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Episode 18: How Lenders Can Protect Themselves in a Distressed Market
Manage episode 476265070 series 3647057
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Is your money truly protected in today’s distressed real estate market? In this episode, Rich Lennon delivers a timely solo episode unpacking real-time signs of market distress and how lenders can adapt. From tightening underwriting to issuing smaller construction draws, Rich shares boots-on-the-ground experiences and cash-flow strategies to help lenders mitigate risk and protect their capital.
You’ll Learn How To
- Identify early warning signs of market distress.
- Adjust draw schedules to protect construction capital.
- Spot risky loan-to-value ratios before it’s too late.
- Navigate borrower cash flow challenges with smarter disbursements.
- Avoid lending pitfalls through better underwriting and inspections.
What You’ll Learn in This Episode
(00:59 – 1:11) Seeing distress in the market for sure right now
(1:25 – 1:55) Nine of fifteen properties had price drops last week
(2:04 – 2:15) Perfect homes still sell, but others are now sitting
(2:20 – 2:44) Buyers not jumping in despite stable or rising rates
(2:45 – 3:39) Flippers request more draws due to running out of cash
(5:02 – 5:15) We are now issuing smaller draws to protect cash flow
(5:25 – 5:59) Project halts happen if cash isn’t carefully managed early
(6:00 – 7:03) Small draws ensure money stays on the project with proof
(7:04 – 8:01) Now is the time to verify contractors and underwriting thoroughly
(8:02 – 9:09) Fewer flippers buying due to current financial distress signs
(9:10 – 9:15) Distress creates opportunities, but caution is required right now
Who This Episode Is For
- Private money lenders
- Real estate investors
- Construction loan managers
- Hard money loan underwriters
- Financial advisors and wealth builders
Why You Should Listen
If you’re actively lending or considering entering the market, this episode offers key tactics to protect your funds and navigate a cooling market. Rich speaks from experience, providing real examples of borrowers struggling with cash flow and project completion. This is not just theory—it’s practical, tested advice from the trenches. Don’t miss your chance to hear what other investors are too afraid to admit.
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