Make More. Work Less. Why I’m Raising Rates in a Tough Economy

Section 1: Life Updates & Lendr Growth

Before I advise you to raise your prices as a private lender, I want to take a minute to give you some personal context because we’ve been busy—really busy—and that’s a great thing.

On the personal front, we had a big shift: we officially moved from Idaho, where we lived for the last 15 years, to Arizona—specifically Queen Creek. That move happened back in November 2024, right after Thanksgiving.

Although we relocated in November, we still had a house to sell in Idaho. The market has been slow, so the house sat for a bit. We left all our big items—beds, couches, dining tables, and more—to help stage it properly. Finally, around mid-March, we got an offer and closed about 10 days ago. It’s been a whirlwind.

We flew back, saw family, packed up, loaded the truck, and officially moved everything into storage here in Arizona.

It’s a strange feeling because I still exclusively lend in Idaho—at least for now. That may evolve, but Idaho is what I know best. I’ve built a network there, earned trust, and understand the nuances of that market deeply. Arizona, by contrast, has stricter lending laws. You need not just a license, but a physical storefront or office space. I’m not crazy about that.

I love being remote. It gives me freedom, flexibility, and a more efficient workflow. So, for the foreseeable future, we’ll stay focused on Idaho. That’s where I have experience, reputation, and momentum—and that’s hard to walk away from.

Section 2: Feature Releases, Product Growth & Going All-In

On the Lendr side of things, it’s been wild—in the best way.

We’ve had a wave of new customers onboarding, many of them migrating from platforms like Mortgage Office and Mortgage Automator. With that came a flurry of feature requests, so we’ve had our heads down building tons of new tools and improvements.

The demand has been overwhelming, but in a good way. We’re seeing the pain points firsthand—where competitors are dropping the ball, where users are frustrated—and it’s giving us a crystal-clear roadmap. Honestly, the progress has been amazing. We had a solid product before, but now it’s on a totally new level. I should probably do a dedicated episode just to walk through everything we’ve rolled out over the past few months.

New document automation tools. Enhanced deal tracking. Smarter investor dashboards. Each feature was designed with feedback in mind.

That’s the real reason I’ve been a little MIA from the podcast.

Now, let’s dive into today’s core topic—why you absolutely need to raise your prices in 2025 as a private or hard money lender.

This topic makes people uncomfortable. It’s rooted in insecurity, inexperience, and mostly fear. Fear of scaring away clients and/or losing business. But here’s the truth—if you raise your prices sends a powerful, silent message.

Raising your prices sends a powerful, silent message.

It tells your borrowers or customers that you’re serious, that you deliver, and that your product is worth it. Let me illustrate that with a quick story.

Years ago, I built and sold a small software company. It was essentially a QuickBooks alternative built for mom-and-pop landlords with 1–15 rental units. We were doing okay—but not great. Pricing was $99 per year. However, despite having a decent number of happy users, it wasn’t sustainable.

We needed to raise prices.

I was terrified. I figured we’d lose everyone. But I made the call to double our pricing to $199/year.

I fully expected a mass exodus of customers. I assumed cancellations would roll in. Surprisingly, that never happened. Out of hundreds of customers, maybe two canceled. Two. That’s it.

We did notice a brief lull in new signups—probably because of a big email blast we sent promoting the last chance to lock in the $99 rate. We likely exhausted our market. However, a few weeks later, conversions normalized again.

What changed? New users didn’t even know about the old pricing. All they saw was a great deal—$199/year for simple accounting software, compared to QuickBooks at $600–$700/year.

The pricing change helped us look more legit, more premium, and more trustworthy.

There was an unexpected bonus, too. Our customer base became easier to serve. People took the product more seriously. Support tickets dropped. Satisfaction went up.

Section 3: Why You Must Raise Prices

If you raise your prices, it is one of the few levers we can pull as business owners to create instant, meaningful change. I understand the fear—it feels risky. Especially in uncertain economic conditions.

We’ve got inflation, tariff drama, political instability. I get it. But here’s the mistake too many people make: lowering prices to try to win customers.

Do. Not. Do. That.

… lowering prices to try to win customers. Do. Not. Do. That.

There’s no upside to dropping your price. You still do the same amount of work—but now for less money. Which means you can’t afford to outsource. You can’t scale. You can’t even market effectively.

It’s a total self-sabotage move.

So let’s flip it. When you raise your prices:

1. You stand out from the competition.
2. You elevate perceived value.
3. You improve your customer base.

Let’s start with standing out.

In most markets—especially lending—everyone’s racing to the bottom. You look at three competitors and say, “Okay, they charge X, I’ll go a little cheaper.” Then someone else comes in and undercuts you. And another one after that. It never ends.

It’s a death spiral.

Unless you’re a company like Walmart, where you make it up in volume, this is not a good strategy for most entrepreneurs. You’re not Walmart. You’re likely small, agile, and doing 1:1 work. Raise your rates.

You offer better support. Better responsiveness. You don’t funnel people to call centers. You give people a real human experience. That’s worth paying for.

Now let’s talk psychology. Humans associate value with price. It’s baked into us.

If I put two cars in front of you—one is $20,000 and the other is $50,000—which one seems better? Even with no details, you assume the $50K car is more luxurious, more advanced, more premium. That perception is automatic.

The same logic applies to your product. Higher pricing implies higher quality.

Here’s the kicker: your customers change too. Some of the most demanding, time-wasting customers I’ve ever had were on $10/month or $25/month plans. It’s wild.

People paying the least tend to complain the most.

Higher pricing attracts better clients. They’re more respectful, they trust you, and they don’t nitpick everything.

Higher pricing attracts better clients.

In private lending, this means moving away from the basic “10 and 2” model (10% interest, 2 points), and toward a “2 and 12” or even a “3 and 14” model.

Yes, you might lose a few borrowers.

But here’s the math: if you double your prices and lose half your customers, you still make the same amount of money—with half the headaches.

Fewer deals, same income, less stress. That’s a win.

Section 4: Competing with Institutions & Why You Deserve to Charge More

Let’s talk about raising capital.

If you’re newer in the space, and you’ve got maybe $3–4 million out on the street, you’re likely in growth mode. You want to raise more capital, fast.

Here’s the problem: if you’re lending at 1 and 10 (1 point, 10% interest), your returns are low. Your capital disappears quickly. You start scrambling for more investors, spending time and money on marketing, stressing yourself out.

Let’s say you start lending at 3 and 14 (3 points, 14% interest).

Yes, you may close fewer deals but your profits grow—dramatically. And you have more room to breathe.

You can do this. You’re allowed to.

You can do this. You’re allowed to.

Some people say, “Yeah, but what if borrowers walk away?” Then they walk. That’s fine. You’re building a real business, not a charity. You’re not trying to compete with Kiavi, Lima One, or institutional lenders that operate on razor-thin margins and make it up in volume.

Those companies will always undercut you on price. That’s their model. Let them.

Instead, focus on your value. For example, when borrowers ask why you’re more expensive, you can say: “Actually, I’m not.”

In fact, while Kiavi might advertise 1 and 9 (1 point, 9% interest), they have hidden fees everywhere.

A $19.95 commitment fee. A $750 doc prep fee. Admin fees. Appraisal add-ons. Underwriting surcharges. It’s endless.

By the time the deal closes, they’ve paid more than they would’ve with you.

And even if the price were higher, here’s what I always say: it’s way more expensive to lose a deal.

… here’s what I always say: it’s way more expensive to lose a deal.

Think about it. You’ve got earnest money on the line and probably have already paid for inspections. You’ve got time, energy, and real dollars invested.

If the deal falls apart at the 11th hour because your lender couldn’t perform—guess what? You just lost thousands.

That happens with big-box lenders. All. The. Time.

They pre-underwrite the deal, make it look solid, and then whoops—last-minute changes, new conditions, extended timelines. The borrower’s left holding the bag.

Meanwhile, we close in three to five days all the time. Not talk. Not maybe. We do it.

That reliability is worth a lot. So when someone says, “You’re too expensive,” I say, “That’s okay. If anything changes, let me know.” And guess what?

Seven times out of ten, they come back.

“Hey, that other lender couldn’t close. Can you still help?”

Every. Single. Time.

We get the deal. We save the day. And the borrower remembers that.

In conclusion, there’s no benefit to underpricing your services and there is actually a massive upside to charging what you’re worth.

Raise your prices in 2025. You deserve it.

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