The present real estate market is anything but predictable thanks to constantly shifting interest rates, depleted housing inventories across the country and ongoing supply chain issues interrupting development efforts. While it may seem like a particularly audacious move to start a mortgage fund amidst such uncertainty, the dynamic duo of Zak and Ahsan Karzi, brothers and co-founders of LendMe, Inc., were undeterred from crafting a soon-to-be launched, strategically-targeted mortgage fund specifically designed to thrive in the current market environment of elevated interest rates.
Drawing from their combined 18 plus years of experience in the overlapping financial and real estate industries, the Karzi’s have announced the upcoming launch of the LendMe Income Fund I, an evergreen mortgage fund that will actively invest in first lien non-QM loans in the U.S. mortgage market. Focusing on residential real estate financing, supporting home ownership opportunities, and bringing private capital into the real estate market, Income Fund I will provide benefits to both the marketplace and investors alike.
Building off the immensely successful genesis of their hard money lending firm LendMe, Inc., which saw the company steadily progress from doing $2 million of business in 2014 to funding over $165 million in 2021 alone, the Karzi brothers are looking to replicate their track record of delivering next-level results while providing unparalleled customer service. It’s certainly no small order, but Zak and Ahsan have supreme confidence in the key industry relationships they have established over the years coupled with their unique ability to leverage market insights and technology to deliver uncompromised results via LendMe’s Income Fund I.
The following is a behind-the-scenes look at the story behind LendMe’s meteoric rise and the upcoming launch of the Income Fund I. All indicators point to this being a highly promising opportunity for investors looking to net above-average returns and collaborate with two proven leaders in the lending industry that have established a track record of success along with a growing contingent of highly satisfied clients.
Improving Processes is a Cornerstone of LendMe, Inc.
Zak Karzi was initially drawn to the lending industry in 2005, when he recognized that facilitating ready access to capital was one of, if not the most, significant factor in real estate transactions—and it was a process that he knew he could improve upon. “After relocating to the Southern California area from Chicago in 2005, the abundant opportunities in the residential mortgage space became readily apparent,” recalls Karzi. “I steadily built experience and acquired an invaluable first-hand perspective of the nuances involved with real estate transactions that I was able to leverage years later in successfully pivoting to the hard money lending sector and launching LendMe, Inc. in 2014.”
During his time working in the residential mortgage niche, Zak gained an insider’s perspective on the challenges and sticking points lenders and clients alike encountered during the funding and transactional phases of a deal. Motivated to help brokers and agents as well as borrowers have a more positive experience, Zak and his brother Ahsan founded LendMe to address the inefficiencies plaguing the industry. “My initial goal in starting LendMe was to create a truly seamless funding process that was easily accessible for mortgage brokers and real estate agents,” notes Zak. “We are not a direct-to-consumer lender, as I believe that there is inherent value in the wholesale channel—catering to the unique needs of brokers and agents to establish mutually beneficial and sustainable working relationships.” This approach has proven extremely effective, with LendMe having originated over $600 million in loans and closed on 1,200 transactions between 2014 and 2022.
The subsequent rise of LendMe as it grew into a hard money lending powerhouse has been a rewarding endeavor for the Karzi’s. “Coming from a retail mortgage background, I was intimately familiar with the innate difficulties associated with closing deals and earning a commission,” observes Zak. “This prompted my brother and business partner Ahsan and I to focus on the wholesale side of the market and we have gone on to develop a vehicle in LendMe that provides world-class service and speed with the highest levels of customer satisfaction to not only borrowers, but to mortgage brokers and real estate agents as well.”
Proven Quality, Undeniable Results
The lending space is undoubtedly crowded, and capital providers have to quickly prove their quality to clients in order to survive—an objective LendMe has been extremely successful in accomplishing in relatively short order thanks to their superior workflow to handle increased volume and an optimized business model that delivers an enviable customer experience. “Our ability to streamline the loan process and optimize workflow is what sets LendMe apart from the competition,” observes Karzi. “We have strategically implemented technology that minimizes the pain points in the submission, analyzing and closing process, enabling us to intake a loan submission, conduct due diligence and underwriting and provide approvals and loan documentation all within a matter of one to two business days on average—all whilst mitigating common risk factors.”
When it comes to the lending process, time is worth its weight in gold—the more efficient a lender is in processing and funding loans responsibly the better. The Karzi’s are continually perfecting and upgrading their underwriting strategy to balance risk mitigation and speed, obsessing over the most minute details to deliver the best end-product to their customers. “LendMe’s underwriting philosophy is grounded in a common-sense, intuitive approach,” says Karzi. “We understand our core borrowers are primarily experienced real estate investors, home flippers or individuals looking to grow and scale their real estate portfolios that are looking for an efficient and hassle-free loan process that enables them to close transactions quickly to secure the underlying assets. Our goal is to avoid introducing unnecessary friction into the process and instead function as trusted business partners with our brokers, agents and borrowers—analyzing and mitigating risk based on market size and condition, LTV, experience, credit, and the client’s historical data. Whereas other lenders typically are looking for reasons to deny loans, the LendMe team prides itself in proactively developing innovative and viable solutions to fund loans and set our clients up for long-term success.”
LendMe Investment Fund I: An Investment Opportunity Like No Other
The LendMe Income Fund I is targeting accredited investors able to pledge a minimum of $100,000, with a goal of delivering an 8.5% preferred dividend. Beginning in Q1 of 2023, the LendMe Income Fund I is anticipating an initial raise of $25 million. The Karzi brothers will draw upon their extensive knowledge of the lending industry and their vast network of strategic partners to efficiently manage and optimize the long-term performance of Income Fund I.
The Karzi’s have experienced first-hand the inherently dynamic nature of the market and have become accustomed to constantly adapting their business model to shifting trends in order to stay relevant. Doing so is no small feat and requires maintaining a deep understanding of the markets they actively engage with—a task the brothers use technology to accomplish. “With the current technology that we have integrated into our platform, we are able to pinpoint historical trends in each sub-market and identify the risks associated with each,” notes Zak. “This baseline level of knowledge allows us to adjust our leverage in any given asset or sub-market to mitigate risk and anticipate potential market shifts. The percentage of credit we extend in markets is always intentionally designed to protect both us and our clients from any downstream risk factors while giving us a strong position in current market conditions.”
Technology has revolutionized virtually every industry—and the lending space is no exception. The Karzi’s have launched an online investor portal for their new fund that will enhance transparency and allow investors to monitor performance in real-time. “We utilize third party appraisal management companies, credit technologies, background systems, loan origination systems, pipeline management, loan servicing, and market data providers,” notes Zak. “We use a combination of all of these tools to determine risk factors and potential red flags that would be reason to not extend credit. Our entire system and submission to funding process is automated through our own internal system. We have the capabilities to manage our portfolio and actively track the progress and status of our active and in-progress loans. Investors will have the ability the monitor their portfolio through own investor portal.” LendMe’s Income Fund I is primed to deliver in a big way, and, judging from the Karzis’ knack for developing effective methods of achieving their goals, their investors should be brimming with excitement for what the future has in store.
For more information please contact Zak Karzi