I’m Sean Reynolds, the owner of Summit Properties NW and Reynolds & Klines Appraisal. And today I have with me Shannon Kershaw of Legacy Capital Group and Shannon, we have worked together for many, many years. So we go back as far as Bay Mortgage and then also Legacy Group Lending and now Legacy Croup capital. And so tell me a little bit about Legacy Group Capital. Give me a little bit of history there.
So a Legacy Group Capital was formed in 2008. We’re a privately funded, a small niche lender that just specializes in short-term bridge lending and by short-term bridge lending, give us a few examples.
Um, anything short term is less than 12 months. Construction, specifically bridge loans, a fix and flips back lending. So anything that kind of lives in that 12 month period, right? So we do on the Reynolds & Kline end we do a lot of appraisals for you, a lot of rehab loans, a lot of construction loans. Um, and more recently some loans for people getting equity out of their homes because that’s the main thing that we’re going to talk about today. So you’ve got kind of a new program that helps out both the homeowner and real estate brokers who have clients in this scenario. Tell us about that kind of niche that you guys are expanding into.
Sure. So a legacy group capital kind of went back and figured, put our heads together collectively on how we could expand our market and kind of find something to assist homeowners in the marketplace right now. So we went back and we thought of a bridge loan, you know, um, and a lot of people think of bridge loans are kind of an urban legend because if you do fit into the small box and you either don’t qualify in one way or another, so legacy went back and said, okay, why don’t we allow homeowners to use the equity in their home without listing their home and selling it first so they can make noncontingent offers and compete in this crazy market.
Okay. So you guys kind of bridged that gap. And when they don’t have enough money for the down payment where they’re not competitive enough, you guys provide a short-term loan until. So they can buy the next house and then have time to sell their home and kind of make everything work.
Yeah, we’re seeing that a lot of people have a ton of equity in their homes, but they’re too afraid to list their home because it will sell too quickly, which I’m sure you guys are running into too. So it kind of bridges that gap so they can find their new home, make a noncontingent offer, compete in the marketplace with these cash offers or quick closings because most of their cash is tied up in their existing home.
Right? Right. And you guys have a kind of different underwriting criteria as far as how you analyze the borrower’s package. Tell me a little bit about that.
So for everything kind of lives in, you know, make sense lending. And I realized again that is an urban legend, a legend, but for us kind of look at the end result. So if someones in an exit strategy for us is to sell their existing home and just have one home at the end, we kind of view it that way. So we kind of go back to just the borrowers’ whole picture, you know, a lot of times you have to qualify with all the debts. Um, um, on some bridge lenders, we will qualify you to adjust the data in the end because we know your intent is to sell your home. So it’s very different than most in the marketplace.
Okay. And so in making your lending decisions, you rely upon a lot of your own instinct, the appraisal, kind of getting some valuations. Tell us a little bit about that.
So for us, we kind of look at the, um, the in collateral, how much equity their home they’re going to sell home, they’re going to sell what their debt is on that, um, and we get an appraisal on the property, determined that fully. And then also the new home. At the end of the day, how much of those proceeds from the existing home, are they going to be dedicated to the new ones? So what is that longterm qualification look like for them? You know, and what we’re seeing is that most people are putting at the end of the day, they’re going to be, you know, 75, 60 percent loan to value when they go into the long-term financing because they have so much equity because they have so much equity and there’s this the home. Right. Okay. And so I know you can’t quote rates because that’s just kind of a big no, no in the industry, but how does your short-term loan compare in the marketplace to other lenders?
So what I will tell you is that the biggest conversation I have with people is when we do give them our rates and our fees associated with a transaction in their written between three, six and nine months. Um, we’re seeing most things happen in less than three months. But what we get most of the time from agents or borrowers, like wow, that is, that was way less than what I was expecting. So it’s, it’s very competitive for what the client is trying to accomplish in the end. And they’re happy to pay, you know, that the rate, the fee associated with the transaction. Because they’re getting the home they want and the seller is getting what they want to.
Right. So this has got, this is a mixed sense kind of deal. It’s private funding. They don’t have to go through the whole typical bank riggermerall of loan committee and all that. You guys basically assess it on your own and Yay or nay. And how often do you decline a customer or a property?
We do have guidelines that we follow, but again, if there are some extenuating circumstances or there are additional factors associated with the transaction, just because someone doesn’t necessarily fall within the guidelines that we have, it doesn’t necessarily mean that they would be a declining loan. They’re just going to have to have other compensating factors, you know, maybe more of their compensating factor is a free and clear property, um, that there’s no mortgage against and maybe they’re slightly below our FICO requirements. So there’s give and take for all of the, uh, the factors.
Right. Okay. That makes sense. Again, I’m Sean Reynolds from Summit Properties NW and Reynolds & Kline Appraisal and Shannon Kershaw from Legacy Group Capital. I appreciate you coming in and explaining your niche program and this is an awesome program if you are a homeowner looking to buy or if you are a real estate broker that has a client who kind of fits this parameter, they have tons of equity, but they don’t have the money in the bank to make a purchase. This is a really good program, so thank you, Shannon, for sharing this and we appreciate you watching the video. Love to have you like subscribe or make comments. For our next videos. We create videos all the time. Sometimes they’re on real estate like this one was today. Oftentimes they’re on other topics as well, but again, thanks for taking the time to watch the video bye.