Originate Report - April 2021 by Originate Report

APRIL 2021

TEMPLE VIEW CAPITAL Private Lending ‘Born of Innovation’

THE OFFICIAL MAGAZINE OF GERACI

INSIDE: RENOVO FINANCIAL

Innovative Customer Service

ARMANINO LLP

Pioneering Digital Asset Assurance

BUILDERS CAPITAL WHAT’S IN THE SECRET SAUCE?

LEGACY GROUP CAPITAL Creating a Culture AND MORE...

INNOVATE S P E C I A L E D I T I O N April 2021 Originate Report 1

CONTENTS APRIL 2021

Innovative Companies 6

Temple View Capital: Private Lending ‘Born of Innovation’

By Emily Rappleye, Contributing Writer for Originate Report

20 The CIVIC Difference: Institutional Backing,

Private Money Strategic Edge

By Charles Peckman, Contributing Writer for Originate Report

24 Renovo Financial: Innovative Customer Service

By Emily Rappleye, Contributing Writer for Originate Report

30 Legacy Group Capital: Creating a Culture of

Trusted Partnerships

By Charles Peckman, Contributing Writer for Originate Report

38 Builders Capital: What’s in the Secret Sauce?

By Charles Peckman, Contributing Writer for Originate Report

Innovative Products 14 Armanino LLP: Pioneering Digital Asset Assurance

By Emily Rappleye, Contributing Writer for Originate Report

26 Mortgage Automator: Revolutionizing the Lending

Industry One Click at a Time

By Mark Dewyea, Contributing Writer for Originate Report

40 The Machines Are Going to Put You Out of Business:

Automate or Die

By Nema Daghbandan, Esq., Geraci LLP

Innovative Ideas 32 Soft Money: Is It the New Hard Money?

By Michael Mikhail, Stratton Equities

Industry Insiders 16 Private Lending Titans

Peter Steigleder, Fidelity Mortgage Lenders, Inc.

34 Industry Spotlight

Beth Johnson, Flynn Family Lending April 2021 Originate Report 3

THANK YOU TO OUR SPONSORS The ® Your Ultimate Lending Platform

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Letter from the

CEO Geraci LLP ANTHONY GERACI a.geraci@geracillp.com

Senior Vice President, Marketing & Media LESLEY BOYD l.boyd@geracillp.com

Lead Graphic Designer LYNDA HIGHT l.hight@geracillp.com

CONTRIBUTORS Emily Rappleye • Charles Peckman Peter Steigleder • Beth Flynn Mark Dewyea • Michael Mikhail Nema Daghbandan

FOUNDING UNDERWRITERS

MARK HANF President, Pacific Private Money

ORIGINATE WEBSITE www.originate.report GERACI LAW FIRM www.geracilawfirm.com MEDIA WEBSITE www.geracimediagroup.com CONFERENCE WEBSITE www.geracicon.com

Editor

Welcome to the April Issue of Originate Report! “Innovation is seeing what everybody has seen and thinking what nobody has thought.” –Dr. Albert Szent-Györgyi With an entrepreneurial spirit, the private lending industry caters to innovation. It plays a central role creating significant new value that inherently changes the way people behave, do business, or address a problem. Originate Report approached a cross-section of our industry – residential and commercial lenders and service providers – to discuss how innovation has shaped their companies and, in turn, hope to shape the industry as a whole. It is these innovators that serve as the catalyst for our annual Innovate conference and are the subjects of this issue. Temple View Capital, our April cover story, has embraced the idea of innovation since its inception. In fact, founder and principal Michael Niccolini indicated that his company formed “by investors, for investors” was designed to “solve problems that (they) know intimately well from having been in the business for more than a decade.” Acknowledging that there are a variety of answers to the same problem, the team at Temple View ensures that they keep the lines of communication open and consistently “encourages people to challenge assumptions” which ultimately leads to unique solutions to further the firm’s goals. In this case, it’s focusing solely on residential 1-4 unit properties and filling any need that they see in the investment community. Don’t miss Temple View Capital’s own COO, Grace Soueidan, for her panel discussing the SFR Market in 2021 at Geraci Media’s Innovate Conference taking place April 15-16th in Newport Beach where we focus on the up-and-coming trends shaping our industry. At Originate Report, we are currently searching for the rockstar women who are helping to shape the industry for our June issue: The Women of Our Industry. Do you know anyone you think should be featured? If so, I’d love to hear from you! Till Next Month…

Lesley Lesley Boyd Senior Vice President, Marketing & Media

April 2021 www.originate.report Originate Report 5

COVER STORY: INNOVATIVE COMPANY

(Left to right) Michael Niccolini, Steven Trowern Two of the Co-Founders and Partners of Temple View Capital

Temple View Capital

PRIVATE LENDING ‘BORN OF INNOVATION’ By Emily Rappleye, Contributing Writer for Originate Report

nnovation in all its forms — from

with innovation at its core, began

and the Department of Housing

incremental improvements to

with an experiment.

and Urban Development to modify

groundbreaking transformations

loans and help families stay in their

— begins with an experiment gone

In the mid-aughts, the firm’s four

homes. In the process, they ended

right. As Amazon founder Jeff Bezos

founders

up owning and selling thousands

has said, “Our success is a function

Steven Trowern, Lara George and

of how many experiments we do

Gerardo Botello — were working

out of the fund. They realized their

per year, per month, per week, per

together at MCM Capital, an $8

REO property buyers needed more

day.” It comes as no surprise then

billion distressed asset management

financing options, so they started to

that Temple View Capital Funding,

company they built from the ground

dabble in lending. When those early

Maryland-based

up. They were buying mortgage

experiments worked, they doubled

specialized private-lending firm

debt from Fannie Mae, Freddie Mac

down and established Temple View

Bethesda,

—

Michael

Niccolini,

real

estate-owned

properties

Capital in 2007 as a platform to

try to solve problems that we know

developing

build and grow investor-focused

intimately well from having been in

products that solve problems for the

loan programs.

the business for more than a decade.”

end customer and building a technology

bespoke,

competitive

infrastructure that supports a seamless customer experience.

Temple View Capital is one of three

The Temple View Capital team is

businesses

Capital

also conscious that they’re working

family, which also includes Alta

in an industry that is itself a

“One of the huge benefits we have

Realty, a full-service sales brokerage

function of innovation, meaning

at Temple View is that we are a

and

experimentation

stakes

balance sheet lender, and so we have

However, Temple View is the fifth

for participation. In contrast to

flexibility in product innovation.

endeavor with MCM Capital DNA.

the traditional real estate market,

We're

where Fannie Mae and Freddie Mac

because that's what Fannie Mae tells

play an outsized role in setting

you to do,” Niccolini said.

REO

the

MCM

management

firm.

“Since we started MCM Capital, the distressed debt fund, we have either reinvented or created new endeavors along the way four or five times. I think if you can characterize this company, it is a perpetual exercise in entrepreneurship,” said Steven Trowern, co-founder and partner of Temple View Capital.

table

market more efficient, the private lending industry was built from scratch. There’s no one playbook to follow and no off-the-shelf software tools to get started. That means its players need to replicate some efficiencies found in the traditional

years

later,

the

firm

market to be competitive.

capitalized and the team well-versed

“This business that we’re in —

in the industry. It operates nationally

fix-and-flip

investor financing in 46 states. It’s hardly a startup, yet Temple View Capital that

largely

still

entrepreneurial

operates

mindspace,

prioritizing experimentation, iteration and evolution. This combination of expertise and experimentation is part of what makes Temple View Capital a force in the private real estate lending industry. “We really think of ourselves as ‘by investors for investors,’” said Michael

checking

boxes

lending,

Temple edge

View

products

Capital’s are

leading-

tailored

the niche needs of their clients. For

example,

they

offer

experienced borrowers the option to take advanced rehab draws, so those borrowers can buy materials sooner and accelerate the timeline of their projects. Then for long-term

well-

and currently provides real estate

just

rules and standards to make the

of the technological and financial

Now five businesses and fourteen

not

residential

investors, the firm offers interest only

DSCR

calculations,

helping

transition lending, investor finance

investors free up capital for their

— really the entire sector is an

next project. They also specialize in

innovation because the role we’re

single-asset lending, meaning one

playing is to fill a demand for credit

loan covers one house. For borrowers

that’s not being met by banks or

with many doors to manage, single-

the GSEs,” Trowern said. “We are

asset lending means they can avoid

constantly trying to evolve and find

rent control agreements and lien

more flexible and less expensive

release coordination.

capital that we can offer our clients to help them innovate with their

“When they want to sell a property, it

business. So, like the sector itself,

really allows them to stay in charge

[Temple View Capital] is born of innovation, to try to fill a need that wasn’t being met before.”

Niccolini, co-founder and partner of

The spirit of innovation

Temple View Capital. “Everything

Temple View Capital focuses its

we've created is really designed to

innovation efforts in two areas:

of their own business, instead of their lender controlling it, because they're tied to some sort of blanket financing on the whole portfolio,” Trowern said. Temple View Capital: Continues on pg. 8

April 2021 Originate Report 7

Temple View Capital: Continued from pg. 7

On the technology side, Temple View Capital is 100% paperless. The firm has worked closely with respected law firms and compliance experts nationwide to integrate real-time instruments and create documents that are compliant and uniform from state to state. This means

also operates its own Home Price

So how exactly has the Temple View

Index. “We maintain massive reams

team continued to foster innovation,

of borrower behavior and property

big and small, for the better part

data, and we run our own HPI, which

of two decades? Here is a look at

we think is more accurate than

the key strategic elements that set

Case-Schiller, particularly on the street-by-street,

neighborhood-by-

neighborhood basis,” Niccolini said. “We think that intelligence allows us to lend nationally in a business

the Temple View Capital team can

that historically has been very local

communicate better with clients,

and disaggregated.”

process documents more efficiently and release draws more quickly, no

These are just a few of the ways

matter where borrowers are located

Temple View Capital is working to

around the country.

optimize real estate lending. Talking to Niccolini and Trowern, it’s clear

Temple View Capital apart. They start with a winning team. The Temple View Capital team has truly become like a chosen family, according to Niccolini. The core team has been together since the start. They know the industry inside out and they’re in it together to work hard, solve problems and achieve common goals.

Lastly, the Temple View Capital

they’re only just getting started. “We

team’s background in the world of

think the last 13-14 years have put

distressed debt, combined with their

us in a great position for the next

could

experience purchasing $9 billion

13-14 years, to really be a dominant

newcomers, in effect it sets the

in assets and underwriting more

player in commercial financing for

tone for familiarity and support for

than half a million loans, the firm

residential investors,” Niccolini said.

everyone on the team. The culture

While this tight-knit environment sound

intimidating

Niccolini and Trowern describe is down to earth and approachable. The firm’s management structure is relatively flat and people are given the latitude to go after their ideas when they see a way to do something better. “There's not a lot of waiting to be told what to do, and I think, as a result, the culture isn't very complacent,” Trowern said. This year, the firm is seeking to grow. Keeping in line with the Temple View Capital culture, Trowern said the hiring process is all about finding problem solvers. Trowern invoked Temple View’s Monthly Staff Meeting

Steve Jobs’ hiring philosophy at Apple to describe the Temple View Capital

Temple View Leadership Staff Working on Strategic Innovation

approach: “It doesn't make sense to

a chat called “Airing of Grievances”

knowing if they speak up, they will

hire smart people and then tell them

for

be heard.

what to do. We hire smart people so

for improvement.

the

team

discuss

areas

“Innovation

they can tell us what to do.” Temple View Capital is working

driven

open

dialogue, and it's actually driven within companies by healthy conflict

They take nothing for granted.

from the same playbook as Benioff.

Many great innovators are known for

Especially because private lending

their “question everything” ethos.

is still seen as a nascent industry,

Take Salesforce’s Marc Benioff for

they know there are opportunities

example. He launched what is now a

to improve. “Just because that’s the

$17 billion business and changed the

way we did it yesterday or that’s the

with a solution, not just a criticism,

way we use software by asking the

way somebody else does it, does not

but a solution, is really lauded

question: “Why are we still loading

mean that’s the best way to do it,”

and exalted.”

and upgrading software when we

Niccolini said.

detailed in Harvard Business Review

Team

in 2017, Benioff continued to foster

this spirit throughout Salesforce by

importantly, the firm creates a space

going on listening tours and creating

where people can be comfortable

challenge

a culture where raising your hand with an idea or voicing a concern or an issue or identifying something that's not working and coming up

Lastly, they know who they are —

have the internet?” As Hal Gregersen members

and debate,” Niccolini said. “We have

are

encouraged

assumptions,

and

and who they’re not. Just because Temple View Capital is constantly evolving to meet the Temple View Capital: Continues on pg. 10

April 2021 Originate Report 9

Temple View Capital: Continued from pg. 9

needs of its clients, doesn’t mean it lacks focus. Instead, its strong sense of identity and deep knowledge of its customer base are anchors that act as a springboard for creativity. That’s

why

“Creativity

Loves

Constraints” was one of Google’s nine principles of innovation. As Marissa Mayer told Fast Company in 2008, when she was vice president of search products and user experience at Google, “People think of creativity as this sort of unbridled thing, but engineers thrive on constraints.” For Temple View Capital creative constraints means knowing what’s in their wheelhouse and what’s not. They’re not chasing the fintech title because they know that’s not at the forefront of what they do. “Our business is about developing and expanding relationships by helping people grow their own businesses

And

while

there’s

opportunity

been ready for anything from the

everywhere in the industry, from

start. They went into the pandemic

small business to commercial to

with a strong balance sheet and

multi-family

Temple

strong ability to finance and operate

View Capital has homed in on one

amid uncertainty. They already had

specific segment of the market:

technology in place to work remotely.

lending for residential one-to-four-

And while they had no way to know

properties,

unit properties. “We stick to our knitting,” Niccolini said. “Within one-to-fours, if there’s something that we see a need in the investment community, and we think we can fulfill it, we look at it, consider it, and pursue it.”

to-four segment and underwritten half a million loans, and they know that’s a strong suit. “We want to be the best at what we do, and you’ve to

concentrate

and

focus,”

Trowern added.

their

agility

meant they were able to continue lending throughout the pandemic without pause. “We're proud of the platform and the team that we've built. We're proud treated. We're very proud of our track record. Navigating through COVID, honoring every commitment through the depths of the pandemic,” Niccolini said. This agility has put Temple View in 2021. So far, the future's looking bright. For their next big experiment,

Temple View Capital? View

coming,

Capital in the position to look ahead

What’s up next for Temple

was

of the way our customers have been

They’ve spent 14 years in the one-

got

what

Capital’s

singular

ability to adapt while staying true

and kind of be there and anticipating

to its fundamental purpose served

some of the changes and challenges

it well throughout the tumult of

that they're going to run into,”

2020. Being founded just ahead of

Trowern said.

the Great Recession, the firm has

The firm has worked closely with respected law firms and compliance experts nationwide to integrate real-time instruments and create

they’re

exploring

the

world

ground-up construction. Currently, the team is considering developing a true construction to permanent loan. The product doesn’t exist yet, “but that doesn’t mean it won’t,” Trowern said. “The development and growth of the rest of the investor finance sector is not temporary. This is an important part of the overall housing lending business,” Trowern said. “I think this

documents that are compliant and uniform

sector will be an order of magnitude

from state to state.

in five years. We see an enormous

greater than what it currently is amount of upside in this whole sector, for everyone.”

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April 2021 Originate Report 13

INNOVATIVE PRODUCT FEATURE

Armanino LLP

PIONEERING DIGITAL ASSET ASSURANCE By Emily Rappleye, Contributing Writer for Originate Report

rmanino LLP, one of the top

In January 2019, Armanino launched

Armanino’s flagship digital asset

25 independent business and

a dedicated practice focused on the

transparency platform, TrustExplorer™,

accounting firms in the U.S. by

crypto and digital assets industry.

is built for the impending digital future.

revenue, is carving out a name for itself

Today, it enables real-time attestation

as a global leader in blockchain and

Early on, the concept was to embrace

and transparency services for over

digital asset solutions.

and leverage the same blockchain

approximately $5 billion in digital

technology their tech clients were

assets. TrustExplorer™ is the first

Headquartered just a stone’s throw

using to explore new use cases. In

and only real-time attest platform

from Silicon Valley, Armanino has

short order, it became apparent that

available, giving clients and their

been working with leading fintech

there was a significant opportunity

current and prospective customers

and cryptocurrency companies in

to build transparency tools. Today,

the ability to download attestation

an audit, tax, and advisory capacity

Armanino

first-of-its-

reports, some only 30 seconds old.

since 2014. This exposure served

kind suite of attestation services

The tool adds a “paradigm-shifting

as a launch pad into the world of

and transparency tools designed

level of transparency,” said Buxton.

blockchain and accounting.

specifically

“We think of it as a giant leap for

Possible

offers

for

future

digital

assets.

applications

“Innovation is a big focus for us. It

across

is something that we actually live

estate investment and lending.

industries,

including

cut

public accounting.”

real Readers can see this tool in action on

because we’ve enshrined it as a

the Armanino website (you will need

strategic anchor for the firm,” said

“In a world where all assets are

to select a current client to view

Noah Buxton, a director at Armanino.

digital, analog audit and assurance

their real-time attest dashboard).

services

will

obsolete,”

said

Buxton leads Armanino’s Crypto &

Patrick Clancy, senior manager of

The Power of Public Chains,

Digital Assets practice and was part

strategic growth for blockchain and

Tokenization and Security

of the team that began experimenting

private funds at Armanino. “Our

Token Offerings

with use cases for the technology.

money has been digitized, our public

Appreciating what makes TrustExplorer™

By 2018, they realized there was a

markets have been digitized, next up

major opportunity at the intersection

is the digital disruption of private

foundational knowledge about how

of accounting and distributed ledgers.

securities offerings and markets.”

blockchain and tokenization work.

groundbreaking

requires

some

Put simply, public blockchains are

tokenize assets, no custodian to hold

critical to making tokenized assets

shared digital ledgers of transactions.

the tokens, no registered transfer

programmable.

A peer-to-peer network of computers,

agents, no licensed broker dealers,

information can increasingly be

or nodes, must verify the data stored

and therefore no secondary markets

brought

in “blocks” on the chain. Any changes

for trading and liquidity. “Now those

networks,”

to a block triggers changes to all the

players are there,” Buxton said.

built information bridges between

blocks that follow, which requires

“That’s the promise for security

approval from the network. Because

token offerings on real estate and

off-chain

the structure is decentralized and

debt pools taking off like wildfire,

constantly verified, the technology is

frankly, in the next few years.” industries

real

estate

Blockchains are all about storing

investment and lending, tokenization

and transferring value. The Bitcoin

on public blockchains holds the

platform is the first blockchain

incredible

and still the largest; Bitcoin is the

previously illiquid assets. Once an

currency built on top. Other public

ownership

chains such as Ethereum (the second

fund managers can benefit from

largest today), can be used to tokenize

increased management capabilities,

(create digital representations of

ease of visibility to cap tables, and

other assets) and to make that digital

increased depth and breadth of

value programmable.

capital. They can even program

potential interest

to is

free

tokenized,

income and dividends using onTokens can empower representation

chain assets, like stablecoins or

other cryptocurrencies.

ownership

frictionless,

on-chain which and

Altogether,

using are

on-chain

this

off-chain “oracle purposesystems.

means

fund

managers and issuers will soon benefit from the ability to strike

highly secure and transparent. In

Such

transparent, automated, programmable, and compliant manner. Tokens that

Tokenized assets that reside on-

represent real-world assets like real

chain will increasingly be used

estate ownership interests are called

as collateral in other on-chain

security tokens. They function as a

activities, including decentralized

“digital wrapper” around traditional

lending. All together this means

private securities that offers the

public chains and the digital assets

promise of making private securities

that run on top are like an “Internet

better, faster, and cheaper.

3.0” that “doesn’t just help you

daily or minute-by-minute net asset value

calculations

for

tokenized

ownership shares. One of the most exciting evolutions for TrustExplorer™ will be its use as a trusted source of off-chain information, known as an “oracle” in the blockchain world. In a digitized future, where commercial real estate and debt ownership is tokenized, trustworthy data feeds of off-chain data (e.g., asset valuations, expenses, income streams) will be in high demand.

TrustExplorer’s™

oracle

service is designed to begin filling this need for trust and transparency as a service to on-chain protocols. In Q3 2020, TrustExplorer™ was the first such system to provide oracle data on-chain. “Asset managers across industries

transfer information, it helps you

should consider that digital assets

The Benefits of Tokenization in

transfer information and value,” said

are

Real Estate

Buxton. “It’s an internet of money,

With the ability to wrap a private

The concept of tokenization has been

not just money on the internet."

offering in a digital wrapper at low

eating

traditional

assets.

cost, increased efficiency and high

around for several years, but until now, it lacked the infrastructure to

In the context of commercial real

liquidity, a move to the tokenized

really take off, according to Buxton

estate and debt funds, information

offering will become the norm,”

and Clancy. There was no platform to

about the underlying assets is

said Buxton.

CONTACT: https://www.armaninollp.com/ April 2021 Originate Report 15

PRIVATE LENDING TITANS

NEW COLUMN

PRIVATE LENDING

TITANS Peter Steigleder

COO of Fidelity Mortgage Lenders, Inc.

salary to a solely commission-based income. I struggled financially and had to regularly borrow money to pay bills and then hope to close a deal in time to pay that money back. It took several years to build up my clientele to where I was making enough money and I didn’t have to borrow any more; things were looking up. Then the 2008 financial crisis hit, and the real estate market collapsed. I had two kids, a wife in law school, and the financial troubles returned, leaving us to live off food stamps and government assistance. Q: Where did it all begin? My future in private debt and equity started, unbeknownst to me, Peter Steigleder, COO Fidelity Mortgage Lenders, Inc.

seventeen years ago when I met a man named Chuck Hershson, or “Uncle Chuck,” as everyone calls

Q: What is the purpose of a COO?

picture of the company's future and

I think the role of a COO depends on

implementing that vision.

Home. When Chuck found out that

you wear one hat or multiple hats?

Q: What is your mission?

A COO is critical for getting things

My mission is not only to reduce

done. Traditionally, the role of a COO

expenses and increase revenue but

was comprised of cutting expenses

also to provide a work environment

and adding or dismissing staff.

for my staff that is both healthy and

Today, a COO's role has expanded

fulfilling. As they say, “a company is

to controlling costs and adding to

only as good as its employees”.

the bottom line by growing and Q: Can you explain a time where you faced adversity or had At

Fidelity,

role

includes

struggles early on in your career?

overseeing day-to-day operations,

I immigrated to the United States

streamlining processes to create

from Germany at the age of fourteen

efficiencies,

with

reducing

expenses

minimal

English

language

without hindering revenue growth

knowledge. Twenty-two years ago,

and generating sales. Simultaneously

I began a commercial real estate

career and had to transition from a

have

consider

the

bigger

charitable organization called The Guardians of the Los Angeles Jewish

the company's size and culture - do

generating revenue.

him. We were both members of a

I was in commercial real estate, he began calling me for my opinion on the value of commercial real estate properties in the San Fernando Valley. My evaluation would determine the size of the loan Chuck was willing to place against the property, and on occasion, I would sell a property for Chuck. Our business relationship very quickly turned into a close friendship. One day Chuck asked me to come work with him at Fidelity. Chuck was looking for someone to come in, help run the company, and eventually buy him out. Peter Steigleder: Continues on pg. 18

April 2021 Originate Report 17

Peter Steigleder: Continued from pg. 17

Q: How did these experiences mold and shape you into the leader you are today? I remember the challenges I have had, and I try to see people's challenges from their perspective. This is a mindset I have to maintain with staff, clients, and anyone else I come across. You'll hardly ever know what someone is struggling with at that time, and it's important to be empathetic towards their situations. I have made the mistake of making assumptions. As my cousin, Paul, says: "don't assume; it makes an ass out of you and me." Q: Is there anything that you wish you could go back and tell yourself at the beginning of your career? There are a million things I wish I could tell my younger self at the start of my career. In all honesty, if I

to work with and learn from. Still,

proportional to how hard and smart

the most significant influence in my

I work. The better I do, the better the

career has been Charles Hershson,

company does, and that provides me

or “Uncle Chuck,” as he is known in

with a great deal of self-fulfillment.

the industry. Chuck convinced me

However, this also makes it the

to transition from commercial real

hardest part of my job because I

estate to the private lending business

feel a personal responsibility for

and taught me how to succeed in it.

my coworkers' and the company’s

I’m grateful to him because it brought

financial success, and I don't want to

me to this chapter in my life/career. Q: What would you consider to be the highlight of your career thus far? While not part of my job, my career's highlight was my election to CoPresident of the Guardians with Zane Koss last year. The Guardians of the Los Angeles Jewish Home's mission is to provide financial support for members of the community who

let anyone down. Q: Do you think that time or money more valuable? When I started my career, money was

valuable

than

time

because I could barely pay my own bills. Time makes you anxious when you’re broke. As I have become more financially secure and been working consistently,

time

has

become

more valuable because it is finite.

the Los Angeles Jewish Home serves

The amount of money I make has

through residential and community-

changed, but the amount of time I

based programs. The Guardians'

have has not.

history goes back to 1938, and in its 83-year history, I am the first non-

Q: How do you make sure

Jewish President. My affinity for

your company stays ahead in

The Jewish Home started seventeen

this industry?

years ago when I learned that the

To make sure my company remains

Home was taking care of Holocaust

competitive

survivors.

when

must be constantly learning. This

working at the German Consulate

entails attending conferences to see

in Los Angeles, I met hundreds

what other companies are doing

of Holocaust survivors, and their

effectively and ineffectively, staying

and follow up. These are two areas

stories touched me. When I saw the

up to date on technology to increase

I struggled with when I was starting

opportunity to give back to those

our efficiency, and never being

out and I had to learn the hard way

who have suffered so much, I knew

complacent with status quo. There’s

to gain these skills.

the Guardians was an organization I

always something we can do better.

knew how hard the beginning would be, I’m not sure I would have had the courage to start. But with that experience and where I’m at in my career now, I’m glad I didn’t know, and I don’t plan on leaving anytime soon. One thing I would like to tell my younger self is to stay organized

Years

earlier,

the

industry,

needed to join. Q: What tools do you use to aid

Q: Who is someone that has had a significant impact on your career

Q: What do you enjoy most about

you in your role as COO to be most

and why?

your job? Least?

efficient, organized, and focused?

I was fortunate enough to have many

The most enjoyable part of my

What has been most effective for

mentors and seasoned professionals

job is that my success is directly

me has been working with my staff

and not trying to micromanage or do

the offices professionally cleaned

company. Often working at the wrong

everything myself. The best way to

several times a week. At the start of

company

get the most from my staff is to let

COVID, many of our borrowers asked for assistance because many of them

people can turn you away from what,

go and trust them to get things done and let them know that they can

were struggling to pay back loans,

come to me anytime.

working with them to see how

Q: Has your role changed significantly to address the current environment? As a financial institution, we have been deemed an essential business, which

meant

many

so a big portion of my job became

operational

changes to address all the concerns, risks, and the unknown that came with COVID. The health and safety of staff became the top priority.

we could help. Before COVID, the servicing manager would take the initial calls we received regarding our borrowers' issues, but after COVID, I have taken all the calls. I received over one hundred calls trying to balance borrowers' and investors' needs. I needed to understand what borrowers' problems were firsthand, so that I could have an informed conversation with investors to create

with

inexperienced

to me, has been a great experience and give you the wrong impression of this industry. Peter

Steigleder,

Chief

Operating

Officer of Fidelity Mortgage Lenders, Inc., and Co-Founder of Hudson Commercial Partners, Inc. brings with

him

years

finance,

commercial real estate, and economic development experience. Peter served as Director of Economic Development for the German Consulate

Additionally, we wanted to ensure our

a deferment plan that worked for

General in Los Angeles. In 1999, Peter

staff continued receiving a full salary.

both parties.

began his real estate career at Beitler Commercial. In 2006, Peter joined Lee

We staggered attendance, so we had about half our staff at the office on

Q: What advice would you give to

& Associates where his consistent status

any given day while still providing

someone who has just started out

as one of the company’s top producers

a full salary and all the benefits.

in private lending?

quickly elevated him to Principal status.

On top of that, we implemented

My advice for anyone starting in the

In 2009, he joined Delphi Business

COVID testing, followed all the CDC

private lending business is to find

Properties as a partner before founding

guidelines, and continued to have

a great mentor and start at a solid

Hudson Commercial Partners.

CONTACT: https://fidelityca.com/

April 2021 Originate Report 19

INNOVATIVE COMPANY FEATURE

The CIVIC Difference INSTITUTIONAL BACKING, PRIVATE MONEY STRATEGIC EDGE By Charles Peckman, Contributing Writer for Originate Report

IVIC Financial Services, based

“The

the

that institutional backing provided.

in Redondo Beach, California,

challenge of having to cater to

The most essential element for any

may

Wall

multiple take-outs,” Rommel said.

successful lender, she said, is their

Street, but unlike other hard-money

“We now have the ability to balance

access to and management of capital.

lenders that rely on finite resources,

sheet most of our paper, which

CIVIC’s private money is there when

enables us to make quicker, more

“We were never put in the position

its customers need it. Funding more

critical decisions on what we are

of having repo or warehouse lines

than $100 million a month – and

willing and able to finance; I think it

getting

growing – Originate Report sat down

empowers us.”

have great capital partners that

backed

acquisition

eliminates

with Kendra Rommel, Director of

maxed

out

because

honored the commitments we had

Regional Sales, to discuss the ‘CIVIC

“It is important to note,” Rommel

in place pre-pandemic,” explained

Difference,’ the hard money space,

added, “that the PWB relationship

Rommel. Fortunately, we were also

and the Company’s recent acquisition

does

having

in a position to keep loans on our

by Pacific West Bank.

additional

This

balance sheet, and not sell at a loss.

flexibility is what makes CIVIC the

That stability encouraged additional

“CIVIC was recently acquired by

ideal partner for so many borrowers

capital partners to look at us, what

Pacific West Bank (PWB), a publicly

and lenders.” Additionally, Rommel

we’ve been doing, and how we

traded institution. What this did for

points out that this partnership does

underwrite deals. This gave us the

the hard-money lender,” Rommel

not ‘bankify’ CIVIC; instead, it serves

time and opportunity to determine

said, “is significantly lower our cost

as the culmination of a years’ long

who would make the best partner for

of capital, which enables CIVIC to

pre-existing strategic relationship.

CIVIC long term.”

products.” PWB had been a strategic

Turning to how CIVIC rapidly adapted

From an organizational perspective,

partner of CIVIC long before the

during the coronavirus pandemic

Rommel said, she could not be

acquisition,

– Rommel said that she has been

happier with the team that is in place

grateful for the competitive edge

at CIVIC. As the Company continues

not

preclude credit

partners.

extend more competitively priced

therefore

the

partnership was a “natural fit”.

new

to grow, she added that President Bill

Paired with this leadership, Rommel

to set us apart is the fact that it’s not

Tessar's leadership sets the course.

said, are CIVIC’s core values: act

just about getting things done; it’s

with honor, be a great partner,

about getting things done RIGHT.

“Bill is a strategist and visionary

communicate clearly, create smiles,

And to do that requires tremendous

that isn’t afraid to roll up his sleeves.

and simplify. Adhering to these

He runs the organization in a way

standards, she said, allows all CIVIC

attention to detail by people who

where that hands-on attitude sets the

team members to share common

example. It is the expectation,” she

goals,

said. “He’s extremely transparent, loyal, and trusting. When…things initially started with COVID-19, he immediately called a virtual meeting with the whole organization and told us to stick to our core values, stay focused and engaged and take care of each other and our customers. He maintained and

composure,

consistent

empathy,

communication

create

customer

experience,

outstanding and

work

towards growing the Company’s sphere of influence in private money. “I feel like two of the most overstated but under-delivered words right now are authenticity and gratitude,” she said. “They’re traveling around social media right now and speaking from a place of truth for us, here at

truly care.” To have such a team in place like the one at CIVIC, she said, is a rarity. Rommel added that the Company is showing no plans of slowing down. In fact, looking forward CIVIC is continuing to grow and expand into new markets and offer new products, while

maintaining

its

top-tier

service to clients. CIVIC lends in 20 states plus the District of Columbia.

CIVIC. Our culture is built by a team

Its 300+ employees are located in

of people who are truly authentic and

14 states including several offices

our capital and continued business.

embody our core values. We do have

in California, plus Phoenix, Las

Clear leadership for an organization

a large team, but we do not simply

Vegas, Portland, Nashville, Dallas,

makes all the difference.”

hire people to fill seats. What helps

Charlotte, Atlanta and more.

regarding the health of our people,

CONTACT: https://www.civicfs.com/ April 2021 Originate Report 21

UPCOMING EDITIONS

ORIGINATE REPORT June:

WOMEN OF OUR INDUSTRY August:

CAPTIVATE

Captivate 2021 Special Edition If you have an article you would like to submit in one of our upcoming editions, reach out to us at: submissions@originate.report April 2021 Originate Report 23

INNOVATIVE COMPANY FEATURE

RENOVO FINANCIAL

Innovative Customer Service By Emily Rappleye, Contributing Writer for Originate Report

enovo Financial is a Chicago-

“Renovo is very much a Chicago

on relationships,” he said. This

based

company,” James Gaskin, Renovo’s

local mindset is core to the ethos

with

portfolio

lender

a singular focus on

the customer experience. Founded in 2011 on the heels of the subprime mortgage crisis, Renovo was built to

senior vice president of corporate development, said over the phone. However, the firm is thinking bigger

at Renovo, largely because the firm puts the customer at the center of everything it does, whether it’s

as it embarks on its second decade

their strategic growth model or

withstand volatility and provide a

of lending. The first tell? Gaskin was

innovative offerings.

resilient financing option for Chicago

dialing in from Austin, Texas. Renovo

real estate investors. Cofounders Kevin Werner and Daniel Rosen were successful in this pursuit: A decade later, Renovo projects can be found in

opened seven new offices around the country since the start of the pandemic, and plans to open three

The Renovo Difference The Renovo Financial philosophy

more in the next month, according

is simple. It’s predicated on the

to Gaskin.

idea that most of what goes into a

92% of Chicago neighborhoods, and

lending business is replicable. Most

they didn’t have a single delinquency

“We are seeking to build a bunch

competitors are within a small range

during the pandemic.

of great local businesses that focus

of each other on loan-to-cost (LTC)

and loan-to-value (LTV). “So, how

where it can find the right people.

debt and buy enough time to finish

do you build a great business when

These

the

their projects. “A lot of folks are in

90% of your competitors are doing

intricacies of the local market” and

a tight spot and really shouldn’t be,

the same thing?” Gaskin commented.

have networks of referral partners,

because if you take the time to get

including real estate agents, general

to know the market and the project,

contractors, and permit expediters.

then you know it makes all the sense

“We have to be really good at the other 10%.”

Renovo

focused

turning a transactional business into

“understand

in the world,” Gaskin said.

To get “really good” at the other 10%,

lenders

interpersonal

one,

and

in a relationship business, every interaction matters. For Renovo, this

Customer-Focused Innovation “For us, innovation is about finding

Renovo has countless other little

new and better ways to be a great

innovations that help make the lives

partner to our customers, and we do that by listening to them and trying to find solutions to the problems that

of its clients easier. It services all its loans in-house. It runs a pod structure for lender support, so every lender

affect them,” Gaskin said.

has a dedicated processing team. It

Promoter Score (NPS) survey are

For example, Renovo spent years

Home Depot so all its customers save

automatically emailed to everyone in

building a bespoke loan origination

the company. If anyone who touches

servicing

a Renovo loan, from the borrower

everything

to the real estate agent, scores the

to the final payment. Now the

company below a 9, Renovo’s chief

firm is integrating technology to

operating officer picks up the phone

accelerate construction draws and

means the results of every single Net

to see how they can remedy the situation. It’s a system that works. In 2020, Renovo received a score of 95%, meaning most customers would refer Renovo to a friend or colleague. And until last year, Renovo’s growth was

built

entirely

word-of-

mouth referrals.

platform from

disbursements

that

even has a strategic partnership with

handles

pre-origination

because

this

was

one of the biggest pain points for

same level of customer awareness.

“The little things add up,” Gaskin said. “If we can make something a little bit easier and something a little bit cheaper, we’re going to do that because at the end of the day, that is what makes a difference.”

borrowers. “We are always working

Looking Ahead

on ways to get them their money

The

faster and easier. Technology plays a

big part in that,” Gaskin said. To answer a need created by the pandemic, Renovo is offering a new

Their growth strategy brings this

on building supplies.

bridge loan. It’s designed specifically for borrowers who are nearing the end of a construction loan but need

focus smart

2021

growth,

for

which

Renovo means

preserving the customer-first, local mindset as it grows. Not only is the firm growing geographically, but it's also expanding its channels and products. Renovo is currently launching a wholesale third party origination business, starting with six to 10 targeted relationships with

“We believe that real estate is

more time. Many of these borrowers

hyperlocal,” Gaskin said. “Most of

are finding their loans were sold

the successful investors we work

during COVID to servicers across the

“We’re going to continue to find

with operate within a very tight

country who won’t extend the loan

areas where we can add value to

geographic area, sometimes down

or may be charging sky high rates.

our customers through new and

to a handful of blocks, or maybe a

Renovo’s offering will give those

innovative lending products,” Gaskin

zip code.” With this in mind, the

borrowers a reduced interest rate

said. “We’ve got a really exciting

firm is only expanding into markets

loan to get them out of expensive

road ahead.”

regional lenders.

CONTACT: https://www.renovofinancial.com/ April 2021 Originate Report 25

INNOVATIVE PRODUCT FEATURE

Mortgage Automator REVOLUTIONIZING THE LENDING INDUSTRY ONE CLICK AT A TIME By Mark Dewyea, Contributing Writer for Originate Report

chances are the first things that

that completely automates the once-

they prioritize are raising money

tedious loan process. For years,

and finding more loans.

This

lenders have fantasized about a truly

makes it difficult for them to find

end-to-end, all-inclusive e-platform

time to focus on improving their

that crosses all the ‘t’s’ and dots all

internal efficiencies and providing

the ‘i’s’ on its own, and thanks to

exceptional customer service to their

Mortgage Automator, that dream is

brokers, borrowers, and investor

now a reality. So real in fact, that, to

partners. Mortgage Automator is

date, over $10 billion has been funded

glance at what makes this one-of-a-

here to change that. Using their

via this ground-breaking platform.

kind operation so successful.

innovative

vast

With over 49,000 documents having

experience within both the lending

been auto- generated, that means

What Sets Mortgage Automator Apart?

and technology sectors, the experts

that the more than 150 Mortgage

at Mortgage Automator have crafted

Automator

When you think about hard money

a customizable, streamlined loan

markets from coast to coast in

and

origination and servicing platform

the US and Canada can focus on

nnovation is great. Innovation combined with a dedication to unparalleled customer service

and a relentless drive to improve is even better. That’s exactly what you will find at Mortgage Automator. We had the privilege of sitting down with Lawrence Schwartz, one of the original founders of the blossoming company, who gave us a unique

private

mortgage

lenders,

software

and

clients

operating

generating more business instead of

adaptive, user-friendly, and efficient

Automator’s employees communicate

being bogged down under massive

borrower portal from which your

amounts of paperwork. With interest

clients can review their loan status,

another so they can deliver you the

request additional funds, and receive

best end-product in a fraction of the

rates at all-time lows, the lending industry is getting exponentially more competitive. Mortgage

account statements. From there, a comprehensive loan origination

Automator’s

tried-and-

tested process can give you a leg up on the competition to help set you apart from the crowd. And thanks to the multiple time-saving features

suite grants lenders the ability to monitor ongoing transactions and accomplish tasks using customized processes that support every type of loan imaginable. “I think a lot of

built into their all-inclusive loan

our success is because we have a

suite, lenders will have no problem

background in private lending and

handling the extra workload. More

our clients can sense that we get ‘it’,”

clients, more profits, all in less time.

explained Lawrence. “We know what

That’s the win-win situation with

their needs are, we know what they

Mortgage

Automator.

Lawrence

made it clear what makes his company truly unique: “We are a true end-to-end loan origination and servicing platform in this space. We are all-encompassing from getting the deals into the system to managing the file, underwriting it, taking care of investors, creating payoffs; we literally have all bases covered from A to Z.”

Truly a One-Stop-Shop The system capabilities of Mortgage Automator’s groundbreaking software platform

are

seemingly

Whether

you

need

endless. generate

custom documents, send out routine borrower communications or track real-time developments in the loan origination timeline, the solution is

real-time

directly

with

one

time compared to the other service providers. As Lawrence explains: “Nothing is done externally. Every line of code is written in our office. I think that is particularly important with this type of sensitive data. We are able to adapt, build quickly and listen to feedback from our clients on how to improve our product—and we’re all ears.” And because everything is handled internally,

Mortgage

Automator

struggle with, so we built a product

offers lenders peace of mind when it

that will make their lives easier. We

comes to the security of their data.

take a lot of pride in that.”

Lawrence gave us a break-down of how his advanced software puts

In-House Responsiveness, Uncompromising Security

lenders in the driver’s seat when

With the advent of telework and

software, you can control who has

outsourcing in today’s professional

access to what data and when. Not

sector, it’s easy to sacrifice quality

just anyone can log in and see all

for convenience. That certainly isn’t

the data. Lenders are fully in control

the case when it comes to Mortgage

when setting their own roles and

Automator.

prides

permissions—giving them complete

itself by retaining 100% of its

control regarding how their data

employees in-house. This allows for a

is protected.”

The

company

it comes to data security: “In the

seamless workflow in a collaborative environment that produces consistent

It’s

and

service.

Automator is pushing the envelope

No unforeseen delays. No costly

when it comes to modernizing the

gaps in communication. Only the

lending industry. And there’s no

solutions

achieve

indication they’re slowing down.

attentive

you

customer

need

safe

say

that

Mortgage

your lending objectives, delivered

Quite the opposite, in fact. The firm

only ever a few clicks away. By using

when and where you need them.

plans to double its client base in the

their

This

allows

next year while continuing to add

approach, the Mortgage Automator

for unbeatable attention to detail

advanced lending features to their

team can also provide you with an

and

software platform.

intuitive,

technology-driven

corporate

structure

responsiveness.

Mortgage

CONTACT: https://www.mortgageautomator.com/ April 2021 Originate Report 27

THE IMPORTANCE OF

your brand or product with the potential to see huge results. This global reach creates networking opportunities for building relationships and partnerships. Your audi ence has invested time in registering and listening to the information you plan to share. They’re expecting valuable takeaways from the webinar, even some thing they can put into place at their own company. This positions you and your brand as an industry lead er, or expert. Webinars can give your audience the hosting a webinar you’ll have metrics to measure chance to ask questions and provide feedback. This how well it performed. These metrics include the is valuable because you can address concerns, reser number of attendees, number of those registered, vations, or any lingering questions they may have Webinars have grown in popularity in recent years and total views. The webinar can and should be recorded about your training or product in real-time. You can and have become an important marketing tool. for you, the audience, and affiliates to share with customize your presentation to your audience based on These live web-based seminars can connect you with others, growing the results even more. Each time a their questions and feedback to keep them engaged. leads from all over the world. They encourage interacti person completes your webinar’s registration form Ask them to take an action, such as completing a task by allowing the audience to ask questions orJust how they should be considered a new potential lead, or answering a question. This will increase audience beneficial can a webinar be to your business? Here whether it be for a sale or a potential partnership. participation and interest. Include guest speakers, are 7 reasons why webinars are a fantastic marketing Webinars adds a personal interaction that videos and such as industry leaders or affiliates, to speak during strategy. Webinars are a cost-effective way to extend commercials don’t. Webinars put a face and name your webinar. These individuals should be familiar your reach globally. Rather than pay for flights and with your product making you approachable, human, with your industry and value of your product. They hotels to meet with individual leads, you can engage and someone they can trust. Educating them on how will be able to educate the audience on the benefits with a larger group over their computer screens. your product can benefit their company is the first or impact, validating information you have or will People from all over the world can attend, providing step in opening the door to future discussions and be sharing. By inviting a guest speaker, you can also your brand or product with the potential to see partnerships. It is essential to show both new and increase the webinar’s attendance by including your huge results. This global reach creates networking established leads how your product or service can guest’s audience and following. This can grow the opportunities for building relationships and improve or enhance their workplace. Depending number of leads you may gain substantially. Results partnerships. on the prospect, the sales process can be slow. can be seen quickly from webinars. After hosting a our audience has invested time in registering and Businesses want to convert a lead into a cusWhile it’s webinar you’ll have metrics to measure how well it listening to the information you plan to share. certainly important to provide useful information performed. These metrics include the number of at They’re expecting valuable takeaways from the and tips to your audience, it’s equally important to tendees, number of those registered, and total views. webinar, even something they can put into place share how your brand or business can help them The webinar can and should be recorded for you, the at their own company. This positions you and your achieve this. How can your product be a solution audience, and affiliates to share with others, grow brand as an industry leader, or expert. to their problems? Your webinar should show the ing the results even more. Each time a person com audience the value of your brand. Garnering interest pletes your webinar’s registration form they should Webinars can give your audience the chance to ask in the product and its potential impact is the first be considered a new potential lead, whether it be for questions and provide feedback. This is valuable step in completing a sale. a sale or a potential partnership. Webinars adds a because you can address concerns, reservations, or personal interaction that videos and commercials any lingering questions they may have about your There are numerous benefits to hosting a webinar. don’t. Webinars put a face and name with your prod training or product in real-time. Though this article only touches on a handful of uct making you approachable, human, and someone them, it should be clear that webinars are an effective they can trust. Educating them on how your product You can customize your presentation to your tool for engagement and growth. As you take these can benefit their company is the first step in opening audience based on their questions and feedback to benefits into account, you should begin to think the door to future discussions and partnerships. It keep them engaged. Ask them to take an action, such how you can use a webinar for lead generation and is essential to show both new and established leads as completing a task or answering a question. This to increase traffic, which will yield great results for how your product or service can improve or enhance will increase audience participation and interest. your business. Webinars have grown in popularity their workplace.Depending on the prospect, the sales in recent years and have become an important formation and tips to your audience, it’s equally Include guest speakers, such as industry leaders marketing tool. These live web-based seminars can important to share how your brand or business can or affiliates, to speak during your webinar. These connect you with leads from all over the world. They help them achieve this. How can your product be individuals should be familiar with your industry encourage interaction by allowing the audience to a solution to their problems? Your webinar should and value of your product. They will be able to ask questions or provide feedback in real-time. show the audience the value of your brand. Garnering educate the audience on the benefits or impact, Just how beneficial can a webinar be to your interest in the product and its potential impact is the validating information you have or will be sharing. business? Here are 7 reasons why webinars are a first step in completing a sale.There are numerous fantastic marketing strategy. benefits to hosting a webinar. this article Business Development • Fintech/Newest Loan Programs • Automation in Today’s Evolving SocietyThough • Upcoming By inviting a guest speaker, you can also increase only touches on a handful of them, it should be clear the webinar’s attendance by• including your guest’s Webinars are a cost-effective to extend your Trends & Changes Marketing & Outreach • Essential Tools way & Technologies •that New Legal and webinars areIssues an effective toolRegulations for engagement audience and following. This can grow the number reach globally. Rather than pay for flights and hotels and growth. As you take these benefits into account, of leads you may gain substantially. to meet with individual leads, you can engage with a you should begin to think how you can use a webinar larger group over their computer screens. for lead generation and to increase traffic, which 5. Results: will yield great results for your business. Webinars Results can be seen quickly from webinars. After People from all over the world can attend, providing have grown in popularity in recent years and have4.

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April 2021 Originate Report 29

INNOVATIVE COMPANY FEATURE

LEGACY GROUP CAPITAL

Creating a Culture of Trusted Partnerships By Charles Peckman, Contributing Writer for Originate Report

egacy

Group

Capital,

in lending, has thrived in seemingly

in his thirty-year career in the

unlikely circumstances.

mortgage industry.

To better understand how Legacy

As CEO of Legacy Group, Scott

Group Capital differentiates itself

said that the team he has built

from the competition – and has

consistently fires on all cylinders and

created a culture of longstanding

has a keen eye for the best real estate

partnerships within the hard money

transactions.

space – Originate Report sat down

unswervingly drumming up capital,

(virtually) with CEO Scott Rerucha

acquiring

adaptation and a commitment to

to discuss what sets his Company

various funds, and hiring builders

staying abreast of the latest trends

apart and the lessons he has learned

to see projects through to fruition

headquartered in Bellevue, Washington,

deceptively

operates

simple

mission

statement: creating healthy returns for investors through real estate investing and lending opportunities. The Company has seen its fair share of economic downturns, and through

With

real

professionals

estate

through

– all to provide profits and value for

on top of what our builders, who are

not spring up overnight, but the

investors – Scott said that making

in the middle of deals, are seeing in

Company’s consistency throughout

sure everyone is ‘on the same page’

the market shift. We’re underwriting

tumultuous periods has created a

is a key to success when all the gears

deals

positive reputation in the private

of a deal are moving at once.

and what we see now is a crazy hot

with

market

expectations,

money space.

market in the Seattle area. We have “We all sync together, and we have

to judge the market and see if it’s

“Even though projects took longer to

software that melds our deals so we

going to rise or going to fall.”

complete because builders were shut

can track them from start to finish,”

down, we took into account these

he said. “We know where everyone’s

Scott said it could be easy to adopt

regulatory challenges and didn’t

at, and we have a system behind

a pessimistic attitude towards the

charge extension fees or higher rates

that. It took a few years to get this

market as it rises and falls, but he

because of the extended build times,”

into place, and at first, we were

added that one differentiator of

he said. “There’s no way to overcome

tracking elements through Excel

Legacy Group Capital is the group’s

some of the cards you get dealt,

spreadsheets, and now we’ve created

ability to take ostensibly negative

but you have to manage through it

software to track and make sure

situations and see the light at the end

and stay with your builders, your

a deal flows smoothly from start

of the tunnel. Scott said his group’s

partners, and work with them to

to finish.”

nimble nature produces results. Even

perform to the best of their abilities.”

considering the 2008 crash, Legacy This commitment to deal completion,

has never lost one investor dollar nor

These partnerships, Scott said, go

he said, was one of the driving factors

foreclosed on a single property in the

‘very deep’ and are built on a level of

in coming out of the 2008 financial

15 years of running the fund. He said

trust challenging to find elsewhere in

crisis in a position to thrive in today’s

that his track record is due to the

the private lending field. For Legacy

buyer market. At the time, Scott

team members Legacy has and their

to win in any given deal or see it to

added, the real estate fund in place at

ability to adapt to any situation.

completion while providing capital

Legacy consisted of three loan types:

gains for investors, an infrastructure

bridge loans, rehab loans (which

This dexterous nature, however, was

of confidence is of the utmost

encompass fix and flip projects,) and

certainly not limited to the 2008

importance. And that infrastructure,

construction loans. Although banks

financial

were

solidifying

about the coronavirus pandemic –

their lending practices’ at that time,

Washington was one of the earliest

he said that the diversified approach

states to see an outbreak of the virus

“We’re looking to expand into a

helped Legacy weather the storm –

– Scott said his team’s ability to

number of different markets,” Scott

an attribute that continues into the

adapt was on full display.

said.

‘tightening

and

crisis.

When

speaking

midst of the coronavirus pandemic.

added,

leads

Legacy’s

continued growth.

“We’ve

always

maintained

our consumer lending license or 25 Communication, Scott said, is of

percent of our loan portfolio, and

“We were in the middle of a down

the

during

our diversified offerings are needed

market,” he said. “Banks tighten

periods

downturn

and will thrive in different markets.

up, and many people turn to private

and national stress. In the Seattle

What we bring to the table is decades

money to finance deals. That gives us

area, he added that dozens of

of in-the-trenches experience and a

leverage, and we have to make sure

builders

commitment to see deals through to

that our portfolio is wide and we stay

These

utmost of

importance economic

use trusted

Legacy

exclusively.

partnerships

the end.”

CONTACT: https://legacyg.com/ April 2021 Originate Report 31

INNOVATIVE IDEA FEATURE

SOFT MONEY: Is It the New Hard Money? By Michael Mikhail, Stratton Equities

"S innovative

oft Money" is a relatively

making it a deeply attractive option

This

new term in the private

to potential borrowers who find the

appealing

lending

concept, (but not the details), of a

borrowers, because they require

hard money loan appealing.

little underwriting, making them a

approach

industry, to

private

money lending. A soft money loan combines similar guideline benefits

Hard Money Loans

of a hard money loan but at lower

Hard money loans have become the

rates and costs.

prime loan product for direct private money lenders. Due to the nature of

type

of to

loan both

program lenders

is and

quick loan for the applicant to get approved and a quick return for the lender on their money. The high-risk nature of this type of loan as well as reservations from

While a soft money loan requires

an asset-based loan, utilizing this

more underwriting than a hard

mortgage program is based on the

money loan, it offers lower risks to

Loan to Value (LTV) of the investment

pursue this type of asset-based loan.

both the borrower and the lender,

property in the loan scenario.

Real Estate Investors are attracted to

the 2008 housing market crash, may make some borrowers reluctant to

build or repair their credit with a soft money loan, making it appealing to those with lower credit scores or those looking to rebuild their credit. The combination of lower rates, credit building, and a longer time frame makes the soft money loan a better fit than a hard money loan for

many

particularly

borrower’s those

situations,

interested

investing in a home or a more longterm property. Why is Soft Money the Future of Lending? Calling soft money ‘the new hard money’ may seem trite and contrived, but upon further reflection, soft money truly is the direction for the future of lending. An innovative approach combining a hard money loan because it has less

between a hard money loan and a

underwriting and guidelines than a

traditional mortgage.

traditional mortgage. A soft money loan requires more However, with more flexibility comes

underwriting than a hard money

a higher cost, which is why a soft

loan, allowing it to have lower rates

money loan has become a cost-effective

and greater security. It is based on

solution to a prospective borrower.

both the borrower’s credit score and the property’s LTV and is usually a

What is Soft Money?

term loan rather than a bridge loan.

Soft Money is an innovative new

the benefits of hard money loans with lower risk, higher rates, and a term loan time-frame - soft money loans fit many borrowers far better with longer terms (12-18 months). While the hard money loan is still the preferred option for many real estate investment scenarios, a soft money loan will become increasingly popular for first-time real estate investors, borrowers looking to build

approach to private money lending

What makes a soft money loan

their credit score, and investors with a

which combines the benefits of

groundbreaking in the mortgage

good credit history who are looking for

both hard money loans and more

world, is that a borrower can also

less risk and slightly lower rates.

traditional loans. First, a clarification on the name: the term ‘soft money’ in the world of lending is completely different than ‘soft money’ in the world In

the

term

political

context

‘soft

money’

campaigning. lending,

the

implies

that

this type of loan falls somewhere

ABOUT THE AUTHOR: Michael Mikhail is the Founder and CEO of Stratton Equities, the Nation’s Leading Hard Money and NON-QM Lender to National Real Estate Investors, with the largest variety of mortgage loans and programs nationwide. Having launched Stratton Equities in early 2017, Michael has always been an entrepreneur and innovator in the real estate market, purchasing his first home at 19 using a hard money loan. Under Michael’s leadership, Stratton Equities has grown into one of the biggest leaders in the Mortgage and Real Estate industry across genres and platforms. CONTACT: info@strattonequities.com | https://www.strattonequities.com/

April 2021 Originate Report 33

SPOTLIGHT

INDUSTRY SPOTLIGHT Beth Johnson

Managing Partner at Flynn Family Lending

more control and security being individually named on a note and deed. And, quite frankly, we preferred the more personalized approach and autonomy whole notes provide. However, with the increased volume since COVID, capital deployment can become challenging, at times. As we continue to grow, we finally felt it was time to start a fund (with the help of Geraci – thanks Kevin and Tae!) as a complementary offering for our investors to place their funds. We’re excited for this new fund to be created and with trust already established with our current investor base due to our conservative approach

underwriting,

transition

won’t

actually

the

difficult as originally anticipated. Beth Johnson, Managing Partner Flynn Family Lending

Q: How has your company evolved since its inception?

Q: How has your outlook of the

If anything, I think the private lending

It started off with just my husband

private lending industry changed

industry will become stronger for

(my boyfriend back then) and me

in light of the new normal?

the smaller, truly private lenders

working on private money part-time

We’ve always been a little more

out there like Flynn Family Lending.

as a side hustle to our day jobs. We

cautious than our hard money and

Tightening credit guidelines and

private lending competitors, so our

frozen

business model hasn’t changed much. Our LTVs remain ultra conservative and our terms are shorter than a year to help create a “speed bump” should anything happen with the project, the market, or otherwise. In fact, our business has improved and grown in the last year due to our lack of dependency on institutional capital or the secondary markets. This reaffirmed how reliable and consistent we are to work with– many clients came to us scrambling to fund their deals in the 11th hour because either their lender stopped funding abruptly or underwriting

capital

markets

allowed

small lenders like us to shine in a moment of crisis. Investors became acutely aware of how important it can be to work directly with key business decision makers and those who control their own fund sources. Demand for private money will

had only two investors and some of our own funds to lend. After two years and 2x growth each year, we decided to quit our day jobs and do private lending full time. While we’ve grown substantially over the years, our culture and core

remain strong for the remainder of

values have remained the same.

2021 and likely beyond.

We chose the name Flynn Family Lending in the beginning because we

Q: What are you doing differently today to move your company forward than you were 6 months ago? Our

business

model

and

key

differentiation in our market has traditionally been direct placement of whole note investments over

criteria changed, requiring more

pooling funds. Our investors prefer

cash to close.

to work with us because they have

wanted to set ourselves apart from the bigger lenders in our market as a small and local lender who truly cared about its community. How can a mom-and-pop shop like us compete when other lenders have Beth Johnson: Continues on pg. 36

April 2021 Originate Report 35

Beth Johnson: Continued from pg. 35

warehouse lines and large marketing spend? We chose to differentiate ourselves based on the way we choose to approach business – treating others like they are family and ensuring every participant involved in the transaction is well cared for with win-win-win outcomes.

while taking care of ourselves and

estate community. It’s been one

each other. But we never gave up

happy accidental journey, for sure,

– on the business and each other –

but in all honesty, we started private

and now we’ve finally overcome the

lending so that we could be at home

challenges of scaling a company and

with our kids more. Our basement

have grown stronger as a couple and a family. It was not a pretty journey behind closed doors, but I wouldn’t change anything about what we’ve done and how far we’ve come.

Q: What is something most people don’t know about your company? I make homemade lunch and snacks for my team several times a week.

is our home office where our team works, and the kids come down often to check in with us. It has been humbling to experience such immediate success without

Q: What advice would you give to your younger self? Relax and enjoy the ride. I was so

much control over the process. It hasn’t been smooth sailing, but I never quit. I found that some of my best decisions were made in times

We truly embrace our brand promise

serious as a young professional;

and company culture of treating

always focused on the “next step”.

everyone we work with like they are

As a young woman, I methodically

part of our family. I take pride in

planned

graduation,

some small way – both personally

making a home-cooked meal for our

getting hired into my first corporate

and professionally. I still like to be in

team. It’s a labor of love and a small

job,

control, though, so let’s just call this

token of my appreciation for all they

“perfect” guy, having a baby, working

do. I hope they know how much I care about them (and their families) and how valuable I think they are to our success.

finding

college and

marrying

the

towards the next promotion. And then, in my late 30s, it all came crashing down. After divorce, I lost almost everything I had worked so

Q: What has been the highlight so far in your career? Everything

–

this

business

has

become my baby. I can’t say one thing stands out, but for me personally – the less business-oriented one – was the challenge and struggle of building a business with my life partner. We never planned on spending so much time together and certainly didn’t think our business would grow to become what it is today. I’d be lying if I said it was kittens and rainbows all day long. The reality is that we

hard for. But now, I’m far better off

emotionally,

personally,

and

professionally than ever before. I would never have had such clarity without losing it all and deciding afterwards to just let it all go and enjoy the ride for once in my life. All the planning in the world does not always mean you’ll create success. The funny thing is none of ours was planned! I certainly never planned on starting my own business, and we never planned on growing as fast as

of crisis. The establishment of Flynn Family Lending has saved me in

a work in progress. Q: What piece of advice did you personally receive early in your career that has helped shaped decisions you’ve made? One thing that still resonates with me every day occurred at my first job out of college. I was an advertising coordinator for the Home Depot, which was my first exposure to corporate culture and values. One of the core values was “Do the Right Thing”, which is such a simple phrase – vague enough to mean anything, but strong enough to compel you to act accordingly. To this very day, I strive to do the right thing – for my team, for my family, for my borrowers and

we did. I never thought I would be

investors, for my community. I don’t

enjoyed the fruits of our labor the

helping others achieve generational

always make the right choices but

first year and after that it was a real

wealth through real estate and be

it’s my Northern star and a guiding

issue trying to handle the growth

an influential part of the local real

principle in all I do.

Q: Tell us about a person or

Q: How have you turned a career

lack of housing remains an evergreen

organization you admire. How

mistake or failure into success in

headline the industry. The need for

have they made an important

your career?

alternative

impact on you, the industry, or

Though I don’t necessarily consider

the world?

is a mistake or failure, I think my

This is a bit cliché, but I would say my

overzealous career planning made it

parents. They taught me as a young

difficult for me to see opportunities

kid that you won’t get rich working

beyond myself and my defined goals

a day job. Mom would read Money magazine in her recliner and tell me about what she learned in hopes of instilling personal financial acumen. My dad was a woodshop teacher, and on weekends and summers he would flip houses way before the term “flipping” was even coined. I learned the art of the side hustle from them. Mom stayed at home, and she taught me to take care of those I loved first, and then business comes second.

at the time. I really had no idea I had it in me to run a small business and, to be honest, I didn’t desire to. This accidental journey I’m on has given me so much personally and really allowed me to blossom. Q: What do you predict for

gotten into the real estate business if it wasn’t for them.

Q: If you had a clean slate to start over and do anything you wanted to do, what would that be? Absolutely nothing. I believe in the butterfly effect and that if I had the ability to change a part of my past, it could alter where and who I am now. That’s not something I’m willing to leave up to chance. I love where I’m at now and my battle scars are what gives me depth.

remembered? What have you

and beyond?

done to cultivate that feeling

As mentioned earlier, I try not to foresee, plan, or predict the future as I’m trying to live in the moment and

and lender. I would never have

solutions will remain strong.

throughout the end of this year

comes to real estate that I don’t see

made me a better real estate investor

lending

Q: How do you want to be

it hasn’t served me well in the past.

served me well over the years and

creative

the future in private lending

My dad taught me intuition when it as much today. These lessons have

and

solve each day’s challenges head-on and celebrate each success – however big or small – for what it is. But, if I had a crystal ball, I think we’ll see

from others? I want to be remembered as someone who cared deeply and gave back to others. I cultivate this with others by listening actively, being authentic and

vulnerable,

and

showing

empathy. For my team, I embrace the role of a servant leader and for

a lot of growth in this sector. Real

my family and friends I try to do

estate continues to be hot all over

small acts of service, so they know

the country and affordability and

I’m always thinking of them.

CONTACT: beth@flynnfamilylending.com

SHARE YOUR STORY! If you would like to be our next featured Industry Spotlight, reach out to us at: submissions@originate.report

April 2021 Originate Report 37

INNOVATIVE COMPANY FEATURE

Builders Capital-What’s in the Secret Sauce? By Charles Peckman, Contributing Writer for Originate Report

uilders

Capital

views

“Acting as an extension of a borrower

build extend all the way through a

themselves as an extension

or lender’s team,” Curt said, “is at

project, and we’re going to be with

of your team. With offices

the forefront of the Builders Capital

those borrowers every month as they

around the country and headquarters

mantra. In a world that is ‘awash

complete their draws and get their

located in Seattle, Washington, the

with capital,’ it is essential to value

project to the finish line. Our team is

customer relationships, innovation

there, side-by-side, to troubleshoot

in the real estate space, and invest

hiccups that come down the pipeline

in technology that extends outside

so that once a project comes to

the ‘basics’ required to complete

fruition, they can move to the next

a transaction.”

project and see their business grow.”

“As much as it’s about that initial

Builders

group offers a wide range of loan programs for builders, developers, and real estate investors. To better understand ‘secret

the

Builders

sauce,’

including

Capital how

the group has grappled with the COVID-19

pandemic,

Originate

Capital

across

the

product, the programs we put into

numerous

Report sat down with Chairman and

place, it’s only the critical first

country and provides loan programs

Founder, Curt Altig.

step,” he said. “The relationships we

in states that differ significantly

markets

operates

More important to Curt, however,

people enjoy coming into work,

than the strategic placement of

there is a camaraderie in place that

personnel

allows people to work with each

bringing personal attention – the

other and solve any issues that may

Builders Capital touch – to every

come up. We want to deliver on our

customer relationship. This includes

brand promise, and there’s a culture

having boots on the ground across

in place where it’s safe to encourage

the country and encapsulating a

suggestions – every person, by

pledge

invest

commitment

technology.

Curt admitted that at times, the lending industry relies on ‘arcane technology’ to complete deals, but in today’s fast-paced, technologydriven marketplace, it is essential to know what customers want and how to provide it. “We have around $8 million invested in our technology platform,” Curt said. “You will be hard-pressed in regulation, requirements, and infrastructure. Though some lenders may view this as an insurmountable challenge rife with headaches and

to find that sort of commitment elsewhere in the lending world. We realized early on that selecting a product off of the shelf would not work, so we doubled-down on

complications, Curt said that his

our commitment to implementing

group works to streamline processes

our platform into the backbone of

using the latest technology and a

our business.”

much more subtle element, the team that sees deals to their completion. “Our

borrowers

are

interfacing

with us at least once a month, so they have long forgotten what the rate and fee is,” he said. “Outside of our operation hub in Seattle, for example, when someone is making a

“A core component of this platform,” he said, “is serving as a one-stopshop for lending professionals from across the country. But paired with this platform, is an element that is

themselves, doesn’t have all the answers. We’re a team.” Curt added that a critical component of Builders Capital’s success is its ‘extremely flat’ organization. He said that you won’t find ‘layers of hierarchy’ like other organizations and that all team members roll up their sleeves to see a project to completion. Looking

forward

coronavirus

economy,

post-

Curt

said

that Builders Capital is continually looking for new markets to grow into, adding that the ‘big, audacious goal’ is to be the largest private construction lender in the country. “We are squarely pointed in the direction

continued

growth,”

he said. “We are building our team, investing in technology, and continuing to secure deals that

‘make or break’ for any organization,

fully encapsulate the breadth of our

the culture.”

experience and expertise in this space. I couldn’t be prouder of the

“Make no mistake – our team works

way our team has dealt with this

very hard, and there is a high

situation, the pandemic, and I think

we have people placed strategically,

expectation for performance and

we will emerge from this period

who are familiar with the area, so

execution. At the same time, there

ready to roll up our sleeves and get

deals can be completed on schedule.”

is an environment in place where

to work.”

loan in Orlando, we make sure that

CONTACT: https://builders-capital.com/ April 2021 Originate Report 39

INNOVATIVE PRODUCT

The Machines Are Going to Put You Out of Business: Automate or Die By Nema Daghbandan, Esq., Geraci LLP

n my first year of practice, my

pessimistic futurist proclamation.

Clients would send us deal terms in

now business partner Anthony

Boy was I wrong.

an e-mail and I would get trained

Geraci said to me, “Nema, in ten

from a senior attorney about which

years technology is going to make

I started practicing law in 2010.

documents we should use in the

transactional attorney jobs obsolete.

Similar to now, I was preparing

form bank based on the type of deal

Legal Zoom has already started

loan documents. Back then, we had

that was in front of me. In each

removing

corporate

a form bank of documents that we

loan folder there were usually 10-

work, and they are going to keep

would use when preparing a set of

15 Word documents which together

advancing and eventually put us

loan documents. There was a Word

made up the loan. We worked with

all out of business.” At the time, I

document for the Promissory Note,

a handful of clients and typically

dismissed his assertion as an overly

another for the Deed of Trust, etc.

charged about $600 for a set of

entry-level

including one set for a loan with a

funds who started calling me to let

personal guaranty, another when

me know that they were planning on

there were two borrowers, etc.

making loans outside of California in

Better yet, I figured out how to use

order to keep their interest rates up

an Excel mail merge process where

for their investors. They wanted our

I could code various fields such as

law firm to prepare loan documents

the borrower’s name and property

with the help of local counsel to

addresses. I would complete the

make sure that the documents were

coded fields and then VOILA! Loan

enforceable in each state in which

documents were 70% complete by

they were lending. I was really stuck

the time I filled in the Excel sheet.

from an efficiency perspective. I

We were not a law firm, we were

had no way to keep a form bank

becoming a tech company! Or so I thought.

and making sure the documents

In 2014, I tried increasing our fee to prepare loan documents to $1,200 and for the first time started to see opposition from our clients. They were explaining to me that interest rates were going down, more market competition was present, and that borrowers

were

becoming

fee

sensitive. At the same time, we were growing as a law firm and in order to retain the top talent, we needed to increase the salaries we were paying business purpose loan documents.

our attorneys to prepare documents.

The process took about 3-5 business

I found myself in a bit of a pickle.

days

Worse yet, we had hit a scale and size

and

everyone

was

okay

with that.

where we were handling so many

Each year, we gained more and

re-using old loan files to try to gain

more clients, started hiring more attorneys, and tried to figure out ways to become a little faster at what we were doing. As is typical for a law firm, we would increase our billing rates, first to $775 for loan documents, then $800, then $1,000. Instead of multiple different Word documents, I put my law degree to great use and formatted a few

of documents with all these states

transactions that attorneys were speed, but in the process, they were making mistakes by not clearing out old transactional data. Our clients were rightfully upset. No one wants to pay for an attorney who produces poor work product.

were updated. We were constantly revising documents each time we entered a new market, and often times updating them again when we re-entered a state based on a recommendation of outside counsel. I was named partner at Geraci LLP in December 2015. At the time there were six attorneys on my team including me and a new reality set in. Clients demanded loan documents be produced cheaper, faster, and with no errors. There is an old saying that you can only ever get two of these three: Cheap, Fast, or Good. I was now tasked to produce all three, and if I couldn’t, we would no longer have jobs. One of our clients requested to purchase a set of template loan documents from us. He asked if I could code them using a free online tool. I told him that I didn’t know

I didn’t know it then, but the World had changed, and we were in a fight for our survival.

different loan document sets which

During that time period, our clients

would cover different loan scenarios,

were primarily California mortgage

what the tool was and could not help. Instead, I kept trying to figure out how to maximize using mail merge and other Excel based tools in order Automate or Die: Continues on pg. 42

April 2021 Originate Report 41

Automate or Die: Continued from pg. 41

to try to reduce drafting time for loan documents. The problem was that loans were becoming exceedingly complicated. Gone were the days where there was a single borrower, with a single principal signing loan documents. We were dealing with complex entity structures,

complex

deal

terms,

multiple properties, and multiple states, making basic automation useless.

Instead

being

70%

complete by the time we were done

sentence structures based on the

due to lack of complexity, (4)

conditions we were programming.

performed by a remote attorney at

We were beginning to build loan

a cheaper labor rate, or in the worst

document automation software.

case scenario, (5) performed by an

From 2015 to 2017 we pushed the software to its limits. We hired outside

consultants

who

would

code our documents, started coding custom client conditions directly into the loan documents, and began

attorney on your payroll locally. He rightfully noted that clients would continue to push down fees and lawyers would need to only focus on tasks that require a high degree of skill: strategy, negotiation, and

The problem was that loans were becoming exceedingly complicated. Gone were the days

with the Excel file, we were at best

where there was a single borrower, with a

25%. We were becoming Good but

single principal signing loan documents.

not Cheap or Fast enough. One Sunday I was playing catch up as I often had to do, and I remembered

to see the fruit of our labor. We were able to keep our prices down and

my conversation with my client

were delivering work product that

about the free online tool he was

was fast and high quality.

tactics. Anything repeatable would not be done by an attorney; better yet, anything repeatable would not be done by humans at all.

using. I went to the company’s website and spent the next several

Then in 2018 I read a book called

hours watching tutorials and various

Tomorrow’s Lawyers by Andrew

videos of how the software worked.

Susskind. The book talked about

Unlike

you

automation, artificial intelligence,

needed to use different document

machine learning, and a bunch of

sets for different loan scenarios,

other buzzwords that I had heard

the software permitted a user to

but knew little about. The author’s

start using conditions. For example,

basic premise was that the lawyers

I could write a condition which

of tomorrow would only do three

stated that if there was no text

things:

entered into the “Guarantor” field,

negotiations. He also discussed how

2. Obtain documents from the client

then the document stack should not

you should take most job tasks and

such as operating agreements,

produce the Guaranty. Better yet, it

then break them down into their

articles of incorporation, title

would modify the recitals in other

most basic units and determine

reports, and other documents

documents to remove any reference

whether the task could be: (1)

(could be done by someone who

to a Guarantor. While this may sound

performed by software, (2) offshored

is skilled enough to understand

easy, it was in fact revolutionary. The

to a non-attorney for almost no fee,

what documents are necessary

software was dynamically changing

(3) performed by a non-attorney

and why, and have an ability

mail

merge

where

strategy,

tactics,

and

I then started to think about how these principles applied to my area of practice. To prepare a set of loan documents, I need to: 1. Obtain the terms from the client (could be done by software if we can either tap into a client’s CRM system or have them enter terms online).

to read through the documents

wanted us to perform so they could

we’re not stopping anytime soon.

control costs and purchase only what

But

they wanted.

forbearances, loan sale agreements,

understand

there

are

deficiencies). 3. Analyze the documents provided to determine signature authority, determine what form of title policy is correct, determine what types of title endorsements the loan should have, and determine whether the loan was compliant from a regulatory and statutory perspective skilled

(needs

attorney

highly

someone

4. Input the terms into software to generate the documents (could likely be outsourced to a cheap labor source). 5. Produce the documents using software. the

automated online loan documentation system called Lightning Docs. A client can go online, enter loan terms, and instantaneously receive the same loan documents that we

documents

make sure they are complete, compliant, and match the client’s

about

private

placements,

litigation pleadings, and all other legal documents? If it’s repeatable, it’s automatable.

house. The deals can have multiple

update a Word document when

borrowers,

properties,

issuing a Letter of Intent? Are you

penalties,

interest

impounds,

complex

the only person who is technically

multiple

holdbacks, entity

structures,

membership

construction,

pledges,

collateral

security agreements, and a myriad of other complex drafting features and yet be downloaded instantly. We offer this as a standalone service to

trained to perform each and every task that you perform at work? If not, you may not realize it now, but you’re fighting for your survival as well. We are just scratching the surface of what software can produce and if

our clients for as little as $200 per

you are not harnessing technology

loan file.

and breaking down every task into its basic units, you are on the wrong

attorney based on complexity).

at the company. At any given time, Up to this point, we had attorneys

performing all six tasks above. We

outside technical vendors including

immediately

web

working

with

developers,

and

coders,

and

external

document

automation software, and began

workflow

consultants

create

better

numerous

internal

processors, purchased best in class furiously coding and re-engineering

What

any task daily? Do you manually

focusing on advancing automation

loan

and other loan-related agreements?

the same automation we use in

produced

Now I spend most of my time

several

modifications,

But what about you? Do you repeat

have

desires (requires a highly skilled

hired

about

using

would

prepayment

trained by an attorney).

6. Review

Today, we have built out a fully

what

loan

try

document

side of history. Technology is great – it lets us perform tasks in less than an hour which used to take us 6-8 hours. But here’s the thing: someone with technical skills is looking at your job right now and figuring out how to do it cheaper, faster, and better.

the way we practice law.

solution. We built a best in class

I looked at the task list above and

solution that produces thousands

Maybe Anthony wasn’t so crazy

of loan documents per month, and

after all.

nationwide online loan document

started breaking down the time and expertise and stopped thinking about

the

preparation

loan

documents as a single task which cost around $1,000. Instead, it was six distinct tasks and we needed to be able to offer our clients the ability

ABOUT THE AUTHOR: Nema Daghbandan is a Partner with Geraci LLP. He primarily representing lenders, brokers, and loan servicers nationwide. His practice revolves around the preparation of documents and providing compliance advice. Mr. Daghbandan also possesses a deep expertise in loss mitigation and advises in the management of defaulted loans nationally. CONTACT: nema@geracillp.com | https://geracilawfirm.com/

to pick and choose which ones they April 2021 Originate Report 43

Reliable. High-Quality. Efficient. Flexible. We’ve developed a personalized and streamlined online interface that empowers clients to harness best-in-class technology to prepare attorney-grade loan documents. In a marketplace riddled with smaller loan transactions that cannot accommodate full-service legal fees, Lightning Docs is your go-to instant loan document software.

WHAT WE OFFER Easily Customizable for Client Needs Easy to Access and Copy Old Files

Artificial Intelligence Meets Custom Loan Documents

Prepares SFR, Multi-Family, and Commercial Real Estate Loan Docs

Prices Starting as Low as $200 Per Loan

Creates Construction, Rental, Bridge, Fix and Flip, Perm and Mini Perm Loans, and Many Other Product Types

No Upfront Costs and No Contract Period

ARM, Interest-Only, Partial Amortization, and All Other Types of Amortization

No Re-Draw Fees Log on from Your Desktop, Laptop, or Mobile Device Documents Available in All 50 States

90 Discovery Irvine, CA 92618 | (949) 379-2600 | https://lightningdocs.com/

Private Lending Lessons is a Facebook community for people who are new to private lending or want to network with others in the private lending space. Learning where to start, the right questions to ask, the resources you might need, and the key steps to help mitigate your risk are crucial to your success as a private lender.

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THANK YOU TO OUR EVENT SPEAKERS Ani Kamikyan, LBC Capital Income Fund, LLC Ani Kamikyan is an analytical and result-driven underwriting professional with expertise in assessment of the risk of the real estate, entities and guarantors, project income analysis. She possesses a high-level knowledge of entire loan underwriting process. Moreover, Ani not only underwrites the files, but she frequently does property inspections and borrower loan signings. Ani is also an expert in the secondary market for mortgage notes to be sold at the secondary market. Ani holds a Broker’s license from the Department of Real Estate, MLO license from Nationwide Mortgage Licensing System and Registry and a notary license. Prior to joining LBC Capital Income Fund, LLC, Ani worked as a banker at US Bank. https://lbccapital.com/ Bobby Khorshidi, Archway Capital Bobby Khorshidi is President and CEO of Archway Capital LLC, where he manages the firm’s expansion and credit decisions. Archway Capital provides bridge debt and equity to Commercial Real Estate sponsors nationwide. The firm operates its business thru a series of discretionary funds that it manages, focusing primarily on lower -middle and middle-market transactions. The firm’s products include traditional bridge debt, structured subordinate financing, Preferred/Co-GP equity, and whole loan acquisitions. The principals of Archway Capital collectively manage over 7B in assets. Bobby has more than 20 years of experience in various real estate investment and management areas, both as a lender and investor. His expertise includes purchasing and restructuring non-performing loans, originating, and underwriting real estate loans, and investing in CRE as an operator. Bobby started out his career and spent a decade as an underwriter, loan officer and manager at Wells Fargo Bank, where he was responsible for funding more than $1.5 billion in loans. Bobby’s civic activities includes his appointment to the Board of Advisors of UCLA Mattel Children’s hospital and his involvement with Chai Lifeline. He is big fan of MLB and always rooting for the Dodgers. He lives in Los Angeles with his wife and 3 children. https://www.archwayfund.com/ David Chen, Esq., Activist Legal David Chen is a Partner with Activist Legal, LLP, and has represented national banks and institutional lenders in foreclosure, bankruptcy, and eviction matters for over ten years. Based in the District of Columbia, Activist Legal, LLP facilitates legal services in the areas of real estate, mortgage, banking, and private investor transactions for non-performing loans and assets. The firm provides centralized access to default law firms, allowing servicers and private investors to manage defaulted assets nationwide. Activist Legal maintains relationships with creditor’s rights law firms in all 50 states, including Puerto Rico and the Virgin Islands, to provide effective and cost-conscious foreclosure, bankruptcy, eviction, and other default-related services. https://activistlegal.com/ David Christensen. Red Oak Capital Group David has over 35 years of commercial mortgage experience encompassing a range of refinance, construction, acquisition, mezzanine debt and joint venture equity activity. He is a designate member of CCIM as well. David joined Red Oak Financial in January 2021 and serves as Regional Manager, Northwest division. David is based in San Francisco and will be responsible for leading commercial real estate loan origination efforts for the firm’s bridge lending programs, encompassing deal analysis, underwriting, as well as structured financing. https://redoakcapitalgroup.com/

Emil Khodorkovsky, Forbix Emil Khodorkovsky is the founding partner of Forbix Financial, which is a direct HUD lender. Forbix also offers all types of commercial loans, including bridge, acquisition, refinance, and CMBS loans. In addition to being a lender, Emil has developed and owned more than 1,000 apartment units nationwide. This gives him the unique perspective of being a lender, owner, and developer. Whether he is talking to a client about their first commercial investment or a seasoned developer, he gives everyone the same attention. It is his unique background in both lending and real estate investment that has proven to be invaluable to his clients. He lives in the San Fernando Valley with his wife and son and founded a non-profit organization to foster entrepreneurship among children. https://forbix.com/ Eric Abramovich, Roc Capital Eric Abramovich is the Co-Founder and Chief Credit Officer of Roc Capital and has pioneered its Residential Private Lender Program which has contributed in originating over $3 billion in loans. Previously, Mr. 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. Mr. Abramovich holds a B.A. in Finance and Actuarial Science from the Stern School of Business at New York University. https://roccapital.com/

Grace Soueidan, Temple View Capital Ms. Soueidan is the Chief Lending Officer of Temple View Capital, and is responsible for risk management, funding and underwriting operations and information technology. Ms. Soueidan brings to this role over 30 years of mortgage industry knowledge. Prior to joining TVC, Ms. Soueidan was Head of Single Asset Lending at CoreVest (a Colony Capital company) and held the positions of Chief Operating Officer, Chief Administrative Officer and Chief Lending Officer at various financial and banking institutions, including FirstKey Lending, Peak Corporate Network and IndyMac Bank. Ms. Soueidan earned a BA Degree in Business Administration from Beirut University College. https://www.templeviewcap.com/ Greg Hebner, Arixa Capital Mr. Hebner serves as Arixa Capital’s Managing Director and Portfolio Manager. In this capacity, he has primary responsibility for investment strategy, originations and operations of the Firm’s verticallyintegrated lending platform. Mr. Hebner brings over 20 years of real estate experience having invested in more than 1,600 transactions deploying over $1.7 billion in capital on behalf of investors and partners. Prior to joining Arixa, he was Founder and Chief Investment Officer of Community Rebuild Partners , a California-based real estate development firm that acquired, renovated and sold residential real estate properties. https://www.arixacapital.com/ Jeb Mason, Mindset Jeb is a Partner at Mindset where he has spent the last ten years building the firm's diverse and successful advisory practice. Jeb is a highly adept policy strategist, sought after for his expertise on housing finance policy, financial regulatory reform, and complex financial market problems with a nexus to Washington. He advises mortgage market participants on the policy landscape with an eye toward the technology and regulatory transformation taking place in housing finance markets. He also specializes in helping institutional investors, global brands, and startups navigate risks and capitalize on opportunities in today's dynamic public policy environment. https://mindsetdc.com/ John Beacham, Toorak Capital Partners John is the CEO and founder of Toorak Capital Partners, the largest correspondent capital provider to the private real estate lending industry. Prior to Toorak, John was the founder and president of B2R Finance, a leading single family rental and residential bridge loan originator. He also led Deutcshe Bank’s SFR lending initiative, where he structured the first-ever SFR securitization and originated more than $5 billion in SFR loans. In total, John has completed more than $50 billion in transactions and has structured financings which won CMBS or structured finance “Deal of the Year” awards four times. https://www.toorakcapital.com/

Kendra Rommel, Civic Financial Services A mortgage professional of over 20 years, Kendra, began her career at the tail end of the savings & thrift crisis in the 90’s. She was only 17 when she began as a loan officer working for Coast Security Mortgage. Her desire to learn more, lead her through her many successful years in operations as a processor, funder, post closer, & operations manager in organizations across Orange County, CA. Kendra’s most recent 12 years has been spent in asset management, capital markets, & private lending. She holds multiple state originator’s licenses & regularly attends industry training to stay ahead of industry news. https://www.civicfs.com/

April 2021 Originate Report 47

Mark Hanf, Pacific Private Money Mark Hanf is CEO of San Francisco Bay Area-based Pacific Private Money Inc., a full-spectrum alternative real estate loan provider to consumers and investors in California. Mark’s real estate career spans over 35 years, including 25 years in commercial development and management, and 13 years in private lending. https://www.pacificprivatemoney.com/

Mitch Ohlbaum, Macoy Capital Mr. Ohlbaum is a licensed real estate broker and loan officer with more than 23 years of experience in the industry. As President of Macoy Capital Partners, he is responsible for business development and loan acquisition for privately funded, commercial, and construction loans, including ground up and fix and flip construction. Recognized as a leader within the real estate and lending industries, Mr. Ohlbaum has been featured as an expert in the media including appearances on CNBC as well as dozens of interviews in major publications including: The Wall Street Journal; Business Week; LA Times; and the LA Business Journal. He is also a longtime and weekly contributor to the rate trend index Bankrate.com. https://www.macoycapital.com/ Noah Brocious, Capital Fund 1 Noah is a principal and the President of CFI which was founded in 2009. 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 having experience in private lending as well as residential and commercial development. Noah lives in Scottsdale with his wife, Jenna, and their 5-year-old son, Bear. https://capitalfund1.com/

Paul Cardon, Bench Equity Paul D. Cardon is a principal of Bench Equity, LLC, a private money lending company headquartered near Phoenix, Arizona. Bench Equity originates and services its own loans as a portfolio lender, and as of early 2021, is quickly approaching $1 billion in loan originations. Paul began his professional career as an attorney at a Phoenix law firm focusing his practice on real estate litigation where he represented lenders, borrowers, landlords, tenants, sellers, and buyer in resolving real estate disputes. In his current role, Paul oversees Bench Equity’s lending operations and investor relations. Paul’s greatest joy stems from his family—his wife and six children. https://benchequity.com/ Paul Rahimian, Parkview Financial Paul Rahimian manages a national debt fund that provides construction financing to ground-up real estate development projects. He founded Parkview Financial in early 2009 and has since originated hundreds of commercial and residential loans, always plying his trademark, hands-on management style. He has been widely recognized as an industry pioneer as he was one of the first to offer complete integration of loan origination and servicing under one roof. Prior to becoming a lender, Paul was a third-generation real estate developer and general contractor. Between 1988 and 2009, he successfully completed over $350 million in commercial and residential projects. His vast expertise and knowledge in the construction and development industry has benefited both Parkview and its borrowers. Paul received his bachelor’s degree from UCLA in Business/Economics and his Juris Doctorate from USC. https://www.parkviewfinancial.com/ Peter Steigleder, Fidelity Mortgage Lenders Inc. Peter Steigleder, Chief Operating Officer of Fidelity Mortgage Lenders, Inc., and Co-Founder of Hudson Commercial Partners, Inc. brings with him 27 years of finance, commercial real estate and economic development experience. Peter served as Director of Economic Development for the German Consulate General in Los Angeles. In 1999, Peter began his real estate career at Beitler Commercial. In 2006, Peter joined Lee & Associates where his consistent status as one of the company’s top producers quickly elevated him to Principal status. In 2009, he joined Delphi Business Properties as a partner before founding Hudson Commercial Partners. https://fidelityca.com/ Randy Newman, Total Lender Solutions Randy is the founder and CEO of Total Lender Solutions, a foreclosure trustee representing lenders in Arizona, California, Nevada, Oregon, and Texas. An attorney licensed in New York for over 30 years, he specializes in complex commercial foreclosures. He frequently contributes articles and is a highly rated speaker on topics surrounding default and foreclosure. Randy is the current president of the United Trustees Association, the national trade organization for foreclosure trustees. https://totallendersolutions.com/

Ryan Craft, Saluda Grade Ryan Craft is the Founder and CEO of Saluda Grade, and has spent his entire career focused on mortgage-backed securities and securitized products. Most recently, Ryan was the Head of Securitized Product Sales at Baird, where he built out a fully bolstered sales and trading division by hiring over 25 new salespeople and adding multiple new trading and banking businesses. Mr. Craft began his career at Merrill Lynch as a Non Agency and Subprime RMBS trader through the 2008 financial crisis. After the BofA acquisition, he traded the ABX and CMBX credit default swap indices mapping Subprime and Commercial mortgages. After transitioning to Securitized Product sales, he was recruited to join Royal Bank of Canada after becoming a top producer across Bank of America’s Global Fixed Income division. Mr. Craft earned a BS in Finance & Management from Georgetown University, where he captained the Hoyas baseball team and earned First Team All-BIG EAST honors. https://www.saludagrade.com/ Sam Chivitchian, Secured Capital Lending, Inc. “Sam” Sarkis Chivitchian is the CEO and founder of Secured Capital Lending, Inc. Sam is a private investor and real estate broker who specializes in private lending and has originated and closed over 1000 real estate transaction in the last 15 years . Sam was nominated as the broker of the year at the 2020 National Hard Money Lending Conference at the Pitbull event. Sam also is a former professional MMA fighter and a former Judo National champion who fought for the UFC and is a judo black belt. https://securedcaplending.com/

Sarper Beyazyurek, Churchill Real Estate Sarper Beyazyurek is a Managing Director of Churchill Real Estate. Prior to Churchill, Sarper was at Wells Fargo Securities, where he managed the $10B Mortgage Finance Whole Loan portfolio, overseeing the analysis, valuation, and pricing for nonperforming, re-performing, and REO assets. Sarper holds a B.S. in Economics and Finance from Marmara University in Istanbul, Turkey and a M.S. in Information Technology with a concentration in Finance from the University of North Carolina, Charlotte. https://www.churchillre.com/

Scott Rerucha, Legacy Group Capital LLC Scott is the CEO and a co-founder of Legacy Group Capital (LGC). Scott is a mortgage industry veteran possessing over 27 years of experience. From 2006 to 2014 Scott was the President & CEO of Legacy Group Holdings. His leadership saw Legacy Group Holdings become the 35th largest real-estate lender in the country. Scott’s industry experience and leadership will be instrumental in leading Legacy Group Capital to long-term growth and success. https://legacyg.com/

TR Hazelrigg IV, Avatar Financial Group T.R. Hazelrigg IV is the co-founder and President of Avatar Financial Group. His responsibilities include loan origination and credit analysis as well as structuring Avatar’s national debt strategies. With over 25 years in the structured finance industry, Mr. Hazelrigg has built a vast network of real estate brokers, appraisers, mortgage brokers, investors and even competitors that provide Avatar with consistent high quality loan volume. In addition to these responsibilities, Mr. Hazelrigg is instrumental in raising both institutional and family office capital for the company. His vast experience is an essential asset to all aspects of Avatar’s portfolio management. https://www.avatarfinancial.com/ Zachary Streit, George Smith Partners Zachary D. Streit works as part of a team that has closed $2.5BN in debt and equity structured financings in the last three years across a broad array of real estate transactions. He has significant experience arranging and closing land, construction, bridge and permanent financing across all commercial property types. Zachary’s clients recognize him for his relentless focus on execution and responsiveness. Zachary has more than a dozen years of real estate experience, including 5 years as a capital advisor, 5 years of experience as a principal lender and 3 years as an equity investor. Prior professional positions include: Managing Director of Originations for Anchor Loans LP; Vice President of Originations at Colony American Finance, a Colony Capital subsidiary; Founder and President of Streit Lending; and Investment Associate, Aviva Investors’ Global Real Estate MultiManager Group. Zachary has a Master of Science in Real Estate Finance from New York University, a Juris Doctorate from the Benjamin N. Cardozo School of Law and a Bachelor of the Arts, Summa Cum Laude, in Political Science from Yeshiva University. Zachary remains involved with his alumni associations. https://www.gspartners.com/

For More Information About Our Conferences & Events: Ruby Keys • (949)379-2600 • r.keys@geracillp.com • https://geracicon.com/ April 2021 Originate Report 49

Your journey to private lending industry data begins here. AAPL has launched the industry’s first benchmark data survey from an impartial organization. The quarterly survey gathers information on everything from origination volume to loan terms and foreclosure rates. Respondents receive FREE aggregated and anonymized results on a quarterly basis, providing a national and regional snapshot of the private lending industry.

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GERACI L AW - M E D I A - C O N S U L T I N G

WE PROVIDE PEACE OF MIND Geraci LLP is a law firm, media, and consulting company that caters to the non-conventional lending space. We are the “go-to” provider for all lending-related matters and are your resource to help you grow your business.

OUR SERVICES CORPORATE & SECURITIES • Securities Offerings and Compliance • Entity Formation

• Corporate (Governance, M&A, Capital Marketing) • Mortgage Licensing

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• Documents Constantly Updated and Approved by Local Attorneys • Available in all 50 States

• No Re-Draw Fees, Upfront Costs, or Contract Period

BANKING & FINANCE • Foreclosure/Loss Mitigation GERACI

PREPARE YOURSELF CONSTRUCTION LOAN CONSIDERATIONS FOR PRIVATE LENDERS

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• Nationwide Loan Documents

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Originate Report - April 2021

Articles inside

Peter Steigleder, Fidelity Mortgage Lenders, Inc

Trusted Partnerships

Legacy Group Capital: Creating a Culture of

Soft Money: Is It the New Hard Money?

The CIVIC Difference: Institutional Backing

Private Lending Titans

Renovo Financial: Innovative Customer Service

By Emily Rappleye, Contributing Writer for Originate Report

Temple View Capital: Private Lending ‘Born of Innovation

Armanino LLP: Pioneering Digital Asset Assurance