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Short-Term Lending: The ALFIE Alternative

ALFIE (Alternative lending for inspired entrepreneurs) is a short-term bridge lender for real estate investment projects in North Carolina. They can help finance fix & flips, buy & hold projects, construction, and developments of all sizes. Basically, they’re THE resource for real estate developers looking for an alternative to bank lending. By providing 9-18 month loans for a variety of projects, they’re a valuable tool for real estate investors.

Craig Peters is the investors’ relationship specialist at ALFIE, and comes from a hospitality background. He got his start in the casino marketing business, creating relationships with big players to bring publicity to casinos. When he started a family in 2000, he moved to Asheville and worked in the food & beverage industry and in hospitality consulting. Craig’s friends John and Todd created ALFIE five years ago, and Craig got on board in 2018.

Craig’s biggest takeaway from casino industry was in building relationships. He teaches his kids that it’s important in everything you do – you never know what will happen in the future. Everyone has their story, and you don’t know their background and how you can help each other.

Approaching strangers with the same respect as a friend or family member is the key to forming a solid relationship.

You never know who you’ll meet and looks are deceiving, especially in Asheville. Although Craig takes real estate risks, he doesn’t gamble. Casino games are too risky, and he’s seen players lose massive amounts of money.

Learning the Short-Term Lending Ropes

In the lending industry, there are many different types of deals with a host of details and teams involved. This surprised Craig, as he didn’t realize there are so many players involved. With loan parameters from $100k-5mil, Craig sees a huge variety of projects at ALFIE. Since he was never a loan originator at a bank, he didn’t know all the aspects and moving parts in larger deals. Luckily, he learned tricks and processes on the back end from seasoned real estate veterans.

Craig’s favorite part is working with people and getting to know them. Even cold calling and knocking on doors can help him build relationships, so he’s learned to do so successfully. Ultimately, he’s helping people get a deal they otherwise wouldn’t be able to, which makes him happy.

Since he is working with borrowers with a real estate background, they don’t have a standard W2 for an income paper trail, so their loans are based on collateral value. The ALFIE team scrutinizes deals differently than the bank, and their main concern is protecting investors’ money through their underwriting. Short-term lending is a great way for real estate investors to secure funding quickly.

Typical banks have limits that ALFIE can stretch beyond, and the team has their eyes on every loan and pay close attention.

The ALFIE Process

To get a loan from ALFIE, you’ll need a property under contract. For example, you’re looking at a property that is $150k and needs $20k of rehab work. Once it’s under contract, submit their 3-page application with all the information and an overview of your project. Include the rehab budget and draw a schedule. That schedule will determine when ALFIE will disburse your funds – upon closing, then when construction payments are due, etc. The application also includes a valuation of the property, via an appraisal or broker priced opinion (BPO). That valuation is important, so ALFIE will perform or schedule a valuation within three days of your application.

It’s also important to know how you will pay back the loan. Will you refinance? Sell the property? Put it up for rent? Get your plan set from beginning to end. Then, once approved, Craig and the ALFIE team can close funds in under two weeks. They can loan you up to 85% of your costs (purchase price + rehab budget) or 70% of the final property value after repair. They look out for everyone involved and may not approve the application if it’s not realistic.

When looking at the industry, Craig sees a few consistent pitfalls. People see it on TV and think it’s easy to fix & flip and rehab homes. However, underestimating the work involved and overconfidence can hurt you in the long run. You may get in over your head too soon. Craig says that just like any other job, you need to start from the bottom and work your way up.

Craig is excited to continue building and strengthening partnerships in the real estate industry, both at ALFIE’s Asheville and Greensboro offices. He aims to keep everyone safe and happy in order to work together and succeed in the future.

Visit the ALFIE website for more information and to contact Craig!