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HOW REFINED LENDING PRACTICES ARE FUELING OUR SUCCESS A New Era for LIONSCOVE
One of our values at LIONSCOVE is “BE FEARLESS,” which we articulate as challenging the status quo as we endeavor to make a positive impact. Being Fearless leads us to consistently look for ways to improve our processes and make adjustments that fuel additional growth. In the past we have shared how we revised our lending criteria, and one of the critical components of that shift was a focus on a completely different borrower persona. Over the last 12-18 months, we have effectively completely pivoted our business to a new borrower base. Changing business strategy is never easy and being fearless allowed us to confidently move forward with the strategic shift. Our business now focuses on relationships with real estate developers in the Greater Seattle area. These developers’ core business is with infill development, typically building one to four residential units inclusive of Accessory Dwelling Units “ADU’s” (think mother-in-law unit), Detached Accessory Dwelling Units “DADU” and small housing tracts. Furthermore, we focus more specifically on the East Side of Seattle in cities such as Bellevue, Redmond, Kirkland, and Bothell. Generally speaking, we find these areas to be less sensitive to downward pricing pressure, meaning that if there was to be a market correction and housing values decline, we believe that these areas would decline less than the average, effectively making these safer investments.
Additionally, the builders we are working with have extensive experience both in terms of completed projects and years in business, excellent credit, and strong liquidity — all essential for successful partnerships. We aren’t just working with anyone who meets our base criteria; we’re working with the best in the business. One of the main reasons we’re so dedicated to working with this current group of builders stems from their market experience and ability to anticipate impending changes. If there is any choppiness or fear in the market, we can rest assured knowing that our builders have been through it before and are fully capable of persevering through challenges. This contributes to low delinquency rates for our loans. Our strong relationships with the building community in the Greater Seattle Area have been pivotal for our growth and success. This is impactful for our investors, as we are driving repeat business with our borrowers and shifting from transactionally driven to relationship driven, which is another of our values. In turn, this reduces risk in the portfolio as we have higher quality borrowers and projects that we are funding.
SEPT./OCT. 2024 LIONSCOVE.COM (855) 438-7051
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Acres of Diamonds Provides New Beginnings for Families in Need Breaking the Cycle
Our children are our future. That’s an idea that most parents can identify with as we work diligently
In 1995, Pearl Tadema recognized the growing homelessness crisis and
raised funds to buy and furnish a home in Duvall. She invited homeless moms and kids from the community to move into the house and provided them with everything they would need to improve their lives and escape their current situations. As a Christian organization that is biblically driven, Acres of Diamonds has provided counseling, parenting advice, financial support, and community to mothers and children for nearly 30 years. In addition to the support systems in place for mothers, there are also children’s programs to help kids develop into responsible young adults. They receive supplemental academic support, relational and emotional training, and intentional mentoring. Acres of Diamonds aims to decrease the symptoms of trauma and help kids become the best versions of themselves. LIONSCOVE stands firmly behind Acres of Diamonds’ efforts. Liam and his wife Rachel regularly volunteer with the kids program, and the LIONSCOVE team recently participated in Acres of Diamonds’ volunteer day by supporting their Olympic-themed summer camp. LIONSCOVE is sponsoring the annual gala at the end of September, and those of you based in Washington have been invited to join us. Please let us know if you want to learn more about Acres of Diamonds or get involved. It is a great cause that we can all rally around to help those in need in our community!
to provide our kids with the tools, skills, and knowledge to find success in the future and make the world a better place for all. However, many children in our community do not get the same opportunities as others due to a financial or housing situation that is completely out of their control. Often, the mothers of these kids are in difficult situations themselves and cannot provide the essentials for their children. Acres of Diamonds is committed to helping mothers and children in Washington break free from the cycle and harm of homelessness.
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Passion for Property Management
SPICED PUMPKIN CRANBERRY LOAF Notes This will make 2 regular loaves or 3–4 mini loaves. I like using mini loaf pans, so I can have one on the counter and others wrapped in the freezer. The mini loaves are also great for gift giving! Ingredients • 2 2/3 cups spelt flour • 1/2 cup coconut sugar • 1 tbsp ground chia seeds • 1/4 tsp salt • 1 tbsp + 1 tsp pumpkin pie spice • 1.5 tsp baking powder • 1/2 tsp baking soda • 1 1/2 cups pumpkin puree • 2/3 cup unsweetened plant milk • 1/2 cup maple syrup • 2 tsp vanilla extract • 1 cup frozen or fresh cranberries Directions 1. Preheat oven to 350 F. Line two loaf pans with parchment paper or use silicone pan. 2. In a large bowl, combine flour, sugar, chia seeds, salt, pumpkin pie spice, baking powder, and baking soda. Set aside. 3. In a mixing bowl, combine the pumpkin puree, plant milk, maple syrup, and vanilla. Add in the cranberries. 4. Pour wet ingredients into dry ingredients and with a spatula fold the mixture until the flour is mostly absorbed. 5. Pour the batter into each loaf pan and tap the pan to get rid of any large air bubbles. Bake on the middle rack for 50 minutes. 6. Remove from oven and let cool in the pan for 30 minutes before removing from the pan.
HOW WES MYERS IS ENERGIZING LIONSCOVE’S BOARD AND VISION
Experience is a valuable commodity when it comes to building a successful business. Without people who have previously experienced the trials and tribulations of your industry, you’re bound to hit a wall whenever an obstacle arises. However, this isn’t something we have to worry about at LIONSCOVE. Our dedicated board of advisors has decades of experience across industries and can provide invaluable advice when needed. Wes Myers is one member of our board who uses his knowledge and experience to help keep us moving in the right direction. Wes is from California and currently resides there with his wife, Jocelyn, and their three children. He graduated from UC Berkeley with a degree in legal studies before working for a boutique residential development firm. It was there he discovered his passion for land use and construction. He started his own real estate business in 2012 alongside his wife. The couple focuses on everything from farming and ranching to apartments and new construction. However, the heart of their business is property management. With vast equity and property management experience, inviting Wes to join our board of advisors was a no-brainer. Wes was thrilled to join the team and tackle the regulatory hurdles and complex market forces often affecting the hard- money lending industry. He states, “It is easy to make money if one side loses. Traditionally, the hard-money industry has been composed of its losers and its winners. This model has never been sustainable. However, LIONSCOVE actually allows and incentivizes win-win outcomes.” As LIONSCOVE continues to grow, Wes hopes to provide stability for all involved and help the company reach new heights. Although Wes is involved in many projects, he also maintains a fulfilling personal life. He loves to ride horses and fly airplanes, as both require discipline and challenge. He makes an effort to live a true Western lifestyle, appreciating all the freedoms it represents. Through Wes’ efforts, problem-solving skills, and vast experience, we know he will help LIONSCOVE maintain its position in the industry for years to come.
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INSIDE
How We’re Maximizing Growth and Originations PAGE 1 Acres of Diamonds’ Mission to Uplift Moms and Kids PAGE 2 Wes Myers’ Expertise is Shaping LIONSCOVE’s Success PAGE 3 Rachel’s Spiced Pumpkin Cranberry Loaf Recipe PAGE 3
... CONTINUED FROM COVER The good news is that the strategic shift to these new clients has been successful. In July and August alone, we almost matched our previous best year ever. You read that correctly, we did a year’s worth of loans in just two months. This trend is holding steady into September and we are optimistic about the prospects for the balance of the year as we bring on several new relationships and do more business with strong builders. So, what does this mean to you as an investor? Many of these loans are attractive to the secondary market, allowing us to sell those loans while keeping a percentage of the interest, thus earning interest payments on a monthly basis and effectively increasing return to investors over time. This is done while shifting the risk to whoever the loan buyer is. The more we originate, the more loans we will sell to the secondary market, creating interest strips, which will increase overall returns and reduce risk as we continue to work with high-quality borrowers. In summary, LIONSCOVE’s strategic shift toward focusing on builders engaged in infill development
within the Greater Seattle Area has yielded impressive results. By honing in on experienced builders with strong financial backgrounds, we’ve refined our lending practices and significantly boosted our origination volume. This approach has solidified our market position, strengthened investor returns, and enhanced our overall stability. Looking ahead, we remain dedicated to refining our processes and leveraging our strong builder relationships to enhance our performance further. We believe these continued efforts will accelerate our growth, delivering greater value and stability for our investors. Thank you for all of your ongoing support and trust in LIONSCOVE as we advance toward an even more prosperous future.
—Liam Leonard
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