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.
Kevin Kim: Hey, guys. We are live and in person. I love doing these episodes. Nema and I have flown up to Sacramento for another episode of Lender Lounge with Kevin Kim. Today, we are interviewing one of our oldest clients, a man I consider a friend. And before I introduce you, why don’t you introduce yourself to our audience, and we’ll get started.
Adham Sbeih: Sure. Thank you, Kevin. My name is Adham Sbeih, and I am the CEO of Socotra Capital.
Kevin Kim: Now, today, our audience may notice that I’ve got another person here with me. You all know him very well. My partner in crime, Nema. He’s our special guest host today because when he found out that we were going to come interview Adham, he said no, no, you don’t get to do this alone. And he wanted to join me. So I’m really happy that you joined us because we’ve got a lot to talk about today because, Adham, you guys have been a client of Geraci for, I don’t even know.
Adham Sbeih: I think in ‘08.
Kevin Kim: Before your time? Right around your time.
Nema Daghbandan: My first summer with the law firm.
Kevin Kim: Yeah, right. So we’ve got a lot to talk about. I would like us to start by, just tell our audience what kind of company is Socotra, what do you guys know? I guess how big are you guys? That kind of stuff.
Adham Sbeih: You know, we’re a hard money lender. We make equity-based loans. We got, in total, I think, around 33 people, close to 500 million in capital between four funds. We’ve got a couple of different products. We do the ground-up construction with our Herzer team. Our Herzer financial team. We do the Turbo close, which is, hey, I need $5 million, and I need it in five days. We do that with Socotra. We do the bank buster. Yeah. We’re a traditional private money lender in this space.
Kevin Kim: You guys have been in business since 2007.
Adham Sbeih: Correct.
Kevin Kim: So you open doors during the recession, at the outset of the recession. And so how right now, when our audience here is a private money lender, they’re probably thinking resi, fix and flip. That’s kind of what they’re thinking. That’s not really what you’re concentrating on these days.
Adham Sbeih: Correct. Yeah, we do, probably I’d say it’s about 70% is in the commercial real estate space. So that can be owner, user kind of product, or it can be investor. Industrial and retail are the two big asset classes that we make loans.
Kevin Kim: That’s great. And then let’s wind the clock back. The point of the podcast, really, is just to interview our friends and clients in this space and learn more about how they grew their businesses and brands because you have one of my favorite stories. I’m so happy that I came here in person because we got to see your team, and I know they’ve been around with you for a long time. Got to see your company wall here. And I just love visiting clients’ offices, especially this one, because I know how much history is involved here. So why don’t you give us a little bit of a wind the clock back?
Adham Sbeih: Sure.
Nema Daghbandan: The man also doesn’t age to be.
Adham Sbeih: Sure. I can talk. Yeah. So, in 2007, I was a commercial banker, and I had a client, a really good client. I’d financed probably 10-12 buildings for him in the previous four or five years. And he’d built a headquarters here in Sacramento, and we did the construction financing for him. And when it came time for the takeout, our bank would not give him permanent financing. So this guy, he owned, oh, gosh, I’m guessing, somewhere close to 20 Coldwell Banker offices.
Adham Sbeih: So he was a huge he had a lot of Coldwell Banker franchises, and the writing was on the wall that the residential real estate market was about to crash. And so our bank wouldn’t give him the permanent financing. And then in the banking world, you know, all the other bankers in town, and no one in town would provide that permanent.
Kevin Kim: That’s all here in Sacramento?
Adham Sbeih: Yeah. So I started, and this client, he’d become a friend of mine, and he said, hey, you got me into this deal. Figure a way out. And so I said, okay. At the time, I was in my gosh, I guess I must have been mid 30s or early 30s. And so I made a list of like, hey, who do I know with money? And it was about a $2 million loan, a construction loan. And he’d put his heart and soul into this thing. It was probably 6 million in value.
Adham Sbeih: So he overbuilt it. He way overbuilt it. But it was going to be his headquarters for all these franchises. So anyway, I made a list of people I knew with money. And, of course, that’s a pretty short list when you’re 33, or 34 years old and started calling all those folks, and no one would provide the money. But I kept asking, who do you know that would have this kind of capital? And eventually I got referred to Glenn Golden.
Kevin Kim: Okay.
Adham Sbeih: And so Glenn flew in on his little Cessna, and I picked him up from the airport. We drove out to the building. I introduced him to the borrower. He walked the building, and he reached out his hand. He goes all right, nine and a half percent, five-year deal.
Kevin Kim: Wow.
Nema Daghbandan: Handshake and everything.
Adham Sbeih: And this is ‘07.
Kevin Kim: Yeah.
Adham Sbeih: And that was it. And I thought, you know what? So, reprop made the loan. And I thought, you know what? I want to be that guy flying in on the Cessna, making the deal.
Kevin Kim: That made an impression on you.
Adham Sbeih: A huge impression. Yeah, huge impression.
Nema Daghbandan: Is Glenn aware that he is the start of your career?
Adham Sbeih: I’m not sure. I told him, but I don’t know if that really hit him. I don’t know that it really hit me.
Kevin Kim: In about a week or so.
Adham Sbeih: The other person that had an impact on me was Uncle Chuck, too, because I’d met Uncle Chuck and I didn’t quite understand what Uncle Chuck did. This was probably in maybe five or.
Kevin Kim: Six when you’re a banker, right?
Adham Sbeih: Yeah. As a foreign consent, if you’re a banker, yeah. I didn’t quite really understand it, but he also made an impression on me, for sure. He was probably my introduction to hey, hard money was uncle Chuck.
Kevin Kim: So you just like, what started right there?
Adham Sbeih: So I thought, well, this is probably going to become an issue going forward. There’s going to be a banking crisis. And I worked at a bank at the time that was run by a local guy here, one of the few billionaires in Sacramento. And he was like the Henry Ford of the concrete tilt-up building. He’d done really well building concrete tilt-ups for whatever, 60 years. He was like in his late 80s or early nineties at this point. And he was saying, oh, yeah, the real estate market is going to crash. Banking is even as much as he owned this bank that I worked for, he was like, yeah, the banking industry is in for some hurt.
Adham Sbeih: So I thought, you know what, I’m going to give this thing a shot. So, about three months later, I started Sbeih Financial.
Kevin Kim: Sbeih Financial.
Adham Sbeih: Original iteration, very creative.
Kevin Kim: Wait, okay, so this is 2007. You realize you have no more future in banking. You open the shop, you by yourself.
Adham Sbeih: Correct.
Kevin Kim: Are you just brokering? Like, what are you doing?
Adham Sbeih: Yeah. So, I had sold my personal home in ‘05 on Buzz’s recommendation. The person who owned our bank, okay, he said, oh, yeah, real estate is going to take a crash. So I sold my house, and I remember to this day, my mom cried because she said, hey, you will never be able to afford another house for the rest of your life. So it was one of those things. I bought the house for, say, roughly 140,000 in ‘99 or 2000, and I sold it for like 350,000. Those were the days, right? So I was sitting on about 200 grand. So, the first couple of loans I made, I made with my own money, just trying to figure out how to do it.
Adham Sbeih: And then about four or five months later, and I had a couple of broker deals I did, too. And then four or five months later, I talked to John, and I said, hey, let’s go grab some pizza. And we grabbed a pizza and had a couple of pitchers of beer. And on a cocktail napkin, I kind of sketched out, hey, this is what hard money is. This is how it works. At that time, he was a commercial real estate broker and did leasing and sales.
Kevin Kim: So, our audience, who are unaware of the Socotra story. This is John Ingoglia. All right. Rest in peace, John Ingoglia. We miss you so much. And this is a crazy story because, literally, John had no business doing private lending. He had been doing just fine.
Adham Sbeih: Right.
Kevin Kim: So, how did you two get together? What was the connection between the two like, was there a friendship before?
Adham Sbeih: So John and I met. I organized a commercial real estate broker softball league when I was doing commercial banking. So it was like a slow-pitch beer league kind of a deal, and John and I both were terrible. John struck out the first week of the first season. So we’re still running that softball league to this day, 19 years later. Nice. Yeah. And we raise a lot of money for charity.
Kevin Kim: That’s awesome.
Adham Sbeih: Every strikeout is $25 to charity.
Kevin Kim: So if you strike out, you got to pay.
Adham Sbeih: You got to pay. Yeah. It goes to the children’s home.
Kevin Kim: Yeah, I like that.
Adham Sbeih: We’ve raised over the years. It’s close to $200,000.
Kevin Kim: It’s amazing.
Adham Sbeih: To the children’s home. So, anyway, so I knew John from the softball league, and I knew he had been a stockbroker in New York. And so, you know, he said, I can raise the money. You just get the deals. I was like, okay, perfect. He grew into an extremely successful, you know, gosh, how would I describe him? He was the quintessential salesperson, energetic, ultimate salesperson. Always selling. Always closing. He was a phenom. I love him to death. Anyway, but he was a little rusty at that point. So we started, and we started out, and he had a spare bedroom in his house, so we were working out of that bedroom. And then his family owned a large food distribution business here in Sacramento.
Kevin Kim: The Salami’s.
Adham Sbeih: Yeah. So it was Tony Salami and Cheese at one point. That was the name of the company. Eventually, it grew to Tony’s Fine Foods. Anyway, so they had a warehouse that they weren’t using, and they’d used it for processing tomatoes. That was their prior use, but they hadn’t used it in a couple of years. So they said, oh, yeah, you guys can take the warehouse. So john and I, we went and cleaned it out. There was all the mosquito larvae and all the bugs and stuff from doing the tomato processing and then closing up the building for, like, five years. So we cleaned all that stuff up, set up a couple desks, and went to work.
Kevin Kim: Started finding deals and investors.
Adham Sbeih: Yeah, so we just started. John, being a stockbroker from new york, he knew how to use the phone, and that was kind of to get the company started. My first 50 dials, trying to find $2 million. Right. So it’s just like, hey. So we started. We just made lists, and we just dialed every day, all day. That’s how we started.
Adham Sbeih: It was tough raising money back then, really tough. I remember the week when Lehman Brothers collapsed and WAMU failed. That was all I think. What was that? Maybe October of ‘08, September of ‘08.
Nema Daghbandan: What was the pitch when you’re calling these people and saying what were you saying to them?
Kevin Kim: Were you used to culture capital at the time?
Adham Sbeih: No. So that’s interesting. Yeah, that’s a good question. So, yeah, when John decided to join me, his last name was Ingoglia. So, you know, those are two terrible immigrant names.
Adham Sbeih: Exactly. Yeah. You know my pain. So we were like, okay, let’s create a name and let’s make something that’s a little different. And there was a company back then, they’ve now gone out of business, but they were called Opus, and they were a real estate developer. And I thought, oh, man, I love the name know, so what can we find that’s like Opus? And we couldn’t really figure out a name like we so then we started looking at islands, and there’s an island called Socotra, and it’s an island that’s part of the Yemen empire. And what we liked about it was it was a safe haven for merchants in the time of Marco Polo.
Kevin Kim: Okay.
Adham Sbeih: So it was like, oh, yeah, we’re a safe haven, all right.
Kevin Kim: Yeah.
Adham Sbeih: And then in Sanskrit, Socotra means Island of Bliss.
Kevin Kim: Okay.
Adham Sbeih: So it was like, there we go.
Kevin Kim: I love these stories.
Adham Sbeih: So. We changed it from Sbeih Financial to Socotra Capital. You do all the reincorporation and all that other stuff, added John to the corp, which obviously was worth nothing at the time. And that cost us, like, I can’t remember, five, six grand at the time. And then, I don’t know if you remember, during that time period, there were those Somali pirates that were attacking the cruise ships. Somali pirates. So, all of a sudden, Socotra was in the news because they were launching off of the island of Socotra. Perfect timing.
Nema Daghbandan: I mean, no press is bad press. I am not the Somali pirate.
Kevin Kim: Or use it to your favor. Hey, we’ve been robbed. Please help.
Adham Sbeih: Right? Yeah. We were at that point in our business where money was like, so dear, and we’re like, God damn, do we want to spend, like, the six grand to try to rename the company something else? And we just ran with it. We’re the island of Bliss. We’re the safe haven for merchants.
Kevin Kim: So back to question, though.
Adham Sbeih: What we would do is we’d call folks, we’d get lists from the title company of people that had seller. Uh, and then John’s mom, we call her our first employee, she would sit on the Internet and do, like, reverse people search to try to find phone numbers, and we’d put them all into Excel spreadsheets. And then we would call those folks and say, hey, you’ve got a first trustee or a second trustee on this property that you sold? Are you looking to do something similar to get that kind of income on something else. That was how it started.
Kevin Kim: And it was a very different way of pitching because it’s not what most of our clients, they were not that resourceful, I’ll tell you that much, because a lot of them had a book of business they had brought over previously, or they had someone who they hired, someone that had that book or something like that. Right.
Nema Daghbandan: They always had some sort of investment background where they knew high net worth individuals, and you were basically reverse engineering who could be a high net worth individual who understood this product type.
Adham Sbeih: Right. That is what we did. So I remember the first investor we ever got, and he still invests with us to this day. I met a guy at the McDonald’s, and he said, I’ll put 50 grand into your deal. So I remember the first deal John and I did together where we raised the money. It was $588,000, and it took us nine weeks to raise the money. Yeah. And of that money, my dad was 50 grand.
Adham Sbeih: John’s brother was 38. The guy from McDonald’s was 50. It was a fractional trustee. Ten people.
Kevin Kim: Good old hard money. Yeah.
Adham Sbeih: $588,000. Yeah.
Kevin Kim: Comparatively now.
Adham Sbeih: Right. So that was the start.
Kevin Kim: Yeah. And so when you guys started out, was it just California only and just you two? And so I’ve always wondered for you, like, I know now you guys lend in many, many states across the country. You’re primarily commercial-driven, but back then, it was just whatever deal came across your desk, and you just raised the money each deal by deal, right?
Adham Sbeih: Yes, that’s exactly what happened. We were a little more local, obviously. I had the local roots, and the banks really weren’t lending kind of a lot. It’s not too far from what it’s like today, right, where the banks aren’t making loans. So I did have a pretty good referral network of seeing loans, seeing opportunities from the bank, and stuff like that, so we didn’t have to spend a ton of time trying to prospect new loans. We spent a ton of energy on raising the money, funding the cash.
Kevin Kim: And so when you guys were growing and growing, when was kind of like, okay, this is now starting to become we’re real now, we’re big boys now. When that first click, like, come up for you?
Adham Sbeih: I think for me, that was probably towards the end of 2010. I remember there was a Christmas or December of 2010 where our phone was ringing off the hook with opportunities, with loans, and John was like, let’s get them all. These were like seven-figure loans, which were really big for us at the time. I remember that December, we closed like 5 million in loans, and it was like, me and John and an admin at the time, still very lean, super lean. And I thought, okay, after that month, it was like, all right, this actually might work.
Kevin Kim: That was when you realized we’ve got a thing.
Adham Sbeih: We’ve got a thing.
Kevin Kim: I like that.
Adham Sbeih: Yeah.
Kevin Kim: Cool.
Adham Sbeih: My mom was wrong. Yeah. My mom wanted me to become a plumber. Full disclosure, I can’t imagine my folks didn’t think real. Right.
Nema Daghbandan: So I’ve noticed there are three types of people in the world for this podcast. There are people who call Kevin and say, Kevin, I want to be on your podcast.
Kevin Kim: Yeah, very common.
Nema Daghbandan: There’s the second camp, which is people who we call and say, hey, we’d like you to be on the podcast. Like, yeah, sounds great. Let’s get set up. And there’s a third camp, people we have to hunt down mercilessly.
Adham Sbeih: Which one am I?
Nema Daghbandan: You are deep third.
Kevin Kim: I asked you when we first started, and you said I don’t want to do that. I remember at the time, it was like you had said, I think it was before the Herzer deal, and you were very concentrated on the next evolution of growth, and you kind of didn’t want to give away the secret sauce at all. And I remember you telling us that in Vegas. And I was like, okay, let’s wait.
Nema Daghbandan: We host conferences and all that kind of stuff, and we’ve asked you to speak many times, and you’ve rejected our offers many times. But I think that that kind of I don’t know if I call it “mysteriousness.”
Kevin Kim: it’s very mysterious.
Nema Daghbandan: Right. You’re not the person who wants attention or spotlight from what I have seen.
Adham Sbeih: That would be correct.
Nema Daghbandan: You are very much behind the scenes. Walk us through that. I mean, walk us through kind of your thought process of what it means to be CEO and what it means to be at the helm of a company.
Adham Sbeih: Sure, yeah. I think that being the CEO is different than being kind of in the forefront of the industry. So as a CEO, I think of myself like, say, like a football coach. Right. You might yell at the defensive lineman, you coddle the offensive lineman, and you meet privately with the quarterback. Right. You do different things to different people in different situations to get the most out of them. And so I take my role as a CEO at Socotra as very serious and that I want to get the most out of my team.
Adham Sbeih: Which doesn’t always mean like, yeah, I want to get the most publicity. I encourage our team members to do your conferences, speak at conferences and do that sort of thing because I think it’s important and it gives them credibility. I don’t need credibility per se in order to be effective, I need credibility within the building. Right. I don’t need it to the external world.
Kevin Kim: But at the same time, a lot of CEOs also have that marketing brain. They want to promote the company to the industry at large. They believe that building brand reputation in the marketplace requires them as CEO to go to, I don’t know, western states CREF and be on panels so all the brokers come to them. But I’ve thought about it for you. I know your business model and I’m thinking about I’m like, you don’t want brokers calling you Adham Sbeih. Right. And that’s a different thing. Like you’ve built a business that’s a little bit not intended to be fed to you.
Adham Sbeih: Yeah, I don’t want something centered around me. I want it centered around my team. And we have a very team-oriented approach to everything we do. Prior to being a banker and a hard money lender, I was a bike racer and I was really fortunate to be on some really high performing teams.
Kevin Kim: Bike racer? Like a cyclist?
Adham Sbeih: Like a cyclist.
Nema Daghbandan: You thought he was like a hell’s angel.
Adham Sbeih: This story would have been a lot more fun, but it’s a mystery. Fortunately, he’s just land.
Kevin Kim: Every time I see Adham, I always learn something new about Adham. He’s always a surprise. Right. So I knew this just making sure.
Adham Sbeih: No. So I was a professional bicycle racer and I was on some really high performing teams. I was also on know, teams that were a little more dysfunctional and weren’t high-performing. The highest-performing teams I’ve been a part of, the captain of the team was not like a person that won the most races. They were the person that enabled everyone else to win. In cycling, it takes a team to allow an individual to win. So it’s a little bit of a foreign concept to people that don’t understand the sport. But the teams that were the most effective and highest performing had captains that are willing to give as opposed to always looking to receive.
Adham Sbeih: They aren’t the narcissists in the group.
Nema Daghbandan: There’s a lot of Pippins and not a lot of Jordans.
Adham Sbeih: Yes. There we go. There we so when I run the business, I try to run it from that same perspective. One, it’s a team. It’s a team sport. We do a lot as far as team goals, team performance. There’s also an individual side to that. But there’s a huge team component here at Socotra and Herzer and me as the leader, I don’t need to take the glory on the team wins.
Nema Daghbandan: How do you balance because I know we’ve struggled with that, which is balancing individual performance and recognizing team and trying to make sure that you don’t create a competitive environment between team members, but while still making sure that your people are being held accountable to standards.
Adham Sbeih: Yeah, it’s challenging. It’s something we struggle with just like you guys do, I’m sure. But we try to create goals that are team-oriented, and then there’s individual accountability that goes with those team goals. So it’s like, hey, what is your participation in achieving that goal for the team? And then each person has their own individual goals. So it’s like you got to kind of build it like a, It’s like a pyramid where you’re kind of building for the peak. So yeah, it takes a lot of effort as the leader to find that you can’t improve what you don’t measure. So you got to measure a lot of different metrics.
Nema Daghbandan: And that’s exactly what I wanted to go to next, which is I have been able to talk with you at conferences for many years now and I love sitting down with you because every time I sit down with you teach me so much about thinking about business. And so give us an idea of just some of the things that you track and why you chose to track those.
Adham Sbeih: Oh, goodness, okay, yeah, sure. We track all sorts of things. So we track, for instance, we track when an Internet lead comes in, how quickly do we call them back?
Kevin Kim: Oh, the time frame.
Adham Sbeih: How quickly do you respond to an internet lead? And there’s data that says, hey, if you are responding within four minutes, your ability to close that lead is drastically higher. Beyond four minutes, the closing rate on that Internet lead is significantly lower.
Nema Daghbandan: They called the next person ready because they’re already onto the next website.
Adham Sbeih:. Right, exactly. So that’s one thing that we track. We track the number of dials somebody makes. We track the number of opportunities that someone sees. We track the number of opportunities that get appraisals paid. And of the ones that get of the deals that get appraisals paid, how many close. And we track all sorts of ratios. We have what we call a power hour. So we do a lot of dialing in our office.
Adham Sbeih: So there’s a two-hour time window. We track how much time are you actually talking to somebody on the telephone during that two-hour time period. We track when we draw Docs to close a loan. We go through a review process. Three people review it. We track how long it takes from the time the docs are created to the time the third person gets the review and the docs go out to title. Because we’re in a speed game, we turbo close. Turbo close, exactly.
Adham Sbeih: We track so many different pieces of our business and then what it allows you to do is you can pull on different levers at different points so you can incentivize employees to say, hey, we want docs going out to title within 45 minutes. So like, hey, if we can draw the loan documents and get three people to review them for accuracy within 45 minutes and get them out to the title company, that gets some kind of bonus. We gamify everything. So I mean, there’s some sort of, you get some kind of point for that.
Kevin Kim: I got a question on this. We’ve known about your guys’ business culture and how you guys have created this very retail sales-oriented outfit when it comes to getting new origination in the door. It’s very different than a lot of the businesses that we interview on the show. A lot of our private lending clients out there because they’re really looking at it from a they’re concentrating on meeting brokers, get repeat business, and they just build the they work on the I would call it the relationship game. And they’re out there doing they don’t really do the call stuff anymore. That’s kind of the sense that I get from a lot of people that that doesn’t work for them.
Nema Daghbandan: Especially nationally, it’s very hard to grow outside of your market.
Kevin Kim: And then adding commercial real estate finance to that makes it even more difficult. But you guys have made it work, and there’s very few organizations that have made that work. It’s been proven time and time again, every retail business that sells to consumers and businesses does that, if you really think about it. But it requires a certain level of discipline and personality to be willing to make those types of phone calls, right?
Adham Sbeih: Yeah, it does. It’s a certain personality, and it’s a certain type of person. And we do really well with team-oriented folks, people that work well in a team environment.
Kevin Kim: Like former athletes.
Adham Sbeih: We absolutely do.
Kevin Kim: Yeah. What’s like the avatar for you when you’re looking for a new hire? On the origination side?
Adham Sbeih: It’s typically a younger person. They typically played college sport or were really good at something. They had some kind of really high proficiency.
Nema Daghbandan: They’re competitive in nature.
Adham Sbeih: Yes. And they’re about to do something that has when you start, it is very difficult. It gets easier as you get going. So what I would say is that you do develop relationships with the people that you’re calling. So it is a long game. It’s different than and we do go to conferences and we do belly to belly and we do build relationships.
Adham Sbeih: I like that. Belly to belly, I like that. That’s a wrestling term. I like that.
Kevin Kim: That’s a real way to put it.
Adham Sbeih: Though, when you’re out there belly to belly and you’re trying to get those deals mean we do that also. But the mean that’s how I started then that’s how John, when he came, when we joined together, that’s what we did. And when we hired our first employee, that’s what they did. And it just has sort of grown and it works.
Kevin Kim: And there’s I feel like a lot of organizations aren’t willing to do it because it’s hard to find people that are willing to do that. The cold-calling game is very tough. It’s very intimidating. And finding the folks to do that.
Adham Sbeih: It’s a certain type of person. They’ve got to be competitive.
Kevin Kim: And we were walking your halls today when we got into this afternoon, and I was just thoroughly impressed. Because not only do you have these young men and women that are really hustling hard, but they’ve got ties on. And this is to me, I love it. I personally love it because I’m the guy that wants to wear nice clothes to work.
Nema Daghbandan: Kevin and I have a lot of friction in the office right now.
Kevin Kim: Nema wants to wear shorts to work every day, and I insist on at least wearing a collar. But I used to wear ties to work every day. And I walked in, and I’m like, everyone’s got their A game on. They’re wearing their tie. And then you guys had this ritual for your newest loan officer or a salesperson. Tell us more about that part of the business, how you’re incentivizing and rewarding and creating that level of it’s like a team feeling. But it’s almost like it felt like he was getting a medal, almost.
Adham Sbeih: Yeah.
Kevin Kim: Right?
Adham Sbeih: Yeah. Tell us more about that and what you’re doing. I think, in general, intrinsic rewards are as valuable and sometimes more valuable than the monetary reward. Part of doing the startup for us and the sales game is that there’s a lot of benchmarks that you get to hit, so you’re constantly climbing a ladder. So it’s not like, hey, I’m three years going across the Sahara Desert. It’s like every one to three months, you’re hitting a new benchmark, accomplishing a new task.
Nema Daghbandan: And do they know mean, when you start on day one, they’re like, hey, in three months, you do this, you get this. And at three months, you do this.
Kevin Kim: You get that.
Adham Sbeih: Exactly.
Nema Daghbandan: Okay.
Adham Sbeih: And it’s celebrated because it’s hard. It’s harder than hell. And most people fail. Yeah, most people fail.
Kevin Kim: What’s that turn like on the entry-level guys?
Adham Sbeih: Starting day one? It’s probably in that 10% range.
Kevin Kim: They just can’t cut it.
Adham Sbeih: Yeah, but I’d say once you make 90 days and you make it, then that’s probably you’re getting up into that kind of one out of three.
Kevin Kim: Right.
Adham Sbeih: It becomes pretty obvious. And sometimes folks make it and they decide, you know what? I don’t want to do it.
Kevin Kim: They’re not built for it. They don’t have a personality for it.
Adham Sbeih: I get it. They don’t love what they’re doing.
Kevin Kim: I Gotta ask for our audience that knows Socotra, you guys know that there are these characters out there who come to the conferences, and they’re wearing the hard money T-shirt, and we’ve got hard money, Chris. We’ve got hard money. Kerati. Hard money. Connor, how did that start? Because it came out right when I felt like our industry was like, oh, hard money. I love see, I was at NBA in San Diego, and I saw Chris walking down the escalator because doesn’t this.
Nema Daghbandan: Feel kind of narcos-ish like, you’re dealing with Adham polished, wears a suit.
Adham Sbeih: Nice, man.
Kevin Kim: I love it. I feel like they lean into it, too, right?
Adham Sbeih: Because we wanted to lean into it, wave the flag.
Kevin Kim: We are hard money. But how did that start?
Adham Sbeih: So we were working out of a warehouse with cold storage and meat in the back. It was like, with my Italian partner, it was like, hey, are you guys Mafia or something? It’s like, no, we’re hard money. And so we decided, hey, we’re just going to lean into it, as you guys say. And really, the first person to it started with Chris. Chris was with us in, I think it was 2010, and he would go to local real estate events and things, and there were a lot of mortgage brokers, and he was trying to differentiate himself. So he’s like, hey, I’m Hard Money Chris. And then that year for the Christmas party, john gave him a license plate that said Hard Money Chris, and then had his phone number on the bottom of it.
Kevin Kim: I love it.
Adham Sbeih: Well, that’s awesome, because people are afraid.
Kevin Kim: To be kind of salesy, I feel like. But you kind of want that in your loan officers. You want them to be out there hustling hard and grinding and doing what they have to do to get deals done.
Adham Sbeih: Correct.
Kevin Kim: I don’t object to it whatsoever, as long as you’re successful in getting the results that you want, is my view on it. But you never got the pressure from the market, from the industry professionals. They like, oh, we don’t call it hard money anymore.
Adham Sbeih: We have but I think everyone has their way of selling. Some people educate, some people are the ABC constantly. I mean, there’s just different ways to approach, you know, different solutions to the same problem. And we have folks that don’t do the kind of the ABC always be closing. We have both types. So you can be successful in any realm; however you choose to do your sales process.
Kevin Kim: Right now, I got to ask you, where did you guys learn this sales training, these strategies? Because this doesn’t come instinctually, does it?
Adham Sbeih: Yeah.
Nema Daghbandan: You weren’t doing this at the bank?
Adham Sbeih: No, we were not doing this at the bank.
Kevin Kim: Did you go to a sales training or a sales course or John, like, a sales manager in this? Where did this mentality come from for your loan officer? Because you have such a unique there’s only a handful of companies that do it this way.
Nema Daghbandan: Direct, retail channel, and just we’re going to own distribution from start to finish.
Kevin Kim: And it’s successful, too. So, I’m just wondering where this came from from a mindset standpoint.
Adham Sbeih: It just evolved over time. John, having been a stockbroker in New York.
Kevin Kim: Yeah, they do it that way.
Adham Sbeih: Yeah. It is not quite the way we do it. We do it a little bit different, but they do a lot of dialing. And I had early on in my business career, I had a mentor, and he was really big on dialing. His background was as a financial advisor, but he would do business coaching of all types. And so when I worked at the bank, I would say, okay, you got to make different games I played. You got to make seven dials before 07:00 a.m. Every day, or you got to make 22.
Adham Sbeih: And he would change it every couple of weeks. And if I didn’t do it, 22 dials by 2:00 p.m. Every day, whatever, he’d make different games up like that. And if I didn’t do it, then I would have to tell the President, like, hey, if I don’t make these dials, I have to clean the bathroom with a toothbrush. And the president of the bank is like, okay, whatever, man. You’re some stupid kid. Sounds good, buddy.
Kevin Kim: These are self-imposedchallenges.
Adham Sbeih: These were self-imposed Yeah. So it wasn’t foreign to me. And then, when John came and joined me, he was rusty on using the telephone. Really? Actually. And I had used a book. You can buy it at Kinko’s. It’s called cold calling sales techniques.
Adham Sbeih: And so I was like, hey, man, you got to read this. You got to understand what the ledge is and how cold calling works. And so I gave it to him. He read it, and he just embraced it. I mean, he would just go all in on it, and then every employee after that got the book, it just sort of just developed that way. And you know, our current team, Chris, Kerati, Matt, those guys have helped evolve the program, and even recently, hard money Munoz, she gave us some really good suggestions on how to improve the ramp-up process. And so it’s constantly improving. We have a saying we’re looking always for 1% improvements. If you can just make a 1% improvement over time, that aggregates to a significant improvement. So how can we improve this process or this system by 1%?
Kevin Kim: Right. 15 years of 1% improvement. It’s a lot.
Adham Sbeih:Yeah. If you stagnate, you die.
Kevin Kim: And that’s what I find in our space. A lot of folks actually face that. Trouble is, they don’t identify where the improvements can be. And then when crisis hits, it really hits. Because now, like, right now, we’re facing it. Right. I mean, this market right now, a lot of our clients are capital markets are dead. They don’t have discretionary capital. They don’t have the deal flow that they need to survive, and they haven’t made the improvements in the business to really get there.
Kevin Kim: And I think one of the best things I’ve learned today is that you guys are always working on the business.
Adham Sbeih: Yeah, on the business. Not in the business. On the business.
Kevin Kim: Fantastic. And is that one of the things that you’re on day to day?
Adham Sbeih: Every day, yes, every day I’m working on the business.
Nema Daghbandan: That’s cool, but get deeper on that. Right. What does it mean? Adham Sbeih walks into this office this morning what is your thought process and your role? I mean, how do you determine how you’re going to work on the business?
Adham Sbeih: It depends on the day. It depends on the day. So I meet with a lot of people and I am constantly talking to our team, and I’m constantly looking for things that we can improve or listening to people with their suggestions of what we could improve or what is a problem. Where is our issue? Where are we having bottlenecks? It varies day to day and there.
Nema Daghbandan: Are kind of like doing like a listening tour to your people. Are you just walking the halls a little bit and kind of what? I mean, walk through the process of that a little bit?
Adham Sbeih: Sure. I am constantly thinking about this. So, behind us is our code of honor. So, we have a code that we follow. We try to be like the Marines. The Marines have a code, right? They say, no Marine left behind. We have our own code. It’s like keep your commitments. It’s develop yourself personally and professionally. TThere arecertain pieces. And we have a way and a process where people are allowed to call people out for doing a good job on meeting that code.
Adham Sbeih: So I see that, and if I see that, I might grab the person and talk to them about it. Hey, I saw or heard that you.
Kevin Kim: That’s really important. Huge difference.
Adham Sbeih: So there’s that piece of it. We’re always looking at like, hey, where is our weak spot? Where do we need to put manpower? Where can we add technology? Where is our communication breakdown? In this office we have baby boomers, Gen Xers, Millennials, and Gen Z. We got four generations working in the office that causes friction. Right? And then you’re thinking, okay, now how do you solve that friction? How do you make this having four generations working in an office can be a huge asset. It can be a massive asset.
Nema Daghbandan: Right. You have diversity of thought.
Adham Sbeih: Yeah, absolutely. And so you want to encourage a little bit of the tension, but you don’t want it to go over the top.
Kevin Kim: You want to challenge each other, and push each other to be better.
Adham Sbeih: Yeah, absolutely.
Kevin Kim: That’s so foreign to me; compared to a lot of the interviews I’ve done with CEOs, they’re not thinking that way. I think that that’s kind of one of the keys to your guys’ success because your hands are working on the business and making sure that things are flowing well and smoothly. You’re not obsessing about capital markets. You’re not obsessing about deal flow. And that’s so different. And what’s interesting to me is that also you guys have built your own; I call it the mysterious money machine. Your funds are significantly sized.
Kevin Kim: You’re about at half a billion dollars under management. And you have been consistently raising money. And a lot of our, I guess you can call it friends in the space have money with you. And what’s fascinating to me is that it’s also very under the radar. I go to a commercial show in Las Vegas and talk to a client, and they’re like, who’s that? Oh, those guys. You aren’t as big lights in the sky kind of operation. But you’re out competing with these guys every day of the week. And I just don’t know how do you put that level of trust in your people to make sure that that level of performance is there. Because you have continuously outperformed a lot of your competitors through much of these problematic cycles, like right now, your guys are doing well, COVID, you guys killed it.
Kevin Kim: But as a CEO, that must be really scary.
Adham Sbeih: No, I’ve got a really good group of people. I think, for me, that’s the bottom line. We’ve got a great executive team, we’ve got a good group of folks on our sales team. We got a great group in our loan servicing team. I mean, super people, our funding group. We’ve got a lot of people that have been with I mean, whatever, we’ve been around 16 years. We’ve got people that have been with us for more than ten years. Quite a few people that have been with us for more than ten years.
Adham Sbeih: We don’t have a lot of turnover. We do everything we can. I do everything I can to take care of the folks that work for us. It’s health benefits and lunches and workouts at the gym. Trying to give people some balance to their life, if they have kids and that kind of stuff.
Kevin Kim: You care about their personal lives and their well-being as well.
Adham Sbeih: Yeah, I do. You become vested in what’s best for them. We’ve had people that we’ve paid for them to go to school, to get their MBAs, get trained, and sometimes those people then move on. Right. That’s kind of part of the what’s the saying? I’d rather train them and have them leave than not and have them stay. We incentivize people to grow personally and professionally. That’s just part of what we do.
Kevin Kim: I want to ask you about the funds and stuff, because there’s only a handful of debt funds out there, and as a debt fund person, this is with my job. Your debt funds are so strange to me because the fact of the matter is, I think you’re one of the very few larger-sized funds that do not use leverage. You do not sell to the secondary.
Adham Sbeih: Correct.
Kevin Kim: You balance sheet everything.
Adham Sbeih: Right.
Kevin Kim: And you do deals that you want to. For a long time you guys didn’t do construction, right? Even when everyone else was. Why?
Nema Daghbandan: What’s wrong with you?
Kevin Kim: No, we talk about this privately, but so many of your competitors right. Have, like they pursued leverage, they pursued.
Nema Daghbandan: Loan sale, they pursue growth, they’re hyper growth focused.
Adham Sbeih: I think most of our these are.
Kevin Kim: All tools to grow. Their mindset is like and they’ve done all these things, but you’ve chosen not to. But you’ve also you’ve grown massively.
Adham Sbeih: Right. That is weird. You know, for me, I don’t want the debt in our funds because I want to be the shot caller. I don’t want a big family office to call up and say, hey, we’re going to pull our $30 million out of your fund if you don’t do XYZ. So it’s been important for me that ultimately the decisions, good or bad, fall on me, not somebody else. And that’s why we’ve steered clear of that stuff. I do think that our approach to origination allows us to see a lot more loans so we can make better deals, and we run things at a pretty low cost so it passes through to our investors at a higher yield.
Kevin Kim: Your expense ratio is like nonexistent.
Adham Sbeih: I think we do things a little more efficiently. No one wants to do what we do, so as a result, we can do it for less, so to speak. Other than that, I think we’re probably just we’ve been a little bit fortunate. We’re disciplined, we work hard, we grind.
Kevin Kim: On the loan sale side, too. There were so many opportunities from basically 2017, and ‘18 till 2021 to sell loans off the books and get liquidity.
Nema Daghbandan: Right. You could have probably tripled your volume if you wanted to.
Adham Sbeih: Right.
Kevin Kim: You chose not to.
Adham Sbeih: Correct. Ultimately, it’s our investor who guides us, and selling those loans didn’t benefit our investor. It would benefit me, for instance. Right? Yeah.
Kevin Kim: You’re fine model, it would just go to you.
Adham Sbeih: Yeah. So, ultimately, I think that played a part in it. I also like portfolioing loans. I think of us as like a national community bank, right. That’s, you know, the community banks are dying. They are dying at at a rate you know, when I, when I got into banking, there were in Sacramento, what was, it was like 23 community banks in the Sacramento region.
Kevin Kim: 23.
Adham Sbeih: There’s four and two of them are merging.
Kevin Kim: They got bought up by different, bigger banks..
Adham Sbeih: And nationally, the banks have gone in that same period. They’re off about like 70% between consolidations and failing. And the prediction is really, we’re going to end up with about 1000 banks in the country, period. So it’s like, for me, kind of the market that we as private lenders, hard money lenders that we can serve is really the borrower that used to go to the community bank and get their loan, that now that community bank doesn’t exist or isn’t making loans. And that’s who we service. So, for us, when Dave Herzer approached me about Herzer Financial, it made sense to me because home builders, they can’t go to their community bank to get a ssingle-familyhome construction loan. And that’s what Dave has been doing for 20 years. And so for me, it was like, okay, let’s learn the secret sauce of how ground-upconstruction works. This is another way we can service the borrower.
Kevin Kim: And that raises an interesting topic, because this is what I love about your story. You have been through this past cycle, if you will call it, a lot of trials and tribulations. And one of the bigger trials and tribulations that a lot of private lenders don’t get to go through is buying another company. They get bought. You grew, and you bought another company, and you bought Herzer Financial. And this is recent, and I’m glad you’re able to talk about it. Tell us more about the mentality, not necessarily the actual transaction itself first and why you did it. More like on your end. How did you know you were ready to buy another company? First of all, a lot of private lenders can buy another private lender.
Adham Sbeih: Right. How did I know I was ready? Well, I’ll say this. We have wanted to get into the ground-up construction business for single-family homes for a while.
Kevin Kim: Yeah, I remember that.
Adham Sbeih: And we dipped our toe in and stubbed it once or twice.
Kevin Kim: It’s a risky business.
Adham Sbeih: It had been on my mind for a while that, hey, I’d like to be able to service that piece of the community bank business. And so Dave Herzer, his company it’s amazing. His dad started it in the 50s, then Dave took it over, and we’re now managing one of his funds. He started it in ’04 or ‘03. It’s one of the few survivors.
Adham Sbeih: It might have been ‘99. He started it.
Kevin Kim: That’s true.
Adham Sbeih: I remember looking at yeah, and I love that. And when I met with his investors, they were super loyal to Dave because he went through the Great Recession returning, like, three or 4%, which is amazing, right?
Nema Daghbandan: And they stuck by.
Adham Sbeih: And they stuck by. And so for me, as we talked about, we call it a merger of the two businesses. We’re calling it it’s two organizations, one team. That’s how we look at it. When we started talking, it was like, hey, I really want to understand your secret sauce of how you were able to make loans, ground-up construction loans through the Great Recession and return 3- 4% to your investors. That’s awesome. And so that was part of the calculus for me.
Kevin Kim: So there was a need for it. And did you approach Dave, or did Dave approach you?
Adham Sbeih: Dave approached me.
Kevin Kim: So it was a legacy move for him. He’s trying to retire, that kind of stuff.
Adham Sbeih: Correct.
Kevin Kim: That’s smart, because that’s the hardest part about private lending, is that there is not really an exit. You either stick with it and retire and just kind of walk away from the business, or you try to sell it. But it’s not that easy.
Adham Sbeih: Right.
Nema Daghbandan: And I think that’s also one of your secret sauces, kind of just being a casual observer of your organization, which is that you’ve gone through a lot of iterations of ownership and management and just kind of thinking through the business of it’s first, you and John.
Kevin Kim: Right.
Nema Daghbandan: And you’ve really been a thoughtful person every time I’ve spoken to you about, how do I make sure that there’s a next generation that sits right behind me, and how do I incentivize them, and how do I make sure I reward them? Walk us through that. Did you know this going in? Where did you learn it? How did you implement it?
Adham Sbeih: I’m still learning it, Nema.
Adham Sbeih: I think in our business, actually, Dave is one that coined it. You got the tiger by the tail.
Kevin Kim: Right.
Adham Sbeih: We’ve got 500 million in capital. We have to do what is best for our investors. And so there’s got to be some kind of succession plan. For me, that’s part of the young folks that we hire. Some of them are a part of that succession plan. I don’t want to have a succession plan with a bunch of 55 year olds. Right. It’s got to be people that are in there.
Kevin Kim: So is there, like, a program that you instituted for your high performers to become partners in the business?
Adham Sbeih: Correct. Okay.
Kevin Kim: They have to buy in, that kind of stuff.
Adham Sbeih: I can’t get into the details of those pieces, but, yeah, if you are a high performer, you can have an opportunity to become a partner, become a part of the business.
Nema Daghbandan: When did you start thinking about that? When did you start going? You know, this can’t be just about me.
Adham Sbeih: It really hit me hard after John passed away. So, he died in July of 2020. It was sudden.
Kevin Kim: Yeah, it was really sudden.
Adham Sbeih: Yeah. So it was unexpected. And then all of a sudden, you realize, okay, if the same thing happens to me, we’re in deep trouble. Yeah. So that was really where it started, and it took me a solid nine months to really kind of figure out how I wanted to do it with who and how and what, that kind of thing. And I’m glad I did. The business needs to be greater than me, and that’s part of that.
Nema Daghbandan: We’ve seen that struggle. I mean, we’ve seen a lot of people currently at this juncture; we’ve been going to see California Mortgage Association since 2011 or so, and you’re watching kind of this aging out type thing, and you can watch in real-time people when they start falling off, their business starts falling off. There just isn’t a plan for continuation. And it’s interesting to see you kind of just jump in front of that the way you have.
Adham Sbeih: Yeah, it’s a challenge. It’s a challenge. I mean, I’m sure you guys are facing similar challenges.
Kevin Kim: We haven’t solved it either. I deal with key man policies and provisions for clients all the time, and there’s no kind know, silver bullet for it either, because every business is different. I want to switch gears a little bit and ask you some questions about Adham. Adham, Adham, Adham. So you have a very interesting hobby. You train dogs, correct?
Adham Sbeih: Yeah.
Kevin Kim: Not any kind of dogs. Okay. Full disclosure. Our mutual friend Vito, who was on the show before, gave us some questions to ask.
Adham Sbeih: Right.
Nema Daghbandan: And I also want to say this is payback for an interview you did circa during the pandemic in which you asked Adham questions that he would like to ask about. So it’s finally coming full circle.
Kevin Kim: So tell us more about this hobby. This is one of the most interesting hobbies I’ve ever heard. So, first of all, what kind of dogs are we training?
Adham Sbeih: Belgian Malinois.
Kevin Kim: Wow. These are the dogs that Militaries use, aren’t they?
Adham Sbeih: Yeah. Military and police, right? Yeah, they’re super smart dogs. And they can oh, gosh, they can do all kinds of things. Yeah, there’s YouTube video. I mean, I’ve made a YouTube video, but yeah, there’s all sorts of videos online.
Kevin Kim: You’re a trainer of these dogs?
Adham Sbeih: Yeah, I’m an amateur trainer, I would say.
Kevin Kim: How did this start? I don’t understand. How does one start thinking about I have a lot of hobbies. I never, ever thought about training an animal. I can barely get my kids to do anything.
Adham Sbeih: Very similar skill set. Right.
Kevin Kim: How did you start this hobby? It’s just interesting.
Adham Sbeih: Oh, gosh, I don’t even know where to begin. Let’s see. I lived in a house where I couldn’t have a dog for a long time. And I said to my girlfriend, like, I can’t believe all this time, and I don’t have a pinball machine. I don’t have a dog that I want, I don’t have a pool, whatever.
Nema Daghbandan: My mom is mad at me.
Adham Sbeih: Exactly. So then she’s like, oh, great. I wanted to get a new house, right? So I was like, okay. So we got a new house. It was a single-story house, a big house, all windows. And then she didn’t feel safe in that house. And she’s not strong. She couldn’t fire a gun.
Adham Sbeih: We don’t own a gun, or I do now, but I didn’t then. And she’s like, I want something to protect me.
Kevin Kim: So it was like, okay.
Adham Sbeih: And she actually was the one who encouraged me to get into the training the Belgian Malinois.
Kevin Kim: So you bought one to raise for your own?
Adham Sbeih: I bought one to raise, I bought one that was we imported him from Holland. He was some, you know, the paramilitary group. They had him. They were out in Texas. I bought him off of them. And then we trained him quite a bit.
Nema Daghbandan: Iraq blackwater?
Adham Sbeih: Yeah.
Kevin Kim: Where are you going to get these dogs?
Adham Sbeih: Most likely going to be a healthier resource. These guys were the real deal. We trained him. There’s a training center here locally that does a lot of police dogs. So I took him over. I took my dog over there and we worked with him. He knows maybe 80, 90 commands, all sorts of different things. We bred him.
Kevin Kim: Did you take a class on this?
Adham Sbeih: I did a bunch of seminars. Tells dog how this works. Right? Yeah. It’s an interesting group, too, because you go to those things where it’s like people have these trained kind of military/police dogs, but they’re maybe kind of paramilitary. They’re out of the military by now. And those people all have crazy stories about stuff that happens to them. And it’s almost like it’s self-fulfilling prophecy sort of stuff like home invasions and all sorts of things, which I’ve never had, thank God. But, yeah, it’s an interesting crowd, is what I’d say.
Adham Sbeih: But yeah, I’ve spent many weekends working with my dog, training them to do different things.
Kevin Kim: Have you trained other dogs before?
Adham Sbeih: A little bit.
Kevin Kim: We want to know whether you’re picking one on a collections case before.
Adham Sbeih: This is funny. I went know the really rough part of Oakland. I used to bring the dog to work every day just because that was part of his training and the people here loved him.
Kevin Kim: Right.
Adham Sbeih: And so I had to go down to Oakland. I was doing a site visit on it was a rough property, and we were unsure of whether or not we wanted to make the loan. And so I took the dog, and there was like a Mexican restaurant and then like five or six apartments up above that were all I mean, these were low income, kind of on maybe MacArthur, I can’t remember, on a pretty rough street. Anyway, so I brought the dog, walked into the restaurant dressed with a tie and well dressed with a dog, and everyone just goes running out. Damn. I was just there for a site visit. We didn’t make the line.
Kevin Kim: We got your answer.
Adham Sbeih: There you go. Right? I love it.
Kevin Kim: It’s awesome. Also, beyond that, you’ve also had beyond the cycling and the dog training. I remember a long time ago reading when I first read your online profile, you were also involved in Toastmasters, correct?
Adham Sbeih: I was. I was involved in Toastmasters. Oh, gosh. I was involved in Toastmasters for about 18 years.
Kevin Kim: 18 years?
Adham Sbeih: Something like that.
Kevin Kim: In the Sacramento chapter.
Adham Sbeih: In the Sacramento chapter, I won a bunch of speaking contests and things like that. It was really helpful. So when I first got into banking, I had no clue about anything. So, I’d been a bike racer, prior to bike racing I’d gotten a degree in PE from Sac State. No finance, no business background. I was a PE Major.
Nema Daghbandan: imposter. Go on.
Adham Sbeih: Yeah, that’s why my mom wanted me to be a plumber. Sorry, mom.
Kevin Kim: But that’s so cool, though. So, did the bank tell you to go in Toastmaster?
Adham Sbeih: No. So I had a business mentor/business coach, and he would have me do different things. So one of them was, hey, make this one time. He said, okay, I want you to make it was ten dials before 06:00 AM Every day. So he wanted me to target some people, commercial real estate owners. He said, okay, call these ten people before 06:00 AM., leave them a message.
Adham Sbeih: Then four days later, send them an article, mail it to them, then a week later, call them at, like, 10:00 PM, leave a message. And it was this whole process, right? So then the final step was call them during business hours and go, hey, it’s Adham Sbeih with XYZ Bank and wanted to set up an appointment with you. And so I did that, and I got my first kind of belly to belly with a guy, and I went into his office, and he put me in the conference room. It was an all glass conference room. And I noticed these people in the office, like, looking around the corner, and they’d point and giggle and then disappear. And it went on for, like, 10-15 minutes. All these people kind of peering at me from behind the corner. So I got up, and I went up to the secretary, and I said, hey, why is everybody looking at me so weird? And she goes, Well, I really shouldn’t tell you this, but you left a message early in the morning one day, and the message had 37 UMS on it, and the owner played it on the intercom for everybody to hear.
Adham Sbeih: And so I was like, Holy moly. Obviously, I was embarrassed. And so I went back into the conference room and waited. And he finally did show up maybe 30 minutes later, and he said, hey, at one point, I was just a simple contractor down in Santa Monica, and I didn’t know how to speak or talk in the business world either. And I went to Toastmasters, and I’d suggest you do the same. Okay? And then he got up and left.
Kevin Kim: You did it for 18 years after that?
Adham Sbeih: I did it for 18 years, yeah.
Kevin Kim: That’s fantastic. I have taken some seminars through the Toastmasters Group before, and it is the best thing that someone can do to learn how to speak publicly because they are ruthless. The “ums”, the “likes” those things, those gap fillers. Oh, my goodness. You will fix it right there. It’s an amazing program. There’s only one other person that I’ve met in our industry that’s done Toastmasters. It’s one of the ladies over at Precision Capital in Oregon.
Kevin Kim: She’s the chapter head up where they are, and she was saying the same thing, kind of similar story. She got into it to be able to basically sell, and learn how to sell. So that’s a really cool story. Thank you for sharing that.
Adham Sbeih: Sure. We send a lot of our folks to Toastmasters.
Kevin Kim: Oh, you do? Okay.
Adham Sbeih: When you start? Yeah, we’ve got two people right now in Toastmasters.
Kevin Kim: That’s fantastic. Well, I think we’re running out of time for the episode, so you know what? I want to thank you, Adham, for letting us come to your wonderful office. Don’t do this very often. I’m so happy, you know, getting to interview a client like you is just one of my joys in life and the joys of working at Geraci. So, thank you so much for doing this.
Adham Sbeih: Yes.
Nema Daghbandan: Thank you, Adham.
Adham Sbeih: All right. Thank you. All right.
Kevin Kim: You’ve been listening to Lender Lounge with Kevin Kim, brought to you by Geraci 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 it if you follow Lender Lounge with Kevin Kim on YouTube, your favorite podcast platform, and 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.