At Pacific Private Money, we strive to provide best-in-class alternative financing solutions for real estate transactions. Our team of experienced professional has built and earns a reputation for transparency, speed, and reliability.
Whether you are a self-employed borrower with a seasoning of funds and reserves issues, a real estate professional trying to provide their client with all the options available to them, or a mortgage broker who wants smart funding to achieve their client's goals, private money is a great tool that gives the borrower lending luxuries such as the ability to make cash-like o ers.
COVER STORY
6 HouseMax Funding – Stewards of Capital, Lone Star Style
By CharlesPeckman, Contributing Writer for Originate Report
FEATURE ARTICLES
12 Foundation Combines Strong Backing and Experienced Leadership to Plot Course Towards Success
ByNick
Georgandis,Contributing Writer for Originate Report
26 Interview with a True Private Lender
By Michelle Llena, Contributing Writer for Originate Report
42 ‘Pro-Borrower Lender’ Deephaven Offers Wide Array of Loans
to Non-W2 Crowd
By Nick Georgandis,GOLD SPONSORS
Contributing Writer for Originate Report
16 Growth in a Turbulent Market: Roc360’s Diversification
Solidifies Lasting Presence
ByNick Georgandis, Contributing Writer for Originate Report
36 Acra Lending Takes Big Tech Leap Forward in ‘23
By Nick Georgandis,
Contributing Writer for Originate Report
44 From Lender to Software Provider: A Bold Brand Reinvention
By Nick Georgandis,Contributing Writer for Originate Report
CONTRIBUTED ARTICLES
48 Current Market Deal Flow for Loans
By Edward Brown, Investor Relations, Pacific Private Money
PRIVATE LENDING TITANS
22 Arvind Mohan, Chief Executive Officer, Kiavi
PRIVATE LENDING TRAILBLAZERS
32 Elizabeth Morales, Chief Marketing Officer, The Mortgage Office
INDUSTRY NEWS
59 Anchor Loans Names Construction-Lending Veteran Jim Fraser as
Chief Operating Officer
60 Real Estate Investors Move Towards Rental Strategy, Differ on Future Market Dynamics in RCN Capital Spring Investor Sentiment Survey
Partner & CEO
Geraci LLP
ANTHONY GERACI
a.geraci@geracillp.com
Senior Vice President, Marketing
LESLEY BOYD
l.boyd@geracillp.com
Creative Director
LYNDA HIGHT l.hight@geracillp.com
Sr. Marketing Ops. Manager & Editor DANI L’HEUREUX d.lheureux@geracillp.com
CONTRIBUTORS
Edward Brown • Arvind Mohan
Elizabeth Morales • Charles Peckman
Michelle Llena • Nick Georgandis
FOUNDING UNDERWRITERS
Welcome to August’s Captivate Special Edition of Originate Report!
"Opportunities don't happen. You create them."
— Chris GrosserIn the ever-changing landscape of private lending, August's Captivate Special Edition of Originate Report brings to light the power of creating opportunities. As we navigate through uncertain times, it is essential to recognize that success is not merely a result of chance; it is the outcome of our determination, adaptability, and innovative thinking. This month's captivating stories showcase how industry leaders are shaping their own destinies and forging new paths in the lending world.
Our cover story features HouseMax Funding, a leading private lender in Austin, Texas. With a wealth of experience and a suite of comprehensive lending solutions, HouseMax has proven itself as a steward of capital, skillfully navigating the dynamic lending environment. From ground-up construction loans to fix and flip lending, rental loans, and multifamily developments, HouseMax Funding's Texas roots coupled with a Wall Street mentality set them apart as a force to be reckoned with in the industry. Through their dedication to customer support, rigorous underwriting process, and commitment to adapt to market demands, HouseMax Funding continues to be at the forefront of the private lending arena.
We are currently searching for companies in the private lending industry who are making a name for themselves in the marketplace for our AAPL special edition of Originate Report. If you are interested in #sharingyourstory with our readers, please contact me at submissions@ originate.report to learn about our feature options.
MARK HANF
President, Pacific Private Money
www.geracilawfirm.com/originate-report
www.geracilawfirm.com
We extend our heartfelt gratitude to all our sponsors and attendees for their unwavering support, making Captivate one of the best shows in the industry. Your dedication and enthusiasm inspire us to continue providing valuable insights and captivating stories from the private lending world, both at our shows and in Originate Report.
All of us at Geraci look forward to seeing you soon to help you facilitate your deal flow and capitalraising activities. Until next time,
“Everything is bigger in Texas.” This phrase is everywhere, and is plastered across t-shirts, bumper stickers, and tchotchkes of every assortment. But what does it take to live up to this catchy moniker?
a fast-paced lending environment. In addition to ground-up construction loans, HouseMax offers fix and flip lending, rental loans, and opportunities for multifamily developments. HouseMax’s owners have flipped over 3,000 homes.
For Jeff, the success of HouseMax, in part, lies in the balance of strong deal flow and staying on top of an everevolving technological environment. Another key element boils down to training, a seed that was planted during Jeff’s childhood.
Look no further than HouseMax Funding, the Austin-based group that has emerged as a leader in hard money lending. The HouseMax team has over 25 years of lending experience and over 50 years of collective Real Estate sales and investing.
With a national footprint and a comprehensive suite of products, HouseMax offers unique solutions in
To better understand how market conditions – including low housing stock, shifting consumer demand, and the permeation of Artificial Intelligence are affecting the lending sphere, Originate Report sat down with three leaders from HouseMax: Co-Founder & CEO Jeff Fechter, Co-Founder & President Alex Morris, and Chief Revenue Officer Doug Roberts.
“My parents owned fast food restaurants and I would sit in the back and see how extensive the training videos were, even down to how the fries were made,” he said. “That’s how we look at the business of lending – every file has the same ingredients and is going to look and taste the same. That kind of consistency across our platforms allows us to focus on the
bigger picture and adapt to trends in the market.”
From the inception of HouseMax, Jeff said organizational efficiency has been a key ingredient in the group’s continued growth. Because of the array of products offered – and the complexity of today’s market – Jeff emphasized that the experienced team of lending professionals is the group’s biggest asset.
During the COVID-19 pandemic, for example, Jeff said a hot real estate
market saw traditional real estate fix and flippers struggling to find investment-grade assets; listings were selling overnight and well above asking prices in markets across the country.
Navigating through the pitfalls of this environment, Jeff highlighted how the HouseMax team adeptly harnessed their wealth of experience to steer borrowers through marketbased challenges.
“On top of [housing] stock concerns, there were also challenges in sourcing raw materials,” he said.
“Because of these conditions, a lot of folks took on longer-term projects, including expansions and additions. Fast forward to today, where the stock, in some cases, has stabilized, we are guiding our borrowers through different challenges. There will always be concerns in the market, but what HouseMax does is offer a guiding hand through those ups and downs.”
Regardless of market conditions, Jeff said HouseMax strives to stay ahead of twists and turns. A recent example, he noted, is hesitancy by regional and commercial banks to offer capital.
“There is unease right now, and some institutional lenders are having to take a step back and reevaluate their market positions,” he said. “An important charge we have as lending professionals is to highlight the positive aspects of the field.”
This market expertise, though, is not formed overnight. Both Alex and Jeff agreed that after fixing and flipping over 3,000 homes, one question always remains central – ‘is this asset a winner?’
“One of the biggest mistakes I see fix and flip investors make is prioritizing the property itself over
HouseMax Funding: Continues on pg. 8
the renovation and intangibles that go into a deal,” Alex said. “We spend a lot of time counseling borrowers to soften the downturns in the market, but also to sell assets that are not winners. We always say – ‘if you don’t have a winner, find one.’”
Jeff acknowledged that unearthing these winners may appear challenging, emphasizing that neither the housing market nor the current stock lies within any single company's control. However, in this dynamic landscape, the HouseMax team focuses on the one aspect they can control – the influx of leads coming through their doors.
“What we cannot control is what comes out of the box,” Jeff said. “When we look at the top of the funnel, what we can regulate is how many leads we place there – and through our stringent underwriting process, we can see what will work and what won’t. And on top of controlling what goes into the funnel, we can also adjust the output. Any company that says it wants to fund X amount of loans per month is thinking about deal flow the wrong way. It is not about the amount but making sure assets are vetted and the deal is sound.”
Speaking to this critical revenue element, Doug said the most important facet of maintaining deal flow is ensuring everyone is on the same page.
“What became abundantly clear to me from the first meetings I had with Alex and Jeff was their attention to detail and commitment to customer support, paired with their market expertise. I knew right away that we would click, and that maintaining a strong cash flow would be on the front burner,” Doug said. “Another attribute we share is following through – even as we continue to grow and our responsibilities expand, if someone picks up the phone and needs us, we are there.”
"One negative element associated with growth is the lack of involvement by management as a firm expands,"
Jeff said. In addition to being there for employees and stakeholders, he added that inspecting each element of operation and adjusting as needed remains crucial.
“One of the core principles of HouseMax is an effort-based mindset with our sales team, which in turn drives revenue and pushes us forward,” he said. “And understanding, too, that the rate of return will never impact our stewardship to the secondary finance market. Just because we have done a great job in the past doesn’t mean we are phoning it in – our eyes are geared towards the future, a future that looks bright.”
Part of this future, however – not just in real estate but practically every sector – is the expansion of Artificial Intelligence. When thinking about the intersection of real estate and AI, Jeff said it is important to weigh when technology-based tools will help and when they will be a burden.
“There is so much that can happen throughout the course of a deal,” he said. “But at the end of the day, a person needs to review that documentation and make sure that just because an algorithm gives the green light, it doesn’t mean that is the end all be all. Where I do think AI will help, though, is on the underwriting
side, assisting with processes that are already partially automated.”
A common misnomer about technology, Doug added, is that it is a differentiating factor for businesses. While some companies may hide behind flashy technology or hop onto fads, the HouseMax team applies the same due diligence to technology that is given to real estate transactions.
“I think that in today’s world, everyone has to have a technological component,” Doug said. “I think what differentiates us is that, in addition to this technological side, we still value the ‘old’ school of
thought: when something needs to get done, we pick up the phone. We talk to borrowers every day, and because we know our clients’ needs, we can break down problems to their fundamental components and get at the root of problems and solutions.”
This sentiment was echoed by Jeff, who added that the HouseMax team stands at the intersection of utilizing new tools while making sure those tools meld with their customers and current demands in the market.
“To overlook something because of automation would be a detriment to
HouseMax Funding: Continues on pg. 10
what we have built so far,” he said. “With some of the tech that has come out over the course of my career, the same headlines have always emerged: that these tools would relegate Realtors into irrelevancy. But here we are, continuing to grow and offer a competitive suite of products for our clients.”
The emergence of AI has permeated many conversations in lending lately, but Alex said one key trend outside the realm of technology is surging interest in build-to-rent developments, which HouseMax is watching closely.
“New home inventory is still an issue,” he said. “I think the current trend of build-to-rent also is indicative of shifting demands from younger generations. In a post-COVID era, there is renewed interest in returning to more metropolitan areas, and we are working with our borrowers to make that dream a reality.”
What these shifting demands also showcase, Alex said, is an underlying fact some groups overlook – housing is not ‘one size fits all,’ and trying to put all customers in the same box leads to floundering business.
“When you think about someone in their 20s or 30s, they don’t want to live on the same street as me,” Alex said. “They don’t want kids running around everywhere, and they also don’t need 3,000 square feet of
space. On the flip side of this, however, what we have seen with the rise of remote work is a desire for more space in rental units and homes.”
a very competitive, and often crowded, field. What we aim to show at HouseMax is that we bring our Texas roots with a Wall Street mentality.”
No matter the location or outstanding market conditions, Jeff said that, ultimately, guiding borrowers – and growing business – makes him feel a sense of pride every morning.
“What I want potential borrowers to know is that we are good stewards of capital,” he said. “We are thoughtful about the loans we originate, and we also understand the ins and outs of the market. Lending is currently
HouseMax Funding is one of the fastest growing hard money lenders in the country. If you would like to learn more about the products offered by the team, visit: housemaxfunding.com.
For more information, please visit: https://housemaxfunding.com/
“I think that in today’s world, everyone has to have a technological component. I think what differentiates us is that, in addition to this technological side, we still value the ‘old’ school of thought: when something needs to get done, we pick up the phone. We talk to borrowers every day, and because we know our clients’ needs, we can break down problems to their fundamental components and get at the root of problems and solutions.”
— Doug Roberts
HouseMax Funding is a Texas based lender with a national footprint. Its principals have fix‑and‑flipped thousands of homes across their combined careers, and have operated within most facets of the real estate industry. When you need the best hard money lenders in Texas, you can count on HouseMax Funding!
Short term financing custom tailored for your scenario. Loan terms are flexible, from six to twenty‑four month terms. We offer same‑day approval with a quick close.
We offer long term rental loans. These loans are fast and easy. We use the rent from the property to qualify the income. Get approved in minutes!
Call or email HouseMax Funding to discuss your deal(s). We will be able to help you pre qualify the deal over the phone in a matter of minutes. If the numbers make sense for all parties, it’s time to get to work.
We get you. We got you. Let’s go!
(512) 759-8325
info@housemaxusa.com | www.housemaxfunding.com
Austin Office: 901 S Mopac Expy, Bld. 4, Suite 125 Austin, TX 78746
Many publications share that the secret to success lies in the implementation of six main principles: passion, vision, preparation, courage, perseverance, and integrity. While the team at Foundation clearly exhibits these principles, their success also rests heavily on a solid partnership built upon years of proven compatibility and drive. Having known each other for close to three decades, it’s no surprise to find John Seeburger and Chris Crovatto working together at the helm of Foundation, a private lending company specializing in off-market properties and flexible financing. The firm, which opened for business in 2018, is the third the pair have founded together following Watermen Capital in 2009 and Accord Golf Capital in 2012.
“John and I met in the mid-1990s working for a subsidiary of Bank of America,” Crovatto, who serves as Foundation’s CEO, says. “I was in the real estate group and John was in the
alternative asset group covering golf and recreational finances. I was in Connecticut and John was on the West Coast. When I’d go to California for meetings, we’d talk.” They remain on their respective coasts, with Seeburger based in Foundation’s California office and Crovatto in Connecticut.
Despite just five years under its belt, Foundation packs a considerable punch in the private lender space specializing not only in traditional business purpose loans secured by 1-to-4 unit residential and multifamily properties, but also in pre-MLS and pre-foreclosure properties. This is due in large part to its alliance with American Mortgage Investment Partners Management (AMIP), an alternative asset manager that owns and manages thousands of defaulted single-family notes and REOs throughout the United States. AMIP is Foundation’s largest shareholder.
Being able to differentiate themselves from the competition is huge
in a crowded industry, particularly with so little inventory to go around.
“We are offering all the same things that other lenders offer,” says Seeburger, Foundation’s president.
“The loan products are fairly standardized throughout the industry. We have competitive terms, leverage, and rates. That means what really sets us apart is process, speed, creativity, and customer service on the lending front along with the ability to offer off-market assets to our customers.”
The company recently rebranded from Foundation CREF to simply Foundation. Seeburger says including CREF (commercial real estate funding) was more important in the company’s early stages.
“We found that early on there was confusion in what we had on offer. We’re very specific; we’re not providing consumer residential finance, just business purpose loans, so that’s why we used 'CREF',” Seeburger says. “As we’ve grown, Foundation is the name that everyone knows.”
Seeburger, Crovatto, and Foundation’s growing team specialize in the origination of new loans as well as the marketing of pre-market properties for third party sellers. With an emphasis on shortening closing timelines and customer service, the company streamlines bridge loans to help investors take advantage of short-term business plans that can be difficult to execute without significant cash on hand.
Another strength of Foundation’s offering lies in an impressive array of tools on its website, including advanced real estate calculators, resources, and more that appeal to potential investors of all experience levels.
“We designed the website to be a tool that the investors and borrowers we work with can use to evaluate a deal at a deeper level,” says Crovatto.
“They can get a real feel for whether a deal makes sense or not. It provides everything they need to pull comps, run profit and yield calculators, estimate loan terms, or calculate refi cash-out proceeds all in one spot. We strived to create a very easy-to-use platform where, with just three inputs you can get a sophisticated investment profile with a detailed settlement statement that can be fine-tuned in minutes to within $1,000 or $2,000 of the final net closing amounts,” adds Seeburger. “We’re using the data intelligence extracted from 10,000 loan modifications and resolutions by our majority shareholder so there’s a
lot going on under the hood, and it’s really cool stuff.”
A real standout on Foundation’s website is the PropertyPortal™, a patent-pending engine where anyone can search for off-the-market properties by price, state, property type, occupancy, ownership, size, year built, and several other criteria. By creating an account, investors can take an extensive dive into property-specific information including property photos, inspection reports, title info, comparable sales, and BPOs. The portal even makes it possible to submit an offer to buy.
“There’s not an investor out there who isn’t looking for a new channel for finding properties at a time when inventory is very constrained,” Seeburger says. “There are fewer and fewer homes to buy given current market conditions, so if we can bring them inventory, even if it is one more property per year, that's a powerful value proposition to a buyer. Because we provide an investor with unique tools and back them up with deep knowledge within the default space, private lending, and commercial real estate, we help to elevate that customer’s game. We also pride ourselves on serving as a consultative sounding board for our customers.”
“We’ve been a small shop, but we’re growing,” says Crovatto. “We see our market share growing and we continue to hone our trade and put together a top team. We’re very nimble, smaller than most, but we do more with less and use technology to our advantage.
“Our goal is to become a major player in the market while many larger shops are downsizing due to current market conditions. The reality is that there is not an endless supply of business, so we are focused on providing a high service level and taking advantage of good opportunities, some of which are not right down the middle, to be able to grow the company profitably.”
For more information, please visit: https://foundationcref.com/
Foundation is a direct private lender specializing in fix & flip, fix to rent, and buy and hold financing on single family and multifamily residential properties. Foundation’s PropertyPortal™ is an online auction marketplace housing hundreds of exclusive, off-market properties including pre-foreclosure and pre-listing REO assets. With reduced transaction costs, expedited closings, and deal calculators to accurately estimate your profit, Foundation is a one stop shop.
Foundation is a direct private lender specializing in fix & flip, fix to rent, and buy and hold financing on single family and multifamily residential properties. Foundation’s PropertyPortal™ is an online auction marketplace housing hundreds of exclusive, off-market properties including pre-foreclosure and pre-listing REO assets. With reduced transaction costs, expedited closings, and deal calculators to accurately estimate your profit, Foundation is a one stop shop.
Foundation is a direct private lender specializing in fix & flip, fix to rent, and buy and hold financing on single family and multifamily residential properties.
Foundation’s PropertyPortal™ is an online auction marketplace housing hundreds of exclusive, off-market properties including pre-foreclosure and pre-listing REO assets. With reduced transaction costs, expedited closings, and deal calculators to accurately estimate your profit, Foundation is a one stop shop.
with flexible loans and fast closings for purchasing and rehabbing or ground-up construction
Foundation’s PropertyPortal™ provides exclusive access to defaulted residential properties nationwide before foreclosure and before they’re listed so you can invest Ahead of the Auction.
Foundation’s PropertyPortal™ provides exclusive access to defaulted residential properties nationwide before foreclosure and before they’re listed so you can invest Ahead of the Auction.
Foundation’s PropertyPortal™ provides exclusive access to defaulted residential properties nationwide before foreclosure and before they’re listed so you can invest Ahead of the Auction.
www.fundwithfoundation.com
Grow your real estate business and capital base with flexible loans and fast closings for purchasing and rehabbing or ground-up construction
RENTAL
Grow your real estate business and capital base with flexible loans and fast closings for purchasing and rehabbing or ground-up construction
Maximize rental cash flow, lock in long-term yields, and enjoy home price appreciation with flexible term options and low-interest payments
Maximize rental cash flow, lock in long-term yields, and enjoy home price appreciation with flexible term options and low-interest payments
RENTAL
Maximize rental cash flow, lock in long-term yields, and enjoy home price appreciation with flexible term options and low-interest payments
MULTI-FAMILY
Build your rental portfolio with value-add acquisition and stabilized bridge financing for apartments, condos, and select mixed-use
Build your rental portfolio with value-add acquisition and stabilized bridge financing for apartments, condos, and select mixed-use
Build your rental portfolio with value-add acquisition and stabilized bridge financing for apartments, condos, and select mixed-use
Simplify your investment business by consolidating multiple properties into one loan with a flexible structure, maximum LTV and best-in-class service
Simplify your investment business by
Simplify your investment business by consolidating multiple properties into one loan with a flexible structure, maximum LTV and best-in-class service
It’s no secret that skyrocketing interest rates significantly damaged the private lending industry in 2022. But for New Yorkbased Roc360, the crisis wasn’t about losing ground; rather, it was an opportunity to expand its portfolio. The company made two acquisitions in the first half of 2023, both direct lenders. The firm purchased Finance of America Commercial in March
and added Civic Financial Services (CIVIC) in May. Roc360 Co-Founder Eric Abramovich says the company’s prudence ahead of the interest rate hike led directly to its ability to make the investments.
“These companies were similar in nature in that they were directly affected by the market environment with last year’s interest rates going up faster than they have ever
before,” Abramovich said. “That caused a lot of problems for a lot of market players, and both of these were collateral damage. When these acquisition opportunities came up, we were able to plug and play two more brands into our technology and platforms.”
While 2022 brought plenty of bumps and bruises to many lenders, Abramovich compares Roc360’s suc-
cess during that time to charting a successful airplane flight.
“If you think about a single-engine airplane versus a plane with multiple engines, that’s very similar to what happened to a lot of companies last year,” he said. “Lenders that had only one engine — one funding source — were not able to prudently manage their balance sheets last year. When that one engine went out, they could no longer sustain their business. But when you have diversity of capital and different sources of capital, it will keep you going through tough times.”
Acquisitions are the latest in the ongoing growth of Roc360, a vertically integrated platform servicing real estate investors. Since 2014, the company has grown to more than 300 employees and has been in the business of white-label table funding for third party originators. They
have launched several brands of their own including Roc Capital, Elmsure, Wimba Title, Anqa Rewards, and Tamarisk Appraisals.
The success of Roc360 since its inception, especially during times of heightened instability, has not merely been a happy accident. Throughout the years, Abramovich
and his partners have relentlessly focused on the most important and basic factor in the business of lending — finance — to guide their decision making.
“You have three variables at play in lending: finance, sales, and technology,” Abramovich says. “Sales is first for a lot of people, or they get enamored with tech and want to focus on that. In a volatile market, however, it’s pretty important to have finance come first. A lot of our competitors had finance as their last priority of the three.”
“Roughly $1.6 trillion is spent a year in consumer housing, but only about $50 billion of that is in properties
We believe in one of our core values, which is to be a fiduciary for our investors and make good, responsible loans. We’re feeling good about what we’re doing for Mom-and-Pop real estate investors. Persistence is key. You have to push through the hard times and stay disciplined.
— Eric Abramovich
that are getting fixed and flipped,” Abramovich says. “How does that make sense in a country where $25 trillion worth of housing stock is 40 years or older? Something has to unleash that. We don’t know what it is yet, but we envision a day where people are buying and selling houses with the convenience of how they buy and sell stocks now.”
Abramovich references Uber and Facebook as the sort of paradigmshift examples that he is expecting to see in the residential real estate investment business in the near
future — the new business model unlocked by technology that turns an industry upside down. He thinks some of the pieces are already in place, with others, like new advancements in artificial intelligence (AI) quickly on their way.
The intersection of technology and real estate financing is booming. Roc360 is actively identifying opportunities to enhance their operations and provide increasingly innovative solutions for the private lending industry.
“We have proprietary things that are already helping us see where
the opportunities are, extract leads, and penetrate the market as much as possible,” Abramovich says. “When you combine AI with outstanding loan management, you unlock the potential to use technology with ChatGPT-like capabilities, allowing you to become more efficient. It’s not far off. Zillow is already using 3D visualization to let people take tours of properties. During the COVID-19 lockdown, you had people buying property sight unseen because of those tools.”
While COVID and the interest rate hike have presented many challenges, Abramovich believes the path to continued success is by sticking to the core values that have been a hallmark of Roc360 since the beginning.
“There are players out there that misprice loans and do things that enhance their origination volume. Those sales tactics are not always great,” he said. “We believe in one of our core values, which is to be a fiduciary for our investors and make good, responsible loans. We’re feeling good about what we’re doing for Mom-and-Pop real estate investors. Persistence is key. You have to push through the hard times and stay disciplined.”
For more information, please visit: https://roc360.com/
Leverage our traffic to increase your brand visibility and attract potential customers. Promote your business by posting various types of content: news, press releases, articles, data reports, white papers, and case studies.
Leverage our video marketing platform and audience to inform the public about your services. We'll create multiple short videos to promote on social media, YouTube and our website. The full interview will be hosted on our new podcast.
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Q: Why did you choose private lending?
I had a bit of an unconventional path to the private lending sector. I’m a Computer Engineer by training but ended up joining a residential mortgage trading desk in New York City right after college. I knew nothing about mortgages at the time, so it was quite the learning curve to understand how mortgage credit, capital markets, and economics work. I spent the next 10 years in various roles at Barclays in the nonagency mortgage space.
Joining Kiavi back in 2016 was initially about getting back to my technology roots, and the fintech sector seemed like a great opportunity to do so. I really liked what Kiavi (LendingHome back then) was doing to modernize the mortgage lending space and solve some of the pro-
cess gaps and thought my mortgage credit experience paired with my engineering background would be a good fit for Kiavi. It didn’t take long to discover the limitless opportunities in the private lending space: a small, non-institutional start-up like ours could bring scalability and improvements to a legacy business model. Kiavi’s use of technology and data to advance the private lending space is why I continue to stay in private lending!
loan / fix-and-flip space and we want to continue to grow our leadership position by expanding our product suite and acquisition channels, 2. focusing our technology and data advantage on next-generation customer experience and underwriting models, and 3. ensuring our capital markets execution and partnerships continue to strengthen. Continued growth in these areas will enable us to scale our business, which empowers more and more real estate investors to create movein ready housing for families across the country.
Q: What excites you about your role today?
As CEO, I am excited to guide the company forward and focus our leadership team on the second- and third-order impacts of what we do so we can execute better and faster for our customers. We have an incredible team here at Kiavi. I've been fortunate to work in many different parts of the company during my tenure, which has given me a really good feel for the impacts of CEO-level decisions across the organization.
Q: What is your current role and what do you do day-to-day?
I was appointed CEO and Board Member earlier this year, but I've been with Kiavi for over seven years (my prior role was COO). As CEO, my top priorities are: 1. continuing to grow our lending presence — we are already a leader in the bridge
Talking about guiding the company forward, one thing that continues to get me excited — and why I love the private lending space — is the opportunity for a company like Kiavi in this space. We have a real opportunity to apply our strengths such as our digital-first online experience, our machine-learning models or our capital execution to enable the mom-and-pop/”Main
Arvind Mohan: Continued from pg. 23
Street” types of real estate investors. These investors are doing incredible work revitalizing aged housing across the country, and the more we uncover new ways to bring our data, technology, and capital prowess to the financing process, the more we can help them take action on opportunities with confidence and grow their businesses’ impact. We’re still early in our journey but are excited about our future!
Q: Can you explain a time where you faced adversity or had struggles early in your career? Where did it all begin? How did these experiences mold and shape you into the leader you are today?
I joined the mortgage banking space right as we were entering into the Great Financial Crisis. A lot of firms, including mine, were going through significant layoffs during that period. I moved to the United States in 2001 for college. At the time, I was working on a H1-B work visa. That meant I’d have to find a job in a tough market or leave the country if I was laid off! I decided then to focus only on what I could control. I put my head down and did my job to the best of my abilities and tried not to worry about things that were ultimately out of my control.
and opportunities — yet focusing on what you can control to give yourself the best chance to succeed. And, as you make progress, continue iterating on this equation to control your own destiny. If you look at Kiavi through the pandemic, as well as the market turmoil over the past year, applying these principles has put us ahead of the competition and enabled the company to thrive despite a challenging market.
Q: Is there anything that you wish you could go back and tell yourself at the beginning of your career?
“Respect what you don't know.” It’s easy to think that you have all the answers, but I believe everyone can benefit from being humble and openminded and respecting the expertise of those around them — especially those early in their careers.
Q: Who is someone that has had a significant effect on your career and why?
innovator in the private lending space. If you look at the residential mortgage lending industry as a whole, there are very few opportunities to do the unique and innovative things we're doing right now at Kiavi by leveraging modern technology: AI/ machine-learning models and data. Being on the forefront of changing the landscape is incredibly exciting.
Q: What would you consider to be the highlight of your career thus far?
Becoming CEO of Kiavi is definitely the highlight of my career! This role offers me the opportunity to keep learning, sharing what I know with others, improving wherever we can, and evolving to scale and improve the business. It’s going to be hard to top this one!
Q: What do you enjoy most about your job? And the least?
In retrospect, this challenging period ended up being a catalyst for my career as the markets recovered. In fact, it’s likely the reason I’m in my role at Kiavi today. What I took away from that experience, and still apply today as I lead Kiavi, is about understanding your strengths, risks,
My wife. We have two young kids now, both of whom were born after joining Kiavi. She has always been so supportive of my career, and even made some sacrifices in her own career trajectory so I could pursue my career goals while she helped with the kids. Additionally, she’s in the health-tech space and works with a lot of start-ups, so she is a great sounding board for me. It’s because of her that I’ve been able to make the impact I have at Kiavi.
Q: What has been your favorite aspect of being in private lending over the years?
It’s been really rewarding to be an
I love addressing new challenges and helping our team, company, and customers grow, which is a huge part of my job. I'm a real believer in understanding second- or thirddegree impacts of decisions that help us inform where and how the organization can innovate rapidly. The part I enjoy the least about the job? Probably all the meetings.
Q: Is time or money more valuable and why?
For me, it's time — and in particular, time with my kids. Money might help you (maybe) retire early, but you’ll never get the time back with your kids after they grow up. I see my kids grow a little bit more every day, so I try to maximize and savor all my time with them while I can.
Q: How do you make sure your company stays ahead in this industry?
It’s critical to be constantly innovating and learning. It's about understanding our strengths, staying focused as a company, recognizing the rapidly evolving market, and ensuring that we remain at the forefront of that evolution with both our customers and capital partners.
Q: What tools do you use to aid you in your role to be most efficient, organized, and focused? When there are a lot of things to do, I find The Eisenhower Matrix helpful as a prioritization framework. It's a matrix consisting of four boxes: important/urgent, important/not urgent, not important/urgent, and not important/not urgent. If something is not important and urgent, you should really be delegating that work to someone else to shift your focus to the most important and urgent action items that need to be delivered. If it's not important and not urgent, then you should be asking why it's on your list of to-do’s!
Q: Has your role changed significantly to address the current environment?
After spending a decade in the capital markets world, I had a chance in my previous role to build strong relationships with capital partners and bring more innate knowledge of the macroeconomic capital impact to Kiavi, which is absolutely critical to a business like ours. Ultimately, we are funded by capital markets participants to continue to lend to our borrowers. Having that community
of capital partners — while continuing to grow that community and build trust with them — plus understanding how current trends impact the future all help ensure Kiavi continues to thrive despite the challenging macroeconomic environment.
Q: What advice would you give to someone who has just started out in private lending?
If I were starting out in private lending today, I would think about what type of business I want to build. Am I building a big business that I want to scale or am I building a nest egg portfolio where I can really be focused on one community and establish my brand there? I think those are two very different approaches and the investments and decisions you make starting out could look very different.
Q: How will private lending change to adapt to the current market trends?
A lot of private lenders tend to be thinly capitalized and borrow money
to lend money. As we think about the next 24 months, it's important for private lenders to have an idea of where they want to be as a business. That includes considering what market factors would influence their goals and developing a risk mitigation strategy to ensure that they’re prioritizing growth and/or earnings. And one of those things is access to capital. Having a strong capital foundation allows us to have that visibility, which I believe is one of the most important factors for those in the private lending space today.
Arvind Mohan serves as the Chief Executive Officer of Kiavi, one of the nation’s largest private lenders to residential real estate investors (REIs) with over $15.5 billion in funded loans. By harnessing the power of data & technology, Kiavi offers REIs a simpler, more reliable, and faster way to access the capital they need to scale their businesses.
“Respect what you don't know. It’s easy to think that you have all the answers, but I believe everyone can benefit from being humble and open-minded and respecting the expertise of those around them — especially those early in their careers."
— Arvind Mohan
Originate Report caught up with Beth P. Johnson, cofounder of Flynn Family Lending and co-author of Lend to Live: Earn Hassle-Free Passive Income in Real Estate with Private Money Lending, where she discusses her recent establishment of a private debt fund, her “lazy” approach to lending, and how this all fits into today’s dynamic real estate and private lending landscape.
OR: The last time OR caught up with you, you had just published a book about how to become a private money lender. How have things changed in the last year?
Beth: It’s been quite a whirlwind since publishing Lend to Live through
BiggerPockets. I receive emails and outreach on social media from people who’ve read the book, listened to my podcast guest appearances, or heard about me through word of mouth. Being hyperlocal in our lending business and then receiving such acknowledgment on a national level wasn’t something I expected — the positive feedback has been tremendous. I also wasn’t prepared to field a growing number of inquiries from people interested in becoming capital partners with Flynn Family Lending and Lend2Live Management. This heightened level of interest in working with our companies led to a major shift in our business model to accommodate growth without sacrificing performance.
OR: In what ways has your business model changed?
Beth: Initially, we operated our private lending business as whole trust deed investments. My husband, Matt Flynn, and I have operated Flynn Family Lending as essentially a private money matchmaker, or a broker for all intents and purposes, since inception. But we grew so quickly over the years and had amassed a large circle of capital investors that lend through us. Based on sheer volume, we couldn’t continue to do individual trust deed investments and provide the same level of support … so we established a pooled mortgage fund, enabling us to aggregate our clients’ capital into a single source to fund loans
with greater operational efficiencies while providing a more consistent source of passive income for our capital partners.
OR: Is this something that just happened this year?
Beth: It started last year (2022) when we published the book, and I realized that business growth was inevitable. … I needed to streamline how we managed existing clients’ capital while building on the Lend2Live brand. What I didn’t want to do was turn away good deals from not having a single trust deed investor that had the right amount of money at any particular moment in time. As a result, we launched the Lend2Live Private Debt Fund (L2L Fund I LLC) with the help of the Geraci securities team to capitalize on the success and business leads generated by the book.
OR: What’s the difference between the book, the fund, and your company’s brands?
Beth: The book is called Lend to Live: How to Earn Hassle-Free, Passive Income, and Real Estate with Private Money Lending and is an evergreen resource for passive investors seeking alternative ways to invest in
real estate without the hassles of tenants or general contractors. It’s the ultimate guide, in my humble opinion, to learn how to find and fund a private money loan opportunity safely and securely. However, we’ve heard from many readers that the challenges of learning all the ins and outs associated with private money lending feels too daunting a task, so the opportunity to invest in a private debt fund like Lend2Live is a perfect passive income alternative. Naming the fund after the book was fitting, and Lend2Live Management was born.
As a loan originator, Flynn Family Lending has a strong brand reputation among active investors in Washington state but doesn’t have Lend2Live’s
national presence. I wanted our branding consistent with borrowers while expanding Lend2Live’s name recognition among passive investors wanting to become capital partners.
OR: How has the real estate and private lending market changed post-Covid and what looks to be a prerecession with high interest rates across the board? How is your business handling this?
Beth: I would say that we’re handling it quite well. Since Covid, the landscape of real estate financing has changed dramatically. With Fed rate hikes and the cost of capital increasing, there’s been some market contraction where a lot of
Flynn Family Lending: Continued from pg. 27 lenders have either paused their lending activities indefinitely, or permanently. Many are just closing altogether from capital constraints and liquidity challenges.
True private balance sheet lenders and fund managers, particularly those without leverage, are thriving in a high interest-rate market right now because competition has somewhat disappeared at regional and national levels. We’ve been a perennial market favorite for
offering reasonable rates while always honoring our commitments to close on time and with the terms originally agreed upon. That’s because we use true private capital and plan to always remain as such.
Q: Where do you find private capital investors?
Beth: We’ve built up strictly through word of mouth and have never had to actively invest in capital-raising activities. We started slowly and wanted to remain intentionally small — a small mom-and-pop business.
My husband and I were just seeking financial and time freedom. We had small children, and we wanted to be present for them and for our aging parents. We started literally with two investors, and it was really an investing club of sorts for everyday people. When you invest in whole trust deeds, at least in our state [Washington], you don’t need to be an accredited investor. So, I could work with decidedly middle- to upper middle-class families — hardworking people who wanted to invest wisely and safely. We grew year over year almost exclusively by referrals to where we built our capital under management up to about $50 million, which isn’t huge, but certainly isn’t small, and is very manageable for us and our busy family life.
OR: Everywhere we look, there’s so much advertising and marketing noise thrown at us. It’s refreshing to hear that your business has grown naturally.
Beth: In all honesty, it’s the lazy lender approach, and I’m cool with saying that. If I let our business speak for itself, if I let our clients share their stories and successes and appreciation for doing business with us, isn’t that an easier and better story to tell than me having to hard sell somebody with a pitch deck over coffee in a dank conference room?
I also liken our business approach to how a slow cooker works — we’re just slow and low. … While other lenders may have “juiced” up their
profits in the past several years when cost of capital was cheap, their dependence on the capital markets or credit facilities make them more susceptible to temporary closures or permanent shuttering. We may not make headlines with magnificent growth, but you also won’t hear about us shutting our doors anytime soon, either.
Beth: Right now, the transition from whole trust deeds to a fund model has been an opportunity for humility, education, and self-reflection. Matt and I needed to be honest with ourselves on what we were capable of doing and, most importantly, wanted to be doing within our private money businesses. There are more considerations with a debt fund that do not exist with private placement of trust deeds: Capital redeployment, cash management, risk modeling and mitigation, and so many other factors. These are things we never had to really address on a macro level.
Ultimately, we partnered with an experienced hedge fund manager to provide the necessary support and oversight to ensure we stay legally compliant, are actively managing portfolio risk, and are maximizing profitability and security for our fund participants. Matt and I are excited to partner with someone who provides the expertise and financial acumen needed to safeguard our clients’ capital while we continue to focus
on the loan origination and investor relations side of the businesses.
I’m also excited to continue to educate and support other private money lenders who want to establish, stabilize, and grow their own practice. Lend2Live is cohosting a pre-day event at Captivate this summer, targeted at small to midsized emerging private lenders.
I’m grateful Geraci supports private lender education and look forward to creating a community where small, independent lenders can network, share best practices, and grow their businesses with peer support and guidance.
For more information, please visit: https://flynnfamilylending.com/
Chief Marketing Officer, The Mortgage Office
the company's overall objectives. I’d like to focus on solidifying our company’s position as the leader in private lending software for 45 years and counting.
Q: What does success look like for you?
Success is being able to sleep at night knowing you did your very best; working at a company that has been around for so long as a leader; and learning from the best in the industry. Success is seeing happy customers whose portfolios have grown over the years as a direct result of using TMO.
Elizabeth Morales Chief Marketing Officer The Mortgage Office
Q: How many years have you been in Private Lending and why did you enter this field?
I have been in Private Lending for over nine years. I love the industry and what it represents: making your own destiny.
Q: Where did you get your start?
I got my first job at the age of 15; however, I got my start in private lending at The Mortgage Office (TMO) where I was hired to lead Marketing.
Q: What is your current role and how does that affect your company at large?
I am currently the Chief Marketing Officer at The Mortgage Office. My job is to create awareness of how our product simplifies our customers’
lives by providing easy HMDA reporting to our online lenders/borrowers’ portal, ARMs indexes, and everything in between.
Q: How have you seen your company grow in spite of or because of current market conditions? The growth has been off the charts. I was employee number 12 when I started with TMO. We have almost 50 now and I have the pleasure of saying I hired many of the folks that make TMO what it is today.
Q: What are some of your goals for 2023 and beyond?
My goal is to drive the marketing strategy and initiatives to achieve
Q: What is something most people don’t know about you or your company?
I am a data nerd, and I love cigars! Many people may not know The Mortgage Office is actually a really fun place to work. You can pop into our offices any time for a visit or to challenge us to a foosball game! We also have a kitchen full of goodies for all these great minds to work on the best product in the industry.
Q: What steps are you or your company taking today to make an impact on the industry?
The Mortgage Office forever changed the way loans were serviced when it came into the market in the late 70s. Today, we continue our motto of listening to our customers and creating an interface that reflects their requests. We continue to set the bar high, and we never cut corners
when simplifying and streamlining the loan management process.
Q: What piece of advice did you personally receive early in your career that has helped shape decisions you’ve made?
Your work is the best representation of your persona.
Q: Tell us about a person or organization you admire. How have they made an important impact on you, the industry, or the world? Coincidentally, today I have the words of Dr. Joe Dispenza fresh in my mind. He explores neuroscience, epigenetics, quantum physics, and consciousness and is now known for helping people heal in miraculous ways. He says: “Nobody changes until they change their energy—and when you change your energy, you change your life; and it only takes a decision with such firm intention, that the amplitude of that decision carries a level of energy that is greater than the hardwired programs in your brain, and the emotional conditioning in your body. Your body literally responds to your mind.” How awesome is that?!
Q: Are you involved in any associations, networking groups, or the like that have influenced your career path?
In my early 20s, I joined Toastmasters. That helped with speaking. I came to the U.S. from Colombia as a teenager, and I didn’t know how to speak English. I enrolled myself in a Drama class because I knew they
would make me talk there! I was willing to do anything to get over the fear of speaking a foreign language with an accent.
Q: If you had a clean slate to start over and do anything you wanted to do, what would that be? Ooh, is that a trick question? I am fascinated, beyond belief, with Quantum Physics.
Q: What is the best advice you could give someone thinking about making a leap into Private Lending? Educate yourself: learn about risk
assessment, loan types, legal requirements, and industry best practices. Clearly define your investment goals and strategy. Translation: don’t put all your eggs in one basket. Seek legal advice to help you navigate the complex landscape of private lending. Get software that you can depend on and that will make your life easier and grow your portfolio more quickly by giving your business an edge.
For more information, please visit: https://www.themortgageoffice.com/
Success is being able to sleep at night knowing you did your very best; working at a company that has been around for so long as a leader; and learning from the best in the industry. Success is seeing happy customers whose portfolios have grown over the years as a direct result of using TMO.
— Elizabeth Morales
By Nick Georgandis, Contributing Writer for Originate Report
Acra Lending’s 2023 has been smooth sailing thus far, having started the year by settling into an exciting new office location. Their new full-floor office is just minutes from the Irvine Spectrum center in Orange County, CA, a vibrant shopping, entertainment, and lifestyle hub, making it an ideal location for Acra Lending’s operations.
The past year has also brought explosive market growth for the lender. The skyrocketing interest rate surge that began in 2022 dramatically altered the landscape of the Non–Qualifying Mortgage (Non–QM) market, but Acra Lending was able to push
through the uncertainty and emerge on the other side.
“There has been a lot of consolidation in the Non–QM market,” says Keith Lind, CEO of Acra Lending. “Those who were able to weather the storm, like we did, captured a lot of tail winds. There are a lot fewer players and competition.”
2023: The Year of Tech Lind knows a thing or two about weathering storms. He came to Acra in 2020 under its former name Citadel Servicing Corporation as its Executive Chairman and President mere weeks before the widespread COVID-19 pandemic lockdowns.
Citadel became Acra Lending in January 2021, and in March 2022, Lind ascended to CEO. Today, Acra operates in 39 states and Washington, D.C., offering programs through four verticals: wholesale lending, investor lending, correspondent lending, and consumer direct lending. The company’s expertise in tailor-made Non-QM mortgage products and focus on exceptional customer service has earned them the title as one of the top lenders in the United States.
Lind takes pride in Acra’s remarkable strides in efficiency over his tenure as CEO. He envisions even greater achievements ahead fueled by the company’s commitment to integrating cutting-edge
technologies into its workflow. One of their priorities involves harnessing the newest loan origination system (LOS) technology.
“Real estate is the biggest business in terms of nominal dollar values in the world; nothing carries more market value, but the technology is so behind,” Lind says. “So, we are tearing apart the processes we have, seeing what makes sense, what doesn’t, what we can improve on, and creating better processes with better technology in each division.”
With new builds still moving at a snail’s pace following the supplychain issues post-pandemic, as well as many properties aging
past the 40-year mark in the US, the fix-and-flip industry is on the rise. In 2022, 8.4% of all home sales were fix-and-flips, compared to just 5.7% of sales in 2017.
Lind says their new LOS technology will be focused on bridge loans and fix-and-flip investment opportunities to match the growing demand.
Another facet of Acra’s tech expansion focuses on Artificial Intelligence (AI). Lind says neither he, nor anyone else in private lending, should fear some version of ChatGPT taking over the Non-QM industry anytime soon. However, he does believe
“We’ve kept rates high, and we’re not chasing the market because we don’t need to. This is no time to try to drive volume by having rates lower than other people. If you have consistent service, you’re funding loans, and you have the liquidity to sell loans, that’s a win in today’s market."
— Keith Lind
that automation will play a big role moving forward.
“We’ll be implementing [AI] into the information we’re receiving to ensure it’s consistent throughout documents,” Lind says. “That’s where AI will do its work – in the loan set-up and loan intake processes. It’s all new tech, but nothing is going to replace the most important thing on the private lending side, and that’s human talent.”
Human talent posed a monumental problem for many lenders as the world emerged from the worst days of the pandemic. Non-QM firms were snatching up talent in a rush to stabilize after being dormant for most of 2020. Acra’s headcount totaled 260 in February 2020 and had dropped down to 160 just six months later. Employee headcount now sits at 300 with the company funding
around $225 million per month as of June 2023.
“We’re much more efficient because we’re always improving our processes and we’re investing in human capital,” Lind says. “The talent pool today is huge. Now we’ve got all-star underwriters, and our pipeline is growing.”
“If you had asked me if we would be funding $225 million a month with our pipeline at 8.5% when it was at 4% in 2022, I would have thought you were crazy.”
Remarkably, the growth that highlighted the first half of 2023 came before the company was done implementing its new tech. Lind believes that Acra is going to stay at the forefront of the Non-QM space going forward by continuing to stick to its fundamentals and implementing efficiency at every opportunity.
“We’ve been profitable every month and every quarter,” he says. “We’ve kept rates high, and we’re not chasing the market because we don’t need to. This is no time to try to drive volume by having rates lower than other people. If you have consistent service, you’re funding loans, and you have the liquidity to sell loans, that’s a win in today’s market.”
In the competitive landscape of private lending, differentiating yourself is paramount. As the market evolves and borrowers’ needs become more diverse, it becomes increasingly important for lenders to offer unique products and exceptional service. Deephaven Mortgage, a Charlotte-based lender and mortgage aggregator with a wealth of experience spanning more than a decade, has embraced this ethos, establishing itself as a trusted choice for brokers and lenders nationwide.
Deephaven has always been a frontrunner in the industry. Long before millions of Americans bid farewell to the 9-to-5 life during the Great Resignation of 2021, the firm
had already begun paving the way for the nonconformists — the selfemployed individuals who steered clear of traditional W-2-required, 40-hour workweek-jobs.
“We’ve always believed there was an underserved segment of borrowers in the US that needed funding for the purchase of homes,” says Dank Pinckney, Deephaven’s General Counsel and Chief Compliance Officer. “We are largely a purchase-money shop. We have designed these products to support that component of the population. There are so many individuals out there who cannot meet the prescriptive underwriting requirements to qualify for the agency and government programs.”
Pinckney came to Deephaven Mortgage in 2015, where he works alongside Chairman Matt Nichols, President and CEO John Keratsis, CFO Mike Witt, and COO Aaron Drago, among others. They collectively have decades of experience in the private capital mortgage arena, enabling Deephaven to offer unique deliverables in a highly competitive space.
In industry terms, Deephaven is primarily considered to be a nonQM mortgage lender and aggregator. Though the company may fit that traditional definition, the team prefers to see itself as a pro-borrower mortgage lender that pushes beyond the institutional hallmarks of what constitutes traditional mortgage
products, serving more than 1,500 independent mortgage brokers and 350 lenders across the country.
As of March 2023, 15% of all workers in the US, which amounts to about 20.2 million people, listed themselves as independent contractors. Factor in the number of people who have a so-called ‘side hustle’— an endeavor pursued alongside full-time employment that similarly deviates from the traditional W-2 structure – and it becomes abundantly clear how quickly Deephaven’s market is growing.
Tapping into a unique subset of borrowers requires a different approach than the traditional lender. “We do a lot of underwriting based on bank statements to establish income,” Pinckney says. “We find them to be very accurate in providing a detailed picture of income when we’re assessing how much can be borrowed and in establishing the borrower’s ability to repay the loan.” The company also uses other assets such as stock
accounts and individual retirement accounts (IRAs) to qualify borrowers.
Deephaven is also a trusted partner in providing business purpose loans for investors acquiring single family rental homes. The industry has continued to grow as rental homes have become a more popular option for many consumers. Deephaven was a pioneer of these lending products to property investors and continues to be an industry leader in this space.
Deephaven also recognizes the benefit of offering varying degrees of client support in addition to loan origination. “We have tools on our website to help clients and potential clients understand how the loans are manufactured and underwritten,” Pinckney says. “They aren’t credit decision tools, but more hypothetical scenario tools to help originators understand our loan programs and how to qualify.”
Services like these open the door for brokers and lenders who may not have the time or resources to become experts on Deephaven’s loan products, further differentiating the company from its competition.
Two years after it was founded, Deephaven was purchased by Varde Partners, a global alternative investment firm specializing in credit and credit-based asset management. In 2019, Deephaven was acquired by Pretium Partners, a firm specializing in mortgage credit with verticals in corporate credit, mortgage finance, and residential real estate.
Pinckney says the presence of Pretium has been instrumental in helping the company continue to grow and to help manage volatility in the mortgage markets.
“2022 obviously wasn’t a growth year for the overall market,” Pinckney says. “But we have the expertise and experience to navigate a number of different market scenarios and stay out in front of the rate increases better than most.”
Pinckney acknowledges Deephaven’s positive outlook for the immediate future while also emphasizing their awareness of how quickly the situation can change.
“The first half of 2023 has stabilized in most market segments, but we know that trying to predict the future is not a productive exercise,” Pinckney says.
“We’re very optimistic for the longer term because there is still tremendous demand for housing, higher interest rates notwithstanding. To someone going in and out of the market, it can look intimidating, but we are focused on the long run. We’ve been at it for a while now and over the long haul, we know that the underlying fundamentals will continue to support growth.”
For more information, please visit: https://deephavenmortgage.com/
Innovators never stop looking for the next big thing, even when they’re already in a great spot to succeed. They are seldom content to simply plug into a system and start making money. Rather, they want to explore new ventures, break down barriers, and search for challenges for which they can provide solutions.
Such is the case for Baseline, which started as a private money lender back in 2016, originating and servicing hundreds of loans over its first few years.
But something unexpected happened along the way for CEO Shaye Wali and
COO Sergio Santinelli. Something that led them to a total positioning pivot that redefined their business position and set the entire industry on its ear.
While the private lending industry for real estate has ballooned in size and value over the past decade-plus, it remains, in essence, a niche market. The number of players is finite, and the digital tools needed to successfully qualify customers and guide loans through their life cycles are limited. One of the more aggravating facts of life for any private lender is consistently forcing the square peg into the round hole when it comes to software applications.
That very frustration turned to inspiration one day for Wali.
“I wanted to go on this mission to build better tools for ourselves because there was nothing that was really built purposely for the private lending industry,” Baseline’s CEO said in a recent interview.
“Once it was built, I came to the realization of what a powerful tool it could be. I wound up showing it to a few peers who were also lenders, and they expressed interest in licensing it.”
Formerly an analyst at Morgan Stanley dating back to 2012, Wali
left the mega-bank world to raise a small fund and subsequently began investing in single-family real estate ventures. This piqued his interested in the private lending world, and, in 2016, Baseline was born.
Santinelli took a much more circuitous route to the firm. He initially studied mechanical engineering, but when he realized it wasn’t a good fit, he left that behind to engage with startups in the US and Mexico. Later, he entered the lending space via the automotive industry.
Shortly after wrapping up his MBA, he connected with Wali and came on
board with Baseline as Director of Lending Operations in Spring 2021. A little more than a year later, he was promoted to COO.
“I met Shaye and had an almost immediate connection,” Santinelli said. “Ultimately, I took on the role of helping him transition from the lending model into the software space.”
Truth be told, even after several other lenders were impressed enough to want to license Baseline’s software platform, Wali never envisioned a
Baseline: Continues on pg. 46
Baseline: Continued from pg. 45
total transition from private lending to a full-fledged software company.
“We started transitioning about two years ago,” Wali says. “In November 2019, we started ideating and began development in March 2020, right when everything was shutting down for COVID. Eventually it became clear that we had gone way too far down the lane to stop and decided the next step would be to license it.”
Nobody is better suited to build the perfect software for the private lending sector than a team of private lenders. Designed to address their own pain points, the software allows users to streamline origination, automate their servicing, set benchmarks for their borrowers’ experience, and more – all in one platform.
No more jumping from one app to the next, hoping that the data import
tool catches every digit, or otherwise losing precious time better spent on what lenders do best lend. The sheer time saved in efficiency of everything under one roof is worth its weight in gold.
“This is the most complete system in the market that serves private
lenders and the value chain,” Wali says. “We have seen other systems that have 1-2 components, but not everything in one package. We have really paid attention to what all of those needs are and have been able to do it better by hyper-focusing on the private lending industry.”
There’s no slowing down for Baseline. After demonstrating their platform at a recent conference, Baseline came away with requests for meetings with 40 different companies.
“It’s a testament to our product,” Wali said. “We’ve built something that addresses pain points for everyone in the value chain.”
For more information, please visit: https://www.baselinelms.com/
Innovators never stop looking for the next big thing, even when they’re already in a great spot to succeed. They are seldom content to simply plug into a system and start making money. Rather, they want to explore new ventures, break down barriers, and search for challenges for which they can provide solutions.
Prior to 2020, many private lenders and Funds that provided capital for lending were faced with having too much capital and not enough loans to satisfy their lending criteria. It was also difficult to offer a high enough interest rate to satisfy their investors’ need for yield.
Too much competition for deployment of capital kept borrowers’ interest rates very low creating a historically small delta of 3.5% between what conventional banks and private lenders were charging. Today, however, not only have interest rates risen extremely quickly and by a big margin, but the delta between conventional and private lending has also gone back to about 5%. This is a
spread that the market had not seen since before the Great Recession because private investors’ capital has become more cautious.
“Rather than chase yield, private lenders have opted to sit on the sidelines as the economy has become uncertain and investors sought interest rate stabilization,” says Fabio Baum, Manager of Pacific Opportunity Fund. In addition, there is a much larger demand for loans than there is supply of money for those loan requests. This has added to the delta between bank rates and private money.
Baum also states that, although there has been a slowdown in the Northern California market, his Fund has
been leveraging the Pacific Private Money team across the US in the alternative private lending market. This is expected to expand well into the next business cycle, as banks and other debt Funds continue to pull back. As Mark Hanf, President of Pacific Private Money, says, “Demand for capital may slow if a recession gets severe enough, but it never disappears.”
Baum noted that no one can ignore the current difficult economic market, social, and political conditions that have stressed the finance industry; however, he does not see a meltdown like we saw in 2008. This opens opportunities for private lenders to take advantage of the inefficient marketplace, as
traditional lending has been backing off commercial real estate over the last 10 years.
Real estate opportunities will always abound. It is the shrewd real estate investor who knows how to navigate through turbulent times. These investors are continually looking for capital. Investors and developers of much-needed SFR and multifamily
housing continue to require capital, and it is the alternative lending industry that has come to the forefront to reliably serve that demand. As of the writing of this article, housing starts increased as fear of a harsh recession appears to have subsided. Banks are usually the last to catch up. Alternative lenders should be able to take advantage of borrowers in need of capital before
the banks jump back in, which may be a few years away.
Alternative lenders should also be able to make relatively conservative loans, as the real estate market does not seem to be in a bubble. Rules after Dodd-Frank made it so that borrowers had to show the ability to repay a loan; thus, it helped mitigate a credit crisis.
In addition, many borrowers refinanced during the extremely low interest rate environment, which we may not experience again for a long time. This helped limit the supply of houses that will be put on the market, as these would-be sellers cannot replace their low interest rate loans. Many of these homeowners will not sell unless they absolutely must. Many will choose to remodel if possible. Another positive factor for the real estate market is that there is a tremendous amount of equity that was recouped since the Great Recession. This helps stabilize the market. Prudent investors should be able to take advantage of the current real estate lending environment by participating conservatively in the lending side of real estate.
Edward Brown Investor Relations Pacific Private Money“RATHER THAN CHASE YIELD, PRIVATE LENDERS HAVE OPTED TO SIT ON THE SIDELINES AS THE ECONOMY HAS BECOME UNCERTAIN AND INVESTORS SOUGHT INTEREST RATE STABILIZATION."
— FABIO BAUM, MANAGER
PACIFIC OPPORTUNITY FUND
Eric Abramovich
Co-Founder & Chief Credit Officer,
www.roccapital.com
Roc Capital
Eric Abramovich is the Co-Founder and CCO of Roc Capital and has pioneered its Residential Private Lender Program which has contributed to originating over $7 billion in loans. Previously, Abramovich was a director at Deutsche Bank where he managed a quantitative equity long/short strategy trading Japanese equities. Additionally, he co-founded an investment vehicle which invested in distressed residential real estate assets post the financial crisis. Abramovich holds a B.A. in Finance and Actuarial Science from the Stern School of Business at New York University.
Gary Bechtel
Chief Executive Officer, Red Oak Capital Holdings, LLC
www.redoakcapitalholdings.com
Gary Bechtel serves as CEO of Red Oak Capital Holdings, LLC (Red Oak), a family of commercial real estate finance and investment companies that includes Red Oak Financial, LLC, Red Oak Holdings Management, LLC, Red Oak Capital GP, LLC and Oak Real Estate Partners, LLC. The Michigan-headquartered firm is anchored by a seasoned team that collectively delivers more than 150 years of commercial real estate lending and investing experience. Bechtel leads the investment management leadership teams with direct oversight of lending strategy and portfolios.
Bechtel sits on the Executive Board of the California Mortgage Bankers Association and is or has been a member of the Mortgage Bankers Association of America, National Association of Industrial and Office Properties, and International Council of Shopping Centers. He is a frequent speaker at numerous industry events and has written articles that are regularly quoted in regional and national publications.
Noah Brocious
Principal & President, Capital Fund 1, LLC
www.capitalfund1.com
Noah is a Principal and the President of CFI. He has been with the company since 2009 when it was founded. After graduating from California Lutheran University in 2003 where he played 4 years of Men’s Basketball, he started his career in real estate and has been in the industry ever since — in private lending as well as residential and commercial development.
Nema Daghbandan, Esq.
Partner, Geraci LLP
www.geracilawfirm.com
Nema Daghbandan is a Partner with Geraci LLP. His practice encompasses all facets of real estate transactions, primarily representing lenders, brokers, and loan servicers. His practice revolves around the preparation of documents and providing compliance advice to mortgage professionals related to nationwide commercial, residential, construction, and multi-family loan transactions. He also provides advice on documentation related to loan transactions, including servicing agreements, spread agreements, secondary market documents, leases, lien releases, procurement agreements, intercreditor agreements, and subordination agreements. Daghbandan also possesses a deep expertise in loss mitigation and advises mortgage professionals in the management of defaulted loans and the remedies available to creditors.
Hank Donaldson Investment Banking VP, Wells Fargo www.wellsfargo.com
Hank Donaldson is a Vice President in the Financial Institutions Investment Banking Group at Wells Fargo Securities. As part of his coverage of the specialty finance sector, Donaldson has advised numerous mortgage companies and buyside investors on M&A, public / private capital raising, and off-balance sheet solutions. Prior to joining Wells Fargo Securities in 2015, Donaldson was at Ally Financial in their Stress Testing & Scenario Analysis group. Donaldson received his BS in Financial Management from Clemson University.
Ben Fertig
President, Constructive Capital www.constructiveloans.com
Ben Fertig currently serves as President of Constructive Capital. Constructive originates, services, and securitizes single-asset rental loans, and originates and services fix-and-flip loans. Prior to Constructive, Fertig ran Credit and Asset Management at Finance of America Commercial; and, before that, he served as Chief Operating Officer at Jordan Capital Finance, where he managed originations, credit policy, and capital markets. Fertig was instrumental in the sale of the Jordan Capital Finance platform to Blackstone and Finance of America in 2017.
Brian Gallian
Founder & Fund Manager, NDetail Capital www.ndetailcapital.com
Brian Gallian is the Founder and Fund Manager of NDetail Capital, a boutique mortgage fund located in Newport Beach, CA. Gallian’s mission is to add value in order to ensure his clients reach their long-term financial goals by both creating and integrating the highest level of efficiency possible within the fund’s investment cycle. This is done by streamlining processes and procedures using automation technologies, utilizing best practices, and seeking guidance from top real estate industry expertise in the areas of brokerage, mortgage, title/insurance, and investment banking.
No stranger to the real estate business, in 2018, Brian became Chief Financial Officer for QIP Management, a family owned and operated real estate business which focuses on the acquisition and management of both commercial and multi-family properties. With a portfolio of over 300 doors and $50 million in property value, Brian was instrumental in mitigating financial risk and driving initiatives to decrease costs and increase NOI.
Nate Goodhart
Director
ofAccount Management, The Mortgage Office www.themortgageoffice.com
Nate Goodhart is the Senior Director of Account Management at Applied Business Software, Inc. Their flagship product is The Mortgage Office, which is used by some of the most prestigious, established, and well-known lenders in the world. Goodhart and his team work intimately with over 1,200 lenders of all sizes to better automate and manage their loan portfolios, borrower relationships, and investor base through Fintech.
Beth Johnson
Managing Partner, Flynn Family Lending LLC; & Co-Author Lend to Live www.flynnfamilylending.com
Beth Johnson, together with her husband, Matt Flynn, are the proud owners and operators of Flynn Family Lending, a boutique private lending business located in Renton, WA. With a business model focused on whole trust deed investing and an un-levered debt fund, Flynn Family Lending has become known across Washington State as one of the most creative lenders with financing capabilities not typically offered by other private lenders with more traditional lending guidelines. Johnson is dedicated to education in the private money lending space. She is currently a member of the Education Committee for the American Association of Private Lenders (AAPL) and recently co-authored a book, “Lend to Live: Earn Hassle-free, Passive Income in Real Estate with Private Money Lending” published by BiggerPockets in 2022. When Johnson isn't busy with her private lending business or managing their multifamily real estate portfolio, she enjoys spending quality time with her blended family of five, running, traveling, and indulging in the occasional game of poker.
Sam Kaddah
President & Chief Executive Officer, Liquid Logics www.liquidlogics.com
Sam Kaddah is the President & CEO of Liquid Logics, a 15-year-old Fintech SaaS company with over 100 national private lending clients that generate over $1.1 billion in loan origination per month. Kaddah’s prior experience includes running a global division of GE, composed of 13 sites across 4 continents, with a focus on productivity, Six Sigma, and technology.
Kevin S. Kim, Esq. Partner, Geraci LLP www.geracilawfirm.com
Kevin Kim leads Geraci LLP’s corporate & securities practice. His expertise lies in fund formation, private placements, and other securities offerings for private lenders, real estate developers and investors of all sizes. Kim and his team have advised and prepared hundreds of securities offerings including mortgage funds, structured debt offerings, real estate syndications, crowdfunding offerings, EB-5 projects, and Qualified Opportunity Funds. Kim passion lies in serving his clients as a pragmatic advisor focusing on real world solutions. He is also a nationally recognized expert in mortgage fund formation. Kim is the lead instructor for the American Association of Private Lender’s Certified Fund Manager courses, where he teaches mortgage fund managers throughout the United States on fund management and securities laws. Kim hosts the podcast Lender Lounge with Kevin Kim, where he interviews industry leaders, friends, and colleagues in the private lending space to learn what makes them tick.
Andrea Propp Knorring is the Chief Strategy Officer, Fund Management & Relations for the IceCap Group, an Oved Family company. She manages a real estate debt fund, a private REIT, and will be launching a third fund in October 2023 ($100M), all targeting 13 to 18% net cash-on-cash returns. IceCap is a private lender based in New York City that has originated over $1.8B of private residential real estate transition loans since its inception in 2017. Prior to her current role, Propp Knorring was a Director of Marketing and Investor Relations at LibreMax Capital, an $8B structured credit asset manager. From 2014 to 2018, Propp Knorring was responsible for investor relations and marketing at Jamison Capital Partners, a commodity trading hedge fund that was $2B in AUM at its peak. From 2010 to 2014, she worked at Goldman Sachs as an energy sales analyst in Calgary (2010 to 2012) and as a relationship manager with the Institutional Client Group in New York (2012 to 2014). She holds a BComm in Energy Management from the Haskayne School of Business at the University of Calgary.
Craig Lawrence Chief Operating Officer & General Counsel, Spectra Capital www.spectracapital.com
Craig Lawrence is the Co-Founder, COO, and General Counsel for Spectra Capital, an opportunistic, special situation real estate debt fund that specializes in providing capital for commercial mortgages to borrowers in the most challenging and complex situations. Prior to founding Spectra, Lawrence was a corporate and real estate attorney at several prominent southeastern firms, including Adams and Reese (Partner), Balch & Bingham (Partner), and Morris, Manning & Martin LLP (Of Counsel). Representative prior transactions include (i) borrower representation on Forty-Five Million Dollars ($45,000,000) hotel portfolio credit facility, (ii) groundup multifamily acquisition and borrower representation on Seventy-Five Million Dollars ($75,000,000) transaction, (iii) representation of Telo in sale to Neustar (ultimately acquired by TransUnion (NYSE: TRU)), (iv) lender representation on conventional and hard money loans, (v) representation of investors and sponsors in fund formation and real estate syndication investment vehicles, and (vi) tenant representation in ground lease drive-through outparcel retail bank construction projects. Lawrence is recipient of the 2021 Mid-South Super Lawyers Rising Stars designation and BEST LAWYERS IN AMERICA® Ones to Watch for years 2021 and 2022. Prior to private practice, Lawrence was an Assistant Vice President at Cadence Bank, where he worked closely with Cadence Bank’s private equity team at Sageview Capital. Lawrence holds a J.D. and MBA from Samford University.
Keith Lind Chief Executive Officer, Acra Lending www.acralending.comKeith Lind is the CEO of Acra Lending and has over 19 years of Mortgage-Backed Securities and Asset-Backed Securities trading and structuring experience. Prior to joining Acra Lending, Lind held positions as a Managing Director at HPS Investment Partners, a Trader at Brevan Howard, and a Managing Director and Head of the US Non-Agency Mortgage-Backed Securities Trading Desk at RBS. He was also a Managing Director at Bear Stearns, where he traded the Non-Agency Mortgage-Backed Credit book. Lind holds a BA in Finance from Purdue University.
Ray Mathoda Chief Executive Officer, Anchor Loans www.anchorloans.com
A transformational leader and accomplished executive, Ray Mathoda brings more than 25 years of experience across the real estate, finance and technology sectors. Most recently, Mathoda was Co-Founder and partner at Emerge Life Sciences, a portfolio of biotech start-ups focused on developing and commercializing innovative genomics and protein engineering solutions to serve lower income consumers in India and emerging markets. She previously served as Chief Executive Officer at Xome, a real estate solutions provider, and Co-Chief Executive Officer at Genesis Capital LLC, a high-growth specialty finance company that was acquired by an affiliate of Goldman Sachs in January 2018. Mathoda started her career at McKinsey & Company. She earned an M.B.A. with Distinction from the Kellogg Graduate School of Management at Northwestern University and a Bachelor of Arts with Honors from Princeton University. Mathoda lives in Los Angeles, California, with her wife and four children and will be based at Anchor Loans’ headquarters in Thousand Oaks as the new CEO of the company.
Greg Meola Managing Director, Acra Lending www.acralending.com
Greg is a graduate of Holy Cross College and received his Masters in 2011. In addition to his educational background, Meola has received his Six Sigma Green Belt Certification. Currently, Meola works in the capacity of Business Development and Strategy for Acra Lending where he is responsible for people, process, and technology efficiencies in the organization. Meola has an extensive knowledge in mortgage and mortgage related services. He also has a depth of knowledge in vendor management processes, regulatory compliance, valuation services, consumer/business purpose mortgage lending, technology transformation, and the foreclosure legal process. Prior to Acra, Meola worked in large Wall Street and fortune 500 companies as well as the small entrepreneurial sector of the mortgage business. Meola has become a recognized problem solver, relationship builder, and operational efficiency expert.
www.encorefinance.com
Beth O’Brien is the Founder and CEO of Encore Finance Capital, a specialty private lender for investors in residential real estate. She is a serial entrepreneur and pioneer in the private lending space. She founded and ran one of the first national fix and flip lenders in 2011, and the largest single-family rental and bridge lender in the space in 2014, CoreVest American Finance, where she was also CEO. Over the past 12 years, she has originated, structured, securitized, and asset managed over $20B in loans being the only end-to-end lender in the space. Prior to private lending, O’Brien held positions in RMBS Securitization and Trading at Citigroup and in Real Estate private equity at Goldman Sachs & Co. where she held a variety of board positions and was also Chief Administrative Officer for the Whitehall funds. O’Brien has also been recognized with numerous industry awards for her impact and influence on the market. She holds a BA from the University of Pennsylvania and a JD from Georgetown University Law Center.
Alex Offutt
Managing Director, Constructive Capital
www.constructiveloans.com
Alex Offutt currently serves as Managing Director of the Wholesale and Correspondent Divisions of Constructive Capital. Prior to Constructive, Offutt served as a Vice President at Goldman Sachs, where he was responsible for loss mitigation servicing oversight for over $20 billion in non-performing residential mortgages. Before Goldman Sachs, Offutt was Vice President for Portfolio Strategy at PennyMac Loan Services, where he oversaw their entire $3 billion of non-performing and re-performing whole loans. Offutt also has served as Portfolio Manager for a San Francisco-based non-performing residential loan (NPL) fund, and was a Co-Founder of Fay Financial, LLC.
Dank Pinckney
General Counsel & Chief Compliance Officer, Deephaven Mortgage
www.deephavenmortgage.com
Dank Pinckney joined Deephaven in January 2015 as General Counsel and Chief Compliance Officer. In this role, he is responsible for legal and regulatory compliance, counter risk and vendor management and human resources and working with executive management regarding strategy and growth of the business. Prior to Deephaven, Pinckney served as EVP for HSBC Holdings, PLC as head of general compliance and counterparty risk. Prior to HSBC, he was a partner at Katten Muchin Rosenman, specializing in mortgage, consumer finance and counter party risk. Pinckney is a licensed attorney in North Carolina and received his J.D. from University of South Carolina and undergraduate degree from Washington & Lee University.
David Rosenberg
Principal & Co-Founder, FUTURES Financial
www.futuresfinancial.com
David Rosenberg is the Principal and Co-Founder of Futures Financial. As a licensed real estate broker and loan officer spanning 20 years, he brings substantial experience to the world of real estate finance. In 2013, Rosenberg transitioned into his position as founder of Macoy Capital, where he capitalized on his reputable interpersonal strengths, cultivating successful alliances between investors and stakeholders. His top-notch enthusiasm combined with his knowledge base in private money transactions is the driving force behind his industry success. Rosenberg’s passion and grit, combined with a grounded sense of humor, make him an indispensable ally and partner at Futures Financial.
John Seeburger
President & Co-Founder, Foundation
www.foundationcref.com
John Seeburger, President and Co-Founder of Foundation, brings over 30 years of experience in platform building, debt origination, private equity, and technology development. Alongside his long-time collaborator Chris Crovatto, he co-founded Foundation, a real estate finance and investment firm. With a strong background in specialty real estate lending platforms at esteemed institutions like Bank of America Commercial Finance, Heller Financial, GE Capital, GMAC Commercial Mortgage, and Capmark, Seeburger’s been directly responsible for over $3 billion in loan transactions. His expertise extends to overseeing the origination and underwriting of specialty real estate products and providing real estate-related financial services. Together with Crovatto, Seeburger leads the company’s new loan origination efforts as well as the development and marketing of an innovative technology platform that integrates advanced analytics and lending workflows with an online marketplace offering pre-market properties.
Jeff Smallowitz
Owner, Private Lending Direct, LLC
Jeff Smallowitz can't believe his luck. He's been living his childhood dream by working as a spacecraft engineer and pinches himself every day in disbelief that his clients actually allow him in the building! With modest real estate experience ranging from out-ofstate house flipping, to a dwindling portfolio of commercial properties, and a growing portfolio of performing loans secured by flips, Smallowitz and his wife Ellen rave about lending. They've been using their after-tax and retirement funds to originate first-position performing trust deeds since 2010, enjoying the safety, time efficiency, and returns, while only regretting not starting earlier.
www.streitlending.com
Noah Streit is Managing Principal of Streit Lending, the private mortgage lending business affiliated with the Streit Family. Streit oversees the sourcing, structuring, underwriting, executing and servicing of all bridge loans for the Streit Family and is a member of the Streit Family’s Loan Committee. Streit is also the President of Streit Real Estate, a real estate investment and management company that oversees the operations of the Streit Family’s portfolio of multifamily housing in Southern California and Colorado. Streit Real Estate focuses on the acquisition, rehabilitation, and management of value-add and distressed multifamily opportunities.
Pavel Tchourliaev Chief Executive Officer, Mortgage Automator
www.mortgageautomator.com
Pavel Tchourliaev is a serial entrepreneur with an accounting and project management background. Applying his vast experience building and growing successful tech startups, Tchourliaev oversees Mortgage Automator's technological advancements and other operations. His expertise allows him to be uniquely positioned at the intersection of the technology and lending industries, creating a product that became indispensable for Mortgage Automator customers.
Jeffrey Tesch
Chief Executive Officer, RCN Capital
www.rcncapital.com
Jeffrey Tesch, CEO, is responsible for overseeing the operations of RCN Capital, including sales growth initiatives, underwriting review with compliance oversight and leadership of senior level strategic planning. Joining the Company in 2010 as Managing Director, Tesch led efforts to develop a national brand in private lending with the best practices and transparent products for a diverse customer base. Since RCN’s inception, Tesch has personally overseen over $3 Billion in originations. Tesch’s previous real estate experience was as an investor in both commercial and residential properties, ranging from single family homes to commercial retail centers. Tesch currently serves as a member of the American Association of Private Lenders’ (AAPL) Ethics Advisory Committee and as an Advisory Council member for the National Private Lenders Association.
Shaye Wali
Founder & Chief Executive Officer,Baseline www.baselinelms.com
Shaye is the CEO of Baseline, a cutting-edge software platform revolutionizing the private lending industry. Having experienced the limitations of existing technology firsthand as a former private lender, Wali took matters into his own hands and developed a purposebuilt software solution designed to address the specific pain points of private lenders. Upon recognizing the transformative potential of Baseline, Wali made the decision to license Baseline's technology to other private lenders. Prior to Baseline, Wali was an Analyst at the renowned global investment bank, Morgan Stanley. He graduated with a degree in Finance from Tulane University, where he earned an athletic scholarship and served as the captain of the men's tennis team, a nationally ranked NCAA Division 1 program.
Darren Weaver Chief
Credit Officer,Renovo Financial www.renovofinancial.com
Darren Weaver, CCO at Renovo, is a seasoned commercial real estate finance expert who began his career at EY, with pivotal roles at Finance of America Commercial, Toorak Capital Partners, and Man Global Private Markets. Based in Renovo’s Chicago headquarters, Weaver is at the center of managing Renovo’s credit risk and monitoring ever-changing market conditions and the real estate landscape.
Brian Wornow
Managing
Director,Piper Sandler www.pipersandler.com
Brian Wornow is a managing director in financial services investment banking at Piper Sandler. Wornow has more than 20 years serving in various financial advisory, capital markets and sales & trading leadership roles. Most recently, Wornow was a managing director at Keefe Bruyette & Woods in their financial institution and fintech investment banking group where he provided M&A and capital raising advisory services to a large and varied mix of alternative lending companies, servicing companies, fintech firms, business services entities, asset managers, REITs and other asset backed originators and managers.
Prior to joining KBW, Wornow was a managing director and co-head of the Morgan Stanley residential mortgage whole loan trading business where he oversaw all facets of trading, sales and risk management. While in that role, he served as the president and a board member of Morgan Stanley Mortgage Capital Holdings, LLC., $5 billion multi asset trading entity responsible for all firm-wide commercial real estate, residential mortgage and mortgage servicing rights assets in whole loan and securities form.
www.aaplonline.com
The American Association of Private Lenders (AAPL) is the only national organization supporting the private real estate lending industry. Our principles – education, ethics, and advocacy – are the cornerstone for success in private lending.
www.acralending.com
Acra Lending was formed with a focus on providing the industry’s leading tailor-made Non-QM mortgage products. We partner with industry leaders and mortgage professionals, focusing on delivering programs that center around borrower and industry needs.
www.baselinelms.com
Baseline is a comprehensive loan origination and servicing software platform for hard money lenders. Our cutting-edge technology streamlines the inefficiencies associated with hard money lending. From document generation and payment automation to reports, Baseline covers all the bases in a single software platform.
www.constructiveloans.com
At Constructive Loans, we believe there is a better way to invest in real estate — a more valuable, less invasive way where we as a lender provide an easy process, competitive pricing, and expansive programs. At Constructive, we all come to work every day because we want to build strong, lasting relationships with our clients in order to help them achieve their financial goals. We focus on Fix-and-Flip and Rental Loans, and believe that caring about the success of our clients and their individual deals is what sets us apart. Constructive’s leadership team draws on decades of experience, across industries, to chart the course for the future of private lending.
www.roccapital.com
Roc Capital is the leading capital provider for private lenders in the residential real estate investment space, funding over $10 billion in investor loans thanks in large part to its superior table funding and white labeling capabilities. We offer the widest range of investor loans in the industry, including comprehensive bridge loan programs for fix-and-flip, ground up construction, multifamily bridge, and rent-ready stabilized bridge loans; as well as a full suite of rental loan products including single property rental loans, rental property portfolio loans, and multifamily loans.
THOUSAND OAKS, Calif., July 13, 2023 – Anchor Loans, the nation's leading provider of financing to residential real estate developers, builders and entrepreneurs, today announced that Jim Fraser has joined the company as Chief Operating Officer. In this role, Fraser will be responsible for the customer experience that Anchor delivers as well as the day-today operations of the company. He will also take the lead in expanding Anchor’s homebuilder and build-to-rent (BTR) finance programs.
Fraser joins Anchor from Built Technologies, Inc, a leading provider of construction-finance software, where he was Senior Vice President for Commercial Real Estate Lending Solutions. Prior to joining Built, he was an independent advisor to the platform’s co-founders and venture capital providers. Over his 30-year career, Fraser has held a number of senior positions in commercial and mortgage lending. He was Executive Vice President of Commercial Lending at Axos Bank where he was responsible for a $5-billion commercial lending and equipment leasing operation. Previously, he was a Senior Vice President at Banc of California where be managed a $500-million bridge/construction loan portfolio. For more than 10 years, Fraser headed IndyMac’s residential construction lending division with more than 400 employees in five regional centers.
“Over the course of his career, Jim has consistently demonstrated his ability to build relationships, grow and manage sustainable businesses, and create value through all economic cycles,” said Rayman Mathoda, Anchor Loans’ Chief Executive Officer. “His deep experience within the construction and homebuilding sectors will further accelerate Anchor’s presence in those markets and particularly within the build to rent space which is experiencing significant growth. Playing a bigger role in financing this growing sector will require talented leadership and scalable operations. Bringing Jim on board gives Anchor a significant advantage in both of these critical areas. Having known Jim for almost 20 years at multiple phases of his career, I’m confident that he will be an excellent addition to our leadership team, helping advance our customer and people-focused culture so we can deliver an exceptional customer and employee experience – the best path to market leadership.”
“Anchor Loans is in a unique position to help residential developers navigate the intersection between the long-term need for housing and current credit market disruptions,” said Fraser. “This opportunity, the company’s 25-year heritage and Ray’s vision for the future are what attracted me to Anchor. I’m looking forward to working with Ray and the seasoned team at Anchor to develop new functions, processes and technology to accelerate production growth and build customercentric operations.”
Anchor Loans has experienced significant growth over the last several years, completing 2022 with a record $2 billion in originations. As part of its growth and expansion plans, Anchor has recently expanded both its senior leadership team and its national sales organization.
High Cost of Financing, Limited Inventory, and Competition
From
SOUTH WINDSOR, CT – JULY 20, 2023 – Real estate investors appear to be focused more on rental properties than on fix-and-flip opportunities according to the Spring 2023 Investor Sentiment Survey from RCN Capital, conducted by market intelligence firm CJ Patrick Company. More than half of the survey respondents (53%) indicated that they plan to hold investment properties as rentals, almost twice the 30% who plan to flip the homes.
“The National Association of Realtors® noted that existing home sales in May were down over 20% from a year ago, and ATTOM recently reported that the number of properties flipped in the second quarter of 2023 was the lowest number in almost two years, so it’s no surprise that investors are more focused on rental properties today,” said RCN Capital CEO Jeffrey Tesch. “Our survey results mirror the trend toward rental investments and reflects what we’re seeing in our current loan activity.”
The Spring 2023 Investor Sentiment Survey is the first in what will be a quarterly report from RCN Capital taking the pulse of real estate investors across the country, identifying market challenges and opportunities, and getting feedback on current trends and events.
Overall, investors’ sentiment on the current state of the real estate market is split fairly evenly, with 30% saying conditions are better than they were a year ago; 32% saying they’re about the same, and 37% saying they’re worse. Views on the market six months from now are more diverse, with 30% believing conditions will improve, 44% thinking they’ll be about the same, and 26% feeling they’ll get worse. But while the trend among real estate investors coming months than singlefamily rental property (SFR) investors. Some 38% of flippers believe conditions will improve in the next six months, with only 19% believing they'll worsen. Rental investors believe the opposite - only 19% believe things will get better, while 31% believe they'll get worse.
Shifts in the type of housing demand investors are seeing offer some insights into some of the trends noted above. For example, 24% of fix-and-flip investors noted a decrease in demand for owner-occupied homes in their markets, while 31% of SFR investors cited an increase in demand for rental properties. More broadly, 34% of the investors surveyed claimed that they were seeing both less demand for owner-occupied homes and more demand for rental properties.
Investors don't expect the kind of housing price crash that some market analysts have been predicting. About 75% believe that prices will remain the same or go up slightly over the next 6 months. But here again, there were significant differences of opinion between SFR investors and flippers. About 35% of rental property investors expected to see property values increase compared to 45% of flippers; and 32% of SFR investors expect to see price declines, while the same is true of only 15% of fix-and-flip investors. Some 39% of flippers think prices will remain about the same, while 33% of SFR investors do.
But despite being somewhat optimistic about the market environment going forward, almost half of those surveyed (44%) believed that the US would enter a recession in 2023 or 2024. Only 15% said that the country would avoid a recession, while 41% were unsure.
Investors overwhelmingly cited today's higher financing costs as the biggest challenge facing their business. Lack of supply is the second highest-rated challenge, followed by competition from consumers, competition from larger investors, and difficulty securing a loan. These were also cited, in the same order, as the challenges investors are most likely to face
six months from now. One interesting observation from the data is that larger investors – those planning to buy more than 11 properties in the next 12 months – cited the difficulty in securing a loan as a challenge more often than smaller investors, and in fact, it’s the second highest-rated challenge by these investors in the next six months. This may be an indication of credit tightening by regional and local banks, which have historically been a source for these types of commercial loans.
“Despite higher financing costs and the downturn in home sales, investors continue to be pretty resilient, with almost twothirds believing that today’s environment is about the same or better than it was a year ago,” noted Rick Sharga, CJ Patrick Company CEO. “That’s probably good news for a housing market that may be heavily dependent on investor purchases to help accelerate its recovery.”
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