Kevin Kim: Hey, guys. Welcome to another episode of Lender Lounge with Kevin Kim. We are using our new studio setup online. We are now in the swing of it for season four, and I have two very good friends of mine as our guests for today. Greg with Arixa and Kevin with Renovo. I want you guys to introduce yourselves to our audience, and we’ll get started with the topic of the day. Greg, you want to start us off?
Greg Hebner: Sure, thanks Kevin. Looking forward to doing this. Kevin and I talked about this, and he knows I have mad respect for him and what he’s built over at Renovo. So I think this is a subject that’s near and dear to our heart, so sure. We’re both looking forward to sharing some thoughts on the subject. Those who don’t know me, I got started on the real estate side as a developer/flipper rental property owner. Was doing it right out of college and full time, sort of when the global finance crisis hit. Bought, sold, and flipped 250 or 300 homes over the course of a few years. And it really gave me an opportunity to work with a lot of private lenders because that’s how I financed my projects, and that was sort of my entree into lending. I was able to get to see what a lot of lenders did and how they did it, what I liked, maybe what I didn’t like. And since I’ve started running the lending platform here in Arixa about ten years ago, I’ve tried to always keep in mind some of those feelings and thoughts that I had as a borrower, and I think it’s helped as we’ve grown the business. Now, Arixa, we are LA based with an Arizona office. Mostly West Coast focused. We primarily make bridge renovation, construction loans on single and multifamily projects, kind of from half a million up to as much as $20 million. Heavy focus on construction. Most of our markets are not really that active doing what I’d call a light rehab. So most of what you see here are very substantial remodels ground up and really big value add and everything here, much like Kevin does, in-house. We do everything from valuations through closing credit, all the way through construction management and draws through servicing, all within the Arixa world, and mostly lend off of our balance sheet. We’re an alternative investment management firm that has both institutions, such as pensions, as well as family offices and high net worth individuals that make up the majority of our LP capital. We’ve worked with you, Kevin, obviously, and Geraci on some of that over the years. And again, we have full discretion over most of those vehicles to be able to operate quickly, make decisions, and take care of our borrowers. So kind of leave that the introduction. Let Kevin tell you a little about him and him and Renovo.
Kevin Werner: That was awesome. Kevin Kim, thank you for having me and Renovo. Greg been looking forward to this for ten years. As long as you and I have known each other, it’s funny.
Greg Hebner: We’re finally relevant, Kevin. After ten years, we’re relevant enough to do this with Kevin.
Kevin Werner: Finally matter a little bit, maybe kind of, sort of. And unlike Greg, it’s funny. Greg came from with a rehab background himself. I didn’t my dad was a home improvement lender in the 70’s, 80’s, and 90’s. And I actually grew up from high school making loans in the home improvement business and have been making loans my whole life. Basically grew up at the dining room table listening to my dad talk, to borrowers on the phone on Sundays, making collection calls from the dining room table and have truthfully, never really done anything else. Kind of coming out of the financial crisis, we started Renovo, and that was 2011. The goal of starting Renovo was to create an institutional sized company, but very customer centric, client centric and local. And we’ve taken a unique approach to any other maybe national lender where we’re local in the markets that we operate in. We’re in 15 markets today, and we’re very focused in those markets. We’ve got people in those markets. Some of those markets have physical offices. The intention is to have physical offices in most of those locations. We started in Chicago, that’s still kind of our main central office, if you will. And there’s about 150 Renovo employees today. We span the product suite of kind of all things residential investor. So the way we think about our product suite is both single family and multifamily, spanning from fix and flip, ground up construction and then the stabilized products, those like, 30 year DSCR, as well as, like, the five year and ten year more balloon products. And that’s a bit about us and excited to be here.
Kevin Kim: All right, well, you both have been on the show before, and the reason why we’re having this group interview, having this group pod today is both of your companies have been almost obsessively focused on this idea of being customer focused or customer service oriented. And I hear it all the time. I hear all the time on panels and advertisements and from other folks. But I met your team, and I know how you guys operate, and I’ve seen it firsthand. Which is why I wanted you guys to be on the show and talk about this, because I want to get in the weeds on the idea of being customer focused and customer centric. What does it truly mean to be that way? And how do you get the team to really live by that? It’s almost like a credo, right? It’s not something that’s easily taught and that’s not something that’s easily embedded into the company. And you guys have done that. And I would like to ask you guys, how have your companies really embraced it and made it part of your day to day? The specific tactical aspects of it. So whoever wants to go first, first question of the day.
Greg Hebner: Again, I think first, let’s compliment Kevin. I think if I’m in the same circle of service delivery as Kevin, I take that as a compliment because I think they do a great job over there.
Kevin Werner: So nice.
Greg Hebner: But I think it does start with the leadership of the business. So if the leader doesn’t walk that talk and it isn’t something that’s talked about, communicated, shared, celebrated, it just doesn’t work. So one thing that’s very unusual before I go into our specifics in our industry, over the last two or three years, there’s been a tremendous amount of change at the sea level, there’s been a tremendous amount of change in the ownership groups. So I think One of the unique things about Kevin and I, good or bad, a lot older than Kevin, is that we’re kind of the same people doing the same thing we’ve been doing since we started. We’re doing it with a lot more scale, but it’s not a new face or a new person or a new this we’ve added to our teams. But there’s a consistency. When I’m assuming if I was in Kevin’s new hire orientation ten years ago, I’m betting he said exactly what he’s going to tell you now. I don’t think he’s changed, and I haven’t changed either. So if you’ve been with the organization and now we have employees, sure. Kevin does too, who’ve been with us for seven, eight, nine years, it’s the heart and soul of our business. And the new people that come in, we spend a lot of time making sure they care about service. They love real estate because that’s what we do here every day. And we care a lot about how the other team members will respond to that person. So I wouldn’t hire somebody unless they’ve met a number of people on my team. Some candidates say, wow, I have to meet a lot of people on the team to get a job here. Like, yeah, because you’re going to be working with all these people. We’re looking to see if they fit into the team and have that sort of service mindset that we think is so critical to our business. We compete out here in the markets that we’re in. There are a tremendous number of great lenders, and every client that we work with is known to our competitors and is a desired customer for the most part of our competitors. So it’s a scratching and clawing kind of business to get the kind of clients that we want to work with and keep them. And Kevin knows this as well. I mean, our best clients, everybody wants them. They’re active, they’re successful, they’re respected, they do great work, they give great referrals, they’re dream clients. And if you’re able to deliver for those clients, it just builds a very sustainable and profitable business that allows you to attract and retain the great talent that allows you to support it. But we’ll give you the most proceeds, we’ll be the lowest rate. There are a lot of places that will do those things for clients. Our job is to anticipate the things that clients don’t know they’re going to need. And I think these last three years, if you could ever write a script for, I used to say clients all the time, when things are really easy, you’re not going to need me. When things aren’t so easy, you’re really going to need me. Then COVID hit. That was an oh shit moment. And then all of a sudden, the Fed raises rates eleven times in 14 months. That was a second oh shit moment. So you really got to test what we’ve been telling clients all these years, which is things are going to happen that you’re not going to expect. And you’re going to need somebody who can pick up the phone and understand or anticipate what you might need and then have the ability to actually do what’s most important to you at the time of need. It’s like, it’s no use having a life jacket if you’re not in the deep end. But if you’re in the deep end and don’t have a life jacket, it doesn’t end very well. So just having that partnership and having that relationship where you know your clients and you also know where they might get themselves into a little bit of trouble. I often have conversations with somebody that says, hey, I’m a little worried. You’ve had this thing on the market for a little while. You got a couple of things coming. How are we looking? All of a sudden you get a little different conversation and they’re like, oh wow, you’re really in touch with me. You know what’s going on. You understand what’s in my portfolio. Not a conversation I think a lot of lenders would be having with their clients. So I rambled a little bit there, but that’s just a little bit about what we know.
Kevin Werner: I would say very similar to Greg, but maybe in a different twist. And again, let’s pay attention to the fact that he called them clients versus borrowers. Okay? That’s a pretty big difference. It’s not one size fits all. There’s a lot of different people in the world. There’s a lot of different people who are doing real estate in the world, and there’s a lot of different needs that they each have. I think for us, it was important when we started the company to decide what kind of borrowers did we want to have as clients that we can get up every day and work hard for.
Kevin Kim: Can you expand on that difference, that client versus borrower? I’d like you to give me how you define the difference, because it sounds like it’s a very big difference for Renovo.
Kevin Werner: I mean, look, we haven’t spent tons of time defining it with exact words, but I would say a borrower is pretty transactional and I would say a client is more of a relationship, which obviously needs to have transactions. But at the end of the day, hopefully the relationship is more than just the transaction. Right? Like Greg said, there’s good times, there’s bad times. What we believe is we have to earn that right, by the way, with that client. We have to earn it every single day and we have to stack chips, hopefully in the right direction with our clients that we woke up in the morning, we did what we said we were going to do, we listened to what they needed and we performed. And you got to perform ten times, 20 times to start to build trust. Because there’s going to be a couple of times where we mess up. No matter how much we focus, no matter how much we care, it’s going to happen. There’s not an exact science to it, but we better be stacking up lots of good execution with that client for that one time we mess up. Because at the end of the day, look, what matters for them is that they’re getting their project done, that they’re meeting their own business goals. We don’t matter. And I don’t mean that negatively, but at the end of the day, they’re waking up in the morning trying to do their thing and we got to wake up in the morning and do our best we possibly can to perform for them. And sometimes no is an acceptable answer, by the way. I think some people get confused and customer service means you say yes to everything. We don’t think that’s what it means. We think it does mean, though, do our absolute best to do what we say we’re going to do. Be reliable, be predictable, be quick and be friendly.
Greg Hebner: I was going to say be kind.
Kevin Werner: Be kind to be friendly, right? I mean, you don’t have to be a jerk. Life is long. Business, hopefully all of us are in this for a very long time and we still have. So it’s funny, I’m not sitting in my office right now because I didn’t have good acoustics for this podcast, but in my office I’ve got a huge picture on my wall of the first project we ever financed. It was a little single family house in suburban Chicago, first loan we ever made. Huge poster on my wall and I’m so proud to say eleven years later, 8000 loans later, that borrower is still a borrower. That client is still using us.
Greg Hebner: Might be paying the same rates now that he paid ten years ago too. It’s come full circle.
Kevin Werner: At the end of the day, what we do, look, we want to be competitive, so we’re in the markets, we’re competitive on price, we’re competitive on advanced rate. But if that’s all that matters to you as a borrower, probably not a really good fit. And we do spend a lot of time up front. We spend a lot of time up front getting to know our clients. And if a client is not willing to spend 30 to 60 minutes with us up front, typically in person, by the way, if they’re not willing to do it and they say, no, just tell me your rates. I don’t know. What’s my rates? We’ve got a lot of different products. We have different advanced rates. We got a lot of different stuff. It’s like walking to a clothing store and says, how much are your clothes? I don’t know. What are you looking for? Socks? A T shirt? Hold on a second. What are we trying to do? So we do try to slow down, get to know the clients. We take really detailed notes in those meetings, and it’s not uncommon that we’ll be in a credit committee meeting reviewing a 7th loan for a client, and we’ll say, pull up the notes from the first meeting. Let’s get a sense like, who is this borrower again? We’re about to have a big exposure we can we think of. So we really do care about. We want to understand the story and the fit for us,
Greg Hebner: We’re the same way, Kevin. It’s just it’s really important. A lot of conversations you have with clients are like, you would be a great client or borrower, just not a great client or borrower for Arixa, for whatever reasons, and happy to give you. There’s many lenders that would be a better fit, but just our loans are a little bit bigger. Our average loans are $2.5 to $3 million. And we’re trying to build that relationship so we don’t just want to do one transaction. So we have to find it’s almost a little bit like that first date. There has to be things in common that are important to you and are important to us that we want to do this again. So we do a lot of construction. So we do very well with owner/builders, people who actually they’re on site every day and they care about how the construction draws happen and they know the difference between what it costs for this faucet or that nail. They like us a lot because we understand the construction process incredibly deeply. Our team does. So they can have a conversation. They don’t have to explain, hey, I’m spending x thousands of dollars for this or that. We’ll understand why they’re doing it in the market that they’re in. They don’t want to have to teach somebody over the phone. I spend the whole podcast talking about construction draws and how hard it is for a builder to actually get somebody to understand a budget or a change order, what they’re doing. But if people care about these things, we can work with you. We can be a great service provider, and we can give you things that are important to you. If it’s just rate, if it’s just maximum proceeds. There are definitely better fits for you than what we would be.
Kevin Kim: Right. And what’s been weird over the years, especially since I would say 2018 over the years, what I’ve noticed is a lot of people say this. They say that they’re focused on this, but at the same time, they’re also focusing incredibly on what I would call commoditization of private lending, where each loan is effectively a widget. And you see this a lot with lenders that are relying on the bond market, right? Especially very institutionalized organizations. You see a lot of this modernization. And to me, from my perspective, it seems to be a logical progression of a growth of a private lending business. And I would argue that it makes sense because now you have an institutional backer or you’re owned by an institution, they’re very much bottom line oriented, productivity oriented. They couldn’t care less. There’s a piece of one piece of their big puzzle. Right. And that’s the question I want to kind of pose to you guys next is does this customer focused type of operation in financial services? We’re a financial services business. We’re a mortgage business as well. Is it possible to continue this as you get going to scale and as you start scaling up and getting to that place where everyone wants to go is kind of competing at the national level, truly institutional outfit? Is it possible?
Greg Hebner: What do we say, Kevin, that 1 billion is now 3 and 3 is now 5? What’s the new number?
Kevin Kim: Seems like it, right? I mean, that’s also the interesting, I would never have imagined that a private lender even hits a billion in origination. And now there are several of you guys in the B club, right? And the several B club. And by the way, kudos to both you guys for hitting those numbers. But the fact that we’ve grown so much is also really cool. But there’s so many companies now that are institutional in nature, and it feels like everyone’s headed toward that commoditization, and you see the same thing in non-QM, right? And so I want to ask you guys, what do you guys think about that? Because you’re both keeping things very retail customer focused and you’re both scaling, you’re working with institutional investors. Is it a pipe dream to be able to hold on to this as you scale up continuously? I don’t know.
Greg Hebner: It turns a lot on your capital. So, I mean, I think if you’re doing things that have to be in a securitization, your capital is dictating your product. I mean, what we’ve tried to do and again, there may be limits to the scale of this, but we think of our business as you know, I’ve told you, we have two hats. We’re an alternative investment management firm that needs to produce great risk reward for our investors, that lets us curate investments. So it can be a very unique investment. It can be an investment where we can cross collateralize something. It can be an investment where we do some things that would not fit in somebody else’s box. And we can make that work because we’re just generating yield. If I’ve got a billion dollars on my balance sheet, I’m trying to generate 90 or $100 million a year of interest income, whatever that number might be. And I don’t have to do it in one particular way. I just have to continue to do it. Now, there’s going to be limits to that scale, but I think if your capital doesn’t force you to it, you can be very creative about how you productize and what you know. Kevin made a comment if somebody asked me to send them a rate sheet, I can’t even do anything with it. I don’t have a rate sheet. We custom price and custom structure every loan. And either my partner or myself are involved in the structuring because there’s so many factors that go into what we price and how we price and what we structure and what our attachment is. We don’t have to do a twelve month term. If eight is your lucky number, you could have an eight month term. Knock yourself out. It doesn’t matter to me. It doesn’t matter what somebody needs as long as we can make it work. So that’s been our strength. I often play the Wall Street versus Main Street card just because as you know we’re independently owned by just my partner and I. So when we’re competing against what were the Goldman Sachs of the world or the Blackstones of the world and those are fine financial institutions, but you’re pretty far removed from where the leadership and decision making is. And if you don’t realize that, just look at an org chart because the person you’re dealing with bosses, bosses, bosses. Not in those, you know, in Kevin and I’s world, if something’s important enough and a bar needs to get Kevin on the phone, kevin’s going to be there for him. I know he will. I’m the same way. And I just think that’s part of what I think both of our secret sauces have been is that Kevin’s got more institutional backing than we do. But I think he’s been able to know, just the way he can still deal with clients and be present I think is a really differentiator versus all my loans go into a security. I’m sorry, I don’t service them anymore. I’m sorry I can’t help. Sorry, sorry. Eventually you use those chips up kevin, after so many sorrys. Those chips aren’t worth much anymore.
Kevin Kim: Problem we’re facing today, right, a level of disconnection as to the borrower relationship and the customer focused orientation.
Greg Hebner: The disintermediation Kevin is really, really accelerated.
Kevin Werner: Kevin. You know, it’s funny. So for us it’s funny. There’s a video on our website, I think it’s still on our website of a client interview that we did probably eight years ago. A woman named Leslie Markwhite. And it’s funny, I didn’t know who she was, okay? It’s a woman who did business with us. She was a builder in Chicago, and she was building homes in Chicago. And one of our marketing team members went and did a video with her and videoed her about her experience with Renovo. Eric Workman is the guy that did it on the Renovo team. Eric walked into my office with this video on an iPad and said, you need to sit down and watch this video. And he sat down and he played this video. And within three minutes, I was crying listening to her talk for a couple of reasons. Number one is because I had no idea that she was a very successful corporate consultant that consulted on customer service for the biggest companies in the world. We had no idea that’s what she did as a full time job. She went on and on and on in this video about how Renovo met or exceeded all of her prescribed customer service experiences that she teaches her big clients to go do. And I got teary eyed because I’m like, oh, my god. And at the time, eight years ago, we’re still pretty small. And the reason I tell that story is really for two things. One, is I met with Leslie after that, and Leslie said, Kevin, first of all, don’t forget, it’s not that you don’t have rules to follow. You’re going to get bigger. You’re going to have to have rules to follow. You’re a lending business, for god’s sake, right? You got to have rules. But there’s an art and a science that your clients cannot feel these rules on a regular basis, okay? And that’s much harder said than done. We work tirelessly to set the right expectations for borrowers, because when you say the thing about not fitting a box, first of all, borrowers don’t know there’s boxes.
Greg Hebner: Well, they don’t care.
Kevin Werner: Care about your boxes and whatever the hell else you’re talking about. They’re like, hey, do you understand my business plan, and what are you doing for me? What can you do for me? If your LTVs are going to change or your pricing is going to go up or your LTCs are going to come down or your interest reserves are going to change, it’s all about getting in front of that borrower and explaining that you have a change. It’s actually a cop out, a real big cop out to blame Wall Street, in my opinion. To be honest. It’s actually bad management and execution of a company. You got to figure out a way to deliver these things called loans in a way that the borrower wants to receive them.
Kevin Kim: And manage expectations that you cannot. That seems to be the problem, right?
Greg Hebner: Once you lose that loan, what can you manage? That’s the issue that I’ve always had.
Kevin Kim: My problem has always been both the aggregation aspect of the business, right? The aggregators and the institutional loan buyers, but also some of the lenders that are national, they’re misrepresenting to the market that they’re still lending when they’re not or they’re still buying when they’re not.
Kevin Werner: Well, and they have advanced rates on their websites that are higher than they actually do.
Greg Hebner: Pricing know it’s the teaser rate.
Kevin Werner: Pricing that’s lower. How many firms are issuing term sheets automatic without even looking at it? To everyone do it their own way. But Kevin, I will say for us, it’s been a constant effort and art and science to remain local, feel direct borrower relationships and marry that with institutional Wall Street money. That does want things in boxes. Right. Because to access large sums of money at competitive prices, you can’t tell your investors, oh, don’t worry about it, we’re going to hug each borrower and then everything’s going to be fine.
Kevin Kim:. Right. So you’re saying it’s an expectation management component. If anything, you’re having to double down on customer service.
Greg Hebner: You have to manage expectations with your capital, too, I think, Kevin. Yeah. You got to do both sides.
Kevin Werner: You got to manage both sides well, and you got to be transparent. And you have to tell a borrower sometimes. Hey, you know what? Just to be clear, what you’re asking for here is a little bit of a special request. Do me a favor if you want me to pursue this. Do you have your seatbelt on? What do you mean my seatbelt? It’s going to be bumpy. Are you okay with that? Yeah. It’s all about setting expectations with a borrower. If you tell the borrower, oh, no problem, I got you. I got you, man. No problem. You want 90 LTC, I got you, no problem. And then you don’t call the borrower back. You wait a week and a half and you send them an email that says, oh, sorry, my underwriter said this. And they blame Wall Street. Oh, it’s Wall Street. Wall street, in some ways, honestly, in my opinion, is one of the greatest things that’s happened to our industry because we are getting so much money pointed at this industry now. I just hope we don’t mess it up.
Kevin Kim: Interesting point, and I want to kind of dig into that a little bit. Because recently, right now, it’s August 1, 2023. Within the past year or so, we’ve had a lot of ups and downs, a lot of volatility, a lot of heartburn, a lot of headache.
Greg Hebner: Not in an age, Kevin. It’s just straight up to the right.
Kevin Kim: Oh, I know, but there’s been a lot of ups and downs as it pertains to borrower volume and market conditions. And we had some months that are good, some months that are bad. A lot of ups and downs. Very tough time for a lot of your institutional counterparties and also the national institutionally backed lenders. But as someone who’s been watching Renovo very closely for a very long time, and I have the. Benefit to also being one of your attorneys, we see continuous ability to weather this storm, if not growth through this storm. And I’ve asked you privately about this and feel free to kind of couch it as you need to, but at the same time, other companies that have also been associated with the various institutions that you’re associated with don’t seem to be able to have not been able to weather the storm and are no longer around. Right? And some of them have been able to have that either sell off or shut down or now actually it’s gone defunct. Is it purely this whole transparency and customer management aspect
Greg Hebner: Kevin also makes really good loans. That’s one thing.
Kevin Kim: That’s got to be it, right? But I mean, no, they got the borrowers come back to the table and you’re making loans happen.
Kevin Werner: We always say this. It’s a thousand details. There’s no one thing, there’s no secret sauce. I mean, honestly, it’s a thousand details. We have a team that’s waking up every morning, and everyone’s got teams waking up every morning. Our team is really well aligned. We have a steady management team that now has been on the team some as much as ten years, and we got the same people doing the same thing. And we try to learn every month, every quarter along the way. We don’t lend in every market. We lend in the 15 to 20 markets that we spend a lot of time thinking about. So we think we know a little bit more about those markets and we care about those markets and we’re thinking about them. Portfolio performance is critical at Renovo, we do monthly calls where a lot of us are getting on the meeting and we’re going through our portfolio up and down. Renovo today has 3500 open loans and we still have a monthly call. And we go through a lot. I mean, we can’t go through 3500, but we go through chunks of our portfolio and we think about what’s our extensions, how are extensions working? We’re in the weeds as a specialty mortgage lender to really understand what’s working and what’s not working.
Kevin Kim: But no one’s ever had to tell you pump the brakes. Right? Like ever until now. For now.
Kevin Werner: What do you mean by that? What do you mean?
Kevin Kim: Well, there have been at least rumors that have been at the institutional level that have been basically says, you’re cut off. We’re no longer other groups. Right? You’re cut off, we’re not buying any more of your loans, we’re not funding any more of your loans. Just not happening anymore unless you conform to this impossible measure. Right? And that’s what I call pump the brakes.
Kevin Werner: We’ve been lucky enough that that hasn’t really been a thing for us. We’ve got a combination of capital, we keep some capital on our balance sheet that we can fund loans. So our balance sheet we run what we call a hybrid model. So we’ve got our own balance sheet, our own credit facilities. We just issued some rated corporate debt last year for the first time. I think only a couple of other people in the space have done that. So that’s totally Renovo controlled capital. And then we have a couple of relationships that really matter to us that we fund loans with, that we stay very close. And look, everyone stays close with their capital providers. I can’t stress enough that you got to stay on the same page and you have to make good loans every single day. We’re a lending business. A lot of the people at Renovo came from either a bank or a specialty finance company. For the first eight years we existed, every loan we made, we held to maturity. In the beginning of Renovo, in order to make payroll, we had to go get extension fees from borrowers in Know so we can make payroll. So getting loans to perform and getting borrowers to pay off and not hate you for it is, again, a thousand details. Now, look, some of the things that happen in the industry are not the fault of the platform. Who would have thought that being owned by a bank would come to bite you in the butt?
Kevin Kim: Greg and I have had many conversations.
Kevin Werner: Well, I might have thought that too, honestly. But look, you never know. And look, we’re all vulnerable. Every one of us is vulnerable.
Kevin Kim: And also, there’s no way to know with banks. It could have been a million different reasons. You never really know why, because with banks, there’s so many different rules and regulations, it’s hard to tell. And my father was in banking for 40 years, and he laughed about it when it happened. And then I talked to him about it when it shut down. He’s like, hey, they lasted a while. So his prediction, his view of it was that shouldn’t last for more than six months.
Greg Hebner: I think they made it 25 months. I don’t know. That’s pretty short in our world, but.
Kevin Kim: It’s pretty long to him. His perspective on it was the regulator shut it down within less than a year.
Kevin Werner: And it look a lot of people have started these businesses and sold them, and the founders are out.
Kevin Kim: And they’re doing their own thing now and they’re doing something. And I think that’s part of the space. There’s a lot of evolution to it, right? And there’s a lot know. You have to kind of go through it to figure it out.
Kevin Werner: Greg and I have a sick addiction to working and making loans, it’s a sickness, actually. Maybe you can help us get some help on that.
Kevin Kim: You’re talking to the guy who comes to the office every day. One of the only partners that come to the office every day. So I have the same sickness.
Greg Hebner: We both take tremendous pride. Kevin’s at 8000 loans, I think we’re at like, 2500 loans. I can tell you the 8 loans that went sideways at the end of 2022. We had the entire portfolio. There wasn’t a single loan in our entire portfolio. It’s changed a little bit since then. That was late out of payment. We went on a mad crusade at the end of the year because we only had a few at the end of 21, I’m like, you know what? Let’s see if we can every single loan in our portfolio, over a billion dollars to be current as of the year-end. And we hustle, and it’s maybe a silly thing. What’s the matter? They pay January 5, December 31, whatever it is. But it was a concerted effort, and we may never do it again for as long as I’m in the business. But it was pretty freaking cool that every single loan that you had had made their current interest payment as of the end of the year. And we care a lot about the performance because again, our investors aren’t saying, you know what, push your leverage, get an extra 100 basis points. I’m running several hundred million dollar portfolio. That one or two or three loans. We don’t get paid enough for loans to go sideways. We’re not in a loan known business. We’re not in the let’s collected default interest. Ha. That’s not the business. We’re in the business of running good loans every day.
Kevin Werner: It’s in everyone’s best interest. It doesn’t have to be we versus them. It doesn’t have to be the borrowers versus the investors. If you think about it, it’s stakeholders. Think about the stakeholders involved, the capital providers, which I don’t care if you have a balance sheet or you’re selling your loans. Right, Greg? you have investors.
Greg Hebner: They all outperform us.
Kevin Werner: Doesn’t matter. It’s somebody’s money. And you got to treat that money with the utmost integrity, respect, thought, and you got your staff to worry about, and then you got borrowers. Like I learned a long time ago in the specialty finance business and the home improvement business, if a borrower goes 30 days late, they’re usually not coming back. They’re pretty much done. So Renovo, If a loan goes one day late, emails go out to the whole staff, 150 people. Hey, these borrowers haven’t, ACHS haven’t gone through. And you’ll see emails flying, people running around. It’s a little chaotic, but it really helps. And the reason we’re trying to do it is let the borrowers know. If you let the borrower know you care about that payment, you will all of a sudden be on the list of companies that get paid.
Kevin Kim: Right. But that level of radical transparency is insane. I mean, I’ve never heard of a company that will spread that across the entire organization. Right.
Greg Hebner: We do it too.
Kevin Kim: That’s crazy. Your accounting department, of course.
Greg Hebner: No, everybody from origination,
Kevin Kim: Your marketing team as well? I mean, that’s kind of like.
Kevin Werner: Yes, because you know why? Here’s why. What if our marketing team is doing a video conference call with a borrower who’s 60 days late. That’s weird.
Greg Hebner: The borrower thinks you’re doing fine. Hey, I got a marketing video going. I must be in great standing.
Kevin Werner: No, you’re not doing a marketing video. You’re get off the marketing video today.
Kevin Kim: That’s true. And this kind of goes to the next question I want to ask you guys, is hiring for this industry is not easy. Right. The lack of, I guess, resources from a hiring standpoint in this industry and the fact that the same person, the same exec or loan officer can bounce between shops because there’s so few people who know this space. Right. I literally met one recruiter who knows the space, nobody else. And this is a multi-trillion dollar industry now. Right. So how do you guys find the people that you found, and what do you look for? Is there an X factor that you guys are looking for?
Greg Hebner: Kevin, you have a six foot seven secret weapon. That’s part of what you guys that’s true.
Kevin Kim: You do.
Kevin Werner: Wait, who?
Greg Hebner: You’ve got a six foot seven special weapon.
Kevin Werner: Yeah, he just walked by my office a minute ago. He just walked by and waved to me a minute ago. Yeah, that is true.
Kevin Kim: The giant the giant gaskin.
Greg Hebner: I mean, Kevin, I think one thing I will say is I think both Kevin’s organization, my organization, we’ve all benefited, I think, from reputationally being a pretty good place to work. If I look at my management team, I’ve got an ex CFO of a competitor that, you know, an ex CEO of a competitor, had a closing of a competitor, had a construction from a competitor. I’ve got probably a third of my staff were highly successful at wedding organizations that I thought had some special things that they did. I think I’m assuming, Kevin, you have a lot of people that were at other shops that you thought had the same quality and the same DNA that you wanted in your team. But we also Kevin, have a lot of people to come to us. Originators are really hard to hire because I’ve never found an originator who came out of conventional or non QM who’s ever made it at Arixa. They couldn’t sell without a rate sheet. They couldn’t sell without a box. So I think our world, we don’t have a lot of originators. We expect originators to do 100 plus million dollars a year. That’s kind of the minimum. We have a lot that do 200, $300 billion. They’ve got to be incredibly talented and be able to hold their own with the kind of borrowers we work with. You have to go on a job site and actually have the presence and enough of knowledge and experience. You can’t be like, hold on just a second. I need to call Greg, or, hey, I need to call this person, or I don’t know. You got to be able to have people that can stand I know, Kevin’s team has a lot of these people, too. You got to be able to stand on site with a client and have the gravitas to actually I want to work with you, Kevin, because you get me. You understand me. You know, my know, I think that’s part of it. And then finding know, that just buy into what you’re trying to do. They’ve just got to accept they’re going to be asked to do a lot of wacky crazy things for the benefit of your clients. I always try to explain the why. Here’s one thing I do, Kevin, if you do like when I ask somebody to do I’m sure you had a day like this yesterday. We had a crazy day yesterday. I mean, in Kevin’s world it was probably like a slow day. But for us it was like a crazy funding day. We were funding till the last minute. The wire cut off. We were running around. The texts were starting at 06:00 a.m. But everybody knew going into Friday that Monday was going to be bat crazy. And everybody was aligned. The closers were aligned. We were running around. But they all knew it was coming. They knew why we were doing it. We had a number of hard closes that needed to close by yesterday. We had an issue where one of the docs wasn’t correct. This never happens. We had to basically run redraw docs, have the notary go out, meet somebody and just kind of craziness when you really look at it. But everyone knew why. They understood the reason why you’re doing it and they felt good about it because guess what we did at the end of the day yesterday, everybody got an attaboy. Everybody got a high five. I bought a few people dinner last night and said thank you for the effort and let’s go do it again. Not just go do it. We don’t just give orders know, Kevin, go do this, Kevin. This is really important for this client and you get it. You buy into the why. The why is so important, not the what.
Kevin Werner: That was perfect, Greg. that was really Perfect.
Kevin Kim: Kevin, you’ve also picked up some interesting talent internally in the space. I don’t actually know about some of the people that we’ve interacted with that aren’t from the space. Right. So I know you, but for example, your chief operations officer, I don’t know where he comes. So and how do you pick these people? Because you’re also in a market that hasn’t been very well known in the industry. Right? The midwest has been left alone for a very long time and you guys are the biggest shop in the midwestern market but still great national presence. Now, you’ve built it and scaled it, but hiring for private lending must have been real tough because you’re in Chicago.
Kevin Werner: Yeah. I mean, everyone pities Chicago, so that’s a good thing for our real estate market.
Kevin Kim: In some ways, I’m flawed for this. Right? I’m biased. I’m on the west coast.
Kevin Werner: I’m teasing you. So first of all, Chicago is an amazing place to find talent. It’s a huge city. It’s an affordable city, and you have a lot of talent that comes from big Midwestern schools that ends up coming to Chicago. So first of all, Chicago is an amazing place for talent. You’re right. Most of our team, I’m going to say, I don’t know the percentage, but the majority of our team is not from the industry. The majority of our team grew up, in essence, at Renovo. The plus and minus is they don’t know anything, know everyone who’s kind of started here, started from the ground up and learned the way we do things. Now, you said about the chief operating officer, so you’re talking about Raimi, who I have his belt behind me. This is his customer service belt that I used on the podcast that I did for you. So I thought it was appropriate to have it sitting back here.
Kevin Kim: It’s gotten upgraded by the nice upgrade to it.
Kevin Werner: So look, Raimi was a branch manager at the bank by my house, and I used to go to the PNC Bank, and I never saw someone who was so talented executing and running the branch and doing amazing things. I was a customer of the bank, and he would do amazing things for me. I was nobody. I was just a person at the bank. And they would always exceed expectations. So I’ll say, look what we’re always working know that’s when we found Raimi. And I said to, you know, what do I got to do to get you out of here, I would love if you joined Renovo. And at the time, we had like seven employees.
Kevin Kim: So you saw him in action as a customer then, right?
Kevin Werner: Yes.
Greg Hebner: If that was our hiring criteria, we’d be very limited. I think in our world, it’s hard.
Kevin Werner: Look, it depends. It becomes what you know when you buy a car or you get a shirt, all of a sudden you see them everywhere. When you start paying attention to special people that are doing special things, and you say, hey, amazing what you’re doing here. Can I talk to you for a minute? Can I buy a cup of coffee? Tell me your story. What are you doing? You’ll be surprised. I spend at least 50% of my time recruiting. At least. I will tell you, I am on a number of first calls that we have with people at Renova. First calls, not second. And the people on the phone are like, why are you on this call? I’m like, I saw your resume. I thought you’re pretty know. And they said, well, you’ve never met the CEO at our company. I don’t know what they’re doing. They’re golfing all day or they’re doing something. I will tell you that we, as a leadership team and me personally spend about 50% of my time recruiting.
Kevin Kim: Is there anything particular that screams to you when you see that resume? Because it sounds like no matter what the position is at the firm, even if you’re an HR, customer service, customer obsession is part of how they have to operate. So if that’s the case, it’s so hard to figure out what that X factor is. For me. For a long time, for me, I was like, have you ever worked retail? Because I worked retail. I waited tables. Right?
Kevin Werner: Well, look, first of all, I don’t want to be naive, and we’re not naive, and I don’t want to make it seem like we’re not grounding her. In reality, we have a number of full time people here at Renovo that are recruiting and that are talking to candidates and that are taking in resumes and that are having conversations, and we’re always trying to look for great people. Now, certain positions at the company obviously require expertise. Not going to walk into a donut shop and say, hey, you got a great personality. You want to come be an accountant, right. So they have to have relevant experience, but we are looking for nice people. I don’t want to sound cheesy when I say that, but it really matters. We can’t have jerks working here.
Kevin Kim: It’s very true. Yeah.
Kevin Werner: Now, we do a couple of different online assessments that we’ve always used that we think are really helpful for us to see what people’s values are. And that does matter. You can really see, do they value the same things the company values? Because sometimes people will apply and you look at their values and you’re like, wow, similar to a borrower who’s not going to really value customer service or relationships, if they’re just transactional, they might be better off working someplace else.
Greg Hebner: We think a lot about internal service. I think you probably do too, Kevin. Some people, like our accounting staff, doesn’t work with clients, but they work with a lot of other people internally. So if you’re working in internal function, we care a lot about, I’m sure you guys have it together. We have a tremendous interdepartmental dependency. It doesn’t work. There’s six or seven different departments that might be working on something at the same time, and their ability to service their internal clients is the only way you do your external clients. I don’t have as good a story as Kevin, but I had a young lady who, when I was a borrower and she was at the lending platform, she used to have to get me to sign my extensions and deal with me. And I wasn’t very easy to deal with, I’ll be honest. And she did it with grace and with class, and she was very persuasive without me ever feeling like she was being pushy. She’s now my director of client services. So similar to Kevin’s story, we took her away from the platform she was working and she’s now working with most of my VIP clients and a lot of my people doing exactly what she did with me with them. I always said to her, if you can put up with me as a client, you can put up with almost anybody. But that internal client is really important, too. You can’t just be externally facing. You got to have that service focus. I don’t know if you guys do this. Kevin we also do like a lot of 360 stuff internally where how is it to work with these different people, people that you have a node to within the organization? It’s just as important as how your direct supervisor or boss, you could be a great employee for a particular department head, but if you’re not a good employee for the interactions you have with other departments, you’re probably not going to go very far here.
Kevin Werner: Know it’s funny what Greg is hitting on, right, is what’s coming to my mind right now is we all went from little lending companies with a few people and now a bunch of us are getting bigger and bigger and bigger and bigger and we’re having to learn how to run a real business, right? Like with real teams and real staff and real problems. And there’s challenges, right? There’s a lot of challenges, but we’re all having to learn now. Making loans is just one thing. Yes, it’s what we do. But all of us now are running businesses and we got to learn how to recruit, how to keep people on our teams, how to deal with compensation, how to HR. You guys are in California.
Greg Hebner: It’s easy here. We’ll let you do whatever you want.
Kevin Werner: Walk in the park.
Greg Hebner: No rules at all out here.
Kevin Kim: But it’s an interesting point I want to kind of get deeper on is because the employee factor, right? In our space in the past year, there’s been a lot of people being let go, people leaving, setting up their own shop, jumping around. And it’s easy right now. Times are tough. How do you keep your team members, your employees, especially your employees, let’s kind of put your execs to the side real quick. Your core team, your manager team, look at your employees, the guys who joined you who are growing in the company. How do you keep them engaged? Because it’s tough out there, right? And it’s also very tempting out there, too, because I’ve heard this a lot from a lot of clients who former loan officers XYZ dangles a carrot in front of them and they try to go build their own shop. It’s been done before. So how do you keep your people sticky and keep them kind of marching the flag on behalf of the company?
Greg Hebner: Great coffee and snacks only go so far, unfortunately.
Kevin Kim: That’s what I’ve been saying for years. We’ve got snacks in the office. I don’t think It does much. Honestly.
Greg Hebner: I don’t know if Kevin shares this view. I think you’ve got to be the kind of place where people go home and they tell their significant other or their parents, I work at this company, and they’re proud of it. If you can create an organization that people really feel like they’re doing good work and they’re making a real contribution in whatever area they are and they’re proud of who they work for and how their business operates. I think even maybe more in the younger generation than people my age, it really matters. They want to be able to tell people I work for this company and my job doesn’t suck. My company is actually a good place to work, and they respect me and they treat me well. I’m doing good work. I think you got to create challenges and you got to create opportunities where your most talented people really feel that they can fly. I think that’s one of the things. I’ve managed some pretty large companies in the past, and I think one of the challenges is it’s pretty easy when you’re growing really fast. Opportunity, It’s kind of like a battlefield promotion. I have a military background. Look, if the people are people are falling down in front of you, suddenly you’re a colonel, right? It’s pretty easy. You’re getting battlefield promotions in a high growth environment. We weren’t high growth in the middle of 2020. We were pretty COVID scared ourselves. The pandemic kind of definitely made us have a lot of second thoughts about things. It’s. How do you keep the people together and keep the team together if everything is not just running perfectly? And I think that’s the test. And we do a lot of communication. We do a lot of call them town halls or Zoom halls or whatever it is. We share a lot of things. We share a lot of the why. Share a lot of the what? I’ve got a lot of executives and people that are like I’ll call them middle management, who’s like, gosh, I didn’t know any of these things at my own company. They didn’t tell me anything. I didn’t know if we made money. Lost money, added clients. Lost clients. Doing well. Not doing well. I was just working in a, I was know, out there doing my like you guys tell us all this stuff. And I know, Kevin, I think you do a lot of this. Like we want you to know what’s going on at the place that you work because you’re part of what it is we’re doing over here. So I think a lot of that is just engagement. And I’m sure Kevin does. We’re trying to bring the group together. Kevin. I think he does more fun things than we do. I’ve seen some of your pictures, Kevin, but it’s like you want people to feel that there’s a real camaraderie. People use the word family. Maybe a little hokey. But you want people to feel it’s a place where it’s a safe zone. And you can have high expectations without making the place, you know, I’ve worked in places where the high expectations turn it into just an unpleasant place. I think law firms are known for that. Kevin, your first couple years in law school, right? I got a great job, except that I actually hate going to work and I don’t really enjoy the people I’m working with or the work that doing.
Kevin Kim: Oh, yeah. That’s why we’ve been so obsessed about this unfirm concept. That drossi, right? We put it on our sweaters recently. It’s part of our core values. We’ve been obsessed about this. I just gave him one of my businesses. I’ll get you one, Kevin. But it’s really interesting. We don’t want to be that law firm, right? But you’re also a law firm, so you have to be a decent lawyer. It’s kind of a hard thing to do, I think.
Greg Hebner: Kevin, we want to be a lender, but we don’t want to be that lender. I mean, I think it’s the same. We think we can do great loans and make great credit decisions, but not be like every other lender. I think we both probably say that I don’t have as cool of swag as you do, Kevin. I need to talk to your marketing team. But we want to be an uncommon lender. We don’t want to be a common lender.
Kevin Werner: I think, you know, in terms of keeping people, it’s just like obsessing over borrowers in some ways. You got to be thinking about obsessing over your team, and it gets harder and harder as you kind of get more and more people. So I’ll give you just a few quick little things that we’ve been doing to try to keep a tight knit team. First of all, we’ve been doing team retreats, and we do this now a couple of times a year where we’ll take a department, like, for example, the closing department at Renovo. The closing department is call it 15 to 20 people. And we’ll rent out in Michigan about an hour from Chicago. There’s a really cool inn that we’ll rent out the whole inn. We’ll curate it with some Chicago chefs, and we’ll do a closer retreat for a couple of days. And a lot of the management team will go. I’ve been to most of them. And we’re going to spend a couple of days with our team talking about what’s working, what’s not working, and more importantly, have fun together and spend time. Because what we’re all trying to learn how to do right now is operate in a hybrid work environment.
Kevin Kim: And you have people all over the country.
Kevin Werner: Well, yeah, we’ve got 150 people, so say about 75 are in Chicago, and about 75 are spread out in other markets. But if you’ll see behind me one of the things we’ve been trying to do for the last few years sorry, this way, is get ourselves onto the lists of best companies to work for, and I never knew how hard that is. It’s really hard to get on these lists. You’ve got to have surveys done with your team. You got to have a high response rate, and you got to get a certain score. And it’s not easy to do. But the benefit is when you do these things, you get the raw survey back now, not by it doesn’t name which employee filled out what, but you can know, well, this department is feeling this way, and these departments are feeling this way, and this is the thing people are liking. These are the things people are not liking. And you get really good feedback. So first of all, this is our second year in a row being a top workplace for Chicago Tribune, which is an important one for us, being headquartered in Chicago.
Kevin Kim: You also won the inc.com Best Workplace, didn’t you, this year in 2023. Congratulations. I know about that. That’s not easy to win.
Kevin Werner: Thank you.
Kevin Kim: Very impressive.
Kevin Werner: It’s really hard. And I’ll tell you, when we started the company, our whole goal we saw Quicken Loans was always on the Forbes list, and we always wanted to be on that list. So we’re not there yet. We got some work to do. We want to be. But I’ll tell you what’s interesting. One of the key findings I’ll share with you guys, the group of people that felt the most disconnected in this most recent survey were those people that were working remotely. Now, you would say, of course, but those are also the same people who are reluctant to come into the office. A number of them work in Chicago. Some of them work within a mile of our office and have never been here. So you say, well, wait a second. It’s a whole new thing that companies have to figure out. How are we going to do this? How are we going to figure this out? So we’re trying these group retreats. They’re going really well so far. We’re doing something in August where we rented a Chicago Cubs rooftop party where we’re having our whole team come in on August 15 and fly into Chicago with about 150 people going on a rooftop.
Greg Hebner: Are we inviting Kevin? Could we go do that? That’d be fun.
Kevin Werner: I’m sending you the link right now. I would love to have you there. But what we’re trying to do is find reasons to get people together because it just isn’t what it was, where people are all in the office, at least for us, because we also have team members spread around. So we got to find ways to get people together to create the camaraderie.
Kevin Kim: Yeah, because we’re on the west coast. We’ve got guys on the east coast like you guys all know Tom Hyda. He’s in Florida, right? One of our marketing people is in Florida as well. We got Matt Gunter in Connecticut. We’ve got guys all over the country. And so trying to figure out a way, we use the conferences as kind of one of the ways to get them here and hang out before all that and do a lot of bonding that way. But even the ones that are local right? The ones that are local. Our challenge has always been like, we can buy as many lunches as you want, but you’re just going to come in for lunch. Right? That’s been my challenge, at least. I don’t know.
Kevin Werner: I hope no one gets mad at me saying this. I was in New York a few weeks ago, just talking to kind of big institutions out there. I’m not going to say the firm’s name, but it’s one of the biggest asset managers. They are 100% required five days a week.
Kevin Kim: Yeah.
Kevin Werner: No gray area.
Kevin Kim: Yeah, it’s going away. Hybrid thing is going away. At the institutional level.
Kevin Werner: I’m not saying, just acknowledging that there’s some parts of the country that are requiring it. There’s no gray area.
Kevin Kim: I wouldn’t be surprised if that changed. We went back to it.
Greg Hebner: One thing we did, because you’ve given me some great ideas on surveying, we do quarterly surveys with all of our employees. Snap. Five questions. We take that again by department anonymize it, and that sort of gives us a pulse, a trend. I like that how people are feeling.
Kevin Werner: Do you guys design it or is it something off the shelf?
Greg Hebner: It’s an online thing if your team wants to get it from my HR person. But it’s a good way to just you can see, like, our originations kind of we were flying last year. We came down a little bit. There are some very direct correlations to how people felt things were going back up again, but it gives you some interesting departmental trends that are pretty it’s a two minute survey. It’s like five questions.
Kevin Werner: I’ll follow up at the end then. I’d love to get that.
Kevin Kim: We’re running out of time, but one of the last topics I want to bring up is, I guess, also from your guys’ standpoint as the leaders in the organization. How much energy and resources do you individually spend on these aspects, on the culture and on having these folks get really engaged? Right. How much do you individually spend on that part of the business? Because I feel like I know that as much as I should.
Greg Hebner: A lot of time. I mean, I do a weekly production call every Monday with everybody who works in the lending business, and they’re basically going to get a half hour pep talk, probably from me every week. Consistent themes. Just try to be as engaged as I can. I mean, I have sort of a wacky mind for just individual loan details. So I’ll go to a closer and say, how’s it going? On 123 Main street. And they’re like, how do you know about 123 Main Street? I want them to know that the people who are in a leadership position know what they’re doing, care about what they’re doing, appreciate what they’re doing, and what they’re doing does to impact how we serve our clients. And again, hopefully they feel that. But I’m a lot older than you guys. It takes a lot of energy. It takes a lot of energy to, you know my organization, we’re in the 50 some employees, so we’re a third of the size of Kevin’s. From an FT perspective, it’s a lot of work to keep your teams grow, to keep them engaged. And it’s not a simple email. Go team. We love you. It’s person to person. It’s a call, it’s a conversation, it’s a task. You know what? I got to make sure I reach out and let so and so know that this is important or this is what they did. It’s one of the challenges of scale, I think. If you lose that, I don’t know that our organizations would be anywhere close to what they currently do or operate.
Kevin Werner: Yeah, pretty much same with me, I try to be as involved in a lot of details as I can. I’m pretty hands on.
Greg Hebner: You got a lot more loans than me, Kevin. I don’t expect you to memorize 3500 loans.
Kevin Werner: I can’t remember the number of loans anymore. But the way that I’ve chosen to do it has evolved over the years. If you’re growing and you’re changing, which every company is always growing or changing, one way or the other, you evolve. And so I would say right now, because we have a bunch of locations around the country, I try to get out to them as often as I can.
Kevin Kim: You’re going out to them? So you’re going out to your tech guys in Texas, in Florida, and in Boston from Chicago.
Greg Hebner: Okay.
Kevin Kim: Yeah.
Kevin Werner: Thursday night I was in Boston at Yvonne’s. Coolest nightclub in Boston. I was there with 75 of our top Boston borrowers clients. And it was awesome, by the way. It was awesome. And our team was there. I was there, and we had a great time. And then the Boston team all went out to dinner afterward. Probably got home at, like, maybe 1-2 in the morning. That was a long day. It was so fun. Wouldn’t trade it for the world. Feel like the luckiest job in the world that I have to be able to go do that. So it’s really a combination of a couple of things. Number one, being present in the office. So my one on one with people in the office, just random things can occur. But then number two, being out in the markets that we’re in, listening and talking to people about what we’re doing.
Kevin Kim: I like that. I think all of our audience can take away from this episode is the amount of almost dedication and obsession to that piece of the business. And that’s hard because a lot of our listeners, even myself, at the end of the day, I’m kind of a salesperson myself, right? And I want to get out there and meet clients. I’m not focusing on a lot of these.
Greg Hebner: These salesperson with a law degree. Scary combination.
Kevin Kim: That’s true. I got a law degree yeah, yeah. But at the same also, I’m concentrating on what moves the needle for the business, and I oftentimes forget about the personal aspect and the cultural aspect, and that’s also what’s driving the business as well. So it’s hard to remember to do all that.
Kevin Werner: As these companies have gotten bigger, all of us are trying to get recruit the absolute best people to the team as we possibly can. It’s about team building because there’s only so much time in the day, right? The team is so much better at so many things than I am. That’s without a doubt.
Greg Hebner: It’s the alignment, too. It’s like getting that team. It’s just that constant. What we can do at a leadership level is everyone aligned on the same two or three things that matter. And if you can get that with the right people, you can do really amazing things.
Kevin Werner: And as simple as it is, what we’ve tried to do, and I know Greg and I talk about this is set big goals that are very simple, that everyone knows what they are like, very big goals that everyone knows, just out there in the future.
Greg Hebner: What are we trying to get bigger and bigger and bigger, though? Every time I talk to him, they keep getting bigger. So I don’t know.
Kevin Werner: We don’t set a new one until we hit the last one. When we hit it. He loves saying that, but I think both of us are in that way where you got to get everyone focused on the same thing. What are we focused on? What are we trying to hit? And for us, it’s a certain dollar amount per year. That’s just the way we how do we get to that level? And then once you get about 70, 80% of the way there, you got to throw another one out.
Kevin Kim: All right, well, that’s all the time we have for this episode. This is one of my favorite episodes so far, so thank you guys for taking the time today. I had a really good time learning and listening to you guys. This has been season four, one of my favorite episode so far, so please listen into this one and catch up on my next one. This is Kevin Kim from Lender Lounge signing off.