The genesis of Sound Capital (formerly Sound Equity) occurred in 2007, when co-founders Dave Huey and Ken Hansen came together to begin purchasing multi million-dollar homes in foreclosure at Trustee sales in the Northwest. They quickly realized that reliable, scalable capital wasn’t available to their fellow purchasers, and in 2008 began to meet this demand by loaning out funds on the courthouse steps in Norwalk, CA.
2008 was also notable for the bursting of the housing bubble, which foreshadowed one of the most difficult periods in the history of residential real estate. Surrounded by exponential growth in defaulted loans and property foreclosures, we recognized that to meet borrower demand we would need to scale quickly by acquiring the most reliable capital, developing lighting quick underwriting processes, and building out an efficient technology platform basically from scratch. It was at this point that the foundations of our company as we know it were laid, and the success that we continue to experience was born.
With this foundation in place, Sound Capital went to work helping countless borrowers finance distressed property purchases with reliable capital at fair prices, and in the process played a pivotal role in the rebirth of hundreds of run down and foreclosed properties, transforming them into beautiful homes that enriched the communities in which they were located.
But an interesting thing happened along the way – many of our capital borrowers became our trusted friends and partners. Given our close working relationship it shouldn’t have come as a surprise, but in many cases, we became as invested in the properties as our borrowers and were actively rooting for their success. Together we were able to repair communities across numerous West Coast markets and give thousands of families the home they’ve always dreamed of.
Ultimately though, the foreclosure bubble ran its course. With an increasingly tight supply triggering a declining rehab market, we faced a choice – fight for a piece of an ever-shrinking pie or continue our growth by diversifying our revenue stream into new construction lending. We chose to diversify.
U.S. Housing Market Needs 5.5 Million More New Units, Says New Report (WSJ)
Construction of new homes in the last two decades lagged behind historical levels, contributing to a recent surge in home prices
To accomplish this seismic shift required enormous amounts of resources and effort. It also necessitated bringing in true professionals with exhaustive industry knowledge base and years of new construction lending experience to make the transition successful. Sound Capital hired Robb Kenyon and Johnny Walker as partners, two long-time NW professionals with a combined 80 years of new construction lending experience, to head our new construction lending effort. Pairing their experience with our resources has already paid substantial dividends: today we lend many tens of millions per month, financing all types of rehab and new construction projects, including finished lot, ground-up and construction-completion loans. Similar to our work with rehab property buyers, our lending to new construction builders is bringing the dream of new home ownership to thousands of delighted families and reducing the levels of inequity and frustration that housing shortages cause.
Sound Capital is not just a lender – we are a partner, a friend, and a resource to our borrowers. Throughout it all, we strive to remember our mission: to help builders across the country “Build Something Great!”