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PLP-059 Listener Spotlight: Hypothecation – A Unique Approach To Private Lending with Nomi Yah

PLP 59 | Hypothecation

PLP 59 | Hypothecation


Nomi Yah is a practitioner of creative financing. She hustles to make things happen. She’s not just waiting for things to come to her, but she makes sure to go after it. After buying her first house for $90,000, she sold it in a few years for $140,000. Seeing the profit from real estate, she bought and sold several more houses, adding in-law units and becoming a landlord. After consistent success, some family members invested and the business grew until they had thirteen tenants and one note. Realizing that the note was easier and more profitable than the tenants, she spent a year learning about notes and decided to sell the rentals and become a private lender, starting Elohe Loans in 2018. Nomi talks about hypothecation and shares her unique approach to private lending. See how this can also work for you.

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Listener Spotlight: Hypothecation – A Unique Approach To Private Lending with Nomi Yah

A Different Way To Earn Monthly Cashflow

We are breaking new ground here. We’re going to reach a new milestone as this episode is the first of its kind, a Listener Spotlight. This an episode where I interview a listener who is actively lending money and seeking to expand their network. The idea is for you to know the ins and outs of lending from somebody in the trenches every day, someone besides me. I’m excited to get to this interview with my guest, Nomi Yah. The nexus of this episode was an email that said she was traveling to Texas in the near future to look for deals to lend on and would like to meet me and talk about all things private lending, which that in itself I thought was cool. She offered to buy me a barbecue, which is my kryptonite. How could I say no?

I met Nomi Yah in Austin near the end of 2018. I listened to how she prefers to lend, how she likes to structure her deals, and how she’d lends for cashflow and also had some fine brisket. It was during that conversation that I realized that I wanted to have people like Nomi on the podcast so they could share their stories, tell us of their genius moves and maybe their mistakes and regrets as well. This thing has made the podcast so much more enjoyable than I could have imagined. I hope you enjoy the first Lender Spotlight with Nomi Yah. Let’s get to the interview.

I’m honored to have a Listener Spotlight with Listener, Nomi Yah. Nomi, welcome to the Private Lender Podcast.

Keith, I’m glad to be here.

Thank you so much for reaching out and agreeing to do this. This is a new segment that I’m trying this year in 2019. As a little background, Nomi signed up for the email list. I finally sent an email out. She responded and filled out a survey and then emailed me and said, “I’m going to be in Austin, Texas. Can we meet up? I’ll buy you lunch.” She said, “Barbecue.” I said, “I’m there.” We had a great afternoon chatting about real estate, lending and everything. She graciously agreed to come on. Again, thank you. I’m looking forward to this. How’d you been?

I’ve been great. It’s my first podcast and I’m excited.

Let’s give us a little background about yourself. What type of environment do you come from, corporate finance? I know you have a very interesting background so please tell everybody.

PLP 59 | HypothecationI’ve been in the music industry for 25 years. I toured around the world. I got a gold record. I’ve performed in front of 100,000 people. I got a whole lot of milestones with my music career. I’d have to say I aged out of the touring part of it. I’m still a songwriter and have some success. I got more and more into real estate. I’ve always been interested in real estate. I finally hung up the touring gear and put on the real estate thing. I started with a whole bunch of rentals then I sold off all my rentals. Now, I’m doing lending.

I’ve seen the gold records. It’s legit. I love the musical background and also real estate. What part of the country do you live in? Do you invest in your own backyard or you go across state lines?

As a landlord, I only invested where I live, which is Northern California. As a lender, I only have one note in California. I’m doing the rest in Texas and Missouri. I’m open to other places as well.

What made you choose Texas and Missouri?

You can get a house for a lot less than you can here. Here it would take all my resources to get one house and there, I can get multiple houses.

There are millions of niches. It may take you a couple of years but you will land on one.
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You can scale it a little more, diversify the risk. What are your goals in becoming a private lender? What is your primary investment objective with that? Is it cashflow?

It’s definitely cashflow and also generational wealth.

You want to leave a legacy.

As a musician you don’t have any retirement plan, so when you start performing royalties trickle in, but they’re not dependable. It’s a retirement plan for myself.

The loans that you have made out in Texas and Missouri, walk us through it. What do they look like, a single-family, rehab or rentals? Walk us through the mechanics of those loans.

Let’s say they’re all a little bit different, but mostly they’re single-family homes. Most of them have come through real estate investors where I own part of it and they own part of it.

Do you have equity stakes in addition to the mortgage and the interest?

That’s not how we set it up. We hadn’t set it up as an equity stake. We’ve set it up as a loan or hypothecation.

Let’s delve into that a little bit and explain because one, it’s a big word and two, not a whole lot of folks understand what it is. Can you walk us into that?

For example, I have a property where a real estate investor bought a house for $22,500. They turned around and sold it for $65,000 with an owner finance note. They needed to pay off a short-term hard money lender and so then I gave them a long-term note. I specialize in long-term notes because I want a stable environment. I believe that balloons create an unstable environment. You have to go and replace that balloon so you have to take action. Whereas when you have a long-term loan, you could refinance it or sell it, but you could also keep it. You’ve created the possibility of long-term stable cashflow. When they hypothecated the note to me in that case, they gave me a first lien for $22,500 on a $65,000 property. They’re collecting from that $65,000 note and turning around and paying me $22,500 note. That’s the hypothecation.

PLP 59 | Hypothecation

Hypothecation: As a musician, you don’t have any retirement plan.


Basically, that debt or pledge as collateral to secure a debt or as a condition of a debt. In this sense, you refinanced the hard money lender out and the investor was able to sell with owner financing. Now, you have a nice note and a $22,000 investment based on a $65,000 note, which is going to pay out more than $65,000 over the life of that loan. You’ve gone a good way of creating something stable there.

I’m looking to go more into that where I’m looking for real estate investors, who are good at finding deals and is using seller finance. I’d like to come up with a way of doing long-term financing for these deals so that they can end up part of the note and I can end up part of the note.

It’s more than a rehab on this is. This is why I find this interesting because this isn’t just, “I need X and we’ll turn it into Y and then I’ll pay you back Z.” I like this because it’s more of a legacy. It’s a bit of the longer term. Nomi and myself, we’re not selling or buying securities or anything like that, but I’d like for you to run through an example of what you would further like to do. You sent me something, you purchased a property a $75,000, for example as an investor does. They put up some cash and borrowed the rest from you at 10%. After the rehab, they sell the property with seller financing. Instead of giving you the money back, you have them say, “Let’s turn that into a note where I get my monthly payments without a balloon.”

The real estate investor can keep part of the note too. They can keep the whole down payment. If you look at that example, I made a loan so that a real estate investor can buy a house for $75,000, fix it for $15,000. We’re in it for $90,000. I lent them $70,000. When they sell the house, in this example, they sold it for $140,000. They have a note for $125,000. That’s how we did it in the example. They have a seller finance loan for $125,000 to the buyer. They’re going to turn around instead of paying me my $70,000 back, they pay me back part of that $125,000 loan. They’re going to pay me, in this case, $93,000 of that note, and they’re going to keep the remaining $31,000.

They get the down payment, which in this case is $15,000. It’s cashflow in their pocket plus the remainder of that note, which they can ride out for $31,000 or sell it or do whatever exit strategy they want it. If they want to turn it into quick cash or have something steady or they can sell it back to you. Let’s walk through another example where this one is a little different. I like it because it’s a lot more advanced than what I would say is your normal run of the mill private loan. This is more in the area of development where you find the 40 acres. It was parceled out and subdivided. You created multiple notes off of this. Walk us through that, please.

In this example, it was a 40-acre parcel that someone was selling for $200,000. It would cost $20,000 to get the subdivision to work. I think that involved dividing it, maybe putting a road or something on it. It’s pretty minimal. It’s basically raw land.

It was basically going down to the city council or the county and having them allow it to be subdivided.

Which you would have to know in advance before you got into the deal. The real estate investor that I would work would find the properties, do the subdivision and I would make the loan. They would split that 40 acres up into five-acre parcels. I’ve even heard of cases where they split it up into one-acre parcels, the smaller, the more profitable. In this case, it was eight parcels for five acres each. They got a down payment of $5,000 for each one and a note for $45,000. They sold a five-acre parcel for $50,000. They have eight $45,000 loans plus $40,000 in down payments they can put it in their own pocket. Out of those eight $45,000 loans, they’re going to give me five. I’m actually going to end up owing them a little bit more. I would give them $8,000 or so to make it an even five notes. I’m going to own five notes. They’re going to own three notes.

All they have to do is get you to agree to loan and they go to the city and get it subdivided. It seems like a pretty nice little payout there.

Everybody keeps saying, “We need money.” Everybody is thinking in terms of two kinds of money. You got hard money. You got the super passive, retired person with some funds, but I’m not in either camp. You’re not either. The Private Lender Podcast is for people who are more active. After two years of struggling with all the different options, there are like millions of niches. It took me a couple of years to land on this one. It’s very profitable for me and for the real estate investor and workable for the buyer. I am currently looking for some investors to work with one deal at a time. I’d like to find somebody I could do multiple deals with.

Getting used to the ins and outs of details is the most confusing thing.
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Why reinvent the wheel if we can get a phone call and say, “Let’s do it?” That’s what this is all about. It’s creative financing. It’s building your network so that you can find people to where you could work together because private lending is not for everybody. Your niche of private lending is not for everybody. Wholesaling is not for everybody. There are enough variances and variations that if you build a big enough network and worked it then you can find what you need and put it to good use. You can fly under the radar of the security laws as long as you keep it personal and one-on-one without advertising. This is what I like about private lending and also what you’re doing. The fact that you got on a plane, came to Texas and was looking for deals and looking for people. Tell me did you go to any REIA meetings or what did you focus on that trip?

I had a REIA meeting I was invited to. I was supposed to go. I missed it because I had a very interesting meeting with somebody else. I prioritized the meeting I was having. I’m going to have to come back. I belong to the Houston REIA, but I didn’t actually make it to Houston. I’d probably come back next year and do that.

I assume you like the relatively short foreclosure laws in Texas?

I very much like that. There are a lot of things about Texas I like. There are a lot of properties of different values you can get like I said, a $20,000 property and you can also go up to $400,000 or $500,000. There are a lot of booming areas in Texas. I like it there.

We have a lot of folks are still moving in. Our three major markets, Houston, Dallas, Fort Worth and San Antonio, the doors are still open. People are coming in. It seems like all the time they expect growth even though I hear that the housing market is cooling off, at least in the Houston area. I understand probably a little statewide not failing, not crashing, natural ebbs and flows of the market. It’s cooling off.

Except for maybe Austin because I heard that they’re getting Amazon now or is it Google? I think it’s Amazon, but I can’t remember.

Austin is the California of Texas. It’s its own special area. I still love the shirts that say, “Keep Austin weird.” I’m all for it myself. That’s one of the reasons I’ve done the private lending is because I can take a property back if I have to. I will never loan, for example, in New York State because it could take years to take it back.

California too.

I won’t invest in California but I would love to, especially on the bottoms. For me, it’s the same thing. I can invest in one house in California or I can have multiple here at home. It doesn’t require any travel. A lot of people are writing about loaning in other states and I don’t do it myself yet. I’m looking into it. I don’t speak about it because I don’t feel like I know enough yet. That’s why I wanted to bring you on because you’ve already started to do it. Is there anything different for making the loans of a property in California than in Texas or Missouri?

Some of the documents are different. Some of the terms are different. People are always stumbling over how to phrase like seller carryback, seller finance, owner finance or installment sale. This is my business and I don’t even know what phrase to use.

PLP 59 | Hypothecation

Hypothecation: If you want a more stable environment, go for long-term notes.


It’s a title company-dependent it seems like because I’ve seen seller finance, owner finance and the carryback. I don’t hear so much in Texas, but I do in other states. It’s the same thing. It’s different terminology. Is it a mortgage or a promissory note or deed of trust? There are documents that secure that loan to that property and so on and so forth.

That’s the most confusing thing about out of state is getting used to the ins and outs of the details.

Do you use a lawyer in whatever state you’re lending in?


How do you make that contact and bring that person into your network?

It’s through recommendations. There is a lot of stuff going on online. I’m sure you do a lot of business without leaving your house, even if it’s in Houston. You don’t have to travel places to do business. The hardest part is that and one of the reasons I went out to Texas is, you have to make the initial contacts with people. If I hadn’t gone to Texas and met with you in person, I wouldn’t be here on this podcast. There is something to be said to getting out there and hooking it a bit but not on every deal, but maybe a few times a year.

Going back to a Steve and Michelle Green, they live in New Zealand. They come over once a year. They still do their investing in Texas. There are hurdles. There are challenges especially when you are nineteen hours ahead or whatever it is. There are some certain challenges but that’s where the money is made. When you solve problems and solve challenges, that’s where you can make money. I liked it immediately. You’re a go-getter, “I’m going to be in Austin.” I told my wife, “A listener wants to meet me.” I was like, “This is awesome.”

I was the opposite. I was like, “Keith Baker is actually meeting me.” I’ve been listening to your podcast since the very first one because I didn’t even know what a podcast was until last December, which is right when you started your podcast. I was like, “Podcast, that’s cool.” I started looking at lenders and yours popped right up because you got the best name, Private Lender Podcast.

I’m hoping that name has a lot of brand equity in the future. There are some podcasts I absolutely love, but the name has nothing to do with what they’re about. I wanted Private Lender to let everyone know this is what it’s about. A note to everyone, if you want some time with me, I take barbecue bribes as Nomi can attest to. I love a good brisket. I will drive to meet you within reason in Texas being in Central Texas in Post Oakwood and there a lot of famous barbecue joints in that area. Nomi treated me to Cooper’s on Red River. It’s a shameless plug for Cooper’s Barbecue. It was quite delicious.

They won Best Brisket in Austin this year. I thought it was pretty good.

Thank you for that. Nomi, I know that your background is extremely interesting. Tell the readers something that most people don’t know about you.

I have to give you the story of how I met Charlie Manson.

Please do tell.

I was about six or seven years old. I lived in our little Northern California town called Albion outside Mendocino. It’s about four or five hours North of San Francisco. It’s a tiny little town. You know everybody. We were driving down to the store. My mom stopped to pick up a hitchhiker. Everybody picked up hitchhikers because you knew everyone. It was a guy named Crazy Charlie. We pick up Crazy Charlie. My mom says, “We’re going to drive him down to the store and that’s all we’re doing.” He’s like, “That’s fine.” He didn’t say another word. He sat there. He’s a very quiet guy.

I looked in the rearview mirror and he had white surround his whole pupils and that’s why they call him Crazy Charlie because he had those weird eyes. He was very quiet, dirty and scruffy looking. We got down to the store. He got out, no problem. About fifteen years later, I’m back in Albion visiting and overhear some people talking about Crazy Charlie was in the news. I got up and say, “I met Crazy Charlie, why was he in the news?” They all stopped and stared at me. They’re like, “Don’t you know who Crazy Charlie is?” They were like, “That was Charles Manson.” It was about a year before all the murders and his arrest and stuff. If you go online, I went online to make sure I wasn’t wrong about this. It turns out that Charles Manson and some of his followers were in Mendocino area in 1967, ’68. It was him. Talking about getting chills, I got bad chills.

That was a wild story. How could you know you’re picking up the guy who organized one of the most gruesome murders in American history? You gave him a ride. That sounds cool. It’s a morbid cool, but it’s interesting.

The moral of the story is don’t pick up hitchhikers especially if you’re driving your six or seven-year-old daughter in the car.

It was a different time back then. How can people get in touch with you if they’d like to speak with you about what you do or learn more or maybe they want some barbecue?

My company is called Elohe Loans. You can reach me at You can also call (707) 931-1396. I am very much interested in talking to some real estate investors who want to work with me.

We’re not offering any securities or mortgages or anything but just informational purposes only. Nomi, thank you for coming on and agreeing to be interviewed. It was great talking to you in Austin. It’s great talking to you here. I wish you all the best.

Thanks, Nomi. Take care.

Take care.

I want to thank Nomi Yah for sharing her story, lending criteria with us, for reaching out to me, making all this possible and making all of this come together. Learn a little bit more about how she likes to structure her private loans to real estate investors. The Private Lender Podcast is completely free and the only price that I asked for reading is that you please leave me a rating and review on iTunes, Google Podcast, Stitcher, SoundCloud or whatever platform you’re using.

Please help spread the word and help others find us to listen and learn. You can connect with me on social media. You can go to and get all the links to Facebook, BiggerPockets, LinkedIn, Instagram, YouTube and Twitter even though I don’t tweet a whole lot. I ask for your patience but go ahead and go to the and sign up to get on the “I Will Deliver This Education” waiting list and be the first to learn how to gain access once the academy goes live. Thank you for joining. I appreciate you sharing your time with me. Please keep reaching out. I do appreciate all the feedback I’ve been receiving. Besides health and success, I wish you safe and prosperous private lending. I’ll catch you on the next episode.

Important Links:

About Nomi Yah

PLP 59 | HypothecationELOHE LOANS LLC


Elohe Loans is a small family-owned private lender. Elohe refers to Genesis [33:20], the first mention of a real estate transaction in the Bible.

Elohe founder and CEO Nomi Yah spent 25 years in the music industry as a songwriter and musician. She got a gold record, toured internationally, and worked with many artists including Eek-A-Mouse, Petra, Chris Isaak, Snoop Dogg, Black Flag, Karamazov Brothers.

Nomi bought her first house for $90,000 and sold it in a few years for $140,000. She bought her second house for $200,000 and a few years later sold it for $400,000. Seeing the profit from real estate was far better than anything else, she bought and sold several more houses, adding in-law units and becoming a landlord.

After consistent success, some family members invested and the business grew until they had thirteen tenants and one note. Nomi realized the one note was easier and more profitable than the tenants. After spending a year learning about notes, she decided to sell the rentals and become a private lender, starting Elohe Loans in 2018.

Elohe Loans has a unique approach to private lending. We offer long-term fixed-rate loans with no balloon. This allows for stability and long-term cash flow. If you are a Real Estate Investor or a Passive Investor, we would love to schedule a time to explore how we may be able to work together.

Elohe buys seller-financed notes and lends to real estate investors. We’re looking for real estate investors with experience finding below market deals. We want to work with you to create discount notes.


1. We make a short-term loan to you to purchase property.

2. You sell the property and make a long-term loan to the buyer.

3. You pay off the short-term loan with some of the long-term note.



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About the author, Keith Baker

My ultimate goal is to create an economy for Real Estate (and other) Investors where banks are no longer needed. An economy where every day people look to each other for leverage and support. During the day I am an insurance adjuster for the oil field, where I handle millions of dollars of other people's money (OPM), and by night I invest in Real Estate and host this podcast. I hope you have an excellent experience and find real value within this website and the Private Lender Podcast. Please leave comments or submit your questions on the Contact Page.

I wish you prosperous, safe and happy lending and investing!

Thanks for listening


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