A real-estate banker with 30 years in the industry explains how the 2022 interest rate spike created a surge of distressed properties selling at 30-40 cents on the dollar. His hard-money lending firm has funded 3,000-4,000 deals nationwide, sourcing deeply discounted single-family and small multi-family properties for investors to rehab and rent or flip.
Global Integrity Investments is a multifamily acquisition firm. So I have been in real estate banking for almost 30 years. I've had about 7 different companies, all in real estate, real estate banking. Owned a RE/MAX franchise, owned an appraisal company, owned a title company. But right now we have Global Integrity Finance, which is our hard money lending firm, to where we loan money, our money, to individuals nationwide to buy real estate. 90% of that real estate is single-family, 1 to 4 unit, distressed, dilapidated, rundown, and our clients are looking to buy it, rehab it, and either turn it into a rental or sell it. And right now it's not a good time to sell. Right now is a really good time to convert those into rentals. Over the years, Since we started Golden Territory Finance, we've probably seen over 3,000, 4,000 deals that have come across to be able to underwrite, to lend money on. And it's just not what, you know, most people do. When you talk to different real estate investors, gurus, very few of them, if any of all, have ever lent money out. They get into that after that. They build up a good network. They build up a great baseline of financials and then they go into potentially lending it out. But most of them do it as a joint venture or a GP/LP scenario. Momentary Finance, Toby Potter, his team started out lending our money out to people nationwide, seeing every deal come across, underwriting it to ensure profitability and success not only for our client but for us. And as we've done that and built it, we built up an immense network of investors, of brokers, and of banks. In 2022, coming out of COVID coming out of the free money, we want to call it, from, from 2021, the Fed's dropping interest rates. But in 2022, that interest rates climbed immensely overnight, and also valuations started dropping. And that was not really that, that we're in a real estate crisis, it was just a flattening of the curve. Because interest rates are so low, everybody was buying, everybody was qualifying. And so more and more demand of housing was being presented. So with that, when the interest rates went up, the demand started dropping and that curve started— well, that also caused stress on people that weren't qualified. And so we started getting a lot of deals come across our desk. We started getting a lot of deals that were upside down. Bad performers, bad operators. And through our relationships, we started seeing some deals. Say, hey man, this seller's in dire straits. Do you know anybody that would, you know, be interested in coming in here and paying 30, 40 cents on the dollar? Like, yeah, right here, we'll do it.
