Coffeez for Closers with Joe Shalaby: Episode 44 Summary Episode Title: What is Private Money Lending? ft. Chris L. Boulter Release Date: October 9, 2024

In Episode 44 of "Coffeez for Closers," host Joseph Shalaby engages in an in-depth discussion with Chris L. Boulter, President and Visionary behind Valkyris Investments. The conversation delves into the intricacies of private money lending, exploring its evolution, advantages, challenges, and future prospects within the financial landscape.

1. Introduction to Chris Boulter and Valkyris Investments

The episode kicks off with Joe Shalaby introducing Chris Boulter, highlighting his pivotal role in transforming Valkyris Investments from a modest family business into a leading entity in the private money lending sector since 1975.

Notable Quote:

“I personally have wanted to meet you... I'm blessed to partner with them and ... at the forefront of all the things that you guys are doing.” — Joe Shalaby [00:57]

2. Chris's Entry into Private Money Lending

Chris shares his unconventional entry into the private money lending industry, emphasizing that it was less a choice and more a calling that found him post-college.

Notable Quote:

“I think private money picked me back in my youth... that's how we started out.” — Chris Boulter [00:57]

He recounts working alongside his father-in-law in a small office, processing their early loans, and how this hands-on experience ignited his passion for the field.

3. Advantages of Private Money Lending

The discussion transitions to the unique benefits of private money lending compared to conventional mortgages. Chris highlights the flexibility and swift decision-making inherent in private lending.

Notable Quotes:

• “I could make decisions every day about whether a loan was approved or not approved.” — Chris Boulter [03:09]
• “Most loans only took maybe 5 to 10 days to underwrite before they funded.” — Chris Boulter [03:09]

He explains how private money lenders focus primarily on loan-to-value (LTV) ratios, allowing them to approve loans for borrowers who might not qualify under strict conventional criteria.

4. Scaling Valkyris Investments: Marketing and Growth Strategies

Chris delves into the strategies that propelled Valkyris's growth over nearly five decades. From humble beginnings of door-to-door flyer distribution to leveraging modern marketing tools, Valkyris has continually adapted to expand its reach.

Notable Quote:

“We started to use some of the other avenues to make ourselves more exposed to more and more people.” — Chris Boulter [04:20]

Key strategies included:

• Direct Marketing: Handing out flyers to real estate offices and mortgage companies.
• Seminars and Trade Shows: Hosting seminars and attending industry trade shows to increase visibility.
• Embracing Technology: Incorporating digital marketing and social media to reach a broader audience.
• Collaborating with Younger Talent: Bringing in tech-savvy individuals to enhance marketing efforts.

5. Private Money Second Mortgages: An Emerging Opportunity

With rising interest rates, Chris discusses the growing relevance of private money second mortgages. These products offer borrowers an alternative to refinancing their first mortgages, especially those locked into historically low rates.

Notable Quotes:

• “Our rate's going to be higher, but let's again, let's focus on the blended rate.” — Chris Boulter [07:14]
• “Most of our loans either have no prepayment penalty or there's no prepayment penalty after six months.” — Chris Boulter [09:21]

He explains how second mortgages can provide necessary capital without the burden of replacing favorable first mortgage terms, appealing to both borrowers and brokers.

6. Evolution of Private Money Lending: From 'Hard Money' to Mainstream

Chris reflects on the transformation of the private money lending landscape over the past fifty years. The rebranding from "hard money" to "private money" signifies a shift towards more professional and accessible lending practices.

Notable Quotes:

• “Hard money was truly hard money... Today we deal with a lot of people with outstanding credit.” — Chris Boulter [13:28]
• “Private money has become more acceptable. It's a more acceptable alternative.” — Chris Boulter [13:28]

He notes significant reductions in loan origination fees and interest rates, catering to a broader spectrum of borrowers, including professionals like doctors and engineers who seek quick and reliable funding.

7. Overcoming Stigma and Navigating Regulatory Challenges

A critical part of the conversation centers on overcoming the lingering stigma associated with private money lending and navigating stringent regulatory environments.

Notable Quotes:

• “The stigma of hard money has like disappeared... now private money is used for... construction loans.” — Joe Shalaby [16:07]
• “We are not a loan shark here... we're not going to come knock on a borrower's door.” — Chris Boulter [21:41]

Chris emphasizes the importance of educating both lenders and consumers to dispel myths and highlight the professionalism of private money lenders. He also discusses the complexities of varying state regulations and the necessity of maintaining compliance to sustain business operations.

8. Adaptation to Technological Advances and Fintech

Addressing the rise of artificial intelligence and fintech, Chris acknowledges the need to adapt but defers to the younger members of his team who spearhead marketing and technological integration.

Notable Quotes:

• “I'm a little bit old school... I'm leaving that to the younger bucks in my office.” — Chris Boulter [17:51]
• “We are using consulting firms also... to make us more competitive.” — Chris Boulter [17:51]

He highlights the importance of leveraging technology to enhance operational efficiency and expand market presence, ensuring Valkyris remains competitive in an evolving industry.

9. Expansion Plans: Navigating State Regulations

Chris outlines Valkyris Investments' strategic expansion plans, focusing on states that are more receptive to private money lending and have favorable regulatory frameworks.

Notable Quotes:

• “We're looking to states that are friendly to private money lending operations like ours.” — Chris Boulter [19:34]
• “We have our target right now on three, maybe four western states...” — Chris Boulter [19:34]

By targeting states with streamlined licensing processes and similar real estate laws to California, Valkyris aims to minimize regulatory hurdles while maximizing growth opportunities.

10. Personal Insights: Leadership, Values, and Work Ethic

Beyond business strategies, Chris shares personal anecdotes that reveal his leadership style and the values that drive his success. He attributes much of his work ethic to his upbringing and educational experiences at USC.

Notable Quotes:

• “My parents were very blue collar... teach me at a young age to save my allowances.” — Chris Boulter [32:43]
• “I never thought private money would grow to where we are today.” — Chris Boulter [27:26]

His emphasis on hard work, passion, and continuous learning underscores the foundational principles that have sustained Valkyris Investments through decades of change.

11. Future Outlook: The Next Decade for Private Money Lending

Looking ahead, Chris expresses optimism about the future of private money lending, envisioning it becoming a mainstream financial option. He underscores the ongoing need for education and acceptance within the industry and among consumers.

Notable Quotes:

• “Educating the popular people out there... private money isn't the stigma that it used to be.” — Chris Boulter [27:26]
• “I hope that is just one of many opportunities I'll have to educate people about what private money really is.” — Chris Boulter [40:37]

Chris anticipates continued growth driven by technological advancements, regulatory adjustments, and a sustained focus on customer-centric lending practices.

12. Conclusion: Goals and Final Thoughts

In wrapping up, Chris outlines his personal, family, and professional goals, emphasizing a desire for personal growth, deeper family connections, and the continued expansion and normalization of private money lending.

Notable Quotes:

• “I need to spend time away from work. I need to find some hobbies...” — Chris Boulter [37:13]
• “I want to see private money become more of a mainstay in the business.” — Chris Boulter [37:13]

Joe Shalaby concludes the episode by expressing gratitude for Chris's insights and hints at future collaborations aimed at further promoting private money lending within the industry.

Key Takeaways

• Flexibility and Speed: Private money lending offers borrowers greater flexibility and faster decision-making compared to traditional mortgages.

• Evolution and Acceptance: The industry has evolved from "hard money" to "private money," shedding negative stigmas and expanding its client base to include sophisticated borrowers.

• Strategic Growth: Effective marketing, embracing technology, and strategic state selection are critical for scaling operations in private money lending.

• Regulatory Navigation: Staying compliant with varying state laws is a significant challenge that requires adaptability and continuous learning.

• Future Prospects: There's a promising future for private money lending as it becomes more mainstream, supported by education and technological integration.

This episode offers valuable insights into the world of private money lending, providing listeners with a comprehensive understanding of its benefits, challenges, and the strategic approaches necessary for sustained success in the financial sector.