One of the most frequently asked questions we get from our investors is “where do we find our borrowers?” The short answer is that we have known our borrowers for an average of over 5 years. We built relationships with the real estate investors who now borrow money from Legacy Capital to help them build their real estate business years before we did business together.
The majority of our borrower relationships have also come from referrals through people who we already know in the industry. We are proud of the reputation we have built and are grateful that people understand the value we bring and how we help real estate rehabbers.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
The foundation of relationships with our borrowers is integrity. Without integrity, nothing works. In short, integrity is doing what you say when you say you will do it. This may seem like a basic concept, but people can get funny when money is involved as it helps reveal people’s character. We build relationships slow and overtime so the relationship has the best chance to succeed.
A business that is built on relationships can take a little longer to “ramp up” than businesses that utilize the power of the internet to scale reaching more and more borrowers in a short notice. We deliberately choose to focus on building the right relationships with the right type of borrowers so we can do business with our borrowers for years to come.
We are quite clear with borrowers before we choose to lend them money that if the deal they are asking Legacy Capital to fund is their first rehab, we are not the lender for you. There are plenty of hard money lenders you can find with a simple Google search that will gladly lend you money, that is not our business model. While we get paid from borrowers by the money we lend them and the interest we charge, we look to always add value to the borrower and build the relationship deeper so that this commodity called “money” is not the only factor in which borrowers choose to do business with us.
We like to think of ourselves as part private lenders part consultants or growth architects. We take on the responsibility to help our borrowers be more successful each year and help them build strong, sustainable and repeatable businesses so we can do business together for years to come.
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Warren Buffett understands the importance of reputation, relationships and people in which you associate in building a successful investment as well as life, we agree with Warren. Relationships are the foundation of Legacy Capital. At the end of the day, all we have is our word. What we deliver to our borrowers and what we deliver to our investors.