If you are a native Nevadan or someone who has lived in the state for awhile, you likely recognize “Battle Born” as our Nevada State Motto. Indeed, Nevada was one of two states admitted to the Union during the Civil War. (For you trivia buffs: The other was West Virginia)
People familiar with the changes in the mortgage lending industry (post 2007-’08) from a national, state –and especially a Las Vegas metropolitan area– perspective can probably guess as to the more personalized origins of our new company name. The back story as some would call it. From that perspective, maybe “Battle Hardened” is a better description of the last 9-10 years.
For us, it has been a season for reflection and introspection, as well as a time to study the reasons for both the very successful trust-deed investment (hard-money lending) marketplace which evolved and grew so rapidly in Southern Nevada from the late 1980’s until the mid 2000’s, as well as the rapid collapse of that same marketplace following the overall Mortgage Industry implosion of 2007-’08.
The lessons learned are many. At a federal level the massive overhaul of the mortgage lending industry culminated in the legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, a complete overhaul of the oversight and management of the banking and mortgage industries. And while the regulations are often considered “onerous” or “over-reach” by some in the investment community, they have provided a solid framework for rebuilding confidence in our financial institutions and safeguarding against the excesses and abuses of the housing bubble.
At a state level, many changes have been made as well, especially with regards to residential mortgage lending, but also regarding hard money lending (aka Trust Deed Investing). If you want to drill down a little deeper into some of the specific changes, you can look at our FAQ’s section here.
The recovery from the meltdown occurred slowly in most communities, more quickly in others. In some of the more depressed communities, a full recovery may never happen. As of the end of 2017, on a national basis, only 35% of homes have reached, or exceeded, their pre-recession values. Whereas, in markets like Denver, close to 99% of homes have done so.
In Southern Nevada, the recovery has been slower to take hold largely due to the impressive growth which we experienced for over 20 years prior to 2007. The Las Vegas metropolitan area was consistently one of the top 3 markets in the United States for population growth and housing growth during those years. The steep rise precipitated an even steeper fall.
The flip-side (or perhaps upside) for Las Vegas more recently has been a steady rise in home and land values in the last 3-4 years. New project growth and establishment of the city’s first two professional sports franchises have added to an impressive array of new construction projects. Unlike many of the hardest-hit metro areas during the Great Recession, Las Vegas has experienced cumulative job growth of almost 20% in the last 10 years, with population growth approaching 12% cumulatively.
Many economists and real estate prognosticators see this trend continuing as Las Vegas is expected to grow by nearly 50,000 people a year on average between now and 2025. (Growing from just under 2.2 million people to over 2.5 million in that time period.)
So, what does all of this mean for hard money lending in Las Vegas? It provides a great opportunity as well as a cautionary tale. The need for financing from hard money lenders is large and growing in Las Vegas but the overhang still lingers from the past. Such lenders provided crucial “bridge” financing or “seed corn” for getting developments started for many decades. And will do so again with some important changes in the lending landscape.
Armed with the important lessons of the last decade and some fresh perspective, Battle Born Capital, LLC is now open for business! We have been through quite a few battles to make it to this point. To paraphrase the old ‘Smith Barney’ commercial, “We earned it!”