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You’re listening to Lender Lounge with Kevin Kim, a podcast dedicated to the private lending industry. I’m Kevin Kim. And my goal is to sit down with key figures in the private lending industry to talk about their business and their personal lives. We’ll get their takes on market conditions, the industry at large, and their personal stories. Overall, I really want to learn more about how they started and grew their businesses. So whether you’re a lender, a borrower, a vendor, an investor, or anyone just interested in learning more about private lending, this podcast is definitely for you. Thanks for tuning in and enjoy this week’s episode of Lender Lounge with Kevin Kim.
Kevin Kim:
Hey, guys, Kevin Kim here with another episode of Lender Lounge with yours truly, Kevin Kim. Today we are in the Zoom and we are interviewing a friend and colleague and someone I actually really much look up to, Eddie Wilson. You guys may know him as the CEO of the American Association of Private Lenders and also Think Realty, but there’s a lot more to Eddie and that’s why I wanted him on the show today because a lot of us don’t know much about the man of mystery that is Eddie Wilson. So Eddie, please introduce yourself to our audience and we’ll get started.
Eddie Wilson:
By the way, I try to keep it that way so I don’t even know if I want to do this podcast.
Kevin Kim:
Oh, man.
Eddie Wilson:
I’d rather just kind of stay in the background.
Kevin Kim:
Just make it all up then. Just go for it.
Eddie Wilson:
Yeah. I’m Eddie Wilson. I think that in our space, a lot of people know me because of AAPL, but really I’m a serial entrepreneur and a private equity guy and so I love buying and selling assets. I love the operational side of buying and selling assets and I don’t know that I’ve ever met a deal that I don’t like. So that’s really who I am. I definitely kind of put into three buckets. One is that corporate leader side. I love the operational side of business. The other side is really an investor. I underwrite both funds and real estate and private equity and I love that space. And then lastly, altruist. I think that we all have an obligation that if we’ve been given opportunity in our lives to make impact on others and so a big portion of what I do is just giving back. We have a lot of orphanages and feeding centers and nonprofits. That is a big portion of what I do.
Kevin Kim:
And we’re going to get into that because I think that it’s one of the coolest things about the universe that is Eddie because it’s definitely a universe. Every year, I find out more about what you do. And I learned about that when we were together in China a couple years back and I was blown away because I’m like, “Where does this man have the time?” But let’s take a step back and really get to know you, Eddie. Where’d you get your start? Because it wasn’t in private lending, I know that.
Eddie Wilson:
No, it wasn’t in private lending at all. I do have some family members that are in banking, but I definitely wasn’t on this side of the fence when I started. I actually started off in broadcasting. I have a broadcasting degree from Ohio State University and really got started there and then managed radio and television stations and assets. And I was going down that path and I sold a TV show and that was kind of the first foray into I could build something with value and then have an exponential exit than the cash flow it was providing. And so I sold that and then built an ad agency and ended up having a group come after me to buy that and realized, “Wait a minute, I have a knack for building things and potentially exiting for larger multiples.” And so then I intentionally went down that PE space. So anyways, that’s kind of who I am, where I got my start from.
Kevin Kim:
So those two big exits in, I guess you can call them media, traditional media too and this is back in the 90s or-?
Eddie Wilson:
90s. Yeah, early 2000s.
Kevin Kim:
Okay. And then you transitioned out and became an investor, right?
Eddie Wilson:
Yeah.
Kevin Kim:
So how long was the gap between exit from traditional media, ad agency into a trade association called the American Association of Private Lenders? That’s a big difference.
Eddie Wilson:
There’s a big gap there. Yeah, there’s the big gap. I’m third generation real estate investor. Grandfather’s a real estate investor, dad’s a real estate investor. And so once my first exit happened, the natural inclination of somebody young and kind of arrogant was just buy the Ferrari and the beach house and live happily ever after. And when I made those purchases, my dad called me and said, “What are you doing? You’re an idiot. You’ve literally watched two generations before you find wealth and legacy through investing and now you’re just playing.”
Kevin Kim:
Right.
Eddie Wilson:
And so a big wake up call there where I realized there was a bigger obligation than just spending my money on me that I’d created. So I started looking for investment vehicles and I naturally went into real estate because my father and grandfather were real estate investors. They both had their own careers, but then it always led back into real estate.
Kevin Kim:
Historically, what kind of real estate were they involved in?
Eddie Wilson:
Multifamily and single family. They primarily were in the buy and hold space. They both loved to hold their assets forever. My grandfather’s in his 90s and still owns assets. It’s just who they are, very old school and my dad’s old school as well. I mean he hates leverage, he doesn’t like dealing with banks, that type of mentality.
Kevin Kim:
Right.
Eddie Wilson:
And for me, it was like that was kind of my first space. And I was always taught that we really have three obligations. We need to understand how to create wealth. We need to know how to keep our wealth so that we’re not just spending that wealth and it just evaporates. And then lastly, protecting our wealth, which the more sophisticated you get and the more wealth you get, the more importance you find on in that last part of the wheel, which is protecting it and making sure that you’re not opening up yourself to liability.
Eddie Wilson:
But that was kind of the journey I was on. And so then as I was building real estate, what I found was I needed an exponential multiplier to get more real estate. A guy that has a million, it’s fairly easy to turn that into $2 million in real estate. If you have $10 million, it gets increasingly harder to turn it into $20 million. If you have a hundred million, it’s really, really difficult. And then statistically, it’s impossible to go from a billion to $2 billion. The government’s against you, taxation’s against you. You can’t find the assets to get into to grow that. And so it’s like the further I went in my investing journey, the harder it was to find assets that would exponentially increase that growth. And that’s when I found the private equity space to be that gap for me. It was like I could invest in a distressed asset, reperform that asset.
Eddie Wilson:
I find myself to be best and probably most skilled at the operations side of business. And so I could reperform that asset and then I could sell that asset at 8, 9, 10 times. And so instead of now operating this business for 10 years, I could take my exit immediately and then dump that into real estate or funds or lending. And really that’s when I found lending as a practical space for me. At some point, you can’t find real estate deals fast enough and so there’s only so many 1031 exchange you can do.
Kevin Kim:
Yeah.
Eddie Wilson:
There’s only so many deals you can get into. There’s only so many deals you can underwrite. But with lending, you actually can find easier ways to deploy capital and deploy capital in shorter time periods with the same gains, if not better.
Kevin Kim:
You started looking at the trusted investment opportunities or what was it like? Or just trust notes or-?
Eddie Wilson:
Yeah, trust notes, trust deeds, all the above. And then I learned lending out of my self-directed IRA and all these other vehicles.
Kevin Kim:
So your first foray into the space was a trusted investor, like a note investor?
Eddie Wilson:
Yes.
Kevin Kim:
That’s very cool.
Eddie Wilson:
Yes.
Kevin Kim:
That’s very cool.
Eddie Wilson:
Yeah. And long before I ever found the American Association of Private Lenders, and I’ll tell you the quick story there was the group of guys that owned, so obviously Anthony Geraci, the principal there at Geraci Founder-
Kevin Kim:
He’s kind of important.
Eddie Wilson:
Yeah, he was one of the original owners of AAPL and it was called the Hard Money Association, something like that. National Hard Money Association-
Kevin Kim:
Oh yeah, I remember.
Eddie Wilson:
On the documents. But when I came into this space, I was looking for investments and one of the minority partners in the AAPL who eventually became the majority partner, owned an insurance company. And so what happened was I was looking for investment vehicles that then I could multiply and create elasticity in my lending practice. So he had a captive of which you could essentially invest in a captive in an insurance structure, and depending on department of insurance and the other structures, you could then invest your captive capital into other vehicles. And so I was like, “Oh, this is cool. It’s kind of a multiplied way for elasticity in my investing strategy.” So I invested with him to build a captive in the insurance space, but he owned all these other assets and basically said, “Look, why don’t you come in and invest in all these assets? I have a ton of distressed assets. You love distressed assets, I’ve got a ton of them.” He had 30 of them and I invested in that group out of Kansas City and one of the assets was the American Association of Private Lenders.
Kevin Kim:
Oh, okay.
Eddie Wilson:
So I didn’t even know that this existed as one of the assets. It wasn’t something I intentionally went after. He had a whole stall of assets that were all distressed. And the American Association of Private Lenders was also distressed. I think they were losing a couple hundred grand a year. I don’t know. It’s kind of a loss leader.
Kevin Kim:
And just so we have point of reference, what year was this? Is this the 2010?
Eddie Wilson:
This is 2013 and ’14. That was when I came in, which I think was year number three or four of AAPL.
Kevin Kim:
Before or after the rebrand?
Eddie Wilson:
Yeah. The rebrand had already happened. And ironically, I had a real estate deal that a buddy of mine said, “Oh, there’s this group out in Vegas that is doing a conference. You should go out there and just walk around and see if you can find private capital.” So I actually attended an American Association Private Events’ event in, I think, it’s 2011 or ’12. And wandered around as just a guy looking for real estate capital. I was actually looking, I think, for a bridge loan on some hairy Chicago investment deal or something like that. I forget what it is now. And so that was my first introduction to it. And then later, ended up becoming minority owner by way of that investment into that group of companies.
Kevin Kim:
You transitioned over the years and what I’m hearing is all of this was kind of not a means to an end, but you’re finding levers to pull that can help execute on your vision to have that exponential multiplier.
Eddie Wilson:
Right.
Kevin Kim:
And it’s very uncommon in our world. In private lending, we have so many fixed income investors and very few gain investors and this enterprise value concept that has started to creep up lately, but it’s not as common to our listeners. And so I want to understand the exact thought process. The idea was, “Let’s find vehicles that can give you more access,” because you’re not going to get all of a sudden a bunch of real estate deals, I don’t know, from AAPL, but it was the thought process there to create more access into other means of finding opportunity. Was that why?
Eddie Wilson:
Yeah. So it was interesting. I bought 30 assets at a time at that point. One of them was a big insurance company. And then I saw on the roster and we were kind of going through it before, due diligence before my investment, I was like, “Oh, you own the American Association of Private Lenders. That’s interesting,” because I didn’t realize you could have a for-profit association. I just assumed, I’m like, “Oh, it’s weird you got a nonprofit organization sitting on your roster. Why is it in here?” And they’re like, “No, no. This is actually a for-profit group.” And then they began to describe to me why it was a for-profit group, why it was created. And private lending is such a small swath of the kind of, I don’t know, secondary banking community. It was like this kind of little spot over here and there really wasn’t enough movement or activity there to where you could gain traditional association style contributions.
Eddie Wilson:
And so it’s like, “Let’s put on conferences, let’s provide value, and that value would have dollar exchange, which then we’d pour right back into the ownership.” And I thought that’s a really cool idea. I love building communities. And so if you look around my world and even under my private equity structure today, everything is communal. It’s tied to data. And so I have a whole fitness side of my life and I just bought a company called FitCon out of Utah and it’s because it fits inside of that ecosystem of culture and community. And when I saw this community, I thought, “Well, this is a really fascinating community,” because number one, I think they’re highly misunderstood. I grew up where traditional banking was the norm and my grandfather would say things like, “Oh, those guys, they give shark loans,” and stuff like that. There was this big disdain for this group and I had actually found massive success in private lending when I couldn’t find the real estate deals to get into.
Eddie Wilson:
So my private equity activity would generate lots of cash. I’d build a tech company and I’d have a 29 multiple on the exit and it was crazy. And then I’d have to dump it into cash and then I’d have to find depreciation levers to offset my non-W2 income and all these crazy things that were floating around in my space. But then lending became this space where I was like, “Wow. There’s a lot of opportunity here.” And I, even though I was a sophisticated real estate investor, always needed private lending as a practice to ultimately get a lot of the deals done. And so I couldn’t go to a bank and say, “Hey, I need an 18 month bridge on this commercial redevelopment project.”
Eddie Wilson:
They would look at me like I was crazy, but I could go to somebody who had a discretionary fund and say, “Hey, there’s a great upside here. We could win together.” So I saw the power in this space and so when I realized I got the play in it, I just felt like I owed it back to the space to be an advocate because it had provided a lot of value to me already and I felt like it was highly misunderstood. And coming from institutional banking, it was really misunderstood. It was always looked at as in this disdain of these guys.
Kevin Kim:
Oh, yeah. Look at my dad’s face, third generation banker right here.
Eddie Wilson:
Yeah, right.
Kevin Kim:
When I went to work for Geraci, he was like, “You’re going to work for a hard money law firm?” He was laughing. I was like, “Dad, he’s pretty cool.”
Eddie Wilson:
Yeah. Well, my dad and I’ve had lots of conversations over the years and it was funny when he was struggling to get some financing done and we got it through a private money source and it was a 30 year loan that was essentially tied to Wall Street. He was like, “Wait a minute. What’s happening right now?” And so it’s just a really cool space and I feel like it provides this massive service in a vacuum. So when you think about the redevelopment of communities or you think about… And again, I have this very altruistic bone in my body. I have to feel like I’m doing something of significance or purpose. And I feel like that one of the greatest turns that I had was I used to think of private lending as my grandfather did. And then once I saw it and it made impact on my life, it was like, “Wow, this is really providing…”
Eddie Wilson:
And we spend a lot of time in DC now and it’s one of the most misunderstood industries. And we sit there and we talk to these legislators that are just puzzled, “So you guys do what and how does this work? So Wall Street money gets deployed into Main Street because of you guys?” It just blows their mind every time. And so I love the AAPL and I love this community because it provided a lot of value to me. But I also feel like it provides a lot of value to Main Street specific to a lot of the areas that we face today like affordable housing, like not enough housing inventory, not enough rental inventory. And banks are not going to be able to provide that. There’s too big of a gap there.
Kevin Kim:
So what I’m hearing was it wasn’t necessarily like an opportunistic, “Oh wow, I can multiply,” but more as a real estate investor, you were saying, “Whoa, I’ve really benefited from this. There’s a lot of room for growth as an industry at large, but it’s got a bad reputation that needs an advocate?”
Eddie Wilson:
Right.
Kevin Kim:
And you found some purpose in that. And one thing that you and I talk about privately is the amount of legislative problems that we face in the sense that we don’t have any massively oppressive bills like our conventional counter-parties do, but what we do have is a lack of understanding by the powers that be, but also a lack of appreciation of the value that we present.
Eddie Wilson:
Right.
Kevin Kim:
I want to kind of touch upon that because kind of going fast forward a little bit, but you started that pretty early on. I remember when you took over, what was that, 2015, ’16?
Eddie Wilson:
Yeah, ’14, I kind of started rolling up my sleeves and getting into all 30 of the assets. ’15 and ’16 is when I really started jumping in and saying-
Kevin Kim:
Right.
Eddie Wilson:
“Let’s make some-“
Kevin Kim:
Because I remember it was my second or third AAPL, the big change and I remember it was partially yourself and then also Think had started.
Eddie Wilson:
Yeah.
Kevin Kim:
And a lot of stuff. Actually before we get into the legislative talk, tell us about Think because a lot of our listeners don’t know about Think Realty and I’m still talking about it.
Eddie Wilson:
Yeah, so Think Realty, really for me, it was a similar thing. It’s like I wanted a way to give back to the real estate investment community and was really trying to give them tools and resources that would help them along their journey. And I saw so many of them being taken advantage of by gurus and seminars and all that type of stuff.
Kevin Kim:
Still the case.
Eddie Wilson:
It is. There’s so much content out there, I think it’s less than it used to be, but I wanted to provide them the tools that I had to be successful and I wanted to build a community of real estate investors. And now Think Realty is a media platform. It has a national magazine, we’re on the shelves of Barnes & Noble, airport, so on and so forth. We have a couple of conferences a year and just a ton of information.
Eddie Wilson:
I always wanted it to be the Bloomberg of real estate investment industry where it’s like we put resident experts specific to certain types of investing modalities, whether you’re in SFR, multifamily, or even tertiary type things like mobile home investing or whatever it is. We have a lot of resident experts in that area. They’re going to speak specific to it. We give a lot of data. We interview a lot of chief economists from Fannie Mae and NAR, just trying to always draw this line back to retail information that skews into the investment space. And now that community’s pretty strong. We have about a million real estate investors a month that touch the platform in some way or another.
Kevin Kim:
And they’re all regular real estate investment. We’re not talking the big, institutional shops. These are-
Eddie Wilson:
Yeah. These are mom-and-pop.
Kevin Kim:
Retail investors, mom-and-pop guys. They can also have thousands of units themselves.
Eddie Wilson:
So if you broke down the data of Think Realty, 60% of them are mom-and-pops that own less than 10 properties.
Kevin Kim:
Right.
Eddie Wilson:
And then another 20%-
Kevin Kim:
Massively underserved debt demographic in the sector.
Eddie Wilson:
And that community mix is by and large where all real estate investment is done now. I mean obviously the big institutional investors coming in recently, the big funds and hedge funds, they’ve made a dent into in that. But if you went back five years ago, almost 80% of the SFR marketplace was mom-and-pops who owned less than four rental properties. That was who it was. And that’s all I was trying to do, was just resource them. And I felt like it was hard because they didn’t see themselves as a community. They saw themselves as either a high net worth or a white collar worker, a engineer, a doctor, whatever, that now had real estate assets. They didn’t see themselves as a real estate investor. When we first started Think Realty in 2013, when we did a ton of research and data, we realized that it was something like less than 200,000 people in the United States actually saw them as a real estate investor full-time.
Kevin Kim:
Right.
Eddie Wilson:
Now you have millions of people, but it is a very, very underserved marketplace. Then the next 20% of that is really the higher level, 10 plus, you get up into the hundreds and thousands of units. And then the other remaining space in that is all the service providers. So then you got all the service providers that kind of encircle them, so title companies and mortgage companies and lenders and that’s a big portion of the space too. And then one of the big things that we did was we aggregated them and gave them a voice. So we have legislative pushes there, but then we also have a massive discounts program.
Eddie Wilson:
So we went to people like Home Depot who didn’t have a discount program and said, “Would you provide a discount program to our million real estate investors, mom-and-pops that have tenant turns and they’re landlords and yet they’re still fixing the toilets?” And Sherwin-Williams Paints and now Behr Paint and GE Appliances. I think that’s probably one of the most used pieces of our platform is we get massive spending power because of the aggregation of the real estate investor. So that’s what Think Realty is all about.
Kevin Kim:
Very cool. And there’s a lot of kind of parallels in what I’m hearing, the cohesion, the building of a community to provide resources. And now that we’ve talked about that one, kind of transition back to AAPL when you started a lot of these additional resources to the space. And I want to talk about why you did it because you jumped in and took over in ’14, ’15 and it was a big change. Effectively, we had some committees, we had the annual event. I think they had a couple different things going on, but very little legislative attempts. We hadn’t really tried to do that. And you brought that to the AAPL association and really got everyone involved. It was natural for lawyers to get involved and so Nima and I jumped in, but it was surprising to me that, wow, membership really got… Now they’re the ones bringing up things to our attention.
Eddie Wilson:
Sure.
Kevin Kim:
The amount of engagement was awesome to see.
Eddie Wilson:
yeah.
Kevin Kim:
What words were going through your head when you’re thinking about adding that because it wasn’t natural for us, we weren’t thinking about it that way?
Eddie Wilson:
Yeah. So there was really a catalyst there. And the catalyst was I grew up in a family that was very politically active.
Kevin Kim:
Okay.
Eddie Wilson:
One side of the aisle or the other, it didn’t really matter. You always find capital and power together. And so I’ve always realized the power of the political scene and a good friend of mine, one of the ad agencies that I sold, we managed a lot of big national political campaigns and so I got fairly tied into that space and always spoke on behalf of the real estate investor. And so I was asked to sit as a subcommittee member on the Committee on Finance. And so under Senator Mike Crapo, this was 2014, ’15, maybe ’15 and ’16, was asked to sit on a subcommittee. And the subcommittee’s task was really to help with the rewrite of Dodd-Frank. That was our entire purpose.
Eddie Wilson:
And so you have your traditional committee that all the senators sit on and then you’ve got these subcommittees which then are typically made up of credible witnesses. And I got that appointment from fairly high up and went in and sat down and began to listen to the conversations they had and listened to them argue through things like what liability should a bank take on and point number three on Dodd-Frank. And it was like all these various things and it began to open my eyes that they had little to no understanding of the private lending space. And I was changing AAPL for the better. I was getting rid of maybe just some old guard, not that they didn’t do a good job starting. I think it had lost some steam and just didn’t have any purpose to it. It was just an aggregation of friends that were doing deals but was really not pointed towards the purpose.
Eddie Wilson:
And I think that the alignment there was, “Wait a minute, we’ve got this community. We should be doing something with the power that we do have and I have access to big legislative bodies. I really feel like I should be bridging these gaps.” So I started beginning to bridge the gap and I realized I can’t do this alone. It’s so misunderstood. And so I think if you remember, we called our first day on the Hill and didn’t know how that would go, didn’t know how well we’d be received and I just called a bunch of people that I had gotten to know in AAPL and said, “Hey, meet me in DC and let’s go have a conversation with legislators.” And that was really the big first push. And we went in there and we had representatives from HUD and representatives from the banking committee and representatives from all kinds of different committees that sat there and listened to us.
Eddie Wilson:
And we began to explain the issues around regulation and how legislation’s written and how this kind of business purpose community for lending is forgotten and how they pass down legislation that gets put over here to HMDA or whoever for regulatory kind of institution. And by the way, we’re forgotten. And so everything from silly things on this form we’re asked to fill out, it doesn’t make sense because we’re a business purpose loan. And we just showed the information there. And I always felt like our issue wasn’t that we didn’t have representation, our issue was that we had a misunderstanding-
Kevin Kim:
Or ignorance to it.
Eddie Wilson:
Yeah, it is ignorance for sure. It’s just a lack of-
Kevin Kim:
Not in a bad way. It’s just-
Eddie Wilson:
Lack of knowledge.
Kevin Kim:
“I had no idea this industry existed.”
Eddie Wilson:
And that was the constant. It was like, “Okay, you guys do what?” And then when we showed them volume, we’re like, “Yeah, so these are the billions of dollars that are going into infrastructure and revitalization.” They were like, “Wait, what?” It was really fascinating to see that come to life. And what I realized is we didn’t need a lobbyist.
Kevin Kim:
I asked about that.
Eddie Wilson:
I really went down the path, “Should we go nonprofit and go more the lobbyist route?”
Kevin Kim:
We talked about that when we were in DC together. “Why are we…?” I remember raising, because our local trade association here in California has two lobbyists, the Mikes right?
Eddie Wilson:
Yeah.
Kevin Kim:
And well, they’re npo, we contribute for that. And I asked, “Don’t we have to have a lobbyist to do this?” Because I wasn’t sure about it. I knew nothing about lobbying rules because Nima and Melissa were going on the Hill with you. And I was like, “Isn’t this activity regulated?” And lo and behold, it wasn’t because it’s grassroots and talking about that, really it’s just so important.
Eddie Wilson:
I’m not against lobbyists, but the thing is after sitting in DC and actually being on a subcommittee for finance where lobbyists came in with an agenda, you met them with this approach of like, “Okay, hold on. What are you selling? How’s it going to hurt me and how’s it going to benefit me?” And I watched every senator go, “If I listen or if I take their point of view, what does it hurt? What does it help?” And there was this constant weighing. It was never met with a friendly-
Kevin Kim:
Political calculation.
Eddie Wilson:
Yeah, it was a complete political calculation and you knew that there was an agenda tied to them. And I made the very early on decision to avoid it. And what I always said was, “Let’s go in as an advocate and advocate for our industry.” And at that point, AAPL was always a loss leader for us. It was like, “Hey, let’s just not let it lose too much money.” That was the financial side of it. It was very altruistic. It was very much like, “I want to support this space and let’s get a bunch of people together and if we lose a little bit of money, cool. Let’s just not lose too much money.” It’s a write-off. Our K-1s can help us in other areas. And even Anthony Geraci, we felt the same way. And I would say things like, “Do you want it to make money or are you cool with the losing money?” And Jack and the early guys, they’d be like, “Oh no, we built it because we believe in the industry, not because we are trying to get rich. We all have businesses larger than this association.”
Kevin Kim:
Right, right. There’s a purpose behind this that’s not-
Eddie Wilson:
There’s a purpose behind it. And so I just decided, I kind of looked at all of it and I said, “Well, I could go nonprofit and I own and run and manage nonprofits. I could go that way, but I actually don’t know that that’s the way that we should be going.” The body of private lenders we had determined at that point was somewhere in the seven to 10,000 range. And that was probably on the high end back then. And so it just wasn’t some massive group of people that I could rally and get donations. And a lobbyist is always representing large amounts of capital or large amounts of people. And if you send a lobbyist in that does not have money or people there, it’s an alligator without teeth. So it becomes pointless. We talked a lot about. I said, “If we go in to the nonprofit space and we just send in Joe Blow lobbyist and he has no money behind him or-“
Kevin Kim:
I want you to give some context there though, because you and I talk about the amount of money that you need to be taken seriously as a lobbyist behind you. It’s not-
Eddie Wilson:
Millions.
Kevin Kim:
The industry would not be able to support that.
Eddie Wilson:
No, it was a calculated approach on our part. We will have more impact if we actually stay in this advocate role where they can call us if they have a question, where we can just be present in their meetings, where we can stand there and just make sure that they have all the data and all the facts as opposed to coming as a lobbyist where you have to force it on them.
Kevin Kim:
Right.
Eddie Wilson:
So many times sitting there in DC, in the seat of listening to the lobbyist, it was always a couch threat. And the couch threat was, “We have this much allocated for marketing. We have this person or this financial institution that is tied and directly related to us. Therefore, there is 50,000 employees tied to this initiative.” It was never, “By the way, we’re going to go get all 50,000 to vote against you,” or, “We’re going to get all X amount of millions to go put billboards up that show that we’re anti-you.”
Eddie Wilson:
It was always these couch threats. But those couch threats, we would go behind closed doors and we would say, “Can they actually do what they said they can do? Yeah they said they had JP Morgan Chase behind them, but what impact do they actually have on JP Morgan Chase’s employees? We understand there’s a hundred thousand employees here. What impact do they actually have?” And we would make decisions based on that equation. And so it was a calculated risk for most legislators. And I determined that as an association we were going to actually make impact, we had to avoid that because we didn’t have teeth.
Kevin Kim:
They didn’t understand what we were. They still don’t. It’s an awareness issue.
Eddie Wilson:
It is an awareness issue. And I felt like we could navigate these. I had enough deep relationships and it goes all the way back to… And I kind of proved our theory when we made that choice and the same year was the first year where the state of Florida, somebody put on the docket for license, like that all lenders had to be licensed. We fought that for three years straight. The first year somebody called and said, “Hey, did you hear this? One of our Florida lenders…” And I said, “Yeah, I have heard that.” And they said, “What do we do?” And I said, “Well, I actually know Governor Rick Scott, so I’ll just try to make a phone call and see if I can talk to him.” And so I had met him in DC many times and had a deep relationship with him.
Eddie Wilson:
And I called him and I said, “Hey Governor Scott, let me explain to you what the private learning space is. Let me explain to you why the motive I see is actually detrimental to this space, how it’s going to stop the flow of capital into these Main Street investments that are really making Florida better. And by the way, if you just want institutional capital, then you’re going to build Miami and Tampa and Orlando and Jacksonville. But the thing is the Ocalas and the Gainesvilles and the Tallahassees are all going to be left behind because that’s where all the private money is right now. We’re seeing private money in Florida moving into Class B and tertiary areas.” And we had a long private 45 minute conversation. He goes, “You know what? I appreciate that.” He was like, “If you don’t mind, send over some data on that, whatever you have.” He said, “But I’ll go ahead and we’ll veto, we’ll just kick it out. I’ll just go in and kind of make this thing go away.”
Eddie Wilson:
And I was like, “Okay, perfect.” We send them date over. Year two, it came back up but it proved my point. It proved my point that if you can get to a place where they don’t see you as adversarial, they see you as informational, you’re an advocate. It’s your industry, you’re just trying to help educate. You’re just trying to make sure that the best interest of Floridians are in practice. And by the way, part of that practice is high net worths in Florida who are retired trying to find return on their money are willing to invest in infrastructure by this means.
Eddie Wilson:
And so it was a very misunderstood thing. And so year two, I had a conversation with him, he was like, “You know what? Let’s see how far this gets.” He said, “If it gets all the way to the house,” he said, “I’ll veto it.” And he did. He literally let it go the entire way, it got passed, and then he vetoed it. He didn’t sign it into law. And then the third time, Governor Rick Scott wasn’t there and we had to work a whole lot harder and Nima and everybody went to Tallahassee and we had to return a third time, but he-
Kevin Kim:
It was like three weeks in a row.
Eddie Wilson:
Yeah, it was rough. And the thing is it just shows the power of a relationship. But the thing is lobbyists don’t have relationships. Lobbyists have leverage. And the thing is-
Kevin Kim:
Well, it’s not well understood by the people in our space. They think that lobbyists provide access.
Eddie Wilson:
And to some degree, they provide access. But in this space, if I wanted to go after a lobbyist, I wanted to turn a nonprofit, what I would actually do is I would actually go after somebody who’s already currently lobbying, who’s willing to take a stall of clients because we couldn’t afford a lobbyist at $10, $20, $30 million. So what we’d have to do is you’d have to actually go after one that’s already carrying three or four kind of strong backers. And you’d have to try to convince him or her to then represent you on your small budget and then try to get him to leverage all that he has to also help you.
Kevin Kim:
He’s pulling interests basically.
Eddie Wilson:
He’s pulling interests and that’s how-
Kevin Kim:
But that number is important. A lot of people don’t understand. I didn’t understand this either. We’re talking about $50, $60, $100 million types of budgets to get your way, legislatively speaking. It’s not something where a couple thousand bucks per head’s going to get anywhere.
Eddie Wilson:
Right. I mean this recent one we just fought in California, there was a pack formed that was willing to fund the opposition. And you’re not talking about a small pack, you’re talking a pack of 50 to a hundred million.
Kevin Kim:
Yes.
Eddie Wilson:
And so when you’re looking to fighting this, you’re like, “I better get better at building relationships because I don’t have the credibility and leverage to do this.”
Kevin Kim:
Right.
Eddie Wilson:
It’s not that I don’t think that our industry never deserves a lobbyist. I think that as this industry grows and it gets bigger, sure, naturally there’s going to be a need for that at some point. I just think today it’s a little bit of a fool’s errand because you don’t have enough leverage. And lobbyists, they’re looked at based on the leverage they carry.
Kevin Kim:
Right.
Eddie Wilson:
There’s one last thing-
Kevin Kim:
They can be a political threat.
Eddie Wilson:
They’re political threat. The second thing is when you talk to a lobbyist, when you sit on one of these committees, the first thing is, yes, “How much leverage do they have?” The second thing is when you’re kind of thinking down this path, I always believed that there was something behind the curtain of every lobbyist. I remember so many times that a lobbyist would go out, the conversation would be had in closed doors that said something like this, “Why are they pushing that so hard? Is it because there’s something else over here to hide? Why are they pushing regulations so hard down this pathway? Maybe we should go open up this door and see if there’s anything else behind that.” And it always became the object of scrutiny. And that was one thing I never wanted to do either was we are a highly unregulated industry and we are almost self-regulated to a degree and that’s what a AAPL’s all about.
Eddie Wilson:
And so the last thing you want to do is draw the ire of somebody who might… It’s like when the IRS comes to do an audit, you typically just wait and give them the information they want. You don’t go, “No, as a matter of fact, here’s my QuickBook, here’s everything. Just log in and do your thing.” It’s like, “No, no, we’ll just give you exactly what you need.” In the end, you don’t want to open up yourself to more liability, unknowing that there’s liability there. And that’s what I feel like, having a lobbyist. That’s a second reason why we chose not to go down that path is because it’s like, “Well, I don’t want to open our industry up unknowingly to regulation that they see as beneficial to them and we didn’t see it coming.”
Kevin Kim:
I think one of the things that’s often overlooked is how active membership has gotten as advocates and people who brought awareness… Because I didn’t get too involved in Florida, when we were fighting the recent Build Back Better Act stuff, we really got a lot of our local members engaged. Our membership in Arizona really got engaged and they took meetings with Senator Sinema and we didn’t have as much access in West Virginia because there aren’t many lenders there. But Arizona, I remember being in Arizona and clients there saying, “All right, we’re going to call Eddie. We’re going to figure out how to get the Sinema. We’re going to do what we need to do over there.” And it was incredible. And then even with Florida, the amount of phone calls that membership was making. And I think that even if we were to have the size and scale to which we could actually do the lobbying game right, you don’t win every battle that way, especially with today.
Eddie Wilson:
When you typically lobby, you typically also get associated with a side, politically speaking. When you go as an advocate and it’s just like, “Hey, I don’t really care…” And I’ve had to tame some of our members back on that, right? I mean, it’s like, “Why are we in here with this senator-?”
Kevin Kim:
Right, with that nonpartisan, for sure.
Eddie Wilson:
Yeah, a hundred percent nonpartisan. And the thing is, as an advocate, you can actually play that way. You can play, “Hey, whatever you choose to do, I just want to make sure you’re educated. Do you know that this body of people exist? Do you know the greater good that we contribute? Do you understand this?” And so you get to play in a really neat space now. I love how active our AAPL membership has gotten. It’s been fantastic. It’s been one of the highlights of my career is to get this-
Kevin Kim:
Back to community, right?
Eddie Wilson:
Yeah, this community that is all rowing in the same direction and hyperactive. And I love it. The last year that we fought the legislation specific to Florida licensing, the senator’s office called us after the bill was dead, a week later, and said, “Hey, could you guys stop all the phone calls? Could you just tell your base it’s dead?” Our people didn’t even know that the thing had… They didn’t read their emails or something. We were all celebrating and they’re still all calling, like, “Make sure of this thing.” And so they were like, “Could you call off the dogs please? Okay, we’ve done it. The bill’s dead. Or we changed the language in the bill.”
Kevin Kim:
Right.
Eddie Wilson:
Which I loved. That was one of my favorite stories where our membership was just-
Kevin Kim:
Passionate advocacy and as a community, because it was a growing market, now a massive market for our industry and the last thing we need is more regulation in that sector.
Eddie Wilson:
And one more quick point on that is that advocacy has provided activity at the lowest and most broad level of our association. And this was the unintended consequence that I never thought of. When you have a lobbyist, typically you think, “Oh, that person is paid to go do that. So therefore, why should I get involved?”
Kevin Kim:
Yeah, no, for sure.
Eddie Wilson:
When we preach advocacy to AAPL, every member feels like, “Oh, I should be an advocate too,” and that’s what we want. And so when we say, “Come advocate with us on this,” they’re all in. They don’t feel like I’m paid to go… I don’t take a paycheck anyways from AAPL, but it’s like they don’t feel like Eddie’s paid to go do this on our behalf. It’s like, “No, Eddie’s just kind of stoking the fire. Let’s all go.”
Kevin Kim:
Right. And I think that while it’s more challenging to herd a lot of sheep, when they are all crying and then saying, “This hurts us,” I think it really drives it home. And to this day, people in Congress do not know what it is that our industry does and I think it’ll eventually change. And I think that for the time being, I think growing awareness is probably the most important thing because literally have no idea. I was shocked. You’d think that they would have a general idea because they watch TV, but they still don’t.
Eddie Wilson:
They don’t.
Kevin Kim:
They don’t.
Eddie Wilson:
We’re not a big broad industry.
Kevin Kim:
We’re a fractured industry too. The industry’s very fragmented.
Eddie Wilson:
We’re fractured. And I love it though. I love the fact that we fly under the radar a little bit because it allows us to tell a true story versus a story that… There’s no conjecture, there’s no already predisposed ideals about us. It’s like, “Wait, you guys do what? Explain that to us.” And honestly, that goes everywhere. I mean, I was interviewed by the New York Times just a few weeks ago on interest rates and things like that and how does that impact our space. And the lady for the first 20 minutes, asked me, “Okay, explain to me what you guys do.” General, broad media doesn’t know what we do. And so to me that is a far better place to be.
Kevin Kim:
Yeah, I mean, I think the only time I’ve ever seen a mass media, major media type, I guess, entity or personality know our industry has been one, Debtwire knew it because they’re Debtwire and the second time was HGTV because they have all those fixed and flip shows. They got the idea of hard money and private lending and one of our clients was on the show so he’s like, “Okay, at least you guys get it.” I wish we could put PSAs on HGTV or something like that to teach the world, “Hey, by the way, we’re taking all these old houses and helping them become houses that you want to live in and buy. And don’t blame us for the skyrocketing housing prices. You guys are all moving here because of these houses are so pretty, right?”
Eddie Wilson:
Yeah.
Kevin Kim:
But it’s one of those things where it’s such a misunderstood space. We spent so much time on lobbying and advocacy, but I want to talk to you about a little bit about the industry and put your private equity hat back on real quick because that’s your passion. I know that’s what you love to do. You’ve all those other, I guess, communities, groups that you’ve built because of your passion in private equity. I want you to comment and give me your thoughts on the kind of recent development in private lending with enterprise value. Past five-ish years, M&A, which wasn’t a thing in our space, it didn’t exist, all of a sudden you start seeing these big sales happen at very high multiples. And to the extent that institutional investors have come to me and say, “Kevin, we really missed the boat on that one. We want to make sure we get in on the next one.” I want to get your thoughts on it because you’re looking at it as an industry advocate, but you’re also a private equity investor. It’s been happening for the past five years or so.
Eddie Wilson:
Yeah. And I’m probably back up to close to 30 assets again. I sold 76 of them in 2019. I can’t help but exist in this space. It’s very much who I am. Private equity is typically servicing a gap. And the gap, it’s twofold. It’s non-performing assets, which is what I love. I don’t like reperforming. If it’s got a bad product or a bad service, I’m out. But if it has people problems or capital problems, I’m in, really don’t care what the industry is.
Kevin Kim:
Right.
Eddie Wilson:
And usually that’s a big gap, that there’s just these growth patterns and small to medium sized businesses that prevent them from hitting the next level and so it ends up having people issues or capital issues and they’re pretty easily solved. The other gap is big money has a hard time biting small assets. It’s this idea of a whale needs a million minnows a day to survive. And so it always is like, “Well, does it go eat a million minnows?” No, actually the minnow gets eaten by the bigger fish that gets eaten by the bigger fish that gets eaten by the bigger fish, that gets eaten by the whale. And so the whale today, this massive gap is that the whale, which would be Wall Street, institutional capital, hedge funds, so on and so forth, is lacking yield because of our current marketplace. And it really has been for four or five years. And we’ve had ups and downs but overall, if you take the last four or five years, generalized institutional capital is not getting the return that it wants.
Kevin Kim:
Right.
Eddie Wilson:
And you take a space like the real estate investment industry, that has provided a lot of returns in underperforming assets and underperforming funds and so on and so forth. And the problem is that banks see the problem and they see the opportunity, but they’re restricted to play. They can’t play in it.
Kevin Kim:
They can’t.
Eddie Wilson:
They’re prevented from playing. And so these big institutional capital providers, investors, so on and so forth, see that problem and go, “Ooh, well, man, if I could be the little bit smaller fish that eats the little smaller fish.” And that’s what’s happening. I remember to me the first time that I saw a big X in our space was when Genesis sold, massive bridge lender. And I remember them getting eaten and going, “Whoa, if this happens on a consistent basis, this changes everything.” And I felt like there was a pretty good sized gap between them and maybe a few others. And now it’s happening very consistently.
Kevin Kim:
Right. And a lot of lessons were learned from that experience. As Goldman’s a big company, a lot of stories got traded. And I interviewed Trixie, she made it sound like it was a jigsaw puzzle because they didn’t really know what to do with it.
Eddie Wilson:
Right.
Kevin Kim:
It was kind of a weird deal for them.
Eddie Wilson:
Yeah. I’ve heard that almost every single time. They’re getting more sophisticated now, but I’ve heard that almost every time. But you’ve had a bunch of big exits recently, and I think all it is it’s underserviced big capital, underperforming big capital is trying to find a way to eat the minnow. And to me, the minnow is still Main Street real estate. And to the degree that private lending interacts with Main Street real estate, it still is the most enticing asset that they can purchase. They just don’t know how to do it at the base level. Now you see groups like Zillow trying to get into buying homes and creating a fund, and then you’ve got all the institutional buyers like Opendoor and all of them. They’re all trying to play in that space. The thing is when you look 30,000 foot view, what you see is these private lenders have direct access into all of it and they’re aggregating them and they’re tied to all the little minnows out there playing.
Eddie Wilson:
And so I see it because of this gap in our lending marketplace. And I’ve always felt like that’s what private lending has done, it’s serviced a massive gap. People wouldn’t pay interest rates that are higher than traditional lending if it didn’t service a gap that was there. I mean, it’s a necessary part of the investing strategy and lifespan. And so I think that it’s actually going to increase and we’re seeing multiples increase to a degree that if I was building a private lending, and I’m not, I’m just the association leader, but if I was an origination platform today, if I was originating private loans, what I would do is I would focus on the data that I possessed, the reoccurring investments that I have from my borrowers-
Kevin Kim:
Repeat borrowers.
Eddie Wilson:
Repeat borrowers and I would be building or leveraging tech to make sure I have IP. Every company that I’ve ever built, every conversation I have with an M&A lawyer, and I’ve sold a lot through Merrill Lynch and others, the three conversations we have every time, number one, EBITDA. What’s your bottom line? In the end, are you making money? Number two, it’s always IP, right? And now there’s secondary questions, but it’s always IP. What do you possess that makes you different than everyone else? And number three, what’s your operating system? If your management team leaves tomorrow, can we still operate it at the same efficiency because you’ve got principles and rules that govern it?
Kevin Kim:
And those were the blocks before. Think about it, right?
Eddie Wilson:
Right.
Kevin Kim:
The book of business was held by the principles and their key executives. IP is a hard thing in our space. I mean, I’ve seen multiples, bigger multiples because they built their own software or they had trademark products or whatever, but we can’t build software in this space and so it’s kind of hard to do that. And then I guess licensable intellectual property. And then the last part was the deal flow issue. And that seemed to be the primary driver, at least in the past few years, what’s your deal flow?
Eddie Wilson:
Deal flow’s huge. And if you can show consistent deal flow-
Kevin Kim:
With the repeat borrower.
Eddie Wilson:
The repeat borrowers, that’s the holy grail that I would be building now,. The IP I would try to build, if I was going to actually build true IP, it would be more around underwriting criteria and understanding my data. In the end, it doesn’t have to be sophisticated IP, it just needs to be your IP. If I know deep levels about my own data and I have some sort of tech built around that or some aggregation of data, that’s IP.
Kevin Kim:
Okay.
Eddie Wilson:
Another way of doing business is going to be.
Kevin Kim:
If I look at it, yeah.
Eddie Wilson:
Yeah.
Kevin Kim:
And we have tons of data. This industry is a gold mine of data. That’s one thing that is working.
Eddie Wilson:
It’s a gold mine of data. And very few people capitalize on that. But those repeat borrowers, so every time you get into their revenue conversation, EBITDA and things like that, then there’s other multipliers on top of that, inside of that first vein. And it’s always tied to what’s your attrition, what’s your churn, what’s your residual monthly revenue, is there any RMR kind of tied to this? And really if you can prove that there’s a repeat borrower that needs your product, whether you’re charging 6.2% or 8.1% or 10%, if you can span time and have a repeat borrower class that’s associated with you, that’s the holy grail right now. And I think the exponential components of private lending are just going to get greater and greater and greater. And that is because it’s getting harder and harder to aggregate single family real estate. And you can do it through lending practice.
Kevin Kim:
Right. And as a lender, you have access to a vast swath of real estate investors who made it ten bucks a month. But at the same time, we have noticed at least a pretty significant downswing in the, I guess you call it term sheet that have gone out.
Eddie Wilson:
Yeah, sure.
Kevin Kim:
And deals are getting done just because market conditions were… We’re recording this in the middle of August, we’re not in the best economic situation as compared to last year or years before. And so it makes me wonder how this is going to change things for the long term.
Eddie Wilson:
Yeah.
Kevin Kim:
We saw so much activity in ’21 and ’20, M&A activity.
Eddie Wilson:
I really believe that our industry is still fractured. I still believe that there’s a lot of amalgamation that needs to happen or can happen. And that doesn’t mean that the mom-and-pop lender’s going to go away. It’s just going to provide more institutionalized practice among all lenders.
Kevin Kim:
Yeah.
Eddie Wilson:
We’ve already seen an aggregation towards more institutional style origination. That’s not a bad thing. Better systems, better processes, better procedures on lending, better reporting, better accounting, better servicing, all of that, that’s a benefit. That actually keeps a lot of the regulation away because if we can keep growing and growing without oversight or regulation, then we are better off for it.
Kevin Kim:
And that’s a good segue, the role of the association today.
Eddie Wilson:
Right.
Kevin Kim:
AAPL today has, I mean comparatively speaking, it’s much more broad reaching membership compared to what when you joined.
Eddie Wilson:
Right.
Kevin Kim:
Way higher now.
Eddie Wilson:
Yeah.
Kevin Kim:
The conference is now, last year where it was like 600 people actually. It was nuts.
Eddie Wilson:
It was a lot.
Kevin Kim:
To the point where I felt like I had not met everybody yet.
Eddie Wilson:
And so did I. It has gotten a little crazy, that’s for sure.
Kevin Kim:
Gotten a little big. And so what role will the association continue to play in fostering the growth of the industry at large? What do you think is going to be the future for the association?
Eddie Wilson:
Really three things. And it’s really the three core values of our association. It’s education, ethics, advocacy. You can’t do all things well, but we feel like we can do those things well. And one big thing that we’ve really been taking out, and I know that you were even a part of that, I mean you taught the certified fund manager course that we’ve put out online. We’re putting out more online education, trying to grow that body of membership into a higher level of understanding and training. And in another, we’re putting out CPLA courses and all types of different things and just constantly making sure that the education is at the forefront. It’s the one thing that our industry has not done well. It’s always been this good old boys, pay to play, “Hey, if you pay me X, I’ll teach you how to do X.”
Eddie Wilson:
“Let me show you about this one sheet that I got that will teach you how to do…” And I feel like that’s one thing that I’m really resistant towards, I think information should go to the masses. And I think that to the degree that you can push it to the masses, the entire industry grows. And so for me, I really love that we are focused on education. The second is ethics and our ethics committee and making sure that we follow an ethical standard for lending and that we hold our members accountable. There’s been a couple of ethics violations this year and our ethics committee has dealt with them sometimes harshly. Sometimes it’s difficult. But in the end, it’s like to the degree that we police our own, then we don’t need somebody else to come in and police us.
Eddie Wilson:
And that’s a conversation we have at DC all the time. It’s like, “Hey, we have this ethics committee. This is our standard that we put out and this is what we hold our members accountable to so you don’t have to worry about coming and hold us accountable. We’re trying to hold ourselves accountable.” And that’s a big deal. And then lastly, advocacy. And that’s advocacy not just at DC but for each other in the industry. And so within those three core values that we really adhere to, we really are trying to push initiatives out there. I mean, obviously I think the most visible issues have been legislative and we’ve been very active legislatively, but also advocacy for things like women in the industry, minorities in the industry.
Eddie Wilson:
This, it would be no surprise to most people, has been an old white guy’s network. And I’m not quite an old white guy yet. Maybe I’m still middle-aged white guy, I don’t know. But I think that this is an industry that needs a revamp in that space. We need to push people that are of color or people that are of different gender to find their space and find their power here. And so we have done a lot in making sure that we’re pushing women forward and making sure that we’re providing the same level of opportunity for those that are in a minority position and making sure that we’re very sensitive to that. And it’s not because of the outside pressure of being sensitive in this area.
Eddie Wilson:
I think it was the first magazine article I wrote in AAPL, and I think it was the very first one I wrote when I first took over the association, my first article was, “We need to find more quality in this space because it’s been far too long a good old boy space. And this industry needs to grow and needs to grow outside of this network of people.” And so I’m a huge advocate for that. So when you get to advocacy, it’s not just advocacy in DC.
Kevin Kim:
Oh yeah.
Eddie Wilson:
The advocacy for people that are making a difference in our space and pushing them and pushing their stories forward.
Kevin Kim:
Yeah, yeah. I mean AAPL has been a very integral part of the women in private lending, I guess you can call it networking group that has been created. It’s all own association.
Eddie Wilson:
Yes, yeah.
Kevin Kim:
And shout-out to Lisa, our last guest, and Ruby on my team and Linda on your team, and then a bunch of people, Christina over Arista, they’ve been really pushing that forward. It’s become really cool to see-
Eddie Wilson:
Yeah and I love that it spans all the spaces, whether it’s at the AAPL conference or it’s at a Geraci conference.
Kevin Kim:
All types of companies are participating, vendors are participating, and they’re not talking shop. They’re talking about how do we grow opportunity for each other and support each other. And I love that about it. And shame on you, boys, who try to break into that networking event, let them have their own time. But at the same time, actually one of the interesting points that I noticed over the years, because I came from the Korean American banking world. It’s a bunch of Korean dudes, you’re all together. And then I come to this space and it’s a bunch of old white dudes. And then past four or five years though, all over the world, I mean not just men, from ethnic and country too, people from all over the world, we have clients from Israel now, clients from Asia, Middle East-
Eddie Wilson:
Middle East.
Kevin Kim:
South America, and all over the world because they see the opportunity in this particular sector. Women, men of all types. And what’s been really cool to see, I don’t know if you noticed this, but past few events I’ve been to have been quite diverse.
Eddie Wilson:
I love it. I have been so proud of that is that every event seems to get more diverse and we see more women stepping up and speaking and being leaders and it’s phenomenal. I always have to give a shout-out to Linda on my team. I mean when I appointed her as executive director, Linda didn’t know the private lending industry, but she was a fantastic operator and Linda has just done a fantastic job. And I know, like you said, people like Ruby on your team and others that have just been amazing at stepping up, making their voices known and heard and other women coming aside them have been great. Yeah, I love it. It’s every race, religion, creed. It’s everybody. And I love that.
Kevin Kim:
I guess I want to make sure that we put it out there for the listeners out there, because this is going to be airing pretty close to the event. Let everyone know about the annual conference. Because I’ll tell you, I don’t know about you, but for our law firm, this is the biggest event of the year for us. I can’t use the word I want to use, but it’s a very large sporting event that happens every year that’s a cool one to a national holiday for us. The entire industry’s there. So please let us know about the event because it’s on a different date this year. It’s not usual schedule.
Eddie Wilson:
Usually, we are always in November and we’ve been in November for 10 years. I think, maybe 11 years now. But this year it’s October 19 through 21st. Again, it’s at Caesar’s Palace in Las Vegas. And we’re expecting record attendance this year. The amount of people buying tickets early this year has been staggering. And even just booths and everything is just sold out. It’s crazy. The amount of demand and you never know when that’s going to happen. And it’s a great problem to have, but it’s also put a lot of stress, trying to make sure we manage everybody’s expectations and trying to give everybody their due respect. And it’s been kind of crazy.
Eddie Wilson:
But yeah, October 19th will kind of kick it off. And if you’ve never been a part of our big VIP reception every year, we always do a big VIP reception. You want to try to get into that. And then on the 20th is pretty much a full day and then 21st is a half a day. So it is a great time and it’s the who’s who of lending and it’s become a community and it’s become more than just an event. The amount of after parties and the amount of just ancillary things going on specific to this space is a lot.
Kevin Kim:
A little bit nuts. But what’s really cool with this year is Linda and I have been working on this together, is that we’re creating, I guess, kind of a round table event for new lenders and for small lenders to come in because the industry’s grown so much that it’s kind of scary if you’re just getting started or you’ve just been investing in some loans here and there.
Eddie Wilson:
Right. What we’ve noticed is a big aggregation or maybe migration from real estate investor to lender over the past two years where you have a lot of private investors that maybe were fixed and flip guys that just couldn’t find the inventory, but they had people that had inventory so they’d be lending. And so there’s just large swath of people that now lend as a part of their practice. And so it’s tough. You’re sitting next to a Jeff Tesch, or you’re sitting next to Ray Stern or one of these guys who just seems like a behemoth in the industry and you’re like, “So how many loans you’re doing?” “Well, I’m doing 400 loans this month.” And they’re like, “How many are you doing?” “Two,” and all of a sudden, there’s this disparity. And so just trying to make sure that we find a navigable path for them so they don’t feel like they’re swallowed in this massive conference.
Kevin Kim:
Right.
Eddie Wilson:
They can actually find success and commonality.
Kevin Kim:
Right. And we want to make sure we stress that because this is an industry that we want everyone to be a part of.
Eddie Wilson:
Right.
Kevin Kim:
And all these guys started out that way and everyone started out doing a couple loans a month and they grew and they grew and they grew and they grew.
Eddie Wilson:
Sure.
Kevin Kim:
So for you new lenders out there or you’re just thinking about, “Hey, this looks like a pretty cool industry,” this is the industry meant to be at. I always tell to anyone that’s new, I always talk to a lot of new lenders, “You’re at any show this year, this is the show to be at because this is where you really can set the tone for the next year.” Great. I mean, one of the things I want to close the interview off with, and it’s just been like I lost track of time, I want to close with our rapid fire questions. And these are more questions about you as a professional and as a person.
Eddie Wilson:
Hold on one second.
Kevin Kim:
First question-
Eddie Wilson:
Before you go there, I feel like I should put on my-
Kevin Kim:
Oh, you got it. You got the swag.
Eddie Wilson:
Let’s put this on first. All right.
Kevin Kim:
Ladies and gentlemen, this is the first time on the show.
Eddie Wilson:
My lounge-
Kevin Kim:
Yeah, we have hats, by the way, for our guests and they’ll be given away at the AAPL so make sure you come.
Eddie Wilson:
Oh, you can’t… I can’t see… Oh.
Kevin Kim:
There it is.
Eddie Wilson:
In the black background, but there’s my mug.
Kevin Kim:
There it is.
Eddie Wilson:
My hat. My hat’s a little small, but hey, we’ll get it together here.
Kevin Kim:
So the question for you is going to be, the first question is, what’s one business tool that you just cannot live without?
Eddie Wilson:
There’s a lot of tools. That’s a tough question.
Kevin Kim:
Yeah.
Eddie Wilson:
This is not rapid fire because I don’t have a rapid answer on this. For me, we build a tool called a Cash Flow Proforma. And what it does is it essentially projects the cash I have and then it tracks it weekly based on performance of every company. It’s a tool I absolutely cannot live without.
Kevin Kim:
And it has all that data together in one place?
Eddie Wilson:
All that data together in one place per company so that every week I can look down as a data analyst and go, “How did we do based on what we projected?” And so it’s kind of this rolling number, but then it also shows me how this week’s performance changes my outcome for the year on profitability. And so it’s kind of proprietary to me and all the PE stuff I do. But yeah, that’s a tool I can’t live without.
Kevin Kim:
But it’s very simple, I’m guessing.
Eddie Wilson:
It’s very simple.
Kevin Kim:
That’s cool. That’s very cool. All right. So another question about you is going to be, what was your very, very first job?
Eddie Wilson:
Very first job?
Kevin Kim:
Yeah.
Eddie Wilson:
My father’s an entrepreneur, so he always had businesses. And so my very first job was picking up roofing materials from a roofing crew. They would chuck shingles off the roof, I had to go pick them up. I was probably, I think 10, 11 years old and I got paid by the hour, I think.
Kevin Kim:
Delivery of roof tiles.
Eddie Wilson:
Yeah, a $1.15 an hour, something like that.
Kevin Kim:
Oh yeah. Yeah. I love it. I love it. All right. And last thing is, the question is really dominating the lending world, but you’re out there just doing all kinds of things, being you, when you’re not out there investing and leading the association and all the other things that you’re so part of, what do you in your own personal time?
Eddie Wilson:
Yeah, so I’m a big fan of time blocking and I don’t do a ton of personal activities other than travel, travel a lot with the family, but a lot of it’s tied to our nonprofit pursuits. And so we spend a lot of time out of the country in places where we have feeding centers, orphanages. We own about a dozen TV studios outside the US. So a lot of travel. That’s primarily what we do.
Kevin Kim:
Where was last country you were in?
Eddie Wilson:
I was just in Mexico, Guadalajara last week.
Kevin Kim:
Very cool, very cool. And this is all part of the charity that you guys work with?
Eddie Wilson:
Yeah, yeah.
Kevin Kim:
Very cool. And I think that’s one of the things that we don’t talk about enough on this show is charity. We’ve had one gentleman, Peter Steeler, he’s very involved in Jewish charities here in LA, your charity as well, but how much of your energy is in that direction? Because we don’t talk about that enough. How much?
Eddie Wilson:
7 to 15 hours a week is about what I put into it. And then I have a full staff over there, so I still play the visionary of the nonprofit.
Kevin Kim:
How many, I guess, centers and orphanages now are under your-?
Eddie Wilson:
About 26. Yeah. Wow. About 26.
Kevin Kim:
In all different countries?
Eddie Wilson:
All different countries. We exist in 107 countries in all the nonprofit capacities. And yeah, that’s kind of the general overview.
Kevin Kim:
Very cool, very cool. Doing God’s work, that’s awesome. And that’s very underappreciated in our sector. I want to commend you for that because we don’t see enough of that in our sector and I’m really happy that the next event, we’re going to be doing some charitable events and hopefully we continue that and I really-
Eddie Wilson:
Yeah, actually big plug for that, that’s our charity poker tournament. And so the buy-in goes to help charity and I’m really excited about that.
Kevin Kim:
Yeah, I think it’s like for homeless youth, right?
Eddie Wilson:
Yeah, I believe that’s what our charity is.
Kevin Kim:
That’s very cool. That’s very cool. All right, everyone, I think that’s all the time we have for this episode of Lender Lounge with Kevin Kim. Thank you, Eddie, very much for your time. And everyone, make sure to make it the American Association of Private Lenders’ October conference to see Eddie himself and the rest of the team. So hopefully, we’ll see you guys all there.
Thanks for listening to Lender Lounge with Kevin Kim. I hope you enjoy this episode as much as I did. If you did enjoy, please leave us a five star view on your podcast platform and be sure to follow our show to be notified of new episodes. If you’re on YouTube, don’t forget to smash that like button and hit subscribe for more content from all of us here at Geraci. Lender Lounge with Kevin Kim is available on all podcast platforms. Referrals really help us spread the word, so please send this over to someone you think might enjoy it. See you next time. This is Kevin Kim signing off.
