Discover the Miller Bates Advantage

EXPERIENCE

We leverage decades of experience and industry relationships

CONVENIENCE

We empower investors with innovative tools to make informed decisions from anywhere in the world.

RESULTS

We offer high-yield investments and portfolio diversification secured by real estate.



The Miller Bates Story

Shortly after graduating from the University of Utah, Dick Miller began his career in real estate with Chrysler Realty. He spent several years managing properties in Southern California and Arizona, as well as ten years as a real estate agent. These professional experiences gave him knowledge and insight into the many aspects of real estate. Many years later, as a successful financial advisor, he was presented with the opportunity to lend money to a developer wanting to acquire and improve a piece of property. Dick believed in the venture and offered to personally fund the project.

From that point, similar opportunities arose at a pace that necessitated the involvement of business partners as co-investors. Eventually, the rate of opportunities increased to the point that in 2003 Dick made the decision to sell his financial planning business and transition his focus back to his real estate roots. He founded Miller Funding Group, LLC to provide short term secured real estate loans.

In 2015, David Bates joined with Dick Miller to form Miller Bates, LLC. David spent 25 years building a successful tax software company which was eventually acquired by H&R Block in 2007. In addition to his software background, David has a strong interest in real estate and has developed several successful commercial office projects. Together with the original Miller Funding Group team, Dick and David are leveraging their experiences and growing the business, while continuing to seek the highest quality loan opportunities.


The Team


Dick Miller

Co-Founder, President


Scott Heagy

Chief Financial Officer


Melissa Miller

Director, Client Relations


Taylor Berbert

Senior Accountant


David Bates

Co Founder – Emeritus


The Process

Every potential loan opportunity is initially screened by us for viability. If those requirements are met, a due diligence process follows which involves both in-house and out-sourced teams. This process substantiates real estate value and potential title claims. It is important to note that every loan is secured by a first position Trust Deed on real property and the borrower’s personal guaranty. This process has been honed for almost 20 years and has a proven track record for identifying high quality loans with high quality collateral.

If a potential loan meets all of our criteria, a summary of the terms is then presented to investors for consideration. Clients evaluate each loan to consider whether it meets their objectives. If an investor elects to become a participant in the loan, he/she buys a percentage of that specific loan. Unlike many of our competitors, investor funds are not “pooled” with other funds and invested at our discretion.

Each transaction is unique, but typically a loan has a 9% - 13% annual percentage rate (APR) and a loan to value ratio (LTV) of 50% - 65%, this is the ratio of the amount loaned to the value of the collateral. The original term of a loan is generally 6 - 12 months.  However, most loans include optional extensions of 1 – 12 months, which can be exercised if the loan is in good standing.  This gives borrowers additional time to complete their work, if necessary, and gives Miller Bates scheduled check in points to assess the borrowers' performance.  In our experience, most borrowers do exercise their extensions.  Keep this in mind when considering whether the specified timeline is appropriate for your portfolio.


Product Types

Debt 1 (First Position Loan): This product may provide rescue funds for a borrower’s business, allow a borrower to pursue an opportunity, or provide the funds a borrower needs to entitle property. No matter the purpose, a Debt 1 product is always secured by a first position Trust Deed on real property. The interest rate paid to investors is based on the current lending market and typically falls in the range of 12 – 13% APR. However, there may be instances where the loan to value is lower than usual and the property location is particularly ideal, in which case the interest rate may be as low as 10% APR. This is due to the reduction of risk. The duration of Debt 1 products generally falls in the 6 – 18 month range.

Debt 2 (Second Position Loan): This product is uncommon, but can be attached to any type of debt product. The due diligence standards are high. The interest rate will usually be 10% APR, but an equity kicker of 12 – 18% APR will be included to keep the return attractive. The combined rate will be 22 – 28% APR. The duration will mirror the original product to which it is attached.

Debt 3 (Acquisition and Development Loan): This is used by a borrower to acquire and improve property. Investors are secured by a first position Trust Deed on the property. Interest rates are from 9 - 11% APR. These products typically have a term of 12 – 24 months.

Equity: In an equity transaction, a Limited Liability Company is formed to purchase a piece of property. The investors make up 100% of that LLC’s members. This provides them with direct ownership of real estate. The purpose for acquiring the property is to add value and realize profits through the development process. The profit sharing arrangement may be structured in a variety of ways, but the current goal is to return at least 16% annually to investors. A typical duration is 24 – 36 months, but can be as short as 12 months or longer than 36 months.

Diversification is an important investment strategy and these opportunities are no exception. We always recommend contributing only a portion of your investable funds into a variety of these product types.


Case Studies

Commercial Land

Loan: $1,618,817.20    Rate: 12% APR

This loan, secured by 4.93 acres of commercial land in Layton, Utah, was funded in November 2016. The borrower made all interest payments as scheduled. Halfway through the 12-month term, the borrower paid the loan off. The total return to investors was 12% APR.

Residential Land

Equity: $637,720.00    Projected Return: 11.84% APR

In October 2012, we formed a new LLC to purchase 27 completed twin home lots and a large custom home in Cedar City, UT. These were acquired at a discount from a failed bank. We estimated the term of this investment to be 24 months. Due to challenges with the buyers of the lots and the home, the investment was fully repaid in August 2017. The total return to investors was 19.75% APR.

Residential Land

Loan: $2,247,452.57    Rate: 13% APR

This loan, secured by 11.55 acres in American Fork, UT, was funded in February 2017. All interest payments were made as scheduled. As a result, we agreed to repackage the loan and create a new loan. The original investors were given the chance to be paid out in full when the new loan was funded in August 2017. Many chose to participate in the new loan. The total return to investors was 13% APR.


Our Mission

We strive to be a leader in diverse, high yield, risk managed real estate investments.

We know our reputation is critical to our success and is guided by living our core values.

We empower people with the tools and intelligence to make informed decisions from anywhere in the world.



Frequently Asked Questions

Yes, we require a minimum investment of $50,000 per project.

It refers to the amount of loan to be obtained in ratio to the current value of the property. For example, if a borrower requests a loan of $1,000,000 and provides collateral valued at $2,000,000, the loan to value (LTV) is 50%.

Since Miller Bates was formed in 2015, we have foreclosed on 13% of the loans originated (as of February 2019). After foreclosure, we turn the property over to a sister company, Manchester Group, LLC, to manage the successful liquidation of the property so we can return investor funds. We keep investors informed throughout this process. Each time we foreclose on a property, we evaluate why the borrower lost the property and what we can learn from the situation to improve future loan opportunities.

They often fund more quickly, with fewer requirements. They are sometimes called “asset-based loans” because they focus primarily on the collateral whereas bank loans require strong collateral, excellent credit and positive cash flow to be thoroughly documented by the borrower. Additionally, traditional banks look to the capability of the borrower to pay back the loan from the borrower’s income, whereas private investors are comfortable looking primarily to a sale or refinance of the property as the method of repayment. Traditional banks often don’t provide the same combination of speed and transparency in their decision-making process. Finally, the borrower’s opportunity may fall outside the lending parameters of a traditional bank.

The advantages may include:

    • High rates of return on investment, typically between 9-13% APR.
    • Cash flow in the form of monthly interest distributions during the loan term.
    • Some risk mitigation, since loans are secured by real property, typically at a lower loan to value ratio.

The disadvantages may include:

    • A lack of liquidity.
    • In the event of foreclosure, the cessation of interest distributions and the need for active management and liquidation of the property.
    • In the event of foreclosure, future cash requirements to cover expenses such as property taxes.

Situations where private money loans make the most sense include those where the borrower:

    • Requires a quick closing and banks cannot meet the deadline.
    • Has more good opportunities than cash.
    • Wants to avoid raising money or debt from many different smaller investors.
    • Lacks the patience or time to deal with the bureaucracy of securing a loan from a bank.
    • Has an excellent investment opportunity, but does not have sufficient financial strength to get a bank loan.
    • Has a bank line of credit but needs a larger loan than is allowed under the existing bank line.
    • The borrower has an opportunity and the cost of interest and origination fee is small relative to the anticipated profit.

Private real estate investors are not regulated but are overseen by both state and federal government agencies.

Private real estate investors differ in several ways, including:

    • Their lending criteria such as loan to value (LTV) guidelines.
    • The type of real estate on which they lend.
    • The minimum and maximum loan size.
    • The geographic region they serve.
    • Their industry reputation.
    • The level of service they provide.
    • The interest rates they offer and the servicing fees they charge.
    • Timing of interest distribution.

To qualify for a loan, borrowers typically need to provide the following:

    • Verified collateral
    • Personal guarantees
    • Legitimate repayment strategy
    • Ability to service the debt
    • Description of intended use of the funds
    • Supporting documentation


Contact Us

MILLER BATES LLC
801.990.2222
1245 East Brickyard Road, Suite 100
Salt Lake City, UT 84106
info@millerbates.com


© 2019 - Miller Bates LLC

Nothing on this website constitutes an offer or solicitation to sell securities nor an offer to buy securities in any jurisdiction. None of the information presented is intended to form the basis for any investment decision, and no specific recommendations are intended. Accordingly, this website does not constitute investment advice or counsel or solicitation for investment in any security. Each individual should consult his or her own attorney, business or tax advisor as to legal, business, tax and related matters concerning the company. Miller Bates, LLC makes no implications, warranties, promises, and suggestions or guarantees whatsoever, in whole or in part pertaining to investment returns.

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