REI INK

Revolutionizing Real Estate Financing for Communities

The Rise of Modular Bridge Financing By Amy Martinson In today’s changing real estate market, challenges drive innovation. As housing costs rise, inventory shrinks, and affordability becomes a distant goal for many, a transformation is underway. This shift offers a practical response to our current issues. In the realm of modular housing, a new solution is emerging with the potential to change how we view real estate and its financing. Navigating a Complex Real Estate Landscape The post-pandemic world has created a complex landscape for developers, investors, real estate agents, brokers, and loan originators for three main reasons:  »         Inflated Money and Higher Interest Rates // Affordability takes a hit as money inflates and interest rates rise.  »         Shortage of Available Inventory // Intensified scarcity and competition in the housing market combined with the inability for existing homeowners to move up into new homes.  »         Reduced Refinancing Incentive // Since interest rates are currently in the 7%+ range on long-term fixed debt and 9%+ on home equity lines of credit, property turnover is slowing. In August, the California Association of Realtors (CAR) reported that the median home price in California reached $859,800, a 3.3% increase from July and a 3.0% rise from the same month in 2022. However, the housing market faced challenges, including rising mortgage rates and a shortage of available homes. Despite these challenges, there was continued strong interest from potential buyers. Amidst the housing crisis, the real estate market experienced a notable phenomenon known as the ‘refinance boom’ in the years 2020-2021. This boom was driven by historically low interest rates, strong household balance sheets, and increased demand for housing. Homeowners who participated in this refinance boom either lowered their monthly mortgage payments or extracted equity from their real estate assets. Approximately one-third of outstanding mortgage balances were refinanced during this period, resulting in improved cash flow for many homeowners. However, this refinance trend started to wane as mortgage rates increased sharply by 400 basis points from their historic lows. The impact of this refinance boom is expected to have long-term effects on the mortgage market, improving the financial position of homeowners and providing potential support for future consumption. Addressing the Housing Crisis: Rise of Modular Housing A housing crisis that is marked by inflation, rising rates, inventory shortages, and reduced refinancing incentives, presents a unique opportunity. These challenges have sparked discussions on innovative approaches to make housing more affordable and accessible, and modular housing has emerged as a promising solution. Unlike traditional construction methods, modular housing involves building homes in controlled factory environments. This offers numerous advantages that set it apart from traditional construction methods. These include significant cost and time savings, facilitated by the controlled factory environment where homes are constructed. Furthermore, the streamlined modular approach simplifies permitting by shifting inspections from the city level to the state level, reducing bureaucratic hurdles. Additionally, modular housing minimizes the reliance on skilled labor, making the construction process more accessible. Lastly, it boasts a reduced environmental impact, aligning with sustainability goals by optimizing resource use and minimizing waste. The Growing Modular Housing Market According to industry projections, the market for modular-built homes is set to surge from its current $32.49 billion in 2023 to $40.70 billion by 2028, with a Compound Annual Growth Rate (CAGR) of 4.61%. This presents a favorable money-making opportunity for smart brokers, agents, and investors. There are five distinct target markets who can benefit from this growth:  »         Homeowners aiming to increase their property values and supplement their income.  »         Developers looking to lower production costs and shorten construction timelines to enhance profitability in their projects.  »         Investors interested in capitalizing on the growing demand for luxury modular homes and the potential for returns.  »         Property Owners of land who want to build anew, bypassing traditional construction challenges and costs.  »         Potential New Home Buyers who thought they could not afford a new home but are attracted to the affordability and benefits of modular construction. Bridging the Financing Gap for Modular Homes The enticing potential of modular housing is also creating financing opportunities that need to be explored for mass adoption. One of the key obstacles is the gap between production and placement. Modular homes are produced in factories but require bridge financing until they are permanently placed on a foundation. This transitional phase can lead to complexities in securing suitable financing options. Traditional mortgage financing models are often too inflexible in a world where technology and innovation are driving modular-building techniques. Challenges and Opportunities Ahead The journey toward mainstream acceptance for modular housing is not without its hurdles. Communication gaps among stakeholders, including manufacturers, builders, regulators, and government entities, can lead to confusion and slow down the adoption process. You may think navigating regulatory frameworks can be cumbersome and unpredictable, impacting the scalability of modular housing initiatives. However, for those who utilize proven processes and systems for proper due diligence, modular-built communities become easier to produce and more profitable. Potential Financial Gains through Innovative Solutions There is a silver lining in the form of potential financial gains. Modular housing’s adoption can yield substantial rewards for both the industry and local communities. By streamlining communication, advocating for favorable regulations, and fostering collaboration among stakeholders, the groundwork can be laid for factory-built solutions to address the housing crisis head-on. In conclusion, housing is a multifaceted issue that demands creative solutions. Modular housing’s capacity to reduce construction time and costs presents a compelling argument for its integration into the broader housing conversation. Replacing aged housing stock, increasing profitability for stakeholders and minimizing environmental solutions are just a few of the significant opportunities at the forefront of this industry now. Learn more about financing modular housing at https://www.modufi.net/

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The Role of Alternative Lending in a Shifting Terrain

Adaptability is the Key to Success By Ren Hayhurst and Virginia Bush In the ever-evolving commercial real estate lending landscape, adaptability is key to survival and growth. As lenders navigate the challenges and opportunities presented by the state of today’s lending market, alternative lending strategies have emerged as powerful tools for success. We will delve into five such strategies that hold the potential to transform the industry. Bridge Lending In today’s high-interest-rate real estate market, bridge lending acts as a lifeline for borrowers, providing prompt funds without the burden of long-term, high-interest-rate loans. Bridge financing allows swift access to capital without committing to extended high-rate loans. Bridge financing caters to this situation, which arose after a multi-decade period of low, stable interest rates. Bridge loans offer a flexible, short-term solution until more favorable long-term options arise. Bridge financing offers not just convenience but a strategic advantage. Its adaptability to specific project requirements, whether acquisition, renovation, or time-sensitive investments, makes it versatile in a competitive market. Streamlining bridge loans with automation simplifies document generation, review, and customization, reducing loan development time and errors, and saving lenders’ high legal costs. Competition in the bridge loan market puts pressure on lenders to have an adaptable automated solution that can address the many types of bridge loans with the speed and cost savings required today. Mezzanine Financing As banks tighten underwriting requirements and demand conservative loan-to-value ratios, commercial borrowers are turning to mezzanine financing to fill the gap in traditional financing and current capital needs. Due to stringent equity requirements, borrowers and investors now require alternatives and/or supplements to traditional loans. Mezzanine loans fill this gap, offering flexibility with reduced equity contributions, improved leverage ratios, and adaptable repayment terms. Mezzanine lenders play a crucial role by helping senior bank lenders meet stress test requirements and funding vital commercial projects, including construction. As banks lower loan-to-value ratio demands, mezzanine financing is a reliable solution to permit borrowers access to additional financing to make up the shortfall in capital requirements. Well-structured mezz loans provide vital secondary support for different loan types in today’s complex lending landscape. Automation streamlines the mezzanine financing process, providing quick access to capital in a high-demand market while addressing borrowers’ and lenders’ evolving needs. Automation also allows mezz lenders to produce a consistent product that satisfies the requirements of the senior debt. Construction Loans The current real estate market is experiencing a surge in construction due to low inventory, changing consumer preferences, and economic growth. Private lenders are witnessing an increased demand for construction loans. These loans enable financing for projects needing significant capital, enabling borrowers to compete in the market. As construction lenders adopt electronic draw processes for efficiency and cost savings, borrowers face more rigorous fund disbursement requirements. Lenders must also embrace a digital approach for loan document generation and draw procedures to accommodate these changes. Construction loans play a crucial role in funding these projects, but they necessitate meticulous documentation and compliance. Automation tools, like those offered by GoDocs, simplify construction loan management. They streamline documentation, reducing administrative burdens and ensuring efficient capital allocation. They can also be tailored to accommodate and complement digital draw processes, enhancing borrowers’ and lenders’ ability to meet the demands of the dynamic real estate market. Debt Fund Participation As borrowers seek diverse financing options, the traction of debt fund participation grows. Debt fund participation, offering capital access without conventional complexities, is now favored by borrowers for its speed and flexibility. Debt fund participation brings unique complexities, demanding an in-depth grasp of fund structures, legal agreements, compliance, and intricate documentation, necessitating lender collaboration among multiple stakeholders. Each debt fund may have distinct terms and conditions, requiring tailored approaches for participation. Lenders and borrowers need precision and efficiency in managing these nuances. Automation streamlines debt fund participation, simplifying documentation, reducing administrative burdens, and enabling efficient capital allocation. It empowers lenders and borrowers to seize opportunities in the alternative lending landscape. The customizable solutions offered by GoDocs enhance precision in managing the complexities of debt fund participation, facilitating efficient and error-free transactions. Portfolio Lending Portfolio lending has gained prominence as borrowers and investors seek versatile financing options for large, complex real estate investments, often over multiple jurisdictions. With traditional loans often falling short in addressing specific project needs, portfolio lending has emerged as a strategic solution to create a single credit facility for a varied and diverse group of investment properties. Portfolio lending brings unique intricacies, with lenders navigating complex financial and legal terrains across different jurisdictions, assessing the diverse risk profiles of various assets within a portfolio. Each loan may have distinct terms, conditions, and risk factors, requiring a tailored approach to underwriting and management. Precision and expertise are paramount in handling these complexities. Automation, exemplified by providers like GoDocs, streamlines portfolio lending by offering quality-controlled, legally compliant solutions for complex transactions. It empowers lenders and borrowers to navigate these intricacies consistently and confidently. Customizable solutions deliver the precision required to efficiently manage diverse loan portfolios, allowing lenders to optimize their strategies and expedite loan closings from weeks to hours in a competitive market. Adapt to Succeed In today’s ever-evolving commercial real estate lending landscape, adaptability is the key to success. The strategies discussed here offer lenders and borrowers unique opportunities to navigate this dynamic market with precision and efficiency. The judicious use of automation further streamlines these processes, ultimately expediting loan closings and securing success in the competitive world of alternative lending.

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Mitigating Risks to Prevent Funding Delays

Reach the Finish Line with Minimal Stress By Chris Branchetti In the fast-paced world of real estate transactions, time is of vital importance. Private Lenders are in demand for quick and reliable funding to support investor deals nationwide. Investors require cash for a fix and flip or for rolling proceeds from the first A-to-B transaction to the second B-to-C transaction. Delays in disbursing escrow can have a significant impact on the success of the deal, affecting private lenders and investors’ overall deal flow. Delays with funding escrow can have severe financial ramifications for all parties involved. Investors relying on timely financing may suffer penalties, and interest charges, or even lose out on their desired properties due to the failure to secure funds within the agreed-upon timeline. Such financial setbacks can have a substantial impact on the profitability and success of the transaction. As a stakeholder in the transaction, it is crucial to understand the requirements and challenges in disbursing escrow, such as title issues, good funds, late day closings, incomplete/missing documentation, and title insurance coverage. There are several key areas that can address any issues proactively through due diligence review, communication of important milestones, steps taken for wire fraud prevention, receiving lender approval to fund, and vetting out the title company for approval. Understanding the Challenge Complex Title Issues: // Title issues, such as liens, encumbrances, or competing claims, can complicate the escrow process. Conducting a thorough title search and resolving any outstanding title issues before closing is vital to prevent delays. Good Funds // When satisfying the terms of a real estate contract, good funding from the buyer is crucial for the disbursement of escrow. Good funds refer to funds that are deposited into escrow balancing that can be applied towards the closing figures. Good funds can come in certified funds such as certified checks, buyer wire transfers, or lender wire deposited into escrow. This requirement ensures a smooth and secure process, as it minimizes the risk of bounced checks or insufficient funds. By ensuring the availability of good funds, escrow can disperse the necessary funds to all parties involved, facilitating the successful and timely completion of the transaction. Late Day Closings // The earlier parties can sign the lender documents, closing statements, title affidavits, and perform a wire authentication on the day of closing, the better the chances the file will be funded the same day. Banks have a wire cut off ranging from 4 p.m. If a closing is scheduled for later in the day, it can be very challenging to get all the closing and escrow tasks completed before that wire cutoff time. Incomplete/Missing Documentation // Missing documents or signatures on loan or transactional documents can significantly slow down the escrow process. It is essential that all parties involved, including the title company, ensure that all required documents are completed and notarized accurately to meet funding conditions requirements in accordance with the Closing Protection Letter (CPL), Contracts, and Lender Instructions. Title Insurance Coverage // The timeline disbursement of escrow funds is crucial for the issuance of title insurance policies. In cases of funding delays, the property may remain unprotected during the interim period, leaving the title to property vulnerable to intervening liens. A title insurance company must ensure their underwriting processes are expedited to provide timely coverage. Mitigating Funding Delays Risks To mitigate delays and streamline the escrow disbursement process, all stakeholders should be mindful of the requirements to be executed and the expectations Private Lenders and investors have for a hired title company to represent the contract in satisfying escrow. The following strategies should be adopted: Due Diligence // Conducting comprehensive due diligence before initiating the escrow process is essential. This includes thorough title searches, property inspections, and documentation reviews. Communicating Milestones // Clear and transparent communication with all parties involved is crucial. Regular updates and prompt responses to all stakeholders can foster trust and ensure that everyone remains informed throughout the transaction process. Expect this from the title company. Preventing Wire Fraud // It is essential to seriously think about using a third-party platform to authenticate the wire information, such as account number, routing number, and name on account for a pass or fail initiation. Prior to closing the transaction, electronically verify wire information and call the party expecting to receive proceeds to verbally verify account information and ensure the person receiving the money is a real person. Lender Approval to Fund // Lender approvals will have specific requirements to meet prior to funding. Most requirements can be addressed by delivering the approved signed documents for their review and approval. Escrow is not permitted to be disbursed until the lender gives their official approval. Hiring a Title Company // When selecting a title company, it is essential to select one that holds the necessary license to issue titles and has a team of experienced escrow professionals capable of handling complex title matters. A title company must demonstrate an understanding of private lender requirements, investor expectations, and title endorsements required to be issued with the correct ALTA policy. Conclusion In private lending transactions tailored towards investor transactions, it is necessary to find a title insurance provider with the ability to disburse funds in escrow quickly and efficiently. Also, most national title companies today should be SOC2 Certified and have ALTA Best Practices. Private Lenders need to ensure that a specific title insurance company is approved with their company. It is critical for stakeholders in the transaction to be aware of all requirements included in disbursing escrow to mitigate risks associated with delayed escrow disbursement. Additionally, streamlined processes and workflows can effectively mitigate delays in the escrow disbursement process. Collaborating with a reliable title partner who maintains constant communication and offers thorough closing instructions is key. Considering that real estate heavily relies on referrals and repeat business, it is crucial to ensure that everyone involved in the transaction reaches the finish line with minimal stress and hassle.

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Q&A with Bill Lodge, President, KingsofCapital.com

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A Conversation About the Economy, Lending and the Real Estate Industry Bill Lodge is the CEO and Founder of KingsofCapital.com, a nationwide lending platform he started in 2016. The company is a provider of hard money and private money lending solutions for real estate investors nationwide. Led by Bill, the team includes underwriters, loan officers, and customer service representatives, all dedicated to helping real estate investors succeed in their real estate investments and providing exceptional service to their clients. REI INK sat down with Bill to discuss his journey in the real estate investment and lending industries and to get his thoughts on the current state of the economy and what may lie ahead in 2024. Bill, can you give a quick overview of your professional journey? I got started in real estate when I was 22 years old. I spent $2000 on a Carleton Sheets course in 1997 and it collected dust for two years before I really looked at it. In 1999, I bought my first property using my own cash, credit cards and cash advances, thinking I could immediately do a refinance on the property. Every bank told me I could not refinance for 12 months. I was shocked. I finally found a small local bank to work with that could refinance for me. After a few years in the business and taking loans, I decided to change my career to lending. I worked at JP Morgan for five years from 2003-2008 until our division was let go due to the economy crash of 2008. However, at that time, I was only 31 years old and already owned 53 rentals. So, after JP Morgan, I took off a few years and was presented with the opportunity of wholesaling with Webuyhouses.com. We were quickly averaging 13-17 deals every month. Then, in 2015, something strange happened to me. I had a dream about Kings of Capital and something in me said “go for it.” I woke up and searched the domain name and it was already taken. I managed to get in contact with the owner and made an offer he did not refuse. Before I knew it, we negotiated the Facebook, Instagram, Twitter and Domain accounts, and here we are today. How about your company, KingsofCapital.com? I started KingsofCapital.com in 2016 after my visionary dream. In a nutshell, KingsofCapital.com is a commercial mortgage lending company providing borrowers with a one-stop national lending platform capable of sourcing all types of Non-Conforming Loans for real estate investors.​ We lend on SFR, condos, 2-4 units, 5-unit multi-family, mixed-use, office, retail, warehouse, light industrial, daycare and automotive. However, we specialize in the BRRRR method which is a real estate investment strategy that involves buying a distressed property, fixing it up, renting it out, and then refinancing it to get cash to fund further investments. This allows our clients to grow their portfolios and achieve financial stability. Interestingly, in the early 2000s, I didn’t even know that there were specific processes and strategies for real estate investment, like the BRRRR strategy. I took that strategy and translated it into baseball terms. For example, a perfect BRRRR is 50% ROI (Home Run); 40% ROI (Triple); and 60% ROI (Grand Slam). However, it’s the singles, doubles, triples that win the game. Another axiom is “Wait for the universe to send you a fastball instead of a curveball.” Anybody can hit a fastball, but not everyone can hit a curve. This translates to analyzing a deal to determine if it is good or bad. If presented with a bad deal or a curveball, wait for the good deal, a fastball. This is what we teach people. What is the company’s formula for success? We are successful, but more importantly, we make sure our customers are more successful. Last year we loaned out $42 million and we did that all by word of mouth. Last month alone we loaned about $4.5 million. We teach people, for free, how to make money in real estate and then hopefully they will come to us to borrow money. People come to me for money, but I’m really a problem solver. Our goal is to help people day-to-day, and we want to be a resource for them and not just another line item. Every day I ask myself, “how can I add more value and charge less.” What are your thoughts on the current economy? Obviously, I’m watching the economy very closely. It is all about the unemployment numbers, and those numbers will dictate the 2024 economy, as well. The bottom line is, as long as a person’s income is sufficient to support their debt, everything will be fine. Currently, I am seeing a ton of Airbnb regulations that are starting to crash the Airbnb market because they won’t be able to support their debt. Thoughts about 2024? Next year will be dependent on the unemployment numbers. I do see more foreclosures in 2024, but that will help with the inventory issues. When inventory increases, that is great news for our investors. Next year we will see an increase in build-to-rent products. Look at it this way; why buy a fixer-upper for say $150,000-$200,000, and then put in $50,000 in rehab costs, when you can buy a brand-new house for less? Builders can manage their costs and produce a cheaper house than an old one. Do you have some parting thoughts or advice? I have three pieces of advice: Number One — Just do it. There is never a perfect time to start. Number Two — Divorce your story and marry the truth. Number Three — Follow the axiom, “You can make money or excuses, but you can’t make both.” As far as parting thoughts go, my wife is a psychologist, and I learned so much from her. Find a purpose in life. Help other people find a purpose in life. Be a free-thinker. Remember that your direction determines your destination. Know your value. Have balance in your life —

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Real Estate, Developer, Fireman, Pizza

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In Order to Succeed You Must Have a Great Team Frankie Herrera is an independent business owner with HomeVestors® of America, Inc. in Tampa, Florida. He started his HomeVestors business in 2014 with his wife, Vanessa, and cousin, Albert. As successful as his real estate business is, he still works as a developer, is a fireman, and owns a Little Caesars fast food franchise. His recipe for success: a phenomenal team. Life Before HomeVestors Frankie has a B.A. in Finance from the University of South Florida which he earned in 2007. He started his professional career with a development company as a project manager, and then in 2009, while still with the development company, joined Hillsborough County Fire Rescue. In 2009, he began his venture into real estate. Frankie worked with a banker who was willing to give him a chance. He bought his first two rental properties and then realized that he did not just want to be a landlord, so he sold both properties to figure out his next steps. Partners Associated In Development (PAID) by Herrera “I stumbled across HomeVestors at a franchise trade show. Vanessa and I did our due diligence on the company, called my cousin, Albert, presented him with the opportunity, and we bought our franchise in 2014,” Frankie explained. “I needed a franchise that had proven systems in place that I could trust, and HomeVestors met that requirement. We started our training in August of 2014 and immediately fell in love with it.” In the short period between August and December of 2014, PAID by Herrera bought seven houses. “We bought our first house almost immediately. It felt great to help someone, but then panic set in until we sold it to an investor,” Frankie reminisced. “It was at that point that I realized ‘One man’s trash is another man’s treasure.’” Frankie’s wife, Vanessa, a graduate of Saint Leo University and an Accountant, joined the company full time in 2015. Present Day The company buys an average 40 houses per year and to date has bought over 300 houses. “We focus on fix-and-flips, but we also have a rental portfolio of 30 doors; we tend to keep five houses per year in our rental portfolio,” Frankie said. Frankie, without hesitation, attributes the company’s success to his phenomenal team. “Keep in mind, I still work as a developer, I’m still a fireman, and we recently bought a Little Caesars franchise. I have a team that makes everything possible.” That team includes his partner and wife, Vanessa, who handles the accounting; Albert, “The Face,” who handles acquisitions; Sandra, “The Closer,” who is responsible for all day-to-day communications with the sellers and title companies; Chris is in charge of project management; and Michael handles sales. And of course, Frankie, who is the CEO, is responsible for operations. Frankie is also a Development Agent (DA) for Florida. As a team, before doing any deal, they always ask themselves, “If we do this deal, are we going to be able to put our head on the pillow and sleep peacefully tonight?” Frankie elaborated, “There will always be people out there who need help with their homes and getting out of undesirable situations. Our job is to sit down with them, listen, and try to help them. People first — closing the deal is second.” Advice from an Expert “I used to have a problem in constantly over-analyzing deals. Once I put trust in comparables and systems, my business changed for the better,” said Frankie. “Additionally, I would give the following advice to anyone getting started in real estate investing”: •          Pay attention and listen. •          Trust the process. •          Pound the pavement. •          Start by hitting singles and home runs will follow. Homevestors What exactly does it mean to be a HomeVestors® business owner? Owning a real estate business is life changing and naturally comes with risks! When you become a HomeVestors business owner, you get immediate access to motivated seller leads, financing resources for qualifying purchases and repairs, one-on-one coaching with your local Development Agent, proprietary software for analyzing properties and deals, and access to a nationwide network of coaches and peers. Your house-buying business is yours and you run it as your own venture with a focus toward your individual business goals. If you are interested in a franchise, call 866-249-6932, email Sales@homevestorsfranchise.com or visit www.homevestorsfranchise.com. Each franchise office is independently owned and operated.

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A Discussion with Alex Offutt and Team, Constructive Capital

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The Lending Industry is Changing and Lenders Must Adapt a Client Focus The lending industry has evolved and continues to do so. It has gone through many cycles and adaptations over the years. The industry has expanded and diversified, and as a result innovative lending models have emerged along with an increased focus on customer service. Alex Offutt currently serves as Managing Director of the Wholesale and Correspondent Divisions of Constructive Capital. REI INK discussed with Alex and members of his leadership team how wholesale capital providers are adapting a client-focused mentality and why that focus is so important in our current market conditions. Alex, first off, just a brief synopsis on Constructive Capital? Alex Offutt // Constructive Capital is a nationwide provider of stable capital for business purpose loans. We built the company to be an efficient engine that can help our clients, both big and small, continue to grow their businesses. These relationships form the framework of how we approach each day and each loan entrusted to us. Given the changes we have seen industry-wide over the last few years, and the changes that are certain to happen in the future, our goal is to remain a constant for our clients and their borrowers. We also have several members of the Constructive team with us. Kyle, from a client’s perspective, what are some elements that are crucial for success in this current market? Kyle Concannon // Clear and concise communication around underwriting conditions is crucial. As the overall credit market continues to tighten, we routinely see new capital market guidance which influences our underwriting and credit criteria. If these changes are not communicated in a timely matter it can lead to a less than optimal timeline and closing experience for the borrower(s). Our clients trust us to execute on their borrower’s loan and earn repeat business. The sales team is trained to think like an underwriter. We think through the loan from submission to closing and identify issues early in the process. We also perform quality checks throughout the life of the loan while it is in process with us. Our clients routinely tell us that they are able to keep borrowers returning to them and earning new referral business from many of those same clients. Benn, is there anything you want to add? Benn Jackson // Our clients repeatedly tell us their end goal is to close loans as quickly and efficiently as possible. To meet our clients’ needs and expectations, we prioritize complete file submissions. Our clients appreciate our approach because it increases file velocity. Once their complete file hits our portal, we move fast. We empower our brokers by giving them a significant amount of control. They choose the AMC and Title company, and other third-party vendors. Our best clients spend time pre-submission putting documents together with care and with intention resulting in a higher quality file that consistently closes faster. We routinely close files inside of a week. In fact, 64% of all our submitted files close within 14 days. We love working with organized professional brokers who want to leverage our speed to gain client satisfaction. Michael, customer loyalty is key. Why do your clients keep coming back? Michael Fuller // Our clients consistently tell us that there are many reasons why Constructive Capital is their go-to source. These reasons range from our competitive prices to our speed of execution. But in my experience, the number one reason we have so much repeat business, and referrals from our clients to others, is the personal service we give to each of our partners and their clients. Between weekly calls and monthly office visits to my clients, they know that we care about them and their borrowers and that Constructive will do anything within our power to get their loans closed. We are not just faceless names behind a cell phone number, but real people who have many years of experience in the Business Purpose Lending (BPL) industry. Our clients value the communication, transparency and diligence of our unparalleled operations team that ensures a smooth process, from opening to closing. Also, it is imperative that we constantly keep our clients up to date on all guideline and policy enhancements and changes, so that our clients can execute for their borrowers in the most efficient manner possible. We routinely hear that this regular communication between us and clients is invaluable as nobody likes to be surprised for any reason when a loan is submitted. This unrivalled transparency is a key tenant of our client relationship. Most importantly, our clients regularly tell us that we continue to earn and keep their business because we always answer the phone and are always available to our clients, even when we know we must deliver the occasional piece of bad news. Ashley, what do your clients tell you about their experiences with Constructive? Ashley Jackway // Our clients tell us that there is a demonstrative advantage of working with Constructive, through the eyes of their borrowers. This stability is key. They love being able to set an expectation for turn times, and then being able to exceed the expectation by closing quicker than what the original set goal was. Our clients vocalize regularly how smooth our process is and how easy it is to work through challenging situations and loans with our entire team. Our clients are always complimentary of our ability to handle difficult scenarios. Our ingenuity and creativity in constantly working to solve problems gives our clients the confidence to keep sending us more business, which in turn helps them continue to grow their business. Alex, you get the final word. Alex Offutt // At Constructive Capital, our highest focus has and always will be on our clients. To that end, we are regularly engaging with our clients for feedback, both positive and negative, to continuously enhance our overall product and client experience. Stability, transparency, efficiency and execution are not just words for us, but rather are

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