December 15th, 2020
Shelter Lending Corporation, Grant Plunkie – #AskAPrivateLender Podcast, Ep 10
Welcome to the 10th episode of the #AskAPrivateLender Podcast brought to you by Mortgage Automator. For this episode, our guest was Grant Plunkie, Senior Underwriter & VP of Mortgage Origination at Shelter Lending.
We talked about Shelter Lending’s operations, the importance of the lender-broker-borrower relationships, some of the specifics of lending in BC and Alberta, Shelter’s speedy turnaround times, and more!
Listen, watch, or read the interview below. And stay tuned for more episodes coming up!
Lawrence: Grant, we are excited to have you join the podcast. We know you’ve been in the industry for a long time. We feel like you can share your experiences, maybe give some people advice or an understanding as to what the market is like, and what private lending is all about.
The first thing I wanted to start off with is how you got into the business. I mean, it’s not a career path that people generally set out and look for, but my understanding is that there are some people in your family who were private lenders way back when, and you saw that growing up. Did that play into you actually getting into the industry from a younger age, or was it something that you did later on?
Grant: There’s a little bit of both elements in there. I don’t think kids grow up dreaming of being a mortgage broker, and I had dreams of doing something else. I thought that I might be a golf pro playing on television, but unfortunately, I was limited by my talent. And I also realized that just seeing as that wasn’t going to happen, I better stay in school, and I was actually on a path to become a lawyer. That started appealing less and less to me after about five or six years of university.
So, I got into the workforce, and through a series of circumstances, ended up buying a house and getting a mortgage, and met a mortgage broker. But to back up just a little bit where I became aware of this, it was actually my grandfather, that was the private lender. He came to Canada as a young man back in about 1920, and really had nothing, worked hard, but he did have some pretty good smarts about real estate for some reason.
He started out basically doing agreements for sale, where he was buying properties for his brothers-in-law because they weren’t able to get credit, or they didn’t have the income to show, whereas he did.
He found out that that was actually quite lucrative or could be more lucrative when you’re dealing with non-family members. So, he quickly aligned himself with a lawyer that somehow seemed to have a lot of these clients in Edmonton and started his private lending career. Did very, very well with it, so much so that he ended up giving away a house to a charity that he was concerned about, and he also bought a fairly large farm and gifted that to my aunt and uncle. So, he did very well with it.
Now, the unfortunate part of that story is out of all of that wealth that he created with mortgages, I didn’t get a dime. However, I did get an idea.
I always thought that when I would be older and have some investment money that I would invest in mortgages, just like my grandfather did. To short circuit that whole idea, when I got a mortgage, I dealt with a mortgage broker because the rates were far better than dealing with the bank at that time, and I ended up talking to the broker that handled my transaction quite a bit. I wasn’t happy with where I was working at, it appealed to me, I thought, you know what, if I can’t be the lender, I can be the middleman.
And so, I thought yeah, this middleman idea appealed to me. You’re not dealing with inventory, which was a problem at the business I was running, and we weren’t dealing with staff in a mortgage brokerage. It’s very limited, maybe an underwriter, or a secretary, or support staff, but not the staffing issues that I had at that store.
So, there were a lot of things that appealed to me about the mortgage broker career at that point. And so, that was the impetus for me, and that was 25 years ago that I had those conversations, and 24 years ago, jumped into the industry. That’s the short version.
Lawrence: To go back, just because it’s such a unique thing that we hear, and we talk to a lot of private lenders, but your grandfather did this such a long time ago …
Joseph: There’s 100 years of private lending in Grant’s blood.
Lawrence: Yeah. And this was like his full business that he set out to do, or was it something that he did on the side?
Grant: This was just on the side.
Lawrence: The amount of money he was probably lending at the time seemed like so much. If he could see the dollars that you’re lending out …
Grant: It would be mind-boggling. When you’re buying homes for a couple thousand dollars back in the day, and somebody needs a thousand dollars, and for us now, that doesn’t even cover the legal fees.
Joseph: It might pay for a mailbox on your lawn at best.
Lawrence: So, you got into the business about 25 years ago, you started as a mortgage broker, so you were helping people get bank financing to start. Was that your entry into the business?
Grant: Yeah, that’s correct. I did that exclusively, brokering where I didn’t have a fund or didn’t have access to private investors. So, I was really what I call a retail broker, and I did that for about 13 years. I thoroughly enjoyed it, it was very good to me. Through that process, I started more and more private deals.
I don’t know how they found me, they just did. I don’t know if it was some sort of a vibe that I was putting out there, but anyhow, these deals just kept on coming to me and I kept on getting them done and finding new lenders and new sources of money to finally reaching the point where I thought, I find this to be my niche in the business and want to make a career out of the private money side.
That was 10 years ago, or a little bit over 10 years ago, that I’ve exclusively been dealing in private mortgages. I haven’t brokered a deal, I haven’t sent a deal to a bank or a mono-line since 2009.
Joseph: It just seems like the natural progression. A lot of people we talked to who’ve been in the industry for quite some time, it seems like they started whether it was banking or brokering, and then they saw those are mainstream financial avenues that people are aware of. And then slowly, through some alley or some way, you end up figuring out that there’s a big opportunity in private lending. I want to ask you when you got into it, it probably wasn’t as competitive as it is today?
Grant: It was a lot different, the landscape for brokers was far, far different. In the community where I live, which is Kelowna BC, there were about 20 brokers in the community when I started, and it was quite noticeable that there was a new guy. I believe at that time, I was either the youngest or the second youngest broker in the city.
And now, I can’t even tell you how many brokers there are, there might be 200 give or take. And while it is more competitive amongst the brokers and the banks, everybody’s buying for the business. 20 plus years ago, there just weren’t the options of four lenders or four brokers such as myself then. It was easier to stand out as a broker, but it was harder to get deals done because the lenders just didn’t exist.
Lawrence: That makes sense. And now, you’re at Shelter Lending and you’ve been with them for how long?
Grant: Well, Shelter Lending is a brand new entity, and it was brought about by some regulatory changes, not on the mortgage side, but more on the securities side. And so, as I mentioned, I’ve been exclusively working in the private lending market for about 10 years. My business partner, his name is Dave McKitrick, he was working in private lending since about 2005. He left the company that he was at, it was a MIC that had over $100 million dollars.
I was the business development officer and senior underwriter for a large MIC that was about $150 million. We left our respective companies roughly speaking out about the same time. We were interested in working together, but I had a non-compete agreement, so that blushed that for a couple of years. In that time period, I started my own MIC, and I was also dealing with a number of individual private investors. So, we had quite a stable of investors built up around my company.
There were some changes with the BC securities in the capital raising department, so all of a sudden, we had to use an exempt market dealer or a third-party fundraiser, and it became far more expensive to raise capital. And also, we were a small company, it was just not practical to carry on.
And so, Dave and I talked again, he was in the process of acquiring the management contract of a MIC where the operator was retiring, and so we decided that this was a good time to join forces. My non-compete had expired, Dave was getting too busy to handle both the lending and investor side, and so he’s focused exclusively now on the investor side with our exempt market dealer. So, we do have an exempt market dealer, that’s a captive company that only raises money for our own funds, and I handle the operation side of the mortgage business.
Lawrence: So even though the company itself is a newer entity, you guys are running it like it’s been around for 20+ years because you’ve been in the business, you know the business, you’ve worked at those types of companies and helped run them. What kind of deals are you guys doing? Is it mainly residential and commercial? What are you looking for out there?
Grant: Right now, it’s strictly residential, as our fund grows, we may entertain some commercial loans, but for the foreseeable future, it’s strictly residential.
Lawrence: First Mortgages, second mortgages, what type?
Grant: Yeah. We’re doing first and seconds, we’re licensed in BC and Alberta, and we’re able to do business in Manitoba, although we haven’t set up there yet. So, just BC and Alberta for today. And we’re looking primarily for second mortgages, but we also do have a first mortgage fund. The second mortgage fund, what I always tell brokers when they ask what our niche is, I say if lender XYZ is going to 65%, we’ll probably go to 70. If they’re going to 70, we’ll probably go to 75. That’s a bit of our niche, where we would go just a little bit above and beyond.
Joseph: Interesting. I’ve had the pleasure of speaking with both of you guys before, and I knew that Dave was out in Alberta, how do you guys compare the two markets? And do you rely on Dave to give you that insight in Alberta and he solely trusts you in BC, or have you personally gained so much information, knowledge during your time in this industry that you are comfortable with both, I guess Calgary, Edmonton, maybe surrounding areas and greater Vancouver and surrounding areas?
Grant: Yeah. That’s an interesting question, Joseph. I’ve been underwriting for Western Canada for over 10 years now. And while I’ve gained a lot of knowledge of the communities and the industries that are in them, it’s not perfect knowledge, and so we have people on the ground.
Dave’s a fantastic resource too when we’ve got a deal in Calgary because he just knows the neighborhoods. If you mention a neighborhood, he knows it, whereas I have to look at it on the map. But what we do to keep up-to-date with all of the data that we need to make decisions is we have regular conversations with realtors in each market, conversations with our appraisers, and then we look at the stats that came out from CMHC and Genworth or whatever. But we try to keep on top of the markets that we lend in, which are primarily urban markets.
You mentioned a few different cities in Alberta, and as long as the city has greater than 5,000 people, we’re probably interested in lending there. Apart from Fort Mac, sorry, Fort Mac, we can’t help you here. We just have to draw the line somewhere. We also stay out of the greater Vancouver market for the most part, and that’s strictly because the deal size is so large, there are so many lenders there that it’s so competitive.
Joseph: It’s almost saturated at this point.
Grant: Yeah, it is. It is. And we just decided that there’s enough of a market elsewhere for us, and we’re going to pursue that market.
Joseph: I guess my question is, given that Alberta is more, I guess, oil-dependent, the real estate market does fluctuate based on oil and how well it’s doing, do you guys have different loan to value criteria or risk appetite in Alberta versus BC? Or is it 70-75% across the board in both places?
Grant: It does vary by province, and it also varies community by community. So, when we’re looking at a large marketable community, say Victoria or Kelowna for example, we’re far more aggressive in those communities because we know that there’s a more balanced and diverse economy.
When we’re looking at smaller communities where there might only be 5,000 people living there, there’s obviously a reason why there are 5,000 people there. It doesn’t have the industry to support jobs, or it doesn’t have the appeal, so we just basically scale back our loan to values in those communities.
And in regards to Alberta right now, we are a little bit more cautious, we’re in a wait and see mode. We’re still doing business there, we’ve funded a couple of deals there within the past 30 days, but really probably 80% of our new business 90% of our new business is applications coming in from BC.
Lawrence: And obviously, you deal with brokers, that’s where I guess the majority of your business comes in. For brokers who want to submit deals too, that maybe haven’t done business with you before. Is there a specific person they should be reaching out to, or getting in touch with?
Grant: Yeah, absolutely. That’s me, and I can be reached by email, grant at shelterlending.ca. We’ve got a toll free number on our website, and we deal exclusively with mortgage brokers. We’re not sourcing any of our own business, so we’re not competing with our brokers, we just want to make sure that we’re looking after them.
We treat our investors as our primary clients, we treat our brokers as our secondary primary clients if you will, and the borrowers are the clients of the broker. So on renewal, we will deal with the broker, we’ll keep them in the loop if there’s a renewal going out, but typically, we’ll just send it out to the borrower themselves. But at the end of the term, it’s the broker’s client. We want nothing to do with trying to place them at an alternate lender or a bank. That’s just not for us.
Lawrence: Yeah. I love hearing that, and I think I’m starting to hear that more and more out of lending companies, simply because it’s number one, the right thing to do, but number two, it’s not easy for these brokers to obtain clients.
They’re working day in and day out trying to find people to work with, and to give that client over to a lending company who will then take that client and renew them for the next 10 years without even letting the broker know, or then takes them once their credit gets better and then flips them over to a B-lender. If I was a broker, I probably wouldn’t want to work with those types of companies…
Joseph: Well, I was going to say, I think that given where the market is today, the saturation of liquidity, and because of the banks not being able to finance a lot of the stuff they used to, the private lending space has changed, therefore, it’s attracted more people.
I think the attitude before was lenders would just keep the borrowers because the brokers had that same mentality with the bank, once they give it to a bank, they were never going to see that client again. They’re going to sell them on lines of credits, they’re going to sell them on Visa products. I think they had that mentality with private lenders back in the day as well.
Now, there are so many different opportunities, there’s lenders in between privates, in between institutions, in between trust companies now, they’re moving them from one place to another. It would be detrimental to a private lender like Grant to lose those relationships by not including the broker in those discussions and allowing that client to get a better deal down the road with an institution.
Grant: You’re exactly right on that, Joseph. We want the borrowers to have the best deal they can possibly have because that’s what we would want for ourselves if the shoe was on the other foot. So, if we’re the solution, that’s great, we like to be a one or a two-year solution, and then they can move on, get back to some better rate financing and get on with lives, and then we’ll take on some new clients, new borrowers, and everybody wins in that situation.
Well, the other thing in there too, is that we don’t want to be running a brokerage. I did that for about eight years where I had 12 sub-brokers working for me. It was a great experience, but it’s a different type of company, and you can’t be great at everything. We’re striving for excellence with what we do, and to run a brokerage and a lending operation, you just get scattered in too many directions. So for us, we made the decision, this is what we do, and we want to be great at it. And we try to make tomorrow better than yesterday, every day.
Lawrence: What are your turnaround times like if someone calls you and wants to get in touch and run a deal by you, is it something that you can give them an answer on quite quickly, or is there a lot of due diligence, and they’ll hear from you days later? What should people expect?
Grant: Well, it depends if I’m on a Zoom meeting with you guys or not (laughs). Typically, we are a small company and I do have another underwriter that works with me, and Dave is available for backup if I happen to be away, exploring the backwoods of BC on a long weekend.
But what we try to do is answer the phone or get back to somebody that’s called in the morning, still that same morning, if somebody calls or emails in the afternoon, respond back within that business day.
I can usually give them a pretty good idea that a deal is either doable or not doable just on the phone. Obviously, it’s subject to supporting documents like an appraisal or probably a GST for self-employed people, would just want to make sure about a few things. But the thing that’s really helped us with our turnaround has been you guys with Mortgage Automator, where we were operating on spreadsheets before, and it would take quite a bit of time to turn around a deal.
Now, when a broker sends in an application, it’s in our system, we just check it for accuracy. We fill in a few of the blanks that would be the interest rate and the term, and so on, things that we’ve negotiated with the broker. And literally, I can turn around a deal from the time I receive it, to sending out a commitment in less than 10 minutes if the application is accurate. And we’ve done that, I’ve actually done that on a Friday. Deal comes in at 4:30, I don’t think anybody’s really expecting it to be looked at, but I had an offer to loan back to the broker within about 10-15 minutes…
Lawrence: That’s awesome.
Grant: … and they were shocked, and that is due to your software. So, Mortgage Automator has sped up our underwriting. Now, from there, we don’t know what happens in terms of the client meeting that happens, does that happen the next day, supporting documents, appraisers are busy, lawyers are busy, but really the turnaround time to get a commitment letter is quick.
Lawrence: And I think that’s all the brokers really want. They want to make sure that someone has seen their deal, they want to make sure they can get in touch with somebody. And it sounds, from what you’re saying, more times than not, unless something crazy is going on, they’re going to hear from you the same day. I think that’s absolutely great.
Now, you’ve probably underwritten tons of deals over your career as a broker, as a lender, any fun stories, any interesting deals that you’ve come across?
Grant: Yeah. I’ve got a fun one. The people that know me, know that I love to play golf, so that’s the background to this story. I had a broker, ironically, she’s not in the business anymore, but she sent the deal in and mentioned the community, and said that this property is right next to a golf course. And so I thought, this sounds a little funny because I know that community doesn’t have a golf course.
Now, the spidey senses are jangling, there’s something going on here, something’s not sitting right with this deal. So, I found the property, it’s actually not in the community that was on the application, it’s in the next community over, which true enough, doesn’t have a golf course. Actually, the community in question did have a golf course, but not the one that was on the application. Then it’s really not on the golf course, there’s about a kilometer of dense brush between the property and the actual golf course.
So, if you’re expecting golf course views, you’re not getting it. The other thing that the broker failed to mention was that the property was directly across from the city landfill.
Lawrence: Hey, listen, someone else’s garbage is someone else’s gold. Just not in your case.
Grant: Not for us. So needless to say, that deal didn’t get done, but that’s the funny thing with all of the resources that not only we have, but brokers have, whether it be Street View, or Google Earth, or Purview, there’s so much good data out there. There’s really no good excuse for an application like that. And I have to say, I think the brokers and lenders are doing a far better job of due diligence prior to sending deals these days.
Lawrence: You’ve been in the financial industry for a very long time, I’m sure you’ve dealt with some high net worth individuals over the years. What’s the best money-related advice that you’ve ever received? And you know what, it could be from anyone, it could be from a family member, it could be from a client, anybody.
Grant: Well, I think the best thing that you can do is live within your means. We’ve seen people that have very little money live within their means and also go far beyond their means, and I’ve also seen some extremely wealthy people live far beyond their means or bite off more than they can chew. So, I think it’s just knowing what you’ve got and staying within it, staying within your lane.
Lawrence: I completely agree with you. I think that nowadays people have lost sight of that, at least in our generation. Everything on social media, what can I post? Very few people actually save and stay within their means. I don’t know if that’s part of just money being cheap today and everyone wants to lend money, or banks give lines of credits and credit cards and all of these sorts of things like it’s nothing.
Grant: Part of that, I think stems back to how you’re raised at home too because financial literacy is not taught in schools. The last time there was a great depression, that started in 1929. My parents were born shortly thereafter, and every penny and nickel that came into the house was precious when they were growing up, and that’s what they learned, and that’s what they instilled in me.
Whereas you look at some folks that were maybe born 10 or 15 years later, all they’ve really known is prosperity for North America or the Western world. And it’s been pretty easy to get a job, savings, you didn’t really need to worry about that because the paycheck rolls in or your house goes up in value. So, I think there’s a bit of a generational mindset, and I guess we’ll see what goes forward here, what the economy looks like in the near future, and what the children of this recession or depression, whatever it might be, how they manage their affairs.
Lawrence: Yeah. It’s a very fair point. Now, you were saying that you, in the last 30 days, funded a few deals in this particular area, which means you guys are lending. When COVID came around, did you guys slow down a little bit, and now you’re back?
Grant: Yeah, that’s an interesting question. The way that our company was set up, a lot of us either work remotely for part of the day or all day. We were set up by design pre-COVID so that we could work remotely. And so, for instance, I’m in my home office right now, I’m heading to our real office once we’re done our meeting, but we have administration that’s done out of Calgary, we have investor relations that’s done out of Calgary and Victoria, and we have the underwriting that’s done out of Kelowna.
So, when COVID hit and we were able to not miss a beat in terms of our administration renewals, underwriting, that just kept on taking along. The new business opportunities dried up for sure.
I remember it was mid-March, I was doing some broker office visits, and basically, that was a Friday, and then Monday, we were all working from home. The phone was pretty quiet for about, I would say two months, which was fine for us because we were actually going through our reorganization and merging a couple of companies to become Shelter Lending.
So when all of the corporate work was done and the licensing issues were all taken care of and properly done, that’s when the phones started ringing again, really, I guess the beginning of June, and we were very busy. June and July, I think there was a lot of pent up demand, and then in August, it seemed everybody was taking a vacation, so it was hit and miss depending on the day, and it seems now September, October, and heading towards November, we seem to be in a more of a regular routine or a regular flow of business.
Lawrence: Now, you were saying you do both first and second, mainly seconds is what you really love. Would you rather do one big second mortgage for $1.5 million, or would you rather do ten $50,000 loans? Do you prefer doing the one big one or many small ones?
Grant: Our ideal size for our second mortgages really ranges from about 25,000$ to 250,000$, and so to answer that, I would probably opt for the ten $50,000 deals, even though it’s a lot more paperwork or even the $500,000 deals versus the one really large one.
We do have a couple of larger loans like that on our books, but they make sense, but it just diversifies the risk. And one of the things that we’ve made as a promise to our investors is that we’re not going to roll the dice on one big file that’s going to put their money at risk because my money’s in there, my parents have money in there, same with Dave, he has money in there, his mom has money in there. So, we don’t want to gamble away somebody’s retirement savings.
Joseph: So, you are treating this as is your own money.
Lawrence: No, this is their money. I mean, and that’s an important thing for investors to know. If you’re going to invest with Grant, his skin is in the game, so he doesn’t want a dollar to be lost because he’s going to feel it personally and his family as well.
Grant: Yeah. That’s exactly what my parents told me when they invested. They said, “If you lose this, you’re losing your own money.” I said, “No, we’re not losing money here.”
Lawrence: Right. And what about credit, would you prefer to have a higher loan to value deal with someone who has a great income and great credit or would you prefer a much lower leverage or lower LTB deal with somebody who has really bad credit, no income, but the equity is there?
Joseph: And the property backs onto the golf course?
Grant: Yes, and it’s close to the landfill too, so if you’re a treasure hunter. I’m really torn between those two because they both have good features to them. Obviously, somebody with a higher income net worth and credit score is going to have an easier time making the payment, and they probably have some other assets to rely on if they do run into a bit of a bad patch. Those are fantastic from a little maintenance point of view on the file management post-funding.
On the flip side of that, to have a lower loan to value file with a problem borrower is not the end of the world either, so long as the property is decent.
Joseph: Talking about problem borrowers, BC and Alberta from my understanding have very different ways of handling deals that go into arrears, have you had deals go into arrears in both provinces, and what were your experiences like in both provinces from actually having to go the full mile, and how long did it take between both provinces to get your money back?
Grant: Yeah, the process is slightly different. It’s probably more nuanced than anything. The timing is roughly similar. We’re allowing about a year for the whole foreclosure from the start of a demand letter to actually having a property sold and getting our money back in both provinces.
We are actively foreclosing on a couple of properties right now. It’s not what we want to do, it takes a lot of time, and depending on the circumstances, can be a little bit emotionally draining. Two of the foreclosures were actually brought about by borrower deaths. So, it wasn’t that they weren’t trying to make payments, they just weren’t around anymore to make those payments. And in both cases, the estates proved to be difficult to deal with, and we have to protect our investors, so we’re going through the motions with that right now, one in BC, one in Alberta.
The time frame is not too much different, but it’s just a little bit of timing with notice to the borrower, time to get into court, really at the end of the day, it does take about that year, and we’ve got great lawyers in both provinces. They know the system, they know what to do and they’re hugely helpful in that process.
Lawrence: What’s the issue with the estate? They just don’t want to sell the property right away, they’re holding onto it, or what seems to be the problem?
Grant: Well, in one of the cases, it was actually a younger borrower and there was no will, so no executor named, so it’s taken a while. And we really don’t believe that there’s a lot of equity in that property, so nobody’s stepping up to maintain the property, to improve it, to make the payments on our mortgage.
But because it was a little bit of a weak file to begin with, where the borrower had okay income for credit, and it was a bit higher loan to value, we do have a guarantor on that file, and they’ve certainly got assets and the ability to pay, so we’re just working with them right now.
Lawrence: So, you’re always happy to do that in a deal, maybe you don’t like the borrower that’s on the file, you’re happy to bring someone else in, guarantee the loan, and that would make you more comfortable on a file?
Grant: For sure. And that was the case here where we just thought it was a little bit on the edge. They even offered that they had somebody that was willing to cosign for them, and we said, okay, you know what, they’ve got reasonable employment, reasonable savings, reasonable equity in their house, and so that was the deciding factor.
Lawrence: Did you tag their house?
Grant: No, we didn’t in this case.
Lawrence: But now if you cannot get enough money out of this property for whatever reason, you have the legal right to now take them to, I guess it’s a civil court?
Grant: Correct. Yes.
Lawrence: And then sue them for any losses and then you’d have a judgment on their property, again, it’s timely, but nobody really wants that on this, it’s almost like I’m just pulling the remainder of the money and giving them, writing you a check for the difference.
Grant: I think that’s what’s going to happen. In this case, we expect that we may get all of our money, or there may be a small loss, maybe limited to legals and real estate fees, so it’s not really a huge amount. Is it good to be the guarantor in that case? Not really. Is it terrible? Well, it’s a problem they can solve with a few dollars and not too many, so I don’t think it will impact their future.
Lawrence: Fair enough. You know what, it’s not something that you want to deal with, it’s not something that they want to deal with, it’s an unforeseen circumstance that came up that no one could have known was going to happen. But it’s great that you dotted your I’s and you crossed your T’s, and you made sure that your investors were secure in that position.
And good thing you did, because it just shows, hey, listen, something did not go right in this situation, but nonetheless, it’s okay because we made sure that if the worst happened, we had backup to make sure that everyone was secure and safe.
Grant: Exactly. And that’s what we’re trying to do from the outset when a broker calls. We’re looking for ways to make a deal happen, not ways to kill a deal because that’s how we make our living, and that’s how our investors get a great return.
So when brokers call, sometimes they’re new brokers, and they’ll even say, “Hey, I’ve never done a private deal before, or I do one a year.” I say, “Great. You know what, I do them all day every day, so just let me know what you’ve got for details here, and let’s see what we can do.” And if there’s a way to do it, hopefully between myself, Dave, and the broker, we can figure out a way to put a deal on the books, and then it’s a win for everybody.
Lawrence: Sounds great to me. Grant, listen, we appreciate you stopping by. To conclude, why don’t you just let people know once again, what kind of deals you’re looking for, where you lend, just so they can start sending in some files to you?
Grant: Yeah, absolutely. We’re licensed in BC and Alberta. We’re looking for first and second mortgages. We are technically allowed to go up to 85%, but we’re not doing that in the current lending environment. 75% is where we’re talking about today. We like first mortgages upwards of 500,000$, we like second mortgages that are between 25,000$ and 50,000$, and our interest rates go anywhere from 7% and up on a first mortgage, and about 10% and up on second mortgages. Lender fees are usually anywhere from 1% to 2%.
The best way to get a hold of us, you can go to our website to get information on how to contact us. It’s shelterlending.ca, or I’m grant at shelterlending.ca is my email address, and we’ve got a toll free number on our website that you can track me down and find me as well.
Lawrence: And as he said, Grant only makes money when he closes deals. When he gets your deal in and he underwrites and he says, no, that’s not good for anyone. So he’s creative, he’s trying to find ways to make deals work. Like he said earlier, if your lender’s going to 65%, he’ll probably go to 70%, if your lender’s going to 70%, he’s probably going to go to 75%. So before you take that deal from your lender that you normally use, give them a shot.