[INTRODUCTION]
Kevin Kim: You are listening to Lender Lounge with Kevin Kim, a podcast dedicated to helping those in the private lending industry grow, improve, and streamline their business. I’m Kevin Kim, partner at Geraci LLP, the nation’s largest private lending law firm. Join me as we chat with the best and brightest in private lending who are eager to share their years of wisdom and best practices with lenders, borrowers, brokers, investors, and more. Subscribe to Lender Lounge on your favorite podcast platform and learn more about Geraci and how we can work with you at geracilawfirm.com. Check out the episode summary for other valuable resources.
[INTERVIEW]
Kevin Kim: Hey guys, welcome to another episode of Lender Lounge with yours truly, Kevin Kim. Today, I am honored to have a guest that I can consider a close friend. And we’ve been involved in her career since the inception. And so I’m pleased to announce that we have Brianna from Cardinal Capital on the call today on the podcast. Briana, please introduce yourself to our audience and we will get started.
Briana Hildt: Thanks, Kev. Yeah, Brianna Hill. And I am the CEO and founder of Cardinal Capital Group. We are based out of Boston, Massachusetts.
Kevin Kim: Now, Cardinal Capital is – I mean, in Massachusetts, it’s become a household name. You guys are on everyone’s lips now. Every client I talk to in Mass is talking about you guys. But let’s take it back a little while because, Briana, you’ve had quite the career in private lending. I’ve known you for years now. And I always reference you guys, and you personally, to a lot of what we call emerging lenders, new market entries, as a really good example of what’s possible.
Briana Hildt: Thank you. And very rarely do I get an opportunity to sit with someone where I’ve been part of their business from inception, right? And so I really want to make sure that our audience gets a deep understanding of who you are and your journey in our industry. Because I remember way back when, you weren’t even a lender. Let’s take it back a few years and let’s get started. Tell the audience about your career in our industry and let’s get started with the inception of Cardinal and all that stuff.
Briana Hildt: Thanks, Kev. Yeah, I mean, I have been in the lending industry now for 10 years and actually longer than that. I started in asset management back in 2012, I believe it was. I was living in California. That’s where I met you guys. Tried a little bit of everything. Got my real estate license. Was working in foreclosures and trustees and then I ended up at a local San Diego private money lender’s office. I was just helping them with some marketing and trying to understand the industry more. And that’s where I kind of learned this sector of the business and just being transparent. It was a lot more exciting to me than foreclosures and just residential real estate. I decided to start brokering some loans.
Obviously, in California, private money was, even back then, popular. But where it was not was on the East Coast. Also just kind of organically going back to the East Coast for holidays and things like that, I started to understand that market more and noticed that there was a bigger need for private lending out there. So I started to kind of broker some deals to some of the bigger California lenders. Got to know their products and understand where they were thriving. And then just honestly, I was bicoastal for a while doing loans on both coasts. And then as I started to understand the market more, I saw a much bigger need on the East Coast. And so eventually I kind of took my career East, and that was where really the switch from being a broker to creating Cardinal and curating that kind of happened.
And I’d say one of the benefits of being a broker for a while was that I got to see what products were working and what products weren’t working. What bottlenecks certain lenders were having versus what they were really excelling at? And I kind of took notes. And when I was creating Cardinal, I really wanted to build something that was really client-facing and really like a product that was needed, essentially. And so that was kind of one of the main drivers to go off and start cardinal, essentially.
Kevin Kim: Right. And you were one of the early market entries into Massachusetts from what I would call more of a – I would say deeper underwriting institutional approach into the asset class.
Briana Hildt: Yep.
Kevin Kim: And, I mean, would you credit that to your experience in California? I mean, because the saturation comparatively, right? The market’s a lot bigger here in California, and the underwriting’s a lot more intense and heavily, heavily more regulatory environment.
Briana Hildt: Yeah.
Kevin Kim: How did that help you translate to becoming a – I mean, right now, Cardinal’s primarily a Massachusetts lender, right? Most of your volume is there?
Briana Hildt: Oh, yeah. Northeast. I mean, we’re picking up volume in the other states in the Northeast. But yeah, Boston, Massachusetts is our dominant state.
Kevin Kim: Your number one market, right? Yeah.
Briana Hildt: Yeah. I mean, I learned a lot in California, almost too much. There were certain things that I was like, “Okay, I don’t need to worry about certain disclosures and certain things and getting term sheets out and licensing. And so it was definitely more user-friendly in Massachusetts and easier to scale in that regard.
But in Massachusetts, I think – well, in California, I learned let’s just cut through the BS. Don’t re-trade me on a term sheet for a corner point with the lender down the street. I’m trying to build more sticky relationships. If I can get you these things, are you going to stick with me for a year? And that was like a skill set that made me gritty. I was like I am never going to – I’m so sick and tired of getting beat out for these little – and that was being a broker. I got my A-S-S kicked multiple times, right?
Kevin Kim: It’s a saturated market, right?
Briana Hildt: You’re right. Yeah.
Kevin Kim: Deals gets cramped on like crazy out here.
Briana Hildt: Yeah. When I went to Massachusetts, it was much more like, “Hey, if I’m going to take care of you, you can take care of me. Let’s lean on each other.” I’m not trying to be the typical – Mass definitely had a perception of hard money that was gangster.
Kevin Kim: Old school hard money.
Briana Hildt: Yeah. I was like I’m young. I have no interest of trying to hurt you. I’m trying to grow. And if I screw you on the first deal, you’re probably not gonna come back to me, right? I think I let my guard down not worrying about clients undercutting me with another lender by a quarter point. I was able to be more vulnerable with the clients. The clients were more vulnerable with me and that really created those sticky relationships. I think that’s what I can definitely attribute to my early stages of my career in California. And so that really was like a premise for what I wanted Cardinal to be, which was like I don’t want to just go take an application and do whatever loan there is. I want to identify the top guys. Be someone that they can rely on, someone that I can rely on to grow and then go about it that way, if that makes sense.
Kevin Kim: Right. I mean, today, Cardinal is ranked number two in Massachusetts. Average loan size is $2 million. You guys hit the billion mark in originations this past year. All these great milestones. And you guys are growing like crazy. And a lot of that has a credit to the foundation of the business. A lot of our listeners, they start out just like you. Many of them start out in a different fashion in the sense of like they’re table funding or they’re corresponding. But ultimately, they’re starting out one-man band, brokering deals. And a lot of our listeners are making the transition into becoming a direct lender.
And give us a little more foundational background. All right, you’re ready to start Cardinal. And I remember the calls, right? You’re ready to start a Cardinal. You must have been nervous. You must have been like, “Oh, crap. How do I do this? Right? Tell me the story behind you as the entrepreneur starting the business. Because how you approached it was very different. I remember very different than others in the sense that you really leaned on your relationships, even with us, right? I remember a lot of the phone calls were a lot of times therapy sessions, right? We’re talking about different ideas.
Briana Hildt: Yeah.
Kevin Kim: But that’s a valuable thing. And if you could expand on that and give our audience some wisdom about that initial first two years had to have been the biggest mountain you’ve ever climbed in your career. I mean, it had to have been, right?
Briana Hildt: Yeah. There was a pivotal moment for me in my career. My book of business as a broker became top in the country. I mean, I was producing 250 to 300 million in volume as a broker. And so I had a couple of shops that I was more loyal to. And of course, there was offers coming in from those shops for me to come in-house. And they were attractive for a lot of reasons, right?
If I had only had to focus on origination and not all of the other things that come along with being a CEO, and running a fund, and having years, and having capital markets behind me and all these other things, the volume could have grown and grown. But I was so big on who am I joining forces with. What company would I be with? What does that company stand for? Does that make sense?
And it was in 2020, I had a couple offers on the table. My wife was pregnant. I think I felt the pressure of like, “This is the easy route. Take the easy route. The easy route is right there.”
Kevin Kim: Stability too, right?
Briana Hildt: Yep. You’ll have a nice life. These companies are there. They’re founded. This is the way you should probably go. And not to be cinematic, but I had the pen out, was ready to sign, and it was like New Year’s Eve. And there was a conversation I had with a couple of higher-ups from some of these other companies. And I think it was their way of trying to allure me to come to them, but it actually did the opposite where they kind of alluded to like, “Come on, let’s get this going. You’re young. We have this set up. What are you going to go do? What are you going to do? You’re going to go start a fund and raise all this money?”
Kevin Kim: Oh, that’s the worst you can say to Briana. Oh, no.
Briana Hildt: Oh, yeah. What are you going to do? You’re going to start a fund and do it yourself and raise capital while –
Kevin Kim: I bet you won’t. Yeah, that kind of mentality. No, that doesn’t win. No.
Briana Hildt: Yeah. And at the time, my office was right next door to the kitchen and my wife had the New Year’s meal ready and she was like, “We have the papers,” and I was ready to sign. And I hung up from this call and I came out and she looked at me and she was like, “Ooh, I probably shouldn’t have said that to you.” And I was like, “Yeah, I know. But again, you’re pregnant. What do we do?” And she literally took the offer, ripped it. And she was like, “I bet on you.” Sorry, I didn’t think I would get emotional. But it was such a monumental moment for me because I was like, “Well, I bet on me too.” I think that’s when I probably – I think I waited. I was polite. I think I waited till January 2nd to pick up the phone and call you. But I was like, “Kev, I got the last X amount of dollars to my name that I set aside and let’s get a fund going.”
And I think, between that first quarter of the year, I called a couple of high net worth individuals that I knew and I said, “Listen, I need you to bet on me. I won’t forget that you’re a seed investor. I need to raise $3 million. I think with $3 million I can do this.” And then I made the same phone calls to a couple of note buyers that I had good relationships with and I said, “I’m going to be real with you. I have 20 to 30 million a month that I need the service here, which means that you got to be buying from me constantly because I have more volume than I do liquidity and I got to pick which one I want to focus on here.” And luckily, it worked out well where I was able to raise, I think, like 3 to $4 million. And I brought in a couple team members that were actually family because that’s all I really trusted, and I’m sure we’ll get to that.
But I just started turning the money and doing the same thing I was doing. But at the same time, I then had to learn how to be a lender instead of a broker. And that was a transition, of course, right? I remember selling my first loan and dealing with the collateral. I was like, “What is in a launch?” There were things I just didn’t know. But yeah, I mean, I definitely didn’t choose an easy market because then there was COVID and all of the things in a timeframe, all the things that came. But I think that we got lucky because we were such a big producer that the note buyers that I was loyal to, they stayed with me and they didn’t pull back from me.
Kevin Kim: I wouldn’t say it was luck. I mean, they wanted your business, right?
Briana Hildt: Yeah.
Kevin Kim: It was clear from my perspective that they wanted your business and they made it very known they wanted your business. And that’s a good thing, right? And it’s a testament to a lot of folks on the call. We’ve talked about this on the show before. Like, track record, right? and when it comes to selling loans, quality of paper, volume of paper, able to underwrite, right? That stuff speaks volumes about your ability to be a strong counterparty to them and the treatment changes, right?
Briana Hildt: Yeah. Yeah.
Kevin Kim: I mean, you got that out the gate. And I think that that’s a testament to your origination abilities, right? That’s something that not many new market entries are able to do, comparatively speaking.
Briana Hildt: Yeah. Thank you. And I think that is though part of an ode to California, because I think when you learn the way that I learned, which was in asset management and foreclosures. I mean, literally, the first conference I went to with Geraci in 2015, I was there as a representative for a trustee’s office, and I was selling foreclosure services. I mean, what an awkward conversation, right? You’re walking up to a lender and going, “Hey, how many bad loans do you have? And can I have the foreclosures?” It’s just like it’s not like – it’s like a jab, but it’s also like a give me more business kind of thing.
But ironically, just like as I was building out the lender business, kind of like taking my broker experience, when you’re like literally writing down, “How many bad loans you have? Why are they bad? Did you put them in an OD or did something else happen?” I was also able to formulate a completely different opinion as an underwriter, which I think that’s what I am first, right? I am an underwriter first. And that’s a skill set that I lean into heavily. And sometimes it’s a gut thing.
But yeah, that is one thing that I remember having a conversation with you a year ago and you saying to me, “Briana, if you don’t have a foreclosure, eventually people are going to be like, “What’s going on?” Right? We had a really squeaky clean, we still do, track record of repeat institutional high-level clients. I’m not really interested in stealing clients from other private lenders. I’m much more inclined to try and go get the bank guys and girls. That’s what I’m looking for, right? And I think that that’s really important.
Kevin Kim: I mean, you see it in the volume, right? Now that the industry is somewhat grown up, I say somewhat, keyword, you can see it in the Forecasa data. Your average loan size is like $2 million, right? I mean, that’s massive for the market that you’re in. And you guys closed a giant multi-family deal earlier last year. And so you’re seeing kind of a higher caliber borrower on your book.
But the challenging question becomes, when you’re starting out, and you have that ability to underwrite, and you have that skill and credit and be able to see 18 months down the road with your borrowers because you have the experience in foreclosure. And if you can do foreclosure in California, you can do it anywhere. Because California, it’s easier. It’s a trusted state. But man, the borrowers here are squirrely. You could see that now.
But translating that, you mentioned that you asked your borrowers to bet on you and you asked your investors to bet on you, but how did you create those relationships to begin with, right? Because the hard part we hear from a lot of folks is like what’s the key to foster those kinds of relationships where they do come back to the table every time, or they do come to invest with you, or whatever, right? That’s a very challenging personal skill, I would say. And you’ve done it quite well not just with your investors and with your borrowers, but also with your capital relationships, with your attorneys. How did you do that?
Briana Hildt: Well, I think there’s two different things here. I think when it comes to the Massachusetts market and my clients, the Northeast in general is an extremely unique market in the sense of like my California lenders are trying to break into right those markets. These guys don’t even want to talk to you unless you have a 413 or a 61. You have to have like the Massachusetts phone number, right?
Kevin Kim: They want to work with their own.
Briana Hildt: They want to hear the tone in your voice. They want to know you’re going to curse and say things that they make them feel like home, right? It’s a hard market to penetrate. I was very lucky with that in the sense that I understood the market, I knew the market, and I’m from that market.
But in regards to all of my relationships, my strategic partners, whether they’re my attorneys, they’re my clients, they’re my real estate brokers, whoever it is, I think I just have a unique approach in the fact of like I leaned into what makes me unique, which is being a woman and having femininity about me and having this – I literally don’t have the energy to lie to you. I have no interest in burning a bridge with you. You got to trust me and I will trust you and I will produce if that’s the case, right?
And so it was that getting them to take the first step forward, right? Getting that investor to put a check into the fund. Getting that client to give me a loan and then me excelling with that loan and then him calling his buddies and being like, “Have you heard of this group Cardinal? Briana? Does that ring a bell?”
And so it was like that to me was the organic way. Everybody else is out there buying lists of developers, and cold calling, and trying to do it the old-school way. And I am so relationship-focused and relationship-driven that I think it’s paying dividends in the sense of like those are very hard relationships to break. And that’s extremely important to me, right?
The same goes with like every category of my life. It’s like lawyers. I’m a dream come true to lawyers in Massachusetts because if we’re doing almost a half a billion a year in origination and that’s going to continue to grow, I mean, think about how much money they’re making off of us, right? But I have two or three loyal attorneys that they send me business and I send them business and that’s that. The same goes throughout all of those things, right? Insurance companies, real estate brokerages that we have referral agreements with. No buyers. I mean, no buyers have broken into the market and have tried to take me back over. And I’ve been really loyal to my few note buyers that I’ve worked with. I think that that’s really key for anybody trying to build something in this relationship because people will remember if you screw them over, 100%.
Kevin Kim: Right. It’s a two-part system, right? Because loyalty is important, but you also have to be able to execute.
Briana Hildt: Right.
Kevin Kim: And what I noticed is that with you, especially the expectation on the counterparty is also you need to be able to execute. Like, “I will be loyal to you, but you have to be able to execute. And you’ll be loyal to me because I’m going to execute.” Right? And that seems to be a very like not really discussed out there, but execution is a key component to that. And I will deliver for you, but you can’t screw me on this. Right? And that’s important.
Briana Hildt: Yeah.
Kevin Kim: And we’ve seen a lot of opportunities for that to occur in the market. I mean, we’ve seen a lot of – I mean, this past few years, the ups and downs have been quite challenging. And you joined the market, right? You had a year. ’21 was a great year. And then all of a sudden, things started going crap. All right. But you beared through it. Now, I do want to ask kind of going through your – you got the company set up. Let’s get kind of like now we’re storming the beaches, right?
And so one of the things that I noticed with you is you were very intentional about your growth, right? You were not of the mind to grow exponentially to a point where it was just the growing pains will kill the business. Talk about that real quick because I think you’re the only one I’ve ever talked to about that particular methodology. I don’t know many people who have that approach.
Briana Hildt: Yeah, I mean, I think it was a necessity even more than it was like an approach if you think about it like that because the book of business that I had doing almost 250 million alone by myself, when I broke off and said, “I’m not a broker anymore. I’m going to be a lender.” It was like, “Okay. Well, who’s going to process my loans? Who’s going to underwrite my loans? Who’s going to fund my loans? Who’s going to ship off the collateral to my loans? Who’s going to then be the servicer for my loans? Who’s going to be the asset manager for my loans?”
I mean, every hire that I’ve made up until probably the last six was so operationally driven that it was like just to maintain a level of client experience that I think they were expecting. Because I also wasn’t going to just be like, “Hey, buyer, I’m going to sell the loan off to you. You deal with the client.” Then I’m not keeping up to my promise to my clients, which is like, you’ll and speak with them. It is me here, right? They are just a capital partner. I am the one that you’re working with. And so if I want that, then I need multiple asset managers, people handling draws, people handling payoffs, people handling anything that any client might need.
The first couple of years was about stacking the team. Obviously, my two biggest moves were bringing in my partners who are blood to me pretty much. My CFO is my brother Jake who had been in finance for a long time but in a different sector. He was in the auto world. This was like a pivot to him. But things happen so quickly that I was like, “You’re the only one I blindly trust. I need you to come in.”
And then the other one, Dominic Blad, he’s my COO. He literally started as – he was almost like a loan associate to me and an underwriter to me, right? But in 2019, 2020, he helped me so much with the growth. And he married my sister. It was like, again, that level of trust that I just had that I probably, with the book of business I had, could have easily went and identified a CFO that’s been in the industry for a long time, or a COO that’s been in the industry for a long time. But again, they had that trust level that was super important to me. And so we all kind of grew together and then brought in the operational people that we needed to.
And now I’d say we’re at a point where things are so fluid operationally that now we’re like, “Oh, okay, we’re going to bring in X amount of salespeople. We’re going to grow it that way.” But even that growth, I, to your point, could have focused on that in the earlier years, which was just like we’ve definitely grown 20% to 25 % year over year. Some people will say that’s an extreme amount of growth, and it is. I could have done more, but I didn’t want to bottleneck us and not be able to give that client experience that we were known for.
Kevin Kim: And we had that same conversation with your fund structure, right? You had the opportunity to blow the fund out and get to several hundred million if you wanted to, but you chose not to.” And I was like, “I think you are literally the first client to tell me I’m not going to actively raise this,” because it’s going to put a negative damper on your current investors. But it’ll negatively affect them, but it also will cause weird dynamics on the loan tape. And I was like, “Literally, the only client not willing to do that and go out and storm the beaches.” But it’s because the growing pains can substantially kill you. I’ve seen it a number of times where they just can’t service the book and the borrowers fall out of love with them and brokers fall out of love with them and they go elsewhere. And it’s a matter of time. And everyone’s starting to fall out of love with their people. I mean, that seems to be a testament to kind of how you’re keeping your people sticky as well.
The team, the team is an interesting question. I’ve actually never asked you this question. I want to ask you this now for this pod. Partnering with family. I mean, I can see the virtue to it. But also, if I partner with my brother, we would have been at each other’s throats constantly. And brother-in-law, I mean, that’s an interesting dynamic. The initial stage of doing that. Was it a necessity issue? Was it a trust issue? What drove that decision?
Briana Hildt: Well, it was a personal thing. To bring you back to that time period, when I was building the fund in Q1 of ’21, they were partners at that time. They were dabbling and involved in a low level. And then, if you recall, kind of in the story, my wife was pregnant and we had something that rocked us super – I mean, essentially long story short, when she was five months pregnant, I will never forget it, we underwrote and closed our first loan as Cardinal Capital Group on March 31st. On April 2nd, we went to a 20-week scan where we had a healthy son. We thought everything was fantastic and we found out that he had a terminal illness, that there was nothing we could do about it. And now picture this. I have 25 million in the pipe. I got 3 million to turn eight times to get to 25 million. And that very first loan on March 31st is set to sell on April 2nd. And it was like a blackout moment for me. Like, “You have to be kidding me.”
When you are in that position, I don’t think it has anything to do with business. I think it has everything to do with trust. I called the two people that I trusted more than anything. Dom definitely had more exposure to how I operated in business and he was my main underwriter and sales guy. So he definitely understood that part. And my brother, Jake, we grew up practically like twins. And so I’ve never had an issue with him in my life. We’ve always been super close. And that was like, “You need to make sure that this thing does not blow up while I deal with this terrible thing for this X period of time.”
And I’ll never forget, they picked up the phone and called my capital partners, my capital markets partners and my investors and we’re like, “This is time to dance, boys and girls. You need to trust us and you need to just – hi, I’m Jake. You’re going to be dealing with me. Hi. I’m Dom. You’re going to be dealing with me. And Bree’s going to be out of pocket for a bit.”
And what they helped me do while I was out for that very short period of, there just was no question in my mind. That was like, “How do I decide? What partner I have after that?” And so I made them both partners right after that. And it’s been amazing, honestly, ever since. I wouldn’t change it for the world, to be honest.
Kevin Kim: I mean, they’re fantastic partners. We deal with them regularly. And they’re looking out for the business. Looking out for you.
Briana Hildt: Yeah.
Kevin Kim: And then that trust you’re in an emerging crisis, I mean, yeah, it makes sense. I mean, there’s only certain people that you can trust with the business when you’re at that infancy stage and you’re dealing with personal crises like that. I mean, I don’t know what else you would do.
Briana Hildt: 100%.
Kevin Kim: That’s a good point.
Briana Hildt: Yeah.
Kevin Kim: I want to do a little bit of a transition forward because you guys had a relatively critical moment when it came to the business. I mean, at a certain point, you guys were – every note buyer in your business. Investors wanted to put more money with you. All right. And you guys are at this really interesting inflection state in about a year or two back, maybe. And you guys made this intentional choice to be like, “We’re not going to overdo it here.” And then suddenly, in 2024, you guys just – I mean, went from the number – I think it went from the number five or six slots in number two slot in the rankings this past year. Talk about what was that big – was there a big clicking moment? All right, now we got this. Was that it? Or what happened?
Briana Hildt: Yeah, I mean, I think it was just maturing in my career with Cardinal and just understanding the nature of the beast, right? We now have almost five years of returns to investors that are double digits and fantastic. We also still have that dominant track record with like low defaults. And like I said, less than a handful of foreclosures and bad loans. That carries a lot of weight, right?
Then my confidence grew in the sense of like, “Oh, yeah, I can go raise a couple hundred million dollars if I want to now. And, oh, yeah, you’re good to me, note buyer. But you’ve also screwed me multiple times.” And there’s more and more and more and more note buyers and capital markets is growing. And there’s trillions of dollars coming into this industry. So you’re not the end all the all. And what comes first to me is keeping the company in a place that is strong. And that’s my duty to my clients, to my team, to my investors and my fund.
When you’re thinking like that and the fear goes away, then it’s a totally different experience, right? I think I just graduated to this like level of like, “Oh, okay. We’ll have strategy A, strategy B, strategy C, strategy D.” I’m young. I have no intention of this thing slowing down. I got the operational thing set. Now let’s put our foot to the gas. And that’s what really happened in ’24. We got the we got the brick and mortar in Boston. We started to dive into other markets. And I think that that’s just what you’ll continue to see now because there’s a confidence there that’s like “Well, we’re not the new kids on the block anymore.”
Kevin Kim: You’re not the new kid. You’re mature. You know what you’re doing.
Briana Hildt: Yeah.
Kevin Kim: Now the question then becomes – in ’24, there must have been I would say institutional guys knocking on your door or either say, “Hey, past year, maybe two years, we’ve seen a significant trend toward what I would call kind of partnership arrangements. Not necessarily just you know MLPA arrangements. Unique leverage arrangements and of course securitization and all that, you must have been getting a lot of pressure to do one of the three, right?” And you’ve chosen not to, at least for now. Talk about that. Because now the opportunity is here, another opportunity to blow it all out and do more, but you didn’t. And a lot of folks who are I would say lower volume than you guys, smaller than you guys have, and they’ve doubled down in that arena. What’s the logic on your side?
Briana Hildt: Well, I think a lot of it actually comes from early talks with you. I mean, because trust is a constant in my career, I recall what you have always said to me, which is your fund and the investors within your fund who are giving you this control, this trust. You literally alluded to, that’s your home. That’s your spouse, that’s your forever thing, right? And these note buyers are kind of on the side.
And I look at all other things like that, right? Like the securitizations and all the other things. For me, it was about nurturing what we have. We grew the fund last year. Like you mentioned, wasn’t even a thought process to us the first couple of years because I am very big on crawl, before you walk, before you run. So I was like, “Uh-uh. We need to make sure that before we raise more, we understand what the vision is and what we’re going for.”
Now that that’s clear, it was easy to raise 30, 40 million quite quickly. And we want to continue to do that and raise even more. I think there’s a lot of opportunity there too. As you know, unfortunately, with everything that is going on in California and some of the other markets, there are a lot of accredited investors in the country that are looking for more stable markets. And now we have the track record where a stable market. Boston has always historically been a very safe place to invest real estate in. We are now just going about the approach of like, “Let’s really get our own fund up. Let’s maybe think about fund two. Let’s raise more money, have more control.”
Obviously, look to the note buyers. Because, again, our volume is – all the old school ways, as you know, was let’s raise balance sheet funds and then go find a bunch of originators and brokers to deploy in. Uh-oh, what if those originators and those brokers break off from us? What are we going to do with all this capital that we’re sitting on?
Cardinal Capital Croup literally has always focused on the origination, the business first. And now that’s making the capital piece easier. And so, oftentimes, I have more volume than I do capital. And so now we’re really focusing on raising the capital. And when you’re producing double digit returns year over year, it’s not that hard to do it.
I’ve really listened to your guidance in the sense of like I want to get my own fund up and that is where I started. I did start with balance sheet lenders and I feel very comfortable there. And I think that will always be a hybrid. We’ll hold and we’ll sell. And I think you have to be versatile in today’s world to thrive.
Kevin Kim: You guys were a prime example of like you have the ability to do both and it’s accreted to the business. You made it accreted to the business. That way, your investors benefit when you benefit. But when capital markets does have its own troubles, which it did, you’re still able to operate.
Briana Hildt: Multiple times.
Kevin Kim: Multiple times. Yeah. And you were able to operate. And you could ultimately – yeah, you’re right. My perspective has always been the borrowers are the ones that come first. I don’t care about everybody else, right? And so you need to be there when shit gets tough because they’re going to come back expecting you to perform back to the whole execution thing. And so it seems to me at least that people like you and others have been able to maintain that level of stickiness with their borrowers when others can’t. And yeah, right now it’s fat and happy time when it comes to capital. But it’ll continue, but there’ll be bumps in the road.
Briana Hildt: Yeah, totally.
Kevin Kim: I would imagine that it doesn’t mean that you’re not going to pursue it in the grand scheme of things, but it’ll be, like all things, intentional and kind of measured in how you go about it.
Briana Hildt: Absolutely. Yeah. I think we’ll always be that way.
Kevin Kim: Right. And I do want to touch on one other thing in this regard. While you guys have been growing 25% year over year, which is also just insane, there had to also have been people like, “Hey, are you interested in selling?” Has there ever been a conversation like that? There have to have been. And how do you approach that? How do you think about that kind of stuff? Because people ask about that these days. They want to know, like, “What should I be thinking about as an exit policy in this industry?” And they’re yelling at you too, right? So they’re not seasoned to call it, right? They have this idea that it’s an opportunity out there, or they want to think about.
Briana Hildt: Yeah. Yeah. I mean, I think my wife would leave me if I sold anytime soon and then I was just sitting there with all the energy and thoughts and innovation that I have. Because I think I’d be like, “Well, what now?” I mean, I guess it hasn’t been – of course, it’s come up. Of course, it’s been talked about. Of course, it will continue. But I think a unique thing about us is that we’re also very young. It’s like I luckily started in my 20s in this career. So now I’m in my 30s. And so for me, it’s like when I’m sitting up there with other industry leaders, I’m still young in that regard. And I’m like, “Well, no, I got a lot to do.”
And so, yeah. I think that from a valuation perspective, I think our value is going to continue to go up if I continue to follow the metrics that I have, which is a very good overall track record, strong borrowers, solid returns, sticky clients. I mean, we don’t even really – this is not against brokers because I came there. And there’s very elite brokers that I will work with, but we’re very in there with our clients and we’ll continue. And I think a lot of a local banks and a lot of other competitors of mine are getting more difficult to work with, more regulated, more up and down than we are. And so we have been able to be extremely consistent in a very non-consistent time period.
I think you know this and you attest to this. The last four years have been absurd. Don’t you remember that? The theme to a lot of conferences were like survived till ’25. I mean, like that was –
Kevin Kim: That was my panel last year with Nemo. Yeah.
Briana Hildt: Yeah. Literally. Right. Yeah. I mean, we’re in ’25 now. And I think my thoughts on that is just like we’re ready to blow the roof off in that sense. You know what I mean? Because I feel – it’s something that’s there in the back of my mind, but it’s not way too young in what I want to do for this company to be planning on that.
Kevin Kim: Love it. And you’d just be bored anyway.
Briana Hildt: Oh my God. Yeah, I don’t even know what I would do.
Kevin Kim: I want to take a look at kind of now, this past year, you’ve been hiring, adding people. And as the firms lead and only originator back in the day, you had to take a step back and you’ve had to let go. This is more of a kind of a CEO entrepreneur. You had to let go of a lot of things. Talk about kind of the process you have to go – your process and your decision making and your acceptance of that. Because it’s one of the things that I noticed that a lot of folks have trouble with is like they can’t scale because they can’t let go.
Briana Hildt: Yeah. I think that when you’re so used to doing things on your own for so long, it’s really difficult to envision passing a lot of that off. But someone that I look up to a lot that’s a mentor to me said, this was a year or so ago, “If you continue to think like a solo entrepreneur instead of a CEO, you’re going to have a very difficult time getting the company to where you want it to be.” I literally have that written down on my desktop and I look at it probably daily. And I have to ask myself, when my knee-jerk reaction is to, “I want to do this right now. I have to take care of this. I have to do this.” I ask myself, “Is this solo entrepreneur Briana speaking or is this CEO Briana speaking?”
And it’s one of those things where it’s like you have to take steps backwards to launch forward. And so there’s oftentimes where I’m such a go-getter that I’m like, “Oh my God, I have to slow down to speed up. This is really difficult.” But when you start to see the fruits of your looms come through in that regard, when you start to see – Frank Amato is my director of lending. I’ve known him since we were little kids. And he was another person that just instinctually I brought in because I was like, “I trust him. I trust the way he treats people.” And he was a resi lender. He wasn’t even in our world.
The first year was coaching. The second year was getting clients to understand like, “Bri and Dom are less available now. You have to go to Frank.” Now to see, I can look at our pipeline and go, “Oh, shoot. We got 16 loans from this guy, that guy, this guy, this guy, and they trust Frank and they understand that they can call Frank and Frank got these from A to Z? And all I’m doing is touching with that client every couple of months saying, “Hey, how are you, Kevin? How’s it going?” That frees up so much time to be able to do more.
And I’ve had to have conversations with clients before that were so used to speaking to me all the time and say, “Listen, I understand that it seems like I’m not as available. But do you realize – did you see how I just got you that better rate? Did you see how I just got you this? Did you see how I just got you more leverage? That’s because I have to do these things behind the scenes to grow the company, to give you better products and better tools and better options.”
And so that’s definitely been a challenge for me. But it becomes addicting once you start to see your team thrive that you’re like, “Wow, okay, wait a second. I could bring in another person for this.” And I think for me, the biggest thing was coaching my approach, coach your approach was huge for me because I brought in a sales guy that came from like a sales position, not real estate. And it was a product. He sold products. And their methodology at the place that he was just like, push, push, push, push. Put them in a choke hold until they finally buy the product. And I’m like, “Whoa, no, no, no, no. This is how we treat our clients.” You might be sitting on the sideline for a while until this bankable guy calls you when he’s in a situation that he needs you. You might be waiting, but it’s worth the weight, right? Just follow up with him. Make sure that you check in with his kid who is sick and you check in on this and that. And like we’re so relationship driven in that way that now starting to see that pay dividends for my originators and going off of that slower pay strategic partnership way is so rewarding that now it’s fueled me to be much more focused on being a CEO than being a solo entrepreneur.
Kevin Kim: Focusing on, I would say, kind of culture, a company culture, external-internal people. I mean, some of the best and brightest out there, they’re doing it primarily because of that. I mean, we interviewed the folks at Renovo and [Rixa? inaudible 0:44:04], and they’ve always said that it’s the customer service that drives everything.
Briana Hildt: 100%.
Kevin Kim: And it seems to me that they’re able to do what they can because their team has adopted that kind of cultural approach to the business. You don’t have the traditional mortgage broker running that sales desk, right? That seems to pay dividends in the grand scheme of things.
Now, let’s talk about kind of where Cardinal’s headed. Cardinal is now – you guys have broken into new states. I was looking at your data. You’re now lending into Southeast. You’re up and down the Atlantic. What’s the next big thing for you guys?
Briana Hildt: That’s it. We’ve got a sale scene. We’ve got people now actually focused on the new markets and origination, which is totally out of the loop for us. Everything we did before was just, like I said, like that kind of organic growth. And we’re opening up another office in Connecticut where we’re definitely focused on that expansion in the right markets, right? I’m not just looking at a map and picking a state and saying, “Let’s go do that.”
We’re basically modeling out that strategic partnership in those territories. And we’re just very focused on what connections do we have in these places? And who should we lean into? And who should we – basically rebuilding what we built Cardinal Boston in these five to seven states and being methodical. I mean, it’s been something we’ve been working on in the works in the background for a year, even though I didn’t need to.
Luckily working with you guys, I know what states I have certain compliance restrictions and things of that nature. So it is something that I could have kicked off two years ago. But again, with that very methodical aspect, this was just something that we wanted to wait until I felt very, very comfortable. So now we do. And so, yeah, it’s kind of running in the opposite directions.
I think I have a forward-facing part of my team and a back-end-facing of my team, right? Finance and asset management. They’re really focusing on the capital raise, the growing of the fund, and those type of strategic partnerships. The front side, the underwriters, the originators, the business relationship managers and things like that, we’re really focused on that growth, that expansion, the pushing of the products that we have that banks and other lenders don’t have.
I think the one thing that’s super unique about us, yeah, you mentioned some of the biggest lenders in the country, and I think the thing that sets us apart is that when my originators have the ability to say, “Hey, I’m going to take this loan to credit committee tomorrow. And although it might be slightly out of the box, our CEO comes on to the meetings and she has the right to stamp loans that she feels like are big and I think she’s going to really like this one.” That’s what we did on that on that big $46 million loan, right?
Kevin Kim: Yeah, enormous deals. That’s so out of character for most of our client. Like, “Is Briana now in commercial real estate? What’s going on here?”
Briana Hildt: Yeah. No. Those clients were bananas. They were better than any – I mean, it made sense to do it, right? But that right there is what I think really carries our reputation through because it’s like we are creative, we’re adaptable, we’re going to try to figure out how to help you and help grow you, right? And so that is different. And I think that’s where our like boutique, more like a family-owned but institutionally-backed is really important. And so I think this year is all about leaning into that and really pushing that.
Kevin Kim: That’s important. I mean, that’s something that a lot of balanced lenders have the ability to. And I’ve always talked about like, “Hey guys, you’re going to get deals that are not cookie cutter. What are you going to do with those? You’re going to tell your borrower to go pound sand or go to your competitor? What are you gonna do with that?”
Briana Hildt: Right.
Kevin Kim: And that’s one of the things. In California, West Coast stuff, it’s a lot of nonconforming loans. But on the East Coast, the business trends seem to be a lot of these folks are kind of double, triple, quadruple down with capital markets. And now they’re kind of in this box.
Briana Hildt: And that’s the way the opportunity comes in as well. And that’s why we’re definitely raising more in our fund. Because as you know, it’s like with the securitizations with capital markets, it’s always been this back and forth and back and forth. And capital markets, while they’re fantastic, they’re really, really good for the $500,000 fix and flip purchase loans. Well, who’s not good for that, right? I can go do that alone with 80 partners. That is like easy.
But if you want to dominate in a market, you need to understand. And even in the very beginning of this conversation, you said, “Well, your average loan size is $2 million.” That’s pretty standard for Boston, right? And it’s like if you understand your market, which we do, you know the average loan sizes. And I could go be doing 10, 15, 20, 30 million-dollar loans in Boston. And I’m not. I’m sticking to the 500,000 to $10 million range our kind of our sweet spot. We are doing a lot of those two-and-a-half million-dollar loans. And we’re going to mimic that that in the other states.
But being adaptable, as the capital markets change over and over and over and what they’re looking for, what they’re not looking for, the loan type they want. And that part has forced my hand and growing our fund, growing our capital stack and just really taking things more so into my own hands, right?
Kevin Kim: Right. Relationship, right? Relationship comes first, ultimately.
Briana Hildt: Right. And those inconsistencies can get exhausting and it’s not fair to my clients. It just really isn’t at the end of the day.
Kevin Kim: That makes a ton of sense. I mean, you can’t build a business on someone else’s credit box. You just can’t.
Briana Hildt: No, no, no. Definitely not. Not if you want longevity, no.
Kevin Kim: Right, right, right, right. All right, so I want to ask you one last question before we run at a time.
Briana Hildt: Okay.
Kevin Kim: You have now have two little kids. How old are they now?
Briana Hildt: Two and three months.
Kevin Kim: You are in it. I got a seven and a four. You are in it.
Briana Hildt: I’m in it.
Kevin Kim: I would say you’re still in diapers. How are you managing? Are you sleeping? How are you doing?
Briana Hildt: Yeah. I mean, I think they got the memo, my little ones, thank God. I’m sure everybody thinks that their kids are the best things in the world. But I got really, really lucky. The two-year-old sleeps seven-to-seven. Yep, has been for literally a year and a half.
Kevin Kim: That’s a blessing.
Briana Hildt: And the three-month-old, she’s just showing off too. I mean, knock on wood. But she’s been sleeping six hours since. I mean, me on six hours and a couple of cups of coffee, I can move a mountain if you want me to.
Kevin Kim: That’s a blessing right there. You don’t get that usually. I didn’t get that.
Briana Hildt: Yeah, right. And I think when you have a business and then you have kids, I think for me that is like – I mean, you thought I was motivated before. It’s like, to me, that is just like – I had a lot of things happen in my young adult life that affected my family. And my mom got sick. She financially struggled because she didn’t have the proper insurance. She went bankrupt. Lost her home. I have this constant thing in my mind where it’s like I need to hustle for these kids and their kids and their kids’ kids. Because if I can, I will.
And so for me, I think when I wake up in the morning and I see them, that’s just like there is no better motivator for me. And when I am talking to investors who want to come in the fund, I’m like, “You can go invest in any of the ones that you find in some random crowdfund. Or you can hear me say that like what I’ve been doing for five years, that is not stopping. And that’s the same thing to my clients, right? I’m not interested in doing one loan with you. I want to do a hundred loans with you. And so for me, my kids and my family have been the best motivator I’ve ever had in my whole life. And so I’m very lucky with that.
Kevin Kim: Oh yeah. I mean, you don’t know how motivated you can get.
Briana Hildt: 100%.
Kevin Kim: How hard you can work once you start having those little –
Briana Hildt: 100%.
Kevin Kim: Those little monsters. But they’re also little blessings. And I would never have talked about this on the show until I had my own kids. It’s something that changes you as a person.
Briana Hildt: 100%.
Kevin Kim: All right. Well, you know what? This has been a really fun episode. I forgot we were even recording at one point.
Briana Hildt: Hi, everybody. Nice to see you here.
Kevin Kim: It’s been a really fun episode. Now, tell everyone where they can find you. And make sure they can reach out to you. A lot of our listeners may be asking for you for some advice. I know they’ve asked me to connect them with you before. Where can everyone find you? And we’ll close up the episode.
Briana Hildt: Yeah, our website is ccgloans.com. Our Instagram is Cardinal Capital Group. Briana, so you can email me directly if you need anything at briana@ccgloans.com. And if you ever need me on a personal level, you can reach out to Kevin. I’m sure he’ll give you my direct line if it’s needed.
Kevin Kim: If it’s needed.
Briana Hildt: If it’s needed.
Kevin Kim: All right, guys. Well, this has been a very fun episode. And it’s really great to reconnect with you. It’s been a while. I know you’ve been crazy busy. And I want our audience to know I’ve been looking forward to this episode for a long time. I hope you all enjoyed it. And this is Kevin Kim from Lender Lounge signing off. Thank you very much, everyone.
[OUTRO]
Kevin Kim: You’ve been listening to Lender Lounge with Kevin Kim, brought to you by Gercai LLP, the nation’s largest private lending law firm. Geraci is the leading legal resource for specialty lenders, asset-based lenders, private lenders, and non-bank institutions. Learn more about the firm at geracilawfirm.com. That’s geracilawfirm.com.
Check out our episode summary to subscribe to our Lender Lounge newsletter and our law firm newsletter where you can get notified about new episodes and recent content directly from our expert attorneys. In addition, we’d love if you’d follow Lender Lounge with Kevin Kim on YouTube, your favorite podcast platform, and on LinkedIn, where you can also check out updates from Geraci LLP.
Thanks for listening. And we’ll see you next time on Lender Lounge with Kevin Kim. This is Kevin Kim signing off.
[END]
