Real short article today. An article just came out today in American Banker Magazine, where I was quoted on financing gentlemen's clubs.
“I think I’d rather finance a gentlemen’s club than just about any other type of property,” Blackburne said. “You know what the biggest problem is? Those borrowers make so much money that they keep doubling up and tripling up on their payments. They pay me off. I’m not a bridge lender. I want my money to stay outstanding.”
There is also an important lesson here. Did you notice how I complained about getting paid off. You don't really want to be a bridge lender. That's far too much work. Every month your portfolio shrinks, and you have to hustle up new business. Instead, you want to make long-term private money loans and earn loan servicing fees.
"It's the loan servicing income, silly!" -- George Blackburne III, circa 1902
But no one ever listens to me.
By the way, in addition to gentlemen's clubs, Blackburne & Sons has also financed a number of adult book stores and adult lingerie stores. We are currently working on a swingers club. Sad note: We have been forced to foreclose on every church loan that we have ever made. :-(