Fairfield Financial Services, Inc. - Private Money Loans, Lending & Borrowing

The private money lending business: Likes and gripes (Part II of III)

S. Clay Sparkman

In Part I, I began a discussion of my gripes and likes regarding the private money lending business and various industry related matters, items, and issues. I allowed myself to amble a bit far afield and concluded by mentioning a book about the legal profession which I personally found to be informing and entertaining. I’d like to indulge myself a bit more on this topic of books at least marginally related to private money borrowing, brokering, and investing.


One of my favorite non-fiction authors is Michael Lewis. His book Moneyball: The Art of Winning an Unfair Game is one of the most interesting and influential books that I have ever read. This book on the face of it is about baseball, but in fact it is about so much more. And as time has gone by, the techniques and strategies applied to sports in this book are being applied more and more to some degree in nearly every significant aspect of human existence. The book is really about exploiting pockets of inefficiency that inevitably exist in markets (for various curious reasons), and I frequently find myself applying lessons learned in this book to the way I think about other aspects of business and life in general. There is most definitely an element of applicability to the private money lending business. If you have read it, please comment, and tell us if you do or do not feel the same. (A hat tip: to Charles Duck who gave this book to me and told me to read it some many years ago. I only wish that I had read it sooner.)


Another Michael Lewis book that became extremely relevant with the recent collapse of large financial firms on Wall Street (though written many years before and published in 1989) is Liar’s Poker: Rising through the Wreckage on Wall Street. This book chronicles the author’s years as a bond trader for Salomon Brothers. The inside look is riveting and terrifying at the same time, and may help explain how things could have gone so terribly wrong during the 2007/2008 fall from economic grace.


As one who brokers and services private money loans, a thing that I particularly like it when the loan payments come in on time each month as per the contractual agreement and without any prodding from my office. Fortunately, this happens quite frequently and it makes my life and the life of those who work for me so much easier. It also opens up the possibility for an extended ongoing relationship with the borrower. Most of our borrowers tend to need private money loans on an ongoing basis; they use them to drive a series of ongoing professional projects. So a positive ongoing relationship is crucial.


And this is another thing I quite like in the business: ongoing, long-term professional relationships with borrowers, brokers, and investors. Things get so much easier when you know who you are dealing with.


I do not like it so much when borrowers become “bad boys,” having to be prompted and prodded each month to send in their payments, and consistently pushing the envelope, going just beyond the boundaries of their agreement. This provides a certain level of strain, both physical and emotional within my organization and with my investors as well.


As mentioned previously, I do like it when borrowers who are having problems actively communicate and behave in a proactive and professional manner—seeking to work with Fairfield (and the investors) in an attempt to navigate through their financial problems and with the intention of ultimately making good on the overall commitment. I have found that investors tend to be quite reasonable in working with borrowers who are attempting to communicate their issues–so that quite often a successful “work out” is possible. In these situations, there is ultimate satisfaction for all parties as everyone tends to benefit.


I do not like it when borrowers who are struggling put their heads in the sand and go into hiding. Once communication stops, there is little chance for a workout, and the only choice is to seek appropriate legal remedy. Fortunately, though this does happen. It does not happen frequently, but it does happen from time to time (particularly during times when the general economy or the real estate markets are behaving badly).


I am particularly fond of small businesses. My parents started this company in 1964, and it remains small but well entrenched to this very day. We prefer doing business with individuals and small businesses. We are the anti-behemoth in a time when so many companies have grown to be to be the size of small to medium-sized countries. We do not have a customer service department. We are all the customer service department. So, if you like the good old days of clean, direct, and honest dealing, consider that you might like working with us.

In Part III, I will be highlighting some web-based resources that I find to be particularly useful, enjoyable, and impressive. If you have any sites that you feel enable you to make better moves and decisions as you invest in trust deeds, please send me a note, and I will most likely include your information in Part III of this post.

End of part II

— Clay (sparkman@lendicom.com, 503-476-2909)

Clay is Vice President of Fairfield Financial, a primary source for private money since 1964. Fairfield is currently targeting loans in OR, WA, ID, MT, CO, and GA. To submit a loan to Fairfield for consideration: http://www.privatemoneysource.com/loanproposal.php

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