Private Lending with Kevin Amolsch
In this edition of the Real Estate Espresso Podcast, Victor Menasce converses with Kevin Amolsch, a Denver-based private lender and founder of Pine Financial Group. Kevin shares enriching insights on his journey in real estate, the current housing market situations, the increased demand for land financing, and the endless opportunities in private lending.
Kevin Amolsch’s Journey
When he was only 23, Kevin began investing in real estate right after leaving the army. The alluring world of financing enamored him after seeing how the structure of a deal could significantly impact the offer and final agreement. Fueled by his passion for financing, he established Pine Financial Group in 2008, filling in the void left by other lending institutions, just when the housing bubble burst. Today, having completed close to $1 billion in transactions, Pine Financial Group is testament to Kevin’s knack for real estate and financing.
On Target Market & Portfolio Allotment
A distinct characteristic that sets Pine Financial Group apart is its focused business model. Kevin explains that their target market is an 80-20 split between residential and commercial properties, primarily in Colorado, Minnesota, Wisconsin, and DC. However, Pine Financial is very cautious about extending land loans due to their potential effect of imbalancing the company’s portfolio. While they still do some new constructions, they have backed off a little bit due to longer project timelines stemming from the current delay in gaining project approvals from municipalities.
Observations on the Real Estate Marketplace
According to Kevin, the housing inventory has been tightened across the nation, especially in Colorado, which has seen inventory increases from 0.6 to around two months. However, he clarifies that it’s still far from a buyer’s market. Despite the recent inventory increases, sellers can still cash in on peak pricing deals for single-family homes.
However, Kevin is cautious about commercial property. He cited a recent sale in Denver Tech Center where an office building was sold for only 20% of its price three years ago. According to Kevin, the various market indicators suggest that we are still in a strong seller’s market environment, especially in the single-family sector.
Segmenting the Market & Risk Evaluation
Kevin gives an insightful breakdown of market segmentation and risk evaluation in real estate. While he tends to bank on a 70% loan-to-value ratio, he also pays close attention to other market indicators such as days on market, cost, and potential market movements. According to Kevin, cash buyers’ decisions are often affected by the overall economy, including the stock market.
Getting into Real Estate
As Kevin highlights, investing in real estate can be classified into two categories: passive and active. Investing in syndication falls under the passive category where you entrust your money to an expert who does the work, while private lending, on the other hand, is more conservative. Despite offering slightly lower returns, private lending provides stability and immunity from fluctuating housing market prices .
For those interested in understanding more about private lending, Kevin encourages reaching out to him directly via email at [email protected] or visiting Pine Financial Group’s website.
