAT MINERAL RIGHTS QUALIFY FOR A 1031 TAX EXCHANGE?

Eckard Enterprises, LLC, is a family-owned and operated oil and gas company with four decades of experience, specializing in mineral rights and other royalty generating assets in the U.S. energy industry. Eckard believes tangible assets such as minerals provide opportunities for qualified individuals to directly own one of the most secure and long-term income generating assets available.

WANT TO LEARN MORE? (800) 527-8895 | www.eckardenterprises.com/thinkrealty

MINERAL RIGHTS | WORKING INTEREST | MIDSTREAM ECKARD ENTERPRISES

thinkrealty.com | 25

Investor Review: FIX-AND-FLIP FINANCING

SPONSORED CONTENT Dominion Financial Services Launches Bridge Loan Program IT OFFERS 100% ACQUISITION AND 100% REHAB FINANCING FOR FIX-AND-FLIP PROJECTS.

DOMINION FINANCIAL SERVICES

D ominion Financial Services (DFS), a national private lender for residential real estate investors, has launched a new bridge loan program designed to revolutionize investment financing. The program offers up to 100% acquisition and rehab financing, with interest rates starting as low as 9.5%, aiming to enhance investors’ operating capital and foster business growth. KEY FEATURES OF THE BRIDGE LOAN PROGRAM: ▷ COMPETITIVE RATES. Investors can take advantage of rates as low as

9.5% with a rate buydown option of one point or opt for an 11% rate without upfront origination points, providing flexibility based on individual financial strategies. ▷ COMPREHENSIVE FINANCING. The program allows for financing 100% of both acquisition and rehab costs, ensuring that investors can fully leverage their capital for property improvements and expansions. ▷ EFFICIENT UNDERWRITING. DFS

significantly speeding up the timeline for accessing funds. Deals can close in as little as 48 hours. ▷ NATIONWIDE AVAILABILITY. The program is accessible to real estate investors across the United States, broadening the reach and impact of DFS’s financial solutions. THE DOMINION DIFFERENCE Dominion Financial Services distinguishes itself in the market by offering up to 100% loan-to-cost, a feature unmatched by other national private lenders. This unique aspect

simplifies the approval process by underwriting deals in-house without requiring an appraisal,

26 | think realty magazine :: september - october 2024

solidifies DFS’s leadership in the real estate investment lending sector. Jack BeVier, Partner at Dominion Financial Services, emphasizes the company’s long-standing commitment to the market, stating: “For 22 years, Dominion has thrived in the fix- and-flip lending market with a commonsense approach focused on providing exceptional rates, speed, and service. Our new guidelines reflect today’s market conditions and give the country’s most talented flippers and landlords a competitive advantage to thrive. We look forward to supporting these entrepreneurs and continuing to grow together.” The new bridge loan program builds on the foundation of DFS’s previous offerings, shaped by extensive industry insights gained since the 2008 financial crisis. Recent market dynamics, including the stress tests brought on by COVID-19 and the 2023 basis point increase, have informed the development of this more intelligent and nuanced approach to bridge lending.

Dominion Financial Services LLC. NMLS ID # 898795, 32 South St Baltimore MD 21202. Dominion Financial Services, LLC is licensed or exempt from licensing in all states. Dominion Financial Services, LLC is licensed in Nevada as a Mortgage Company (License No. 5594). Dominion Financial Services, LLC is licensed in Minnesota as a Mortgage Originator (License No. MN-MO-898795). Dominion Financial Services, LLC is licensed in Arizona as a Mortgage Banker (License No. 0950308). Dominion Financial Services, LLC is licensed as a California Finance Lender and Broker under Department of Business Oversight (License No. 60DBO 91679). Dominion Financial Services, LLC is licensed in South Dakota as a Mortgage Lender (License No. ML-05220). Dominion Financial Services, LLC is licensed in North Dakota as a Money Broker (License No. MB103364).Dominion Financial Services, LLC is licensed in Vermont as a Commercial Lender (License No. 898795 CLL). Dominion Financial Services, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5763). Dominion Financial Services, LLC is licensed in Idaho as a Mortgage Broker/Lender (License No. MBL-2080898795). Dominion Financial Services, LLC is licensed in Colorado as a Mortgage Company.Dominion Financial Services, LLC is licensed in the District of Columbia as a Mortgage Dual Authority (License No MLB898795) Dominion Financial Services, LLC is licensed in Florida as a Mortgage Lender (License No. MLD1796). Dominion Financial Services, LLC is licensed in Pennsylvania as a Mortgage Lender (License No. 104295). Dominion Financial Services, LLC is licensed in Texas as a SML Mortgage Company.

EMPOWERING REAL ESTATE INVESTORS

DFS’s new bridge loan program is tailored to help real estate investors expand their businesses by providing crucial capital for new opportunities. With 100% financing options, competitive rates, and a streamlined approval process, DFS empowers investors to maximize their operating capital and scale their portfolios efficiently. Investors seeking long-term financing solutions should inquire about Dominion Financial’s rental loans with a DSCR price-beat guarantee. For more information about the new DFS Bridge Loan Program, call (410) 883-8493 to speak to a loan officer.

thinkrealty.com | 27

DOMINION FINANCIAL

100% FINANCING Now Offering: For Fix & Flip Loans 100% Acquisition 100% Rehab No Appraisal Rates as low as 9.5%

Option for no upfront points Close in as little as 48 hours Available Nationwide

410-883-8493

28 | think realty magazine :: september - october 2024 Dominion Financial Services LLC. NMLS ID # 898795, 32 South St Baltimore MD 21202. Dominion Financial Services, LLC is licensed or exempt from licensing in all states. Dominion Financial Services, LLC is licensed in Nevada as a Mortgage Company (License No. 5594). Dominion Financial Services, LLC is licensed in Minnesota as a Mortgage Originator (License No. MN-MO-898795). Dominion Financial Services, LLC is licensed in Arizona as a Mortgage Banker (License No. 0950308). Dominion Financial Services, LLC is licensed as a California Finance Lender and Broker under Department of Business Oversight (License No. 60DBO 91679). Dominion Financial Services, LLC is licensed in South Dakota as a Mortgage Lender (License No. ML-05220). Dominion Financial Services, LLC is licensed in North Dakota as a Money Broker (License No. MB103364). Dominion Financial Services, LLC is licensed in Vermont as a Commercial Lender (License No. 898795 CLL). Dominion Financial Services, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5763). Dominion Financial Services, LLC is licensed in Idaho as a Mortgage Broker/Lender (License No. MBL-2080898795). Dominion Financial Services, LLC is licensed in Colorado as a Mortgage Company.Dominion Financial Services, LLC is licensed in the District of Columbia as a Mortgage Dual Authority (License No MLB898795) Dominion Financial Services, LLC is licensed in Florida as a Mortgage Lender (License No. MLD1796). Dominion Financial Services, LLC is licensed in Pennsylvania as a Mortgage Lender (License No. 104295). Dominion Financial Services, LLC is licensed in Texas as a SML Mortgage Company. Dominion Financial Services, LLC | NMLS# 898795 | 32 South St, Baltimore, MD 21202 | DominionFinancialServices.comipsum

DOMINION FINANCIAL

RENTAL LOANS WITH DSCR PRICE-BEAT GUARANTEE Now Offering:

DSCR Price-Beat Guarantee Up to 80% LTV 680+ FICO Score

$100,000 minimum property value Single-family and 2-9 unit residential Available nationwide No prepayment options available

Ask about our Express Rental Loan Program 410-883-8493

thinkrealty.com | 29 Dominion Financial Services LLC. NMLS ID # 898795, 32 South St Baltimore MD 21202. Dominion Financial Services, LLC is licensed or exempt from licensing in all states. Dominion Financial Services, LLC is licensed in Nevada as a Mortgage Company (License No. 5594). Dominion Financial Services, LLC is licensed in Minnesota as a Mortgage Originator (License No. MN-MO-898795). Dominion Financial Services, LLC is licensed in Arizona as a Mortgage Banker (License No. 0950308). Dominion Financial Services, LLC is licensed as a California Finance Lender and Broker under Department of Business Oversight (License No. 60DBO 91679). Dominion Financial Services, LLC is licensed in South Dakota as a Mortgage Lender (License No. ML-05220). Dominion Financial Services, LLC is licensed in North Dakota as a Money Broker (License No. MB103364). Dominion Financial Services, LLC is licensed in Vermont as a Commercial Lender (License No. 898795 CLL). Dominion Financial Services, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5763). Dominion Financial Services, LLC is licensed in Idaho as a Mortgage Broker/Lender (License No. MBL-2080898795). Dominion Financial Services, LLC is licensed in Colorado as a Mortgage Company.Dominion Financial Services, LLC is licensed in the District of Columbia as a Mortgage Dual Authority (License No MLB898795) Dominion Financial Services, LLC is licensed in Florida as a Mortgage Lender (License No. MLD1796). Dominion Financial Services, LLC is licensed in Pennsylvania as a Mortgage Lender (License No. 104295). Dominion Financial Services, LLC is licensed in Texas as a SML Mortgage Company. Dominion Financial Services, LLC | NMLS# 898795 | 32 South St, Baltimore, MD 21202 | DominionFinancialServices.comipsum

Investor Review: ONLINE LENDING PLATFORMS

SPONSORED CONTENT From Paper to Pixels: The Rise of Data-Driven Lending Platforms THE SHIFT TO DATA-DRIVEN DIGITAL LENDING PLATFORMS IS ENHANCING THE MORTGAGE PROCESS.

KIAVI

M ortgage lending companies have adapted to an increasingly online customer base. Despite rapid technological advancements, the lending process has largely remained traditional, relying heavily on paperwork and phone calls. However, the industry is now experiencing a shift toward a more sophisticated, data-driven digital experience. HISTORICAL EVOLUTION OF MORTGAGE LENDING Traditionally, mortgage lending was based on trust and local knowledge, with borrowers engaging directly with lenders at banks. Decisions were often rooted in personal relationships, with manual verification processes being the norm. The mid-20th century introduced computers into banking, improving account management and transaction tracking. The late 20th century saw the internet revolutionize banking, leading to the emergence of online lending platforms. Initially, these platforms allowed borrowers to fill out loan origination forms online and receive follow-up calls from brokers, reducing the need for in-person bank visits.

Companies like Kiavi, a fintech pioneer, have utilized technology to simplify applications, enhance transparency, and increase accessibility in pricing and terms. The shift from manual to digital, data-driven transactions has allowed borrowers to receive immediate feedback on loan terms, significantly accelerating the buying process. THE ROLE OF DATA IN CUSTOMIZED SOLUTIONS A key advancement in modern lending is the collection and utilization of data. Advanced analytics and machine learning have enabled more accurate risk assessments and tailored lending products. Kiavi, for instance, uses personal and property data to calculate loan terms. Their pricing calculator analyzes factors such as property valuation, historical trends, and market dynamics. This approach provides borrowers with upfront certainty in loan terms, crucial for making quick and informed decisions.

particularly large, allowing for a quicker and more efficient lending process. Their data analysis also challenges conventional wisdom, showing that quicker property fixes and refinances yield better returns on investment.

THE FUTURE OF LENDING WITH AI

Artificial intelligence (AI) is set to further revolutionize lending by streamlining credit assessments and risk analysis, reducing the need for human intervention. Companies like Kiavi are experimenting with AI to automate internal policies and decision-making, enhancing the lending experience. Despite these technological advancements, personal relationships and trust remain crucial in real estate lending. The evolution of technology in lending reflects broader trends in financial services, where innovation drives change, enhancing efficiency, transparency, and accessibility for all.

KIAVI’S INNOVATIVE LENDING APPROACH

As a hard money lender, Kiavi focuses on the potential of the property rather than the borrower’s finances. Unlike traditional mortgages that emphasize borrower creditworthiness, hard money loans are backed by the property itself. Kiavi’s model doesn’t require extensive financial details unless the project is

THE RISE OF DIGITAL LENDING PLATFORMS

Recently, digital lending platforms have further leveraged the internet’s capabilities, offering automated decision-making and instant quotes.

30 | think realty magazine :: september - october 2024

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