Transforming Lives with Loans – Ken and Ari Walker on Private Lending Success

Bryce
Today, I’m joined by special guests Ken and Ari Walker. Thanks so much for being here.

Ari
Thanks for having us!

Ken
Absolutely!

Bryce
I just have to say, I’ve been following both of you on social media ever since we scheduled this podcast. I feel like I already know you, even though we’ve never met. I’m really excited to finally connect! We’ve been planning this for a month or two, so it’s great to be on your schedule. I’ve seen Ari show up in a T-Rex costume for Halloween and at BBQ events—I really wish I could’ve made it to that golf event you had. You two seem like such a fun couple, so I’m really looking forward to today.

Ari
We’re excited too! And yes, we are a fun couple.

Ken
There’s no point in doing what we do unless we’re having fun with it.

Bryce
Haha, that’s right. I need to take some lessons from you guys. Sometimes I get so focused on work—more borrowers, more investors, marketing, all the different components of the business. It’s easy to get lost in the weeds and forget about the fun aspects of life. Let’s dive in, though. Can you give us a 30-second elevator pitch and tell us about your business?

Ari
Sure! We’re Ken and Ari. We’re second-generation owners of Pacific Direct Mortgage, a private money company we launched last year. We rebranded to help more buyers, borrowers, and brokers. We also have another company where we service loans. While this new company is recent, we’ve been in the hard money business for over 15 years. We’ve seen it all and done it all. We’re licensed real estate agents and lenders.

Bryce
Wow, that’s impressive. So why break it into two separate businesses? Why not combine hard money lending and servicing under one roof?

Ken
It started about two years ago when we were with a previous company owned by my parents. They ran a mortgage company, but they didn’t want to touch servicing. We wanted to handle servicing ourselves, so we started that first. Then, we launched the mortgage company after.

Bryce
Got it. That makes sense. What was the catalyst for starting your servicing company? Was it frustration with third-party companies or seeing an opportunity to make more money?

Ken
It was more about frustration. We were spending about 30% of our time on servicing-related issues—borrowers, lenders, and even the servicing companies calling us with questions. It got to the point where we were doing their job for them. We realized we needed to take control. Our lenders weren’t being properly cared for, and borrowers weren’t being followed up with when they missed payments. So, we started our own servicing company, and it’s been a game-changer. We’ve created a top-notch service where every lender we’ve worked with raves about us.

Our lenders weren’t being properly cared for, and borrowers weren’t being followed up with… So, we started our own servicing company, and it’s been a game-changer.

Ari
We wanted to stand out by being exceptional. A lot of servicing companies don’t answer the phone or respond to issues, but we excel in those areas. We go above and beyond, and it’s been working really well.

Bryce
That’s amazing. So, are you only servicing your own loans, or are you working with others too?

Ken
Primarily, we service our own loans, but we’ve just launched a department to take on loans from outside clients as well. We’re now open to servicing loans from anywhere.

Bryce
Wow, that’s awesome. Well, when I get tired of servicing my own loans, I’ll send them your way!

Ari
We’ll take great care of your lenders.

Ken
Exactly! We cooperate with brokers as well, so it’s no problem.

Bryce
It’s so interesting because everyone in private lending seems to run their business a bit differently. Some people do everything in-house, like I do, while others use third-party servicers. It’s a very flexible industry, and it’s fascinating how everyone can do the same thing, but in completely different ways.

Ari
That’s the beauty of private money. There’s so much flexibility, and you can really personalize it for each situation.

Bryce
Exactly. A lot of people I talk to come from a background in formal mortgage lending, like Fannie Mae or Freddie Mac, and get frustrated with all the red tape. They end up turning away borrowers because they can’t fit into those rigid systems, and then they discover hard money as a more flexible solution. It’s really interesting how that transition happens.

Bryce
So, tell me more about your background. You mentioned it’s a family-run company. Did your parents start the business?

Ken
Yes, my parents started a mortgage and real estate company about 36 years ago. When the market crashed in 2008, we focused on real estate, specifically flips. We’d buy properties, fix them up, and sell them. Then, about four or five years later, we decided to drop all conventional loans because of the competition, especially after shows like HGTV made everyone a flipper. We shifted 100% to hard money and got our lender licenses around that time. Before that, we were just licensed real estate agents.

Ari
In 2021, my dad passed away, and then we joined forces with my mom to run the company. But with some of the financial challenges going on, we realized we couldn’t expand the way we wanted to. So, we decided to start our own legacy, rebrand, and create something new. And that’s how we launched Pacific Direct Mortgage.

Ken
We made it more contemporary, more youthful, and it’s been going really well.

Bryce
I love it! To make the company feel young, all you need is Ari to show up in a T-Rex costume, right? I love that! So, it sounds like a lot of people we talk to follow a similar path—you start by buying a couple of rentals, then realize they either don’t make enough money or become a headache. So, you pivot into flipping. But after a while, flipping becomes a grind with contractor delays, supply shortages, and homes sitting on the market. Eventually, you just think, “Let’s be the lender instead.” It sounds like you followed that same transition—maybe without the rentals? I’d love to hear more about your journey from start to finish until you got into hard money.

Ken
Well, for us, we started in real estate through my parents’ company. We did real estate for a while but quickly realized it was a lot of work for little return. So, after the 2008 crash, we decided to try flipping houses. We did really well for about two or three years.

Ari
Actually, we did 78 flips during that time.

Ken
Yeah, we averaged about two to three full remodels per month—buying REOs and fixing up gutted houses. At first, no one wanted to buy REOs, but we didn’t mind; we were flipping them. That worked great until everyone started flipping. The competition grew, margins shrank, and that’s when we decided to step back. Along the way, we also held on to some rental properties for passive income. Once flipping slowed down, we pivoted into hard money, wanting to stay away from the regulations around conventional financing.

Ari
And one thing that made it easier for us is that we had first-hand experience as real estate agents, flippers, and even landlords. When we needed private money, we saw exactly what was missing and what people needed. All our experiences helped shape how we help others today. It’s made it much easier to connect with people and understand their needs.

Ken
Exactly. We still work with a lot of the same agents and flippers we worked with years ago. Some of those flippers are even our lenders now.

Bryce
That’s so interesting. Experience is often underrated in this industry. We’ve had borrowers come to us asking for loans, and I’ll tell them, “I wouldn’t touch that property with a 10-foot pole—you’ll lose money.” And some people get upset, find another lender, or later come back and thank us. It’s amazing how valuable real-world experience is, especially when you’ve been in all those roles yourself—agent, landlord, renter. I don’t think people value that enough.

Ari
I completely agree. That’s been a huge advantage for us.

Bryce
It’s huge. And I have to touch on this: flipping is nothing like it’s shown on HGTV. It’s not all Chip and Joanna Gaines! Everyone thinks flipping is easy, but in reality, it’s so much more than just throwing in new floors, paint, or some fancy electrical and plumbing. The truth is, it’s not as glamorous as it looks on TV.

Ken
That’s true. Flipping can be a lot of fun, and it’s rewarding when you finish a project. But when you’re working seven days a week, 10 hours a day, it really wears on you. Being a lender is much smoother and easier on the body.

Flipping can be a lot of fun, and it’s rewarding when you finish a project. But when you’re working seven days a week, 10 hours a day, it really wears on you. Being a lender is much smoother and easier on the body.

Ari
And it lets you spend more time with the kids.

Ken
Yeah, and now I have more time with the kids, though I do need to exercise more!

Bryce
Right! So, you were hands-on in the flipping, not just subcontracting everything out?

Ken
Correct. I was doing a lot of the work myself.

Bryce
Wow! That’s even more reason to become a lender—it’s definitely easier on the body!

Ken
I’m not going back to flipping!

Bryce
So, let’s talk hard money. I saw in your pre-show notes that you’ve done hard money loans for primary residences, which is a bit unusual in the industry. Typically, that’s frowned upon due to regulations like the Truth in Lending Act or RESPA. Can you explain that? I’ve never heard of other lenders doing that.

Ken
I actually see consumer lending as a crucial service. Not many lenders focus on it, but people want to buy and live in homes, so if we can help with that, we’re doing something valuable for our community. As long as we follow regulations like Truth in Lending, RESPA, and Reg Z, there’s no issue. We use a system that helps us stay compliant, ensuring everything is done by the book. We run everything through specific programs that automatically tell us what needs to be done—when disclosures go out, if numbers match, etc. Once we’re compliant, it’s just like any other loan.

Ari
But it does require a broker who stays on top of everything. It’s a lot to keep track of, but we don’t shy away from the extra training and education. We’ve been able to help many more people by staying up-to-date with all the rules.

Bryce
That’s amazing. You’re the first lenders I’ve talked to who’ve done this. Most people want to stay away from conventional lending and focus on more experienced investors. But you’ve found a unique niche, and it’s a great revenue stream.

Ken
Exactly. We don’t deal with Fannie or Freddie—we stick to hard money, and that’s where our focus is.

Bryce
Got it. What about your investors? Does it bother them that you’re doing long-term mortgages, or are they okay with it?

Ken
Our investors are fine with it. We keep everything in hard money and make sure all the terms are clear and manageable. They’re comfortable with the strategy because we’re very transparent. We also do owner-occupied loans and those can be done in one of three ways. The first is a bridge loan, where the borrower pulls cash out of their current primary to buy a new one while selling the old property. This is not a long-term loan—it can’t exceed 12 months, so we usually do an 11-month loan. There’s no prepayment or default interest, and we have to follow all the necessary regulations, like loan estimates and closing disclosures.

Another option is an owner-occupied business-purpose loan, which is exempt from many of the regulations that apply to regular owner-occupied loans. Finally, we offer a 15-year loan structured in a way that benefits the lender but is still feasible for the borrower. It’s three years interest-only, followed by 12 years fully amortized. Borrowers know that after three years, their payments will increase, but the new payment won’t exceed double the original amount. This gives borrowers a chance to improve their credit and financial situation before the larger payments kick in.

Bryce
Ah, got it. Very interesting. I’ve never heard of people doing that before. Seriously, I learn something new every time I chat with people. This is great.

Ken
We have a huge database of investors, each with their own opinions and underwriting guidelines. Some investors prefer owner-occupied properties, while others want land, or non-owner-occupied rental properties. It really depends on their specific goals and past experiences.

 

Bryce
Got it. That’s incredible. Do you mind sharing how many investors you work with?

Ari
We work with nearly 700 investors. Some of them are locked into longer-term deals, but we’re constantly searching for new investors to meet demand. So, we have over 700 that we regularly communicate with.

Bryce
Wow, that’s incredible! Are you actively marketing to find new investors, or is it mostly through word of mouth?

Ari
It’s a bit of both.

Bryce
I don’t think I’ve heard of an operation this large. To be honest, we probably have only about two dozen investors we work with. They prefer shorter-term fix-and-flip loans, so it’s really interesting to hear how you manage such a diverse group.

Ari
Thank you! It’s interesting because your two dozen investors might have huge portfolios or retirement funds, whereas many of ours are individuals with a few hundred thousand to invest. We do make sure they’re accredited, though. They might have a net worth ranging from $1 million to $100 million, but the $1 million investor might only be able to invest $100,000 at a time.

Ari
So, we need volume. But for anyone listening who has billions to invest, we’d love to work with them.

Bryce
I love that. Honestly, that’s part of why I started this podcast. I think private credit is an incredible investment vehicle. So, if anyone has additional capital on the sidelines, they should definitely reach out to Ken and Ari to put it to work.

Ken
We’re primarily focused on California—99% of our loans are here. We’ve done a few in Hawaii, Florida, and other states, but each state has its own regulations. We can lend in about 20 states where our California broker and NMLS license are accepted. Some states have specific rules, like we can do loans in Florida, but they can’t be promoted publicly. They also have to be non-owner-occupied, business-purpose loans. Each state has its own pages of regulations that we have to follow.

Ari
California is the easiest for us because we do it all the time.

Ken
Yeah, California is easy because we’re already set up for it, with all the regulations and documentation in place. It may be the craziest state, but we’ve got it down.

Bryce
Most people shy away from California because of the complexity, but you guys are the compliance experts! If I have any questions, I’m definitely giving you a call.

Ken
We’re all set up for California. It’s easy for us because we’ve already done the work to comply with all the regulations.

Bryce
Got it, I love it. That’s awesome. So, do you ever experience challenges with having enough capital or loan volume? I ask because, in my own business, it feels like a constant seesaw. Sometimes I have too much capital and not enough deals, and then other times, I’m in capital-raising mode. Does that ever go away, or is that just part of the business?

Ari
I think we’ll answer that in two ways. It won’t go away unless, like us, you need investors. That’s how we got started.

Ken
Yeah, that’s how it began for us.

Ari
But now that we have so many investors, the liquidity issue isn’t as big. The real challenge is keeping up with the lender’s needs. When we have an attractive offering—a great loan in an urban area with a low LTV and a solid borrower—we can have 12, 14, even 20 lenders wanting in. The difficulty then is how to satisfy everyone, because 11 lenders will inevitably be disappointed that they didn’t get the deal.

Bryce
Got it.

Ari
We’re constantly marketing and building new relationships. We help people like you—borrowers who need capital or investors with too much capital—and pair them together for a win-win. It’s something we really enjoy.

Ken
Here’s what we aim for every month to keep things balanced. If you do this, it’ll help solve the “seesaw” problem. We try to add eight new lenders to our portfolio each month and fund 20 to 25 loans. With new lenders coming in and about that many loans going out, everything tends to even out.

If you do this, it’ll help solve the “seesaw” problem. We try to add eight new lenders to our portfolio each month and fund 20 to 25 loans.

Bryce
Okay, so you don’t have the massive swings.

Ken
Right. Some lenders get paid off, then they’re back in the loop, wanting another loan. So, adding eight to nine new lenders each month, plus the ones who get paid off, keeps us in the sweet spot to manage 20 to 30 loans monthly.

Bryce
I see. Correct me if I’m wrong, but it sounds like you’re not using a fund model. Instead, the investors wait until you have a deal, then you place them on that loan, almost like a co-lender agreement.

Ken
Yes, that’s correct. We typically have one loan, one lender, unless it’s a larger deal that needs to be fractionalized. If you’re on our list, you’ll get the loan offer, see the due diligence, and if you’re interested, you approve it. Then we do the docs, you fund it, and it’s a done deal.

Bryce
Wow, okay. Have you ever considered starting a fund? I personally really like that model—it’s easier than piecing together different investors for each loan. With a fund, you just have your bucket of capital and can allocate it how you see fit. Have you thought about going that route, or is it not something you’re interested in?

Ken
We’ve looked into it. We actually followed in my parents’ footsteps. They stayed away from funds after seeing what happened in 2008. Many of the brokerages that got into trouble had funds.

Bryce
Interesting.

Ken
That doesn’t mean funds are always problematic, but that’s what they observed. So, we decided to stick with our current model. Our attorney has recommended a fund, and we’ve attended conferences where they’ve weighed the pros and cons of doing a fund versus what we do. Both models have advantages and disadvantages; it’s just a matter of what works best.

Ari
For now, we’re focused on what we know works. Opening this company and expanding our other one has kept us busy. I’ve hired four people in the past five months. We’re aiming for growth, but we don’t have immediate plans to start a fund. To be honest, we’re just focused on delivering and doing what we do best.

Ken
And if it ain’t broke, don’t fix it. The current model works well for us.

Bryce
Absolutely. I’m not criticizing the model at all. Most lenders actually follow this approach, and it works. I was just curious if, given the size of your operation now, you’d ever considered a fund. But it sounds like you’ve carefully considered it and have solid reasoning for sticking with your current strategy.

Ken
Yeah, we’ve looked into it briefly, but we’ve been so busy that we haven’t gone deeper into it.

Bryce
It’s a fleeting thought, then.

Ken
Exactly. We’ll put a pin in it and come back to it if needed.

Bryce
Got it. In my own experience, I’ve found that the fund model works well, but one downside is that you’re paying interest on funds even if they’re not being utilized. That can push you to take riskier loans just to put the capital to work. With your model, though, investors stay on the sidelines until a deal comes up, so you can ensure it aligns with both your and the lender’s criteria. There are pros and cons to both approaches.

Ken
Exactly. Those are some of the points that came up when we discussed it.

Bryce
Gotcha. So, you’ve opted not to go that route. One thing I’ll add is that a lot of the concerns around funds—like compliance headaches and costs—can be managed. Sure, some attorneys charge $100,000 to set up a fund, but that’s not always necessary if you know the process. It sounds like you’re already following accreditation rules and regulations, so if you ever decide to go down that path, you’d be well-equipped to handle it.

Would you be comfortable sharing how much you have in assets under management?

Ken

Yeah! We’re servicing around $60 to $70 million at the moment. That’s what we’ve built up in just over a year and a half.

Bryce
Wow, all that in just a year and a half?

Ari
Our mortgage company is pretty productive.

Ken
Well, we already had a thriving, very productive mortgage company. The only issue was that we weren’t servicing the loans ourselves—they were farmed out to other companies who didn’t handle them properly. Once we took that over, the growth took off, and we want to keep it growing.

Bryce
For everyone listening, what’s your advice on staying on top of capital, borrowers, and lenders? What do you do daily, weekly, or monthly to keep things moving? Also, what marketing strategies have worked best for you?

Ari
Number one is word of mouth. We build strong relationships with past borrowers and keep their information for future opportunities. We’re even setting up a department in our servicing company to help optimize credit and assist with refinances. We stay connected with borrowers and make it clear we want to help. We also rely on friends, family, and referral sources. I still send old-fashioned mailers once a month or once a quarter. People keep them for over a year—one person even called me after a year saying they still had my flyer. For us, it’s about connecting with people.

Number one is word of mouth. We build strong relationships with past borrowers and keep their information for future opportunities.

The second thing that’s worked well for us is partnering with other licensed professionals. If they have products I can’t offer or borrowers who qualify elsewhere, we still work together. We both win, and most importantly, the borrower gets a solution. We’re always looking for ways to collaborate. We’ve been in this business for 15 years, and it’s about maintaining our brand integrity. People call in and get real people on the other end—me, Ken, even my adopted aunt. Our clients appreciate that personal touch.

Bryce
That’s awesome. I tell people all the time—if you’re waiting at a restaurant and there’s an hour and a half wait, are you really going to sit there or go somewhere else? People just expect common sense and real human service, but that seems to be lacking in so many industries. The bar for service is so low that it’s easy to stand out just by being genuine.

Ken
It’s true, it’s so bad.

Bryce
Exactly. I try to keep things simple—just shoot me a text, call me, email me, or even tweet me. There are so many ways to connect, and we’ll get it done. It doesn’t take much to provide excellent service.

Ken
We genuinely care about the people we work with.

Bryce
And I love the personal passion behind it. For you, it’s more than just business; it’s about helping others in the way you were helped when you couldn’t get a loan. That’s powerful. Personally, I find that motivation really inspiring. Sure, being a lender is a great business model, but when there’s a deeper purpose, it really drives you.

 

Ken
Exactly, it’s about giving back and making a difference.

Bryce
I love it. So, I know we’re nearing the 45-minute mark, but for anyone listening who wants to reach out to you, what’s the best way?

Ari
The easiest way is through our website: pacificdirectmortgage.com. Every page has a contact form. You can also call us at 707-708-0797—we have multiple lines, and phones are on from 8:30 a.m. to 4:30 p.m., Monday to Friday. For immediate contact, email is a great option: [email protected].

Bryce
Perfect. And anyone listening, if you have any compliance questions, Ken is your guy!

Ken
Haha, I’m not a licensed attorney, just to clarify, but I can address those compliance questions!

Ari
Before we wrap up, for those who might be new to the podcast, where are you located?

Bryce
I’m based in Idaho, at least for now.

Ari
Wow. Do you lend only in Idaho, or are you active across the U.S.?

Bryce
Right now, we’re only in Idaho. I live in Idaho Falls, a small area with a population of about 80,000. We do a lot of lending in Boise, Twin Falls, and surrounding areas, but we’re focused on Idaho for now. I want to build up and tap into that market before expanding to California and going up against you guys.

Ari
People often ask us to expand to Florida, Hawaii, or other areas. But with how busy we are in California, we’re not going anywhere. We’re going to finish what we’ve started here before expanding further.

Bryce
Exactly, sticking to our lane. I don’t have a compliance department—it’s just me handling everything. So for now, we’re staying local.

Ari
We get some inquiries from Idaho every now and then. I’ll be sure to send them your way!

Ken
I actually got an inquiry from Idaho this morning. I might reach out to you about it.

Bryce
Please do! I’d love that.

Ari
To wrap up, I sincerely hope this podcast has helped expand people’s understanding of real estate investment. Real estate is a solid investment, and while there are risks, the value it offers is significant. If anyone is looking to expand their portfolio or earn passive income, trust deeds are a great option. Whether you’re in Idaho or California, we can help.

Real estate is a solid investment, and while there are risks, the value it offers is significant.

There are also many people who dream of becoming homeowners but face challenges—whether due to self-employment, having an ITIN, or high debt-to-income ratios. That’s where private money can make a difference. If you’ve struggled to secure a home loan through traditional banks or credit unions, reach out to us. We want to help make homeownership a reality for you.

Bryce
Absolutely, I know it has! To put a cherry on top, I’ll share a quick story. The first rental property I ever purchased was a single-family home with a mobile home in the backyard. It wasn’t a permanent structure—just a mobile home on a title, but I couldn’t get a lender to fund it. They wouldn’t consider it because of the manufactured home. I called 45 different lenders, and none of them would help. Finally, I found a lender who was willing to close their eyes to the mobile home and focus on the permanent foundation.

At the time, I didn’t even know hard money lending existed. If I had, I could have funded it right away. My point is, don’t let a few “no’s” discourage you. Whether you’re buying a home, a rental property, or anything else, there are people in this industry who offer solutions to fund your dreams. If there’s a will, there’s a way.

Ari
That’s such a great story. It really shows the power of persistence.

Bryce
Exactly. So many valuable takeaways from this conversation. Thank you both so much for being here. I truly appreciate your time. I know the audience got a ton of value, and I personally did as well.

Ari
Thanks for having us!

 

Contact Ken & Ari!
pacificdirectmortgage.com
[email protected]
(707) 708-0797

 

Contact us!
joinlendr.com
[email protected]
Instagram, LinkedIn, YouTube