Pandemic Thoughts with the Best Hair in Lending | Romney Navarro, Noble Capital

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In the podcast’s second episode, Kevin interviewed Romney Navarro with Noble Capital. This interview took place at the peak of the pandemic lockdown and gives an interesting flashback into Kevin and Romney’s thoughts at the time. Kevin and Romney also talked about life, business, Noble Capital’s history, and Romney’s career in the private lending space.

Romney Navarro is a Partner and Chief Revenue Officer at Noble Capital. His primary role is to oversee all business development within the organization.

Navarro has been a part of Noble Capital since 2008. In that time, his role has expanded greatly and evolved from overseeing the lending company’s loan originations to overseeing the parent company’s marketing initiatives. A proud member of the American Association of Private Lenders, Romney has participated in the origination of over $1B in non-consumer investment loans throughout his career.

In 2015, Navarro launched the Investment Real Estate RoundTable (a Texas-based investment club with over 2,000 members), and in 2018 was the host of the highly-acclaimed Firestarters Podcast, known among real estate investors and developers as a premier source for those looking to scale their businesses.

In his spare time, Romney appreciates an active outdoor lifestyle with his family and friends. In addition, Romney is an avid whiskey collector who one day looks to retire on a beach and finally enjoying the fruits of his collection.

Above all else, Romney believes mastery can be achieved through repetition and continuously strives to lead his team to be masters of their respective crafts. This allows all involved to provide the best possible experience for investors and clients alike. In 2019, this philosophy earned Noble Capital (and The Private Lender Network) the Think Realty Honors Private Lender of The Year Award.

Episode Transcript

Kevin Kim:
Welcome, everyone, to the Coronavirus work from home edition of the podcast. I’m your host, Kevin Kim, and with me today is my esteemed guest, Romney Navarro, or as I like to call, the best hair in hard money with Noble Capital. We’re trying to have a little bit of fun today because these are very serious times, and we’re all working from home. We’re all staying safe. Romney, welcome. Thank you for joining us today.

Romney Navarro:
Thank you, sir, for having me. Thank you for the compliment. The best hair in hard money hasn’t gotten a haircut in about 45 days.

Kevin Kim:
Same here.

Romney Navarro:
Yeah, and just kind of covering it up this morning. I got a good workout in. I took a shower, and then it was like, “Oh damn, I have a call.” So it was either brush my hair or get breakfast, and I just decided to go with breakfast.

Kevin Kim:
Yeah, that’s all good. I understand. We’re all struggling with that. A lot of us are trying to cut our own hair. I had a friend who just did that. It’s not fun. It did not look good. These podcasts, for the listening audience, we usually try to promote and highlight some industry leaders that we’re close with and we’re friends with, and the Noble team have definitely become very close friends of the law firm. Romney and I have had many nights out, many drinks and a lot of great conversations about life, the industry. We’re going to try to have a more fluid conversation today. Talk about the business, but also talk about … get to know Romney a little bit more, get to know the team a little bit more and get to know what they’ve done to get here and where they’re going.

Kevin Kim:
That’s the agenda for today. I’m going to try to keep things a little bit fluid. First thing, Romney, I have a question for you. I actually don’t know this answer. Were you always … I’ve always been an attorney. Were you always … I came out of my mother’s womb as an attorney. Were you always in lending or what were you doing before the whole Noble, the creation of Noble Capital?

Romney Navarro:
Yeah, man. I didn’t come out of my mother’s womb a private lender. I actually … I guess I kind of stumbled across it, but I did cut my teeth in real estate. After college, I got right into real estate, but specifically title.

Kevin Kim:
Title?

Romney Navarro:
Yeah, and it was interesting because my superpower, my strength is typically just talking and sales and walking people through, the relationship sales. Title was kind of weird for me. It was very procedural. It’s more closely suited to your world than my world.

Kevin Kim:
Right.

Romney Navarro:
Very procedural, very by the book and that wasn’t my thing, but I was able to at least sell. I was able to bring a lot of accounts over. What I did get though, because if nothing else, while I might not be a great rule follower, I’m pretty intuitive, so I got to learn a lot, a lot, a lot about the business. I got a good kind of 360 degree view of the world. Saw a little bit of legal, saw a little bit of titles, saw a little bit of real estate, saw a little bit of finance, and it was there where I kind of got my … not my break, I wouldn’t say my break came next, but that’s where I cut my teeth in real estate. I actually thought anything real estate should be profitable, so I was like, “Oh title should work.” It worked out pretty well.

Romney Navarro:
Then right after that, I moved back to Texas. I’m actually from Miami. After school in Texas, I moved to Miami, cut my teeth in title and then moved back to Texas, and I landed a job with a group also out of Miami surprisingly, that was doing commercial lending, and I remember, I was like a week into moving back home, or back to Texas, I told my wife, “Babe, I got to go to Miami next week for, I don’t know, a month for training.” So it was a weird transition, but I started doing was doing commercial lending for the next four or five years of my life, and that right there was where I started transitioning into private lending.

Romney Navarro:
It was funny, but the previous recession, 2008, we all … not we all, but many of us lived through that. We’re a similar age, so you have your stories too.

Kevin Kim:
Mm-hmm (affirmative).

Romney Navarro:
I was doing these commercial loans and everything was good, family was growing, bank accounts were growing. I was still a kid in my late 20s, and dude, I got crushed, lost my job. I was like, “What do I do with all … I can capitalize on some of these loans in my pipeline. What do I do?” I found this kind of weird subsection of the industry, which was called hard money lending. I was like, “Everybody’s frozen but this thing still remains a little bit fluid, let me try to dip my toe.” Fast forward, man, I got into hard money lending right there and then post-recession. I’ll tell you the date that I got into hard money lending. September 1, 2008 was my first day doing a hard money loan. In the middle, at the height of the crash, I became a private lender.

Kevin Kim:
Nice.

Romney Navarro:
Yeah.

Kevin Kim:
Was Noble founded then or was it just Romney as an investor?

Romney Navarro:
Yeah, good question man. I forgot that we don’t know how we got here.

Kevin Kim:
Right.

Romney Navarro:
You know one of my business partners, Jadon Newman [crosstalk 00:05:08]?

Kevin Kim:
Right.

Romney Navarro:
Jadon started a company called Streamline Funding back in 2002, and they were doing little fix and flip loans all over Austin’s east side, streamlined and kind of evolved into a little bit more of a fund management company, just started doing some development. In 2004, yeah, going into 2005, in order to show a different brand for its private lending and its fund management, Streamline broke off and created Noble Capital. Jadon started Noble in ’04, going into ’05, and they started doing some development, so on and so forth. I actually backed into … it was funny, I walked into Jadon’s office in 2008, telling him, “Hey man, I got a deal that I need funded. Why don’t you take a look at this?” What started as a deal pitch turned into a job interview.

Romney Navarro:
I said, “Well look, I just got displaced. I’ve been unemployed for however many months.” Anyway, I came in, it was serendipitous because they weren’t lending at the time. They were doing a lot of development deals. He’s like, “Yeah, I need somebody to lend money. That’s kind of what we do but we’ve kind of stopped.” Long story short, I mean we’re talking 12 years later, here I am. A couple years into that tenure, obviously the market shifted. We had some adjusting. We even changed our business model up. He offered me equity in the company, and as a result, myself and a couple of my other colleagues became business partners at Noble Capital.

Romney Navarro:
I backed into the Noble Capital [crosstalk 00:06:44].

Kevin Kim:
All in trying to get a deal funded.

Romney Navarro:
I was just trying to do a little ugly deal to pay the rent or the mortgage I guess in those days.

Kevin Kim:
That’s very cool. That’s very cool. Usually these partnerships are more like, “Hey, we joined forces after coming out with two shops,” or whatever, but you came as a broker trying to get a deal funded, and Jadon saw something in you. You joined their team back in ’04?

Romney Navarro:
No, in ’08.

Kevin Kim:
In ’08.

Romney Navarro:
’04 is when he launched … so Streamline was the first company, it was a little hard money lending company in Austin.

Kevin Kim:
Right.

Romney Navarro:
Then Noble was launched specifically to capture investor capital, and Noble and Streamline have always been one and the same just different functions. I came in in ’08. As I mentioned, I was displaced in about April of ’08 from my previous company, a company out of Miami called Bayview Financial. I was displaced, and September 1st, like I said, 2008 that was my first day and about a week later I’m closing my first deal.

Kevin Kim:
That’s great.

Romney Navarro:
I was like, “This works.”

Kevin Kim:
That’s great. Yeah. I mean a lot of the, I don’t know, leaders in our space have come from that world, where you see a lot of guys coming out of the mortgage market, out of the title market, out of the real estate market, and they start practicing in ’08. We did too. We started in ’07, as a firm. Anthony started the firm in ’07, so we started right smack dab in the middle of the crisis, and here we are today 10 years later. It’s really cool to see that story, you guys.

Romney Navarro:
13 years later, Kevin.

Kevin Kim:
13 years later. I know, gosh damn. Where is the time going? Wait, so I want to take a step back. You’re originally from Miami, you’re not from Texas.

Romney Navarro:
I am not from Texas, I’m from Miami, Florida.

Kevin Kim:
Okay, you’re from Miami, Florida. You went to school in Miami or you went to school in Texas? How did you end up in Texas?

Romney Navarro:
Yes, I went to school in Texas. I had a couple of choices to get out of town. I’m from a part of Miami called Hialeah. If you’re not familiar with Hialeah, it’s God’s country, you know what I mean? It’s the best place in the world. It’s very high concentration of Cuban American. They’re Cubans. My family’s Cuban. The kind of story there is a little different than what I kind of seen on TV growing up all those years. Not many people necessarily went away for school. Not many people had the opportunity to do so, but I had a brother of mine who moved away. He moved to Austin. I don’t remember what year it was, but he moved to Austin to pursue a job, a career.

Romney Navarro:
My junior and senior year in high school, I’m starting to think about what the hell am I going to do? Am I going to stay here and maybe do what everybody’s doing, whatever those three or four things may have been, starting with literally do nothing. Just work for some type of state government.

Kevin Kim:
Right.

Romney Navarro:
Go to local community college, maybe try … whatever. That’s what people were doing. Or do I try to go away for school? So I had a couple of options, and one of them was to go to school here in Texas, University of Texas. I was like, “Let me see what this looks like, man.” I jumped on a bus, straight up on a bus.

Kevin Kim:
You rode a bus from Miami to Austin.

Romney Navarro:
This is the first time I’ve ever said that in public.

Kevin Kim:
I love it. I love it. This is [crosstalk 00:10:04].

Romney Navarro:
Oh, it’s embarrassing.

Kevin Kim:
No, that’s cool though, right? I mean it shows where you’re coming from.

Romney Navarro:
Yeah, it’s what it is, man. I got here. I’ll tell you a little anecdotal side story. Anyway, I got to Texas, did my thing, four years later, I moved back to Miami. That’s why I was saying when I got back after school, I got back home and I saw a lot of people making money on real estate in 2001, ’02, ’03, ’04.

Kevin Kim:
Right.

Romney Navarro:
I was like, “Yeah, there’s some money here.” I didn’t really understand the move because I’m 22 years old, and kind of an idiot.

Kevin Kim:
Right.

Romney Navarro:
Not kind of, absolutely. I was just … it was a little bit more of a hustle, so I got into title. Like I said, that would have … my life would be different if I wouldn’t have gotten in there. It probably delayed my start a little bit, but today, God, almost 20 years later, I’m more well rounded in this game than a lot of my peers, and I don’t mean that like they’re less than. They probably have some strengths that I don’t, but I have a good understanding of the whole field from a deal to the business. Anyway, so I went back home and it wasn’t but … I stayed there for about three years, and then I decided to move back to Texas. Married my wife, and the rest is kind of … the story is still evolving.

Kevin Kim:
Right. I met the wife. We’ve had drinks together as well, you bring her out to the conferences and the parties. It’s great to meet the family. What I love to see with, especially what I see with lenders in Texas primarily actually, it’s still a very close-knit community. You guys really keep it close to the vest out in Texas. Big state, huge state. I thought that the Texas market would look like California. Got a massive lending community, industry here in California, but what I found is the Texas industry, everybody knows everybody, and it’s a very, very close-knit industry. They’ve all done deals together, they’ve all hung out together. I want to ask your opinion on that. The Texas market, the first thing I want to evaluate, so you guys for a long time, you guys were focused in Texas only, right? You guys were focused exclusively in Texas, right?

Romney Navarro:
Yeah.

Kevin Kim:
I’m going to let you [inaudible 00:12:25].

Romney Navarro:
I do have to take a little-

Kevin Kim:
No.

Romney Navarro:
… water break.

Kevin Kim:
Me too. I’ll go for mine. Yeah, so you guys were exclusively lending in Texas. So you move back to Texas, and you stay in Texas, and the business concentrated in Texas for such a long period of time. What makes the Texas real estate or lending market unique?

Romney Navarro:
Yeah, well coming up when I came up in our market, which was pre … was right wrapped around the recession. I was already in the game before, and then I of course stayed in the game after. There was a lot of resiliency to the coasts. The coast got smashed, and we had a little … we were resilient.

Kevin Kim:
Right.

Romney Navarro:
What it is, we could kind of throw theory out there. My theory is we just got a lot of land dude. At the end of the day, there’s space for people to come into town, and there’s still more space. Even if California floods us or if New York floods us or if Chicago floods us or South Florida floods us, there’s just space to grow. I don’t know what the COVID looked like in terms of growth. My assumption is none, but every single month for the last however long you can count, growth here has been insane to the tune of like … I’ve heard numbers where the numbers are so extraordinary that they almost seem made up. People continue to move here. That is creating obviously a need for housing. That need for housing is satisfied by flippers, home builders and developers.

Romney Navarro:
Those are the people that we serve. It’s a beautiful little cycle, and I don’t … I think we’re still going to remain resilient even with the outcome of whatever happens now.

Kevin Kim:
Right.

Romney Navarro:
Knock on wood, it feels like it’s going to be more of a quick valley than a long recession.

Kevin Kim:
Let’s hope. Let’s hope. I was a little bit worried talking about COVID on this podcast, but you know what, let’s just talk about it.

Romney Navarro:
You have to, right?

Kevin Kim:
You have no choice. I mean we’re in our home offices. We haven’t had haircuts in a while. This is the reality. I saw a YouTube video this morning about a young woman who was telling herself in January of 2020 what to do, and it was the most just depressing video to watch, except for the fact that you should buy Zoom stock. That was the most hilarious part. Right now, we’re all kind of in this weird place where everyone’s just kind of, I don’t know, everyone has this weird uncertainty in these “unprecedented times”. I hate that word now.

Romney Navarro:
I do too.

Kevin Kim:
Right? I want to ask you, personally, Romney, we can get into Noble in a second, but Romney right now, how are you and your family coping with this crisis? How are you managing it? How are the kids, everything else?

Romney Navarro:
Yeah. Well good, man. I mean nobody’s sick.

Kevin Kim:
Thank God.

Romney Navarro:
That’s good. Nobody in my household’s sick. Nobody in my office is sick. Nobody’s gotten tested positive for the thing. Nobody in our immediate circles or family has gotten sick. Distant, we haven’t been quite so fortunate. Even in the extended family, meaning some of our clients, they’ve had some pretty horrendous stories. Personally, good. The effects are real and whatever. I’m good. It’s interesting, I don’t know what that girl was telling herself back in January, but I was having a good conversation with a buddy of mine. He’s a guy that works for us, and you’ve met him. He’s an Australia guy, Lucky.

Kevin Kim:
Oh yeah, yeah, yeah, yeah, yeah.

Romney Navarro:
Yeah. He is not your prototypical financier. He’s a little rough around the edges, but smart as a whip, and just kind of sees the ball. What I mean by that is it’s kind of a baseball scene, some people just see the ball a little bit better than others. Things slow down for him, and he was telling me something. He’s like, “I know this might sound like this is impossible.” He’s like, “But a little part of me wishes we could do this once a year. Not the virus, but the pause, the reset.” I was like, “Bro, that is totally idealistic.” AKA, not possible, but I get it. A couple days ago I caught myself telling my 13 year old daughter, 13 year old is tough, dude. I was like … I didn’t tell her, excuse me. I would never tell her this. I’m not so stupid.

Romney Navarro:
I told my wife about her. I said, “Babe, I kind of like Peyton. She’s all right.” That’s a legit comment. I’m starting to see the things that you take for granted have kind of become the new … the temporary normal, and I’ve felt a personal reset as a result of that.

Kevin Kim:
Right.

Romney Navarro:
Straight up, man, I know the first couple … by the way, again, we have to talk about it because it’s here. When this whole thing started, there was a little bit of panic in the media, in your heart, in the company, in your client base, everywhere. There was just panic in the marketplace. It’s settling down just a little bit now. Lord knows what tomorrow’s going to look like, but right now it’s a little settled. In that kind of transition from panic to settling, I’ve gotten a lot of clarity. How I’m doing, I think I’m pretty good. I could certainly be worse, but I’m clear, man. Stay focused, become a master, and create alignment.

Kevin Kim:
Right.

Romney Navarro:
That’s what I’m focusing on.

Kevin Kim:
I think a lot of folks are using this opportunity. That video, actually it’s a good question. That video, it’s this woman who’s in her probably her mid-30s, early 30s. She’s traveled back in time and she’s telling herself in January of 2020, and they’re reflecting on, and one thing she says is … she asked her, “Do you want the good news or the bad news?” She says, “The good news.” Well climate change is great because the world is clean. I was thinking about it myself. It’s like I’ve had a lot more time to reflect on the business or reflect on my interpersonal life. I spend more time with my college friends now, and it’s made me realize how important that personal connection is more than ever, and living through Zoom, if you will, living through these …

Kevin Kim:
Alicia, in my office, for those of you who don’t know Alicia, she’s our event director for our media team, and Romney knows her very well. By the way, you need to call her back.

Romney Navarro:
Oh gees.

Kevin Kim:
She’s a very extroverted person. She’s like, “The first thing I’m going to do is I’m going to hug people.” It’s really interesting. I’m not a very big hugger, but it makes me think about how valuable that interpersonal connection is, and it makes me really reflect on how important relationship really are in our business, but also in our lives, because we overlook that a lot. We’re so focused on getting the next deal done, we’re so focused on getting the next sale or the next investor in or the planning for the next quarter’s goals, and how are we doing on financials, but we’re overlooking a lot of the person.

Kevin Kim:
I’m personally very excited to get out of this so I can go out and hug people.

Romney Navarro:
Oh yeah. Hell yeah, man. I had a real difficult conversation. Let me … yeah, I had a real difficult conversation with somebody the other day. It had to be done like this. [inaudible 00:20:30] talking about.

Kevin Kim:
Yeah.

Romney Navarro:
It was so surreal that that conversation would have probably ended with a handshake, a hug, something, ended with a kind of weird sign-off. I don’t even remember how it was. I don’t know. Anyway, yeah, I can’t wait for that to happen. Kind of trying to move off of the COVID thing, but just generally speaking as people that are leading their businesses and in a lot of ways your family, my CEO is my wife. She’s downstairs. I’m asking her to bring me something via text, so if you heard that, my bad.

Kevin Kim:
You’re good.

Romney Navarro:
We have to remember this little time in whatever the silver lining was.

Kevin Kim:
Right.

Romney Navarro:
And I think we will because this [inaudible 00:21:25].

Kevin Kim:
I hope so.

Romney Navarro:
I heard somebody, I think it was Steve Forbes, during the panic, mind you. He said, “Our economy just got hit with a sledge hammer.” That’s perfectly said. Perfectly said. This thing just got rocked, so there is no … when you pick up these pieces, you’ll remember how you’re picking up these pieces. I hope on the other side of this, I can look back to this, because I do look back to 2008. I really do. In fact, I still make decisions based on some of the shit that was going down in those days.

Kevin Kim:
Right.

Romney Navarro:
In fact, we make decisions right now. When we got hit by this sledge hammer, we made a couple of decisions based on wisdom, based on, I wouldn’t call it wisdom, that’s a little self-serving, but based on some things that we learned back in those days. In particular, this was probably the biggest one, and knock on wood man, it’s working right now in our favor. One of the things that we were criticized on, if you will, was not acting quickly enough back in ’08. In ’08, it hit us slowly. This time it was a sledge hammer, so this time we acted. We took action quickly. It hurts a little bit when you take action, but taking action is also meant to protect. Not to get too abstract, I’m talking about protecting our funds, protecting the capital.

Kevin Kim:
Oh yeah.

Romney Navarro:
The market has adjusted, values are adjusting, and we just said, “Hey, hold on. Let’s figure out what is going on here. Hold on.” As opposed to just continuing, skipping down the yellow brick road and getting smashed again. You learn from these things, and you draw from these things. I don’t know exactly what that one thing that we’re going to learn from, this kind of sledge hammer, is going to be, but I suspect it’s going to be find that piece and what’s really important. Basically, I don’t know, it just feels like we rewind in time several hundred years to focus on [crosstalk 00:23:33].

Kevin Kim:
Well I mean from a business standpoint, I’m so deflated in a lot of respects, because I can’t. This is the time of year where I’m out there shaking hands and kissing babies. I’m seeing my clients, I’m seeing my friends. Talking business, or talking shop, talking the industry. That’s not happening for me, so that’s one of the things from a silver lining perspective, I am so excited to double down and do more of that when all of this is over. Even from a lessons learned, I think a lot of our industry is actually taking a very, very smart approach. They’ve learned their lessons because they got hurt so bad in the last recession, and their memories are not short. Thankfully, their memories are not short.

Kevin Kim:
Wall Street has a short memory, it’s always a joke, but our industry, we’re not too much Wall Street people. I feel like our industry is being really smart about it. They’re really learning. They’ve really learned their lessons. I think one of the things from a silver lining perspective is that we’re really going to take home that relationship game. I think everyone’s really going to really double down on those relationships. I think it’s the value of that, because right now, what I’m seeing is everyone is relying on their relationships and trying to support each other. Whether it’s me sending clients who are just originators to you guys to get deals done or I’m sending loans to my more larger clients who are buying, whatever it is, we’re trying to provide support to the industry, and we’re not charging anything. We’re just saying, “Hey, let’s support each other as much as we can.”

Kevin Kim:
I think that is something that people are going to reflect on and have a warm fuzzy feeling about, hopefully. I’m hoping [crosstalk 00:25:09].

Romney Navarro:
It’s kind of becoming part of our fabric right now though, and that’s the part that I kind of get … I like that.

Kevin Kim:
I love that. I love-

Romney Navarro:
It’s a correction in some way. The best way to … you remember when you were your own IT guy and you’d have a problem with your computer and you’d hold the-

Kevin Kim:
Oh yeah.

Romney Navarro:
… rest button for 10 seconds?

Kevin Kim:
Oh yeah. Yeah, yeah, yeah.

Romney Navarro:
Then you’d turn the computer back on and everything was mysteriously fixed?

Kevin Kim:
Yeah.

Romney Navarro:
Maybe we’re resetting the way we should be doing business. You said it, man, it is relationship. We can talk theory all day long. One thing I learned in ’08 was local money is the one that shows up and responds, answers the bill.

Kevin Kim:
It’s more resilient too.

Romney Navarro:
It’s more resilient. Yes, it is. It’s also got more … it’s just built for this.

Kevin Kim:
Yeah.

Romney Navarro:
Whereas institutional, that larger money that doesn’t necessarily know the nooks and crannies has a hard time entering. They’re able to enter a lot easier when things are just … when things are great, nothing could go wrong.

Kevin Kim:
Yeah, and you saw that. When did they enter, right? They entered when the market was at its peak. It took them a while to get in, and once they saw this, you also had the [inaudible 00:26:25] market blow up too, right? Just all this institutional money flooding. [inaudible 00:26:29] was a blip on the radar and became trillions of dollars in originations overnight. It’s definitely, you’re absolutely hitting the nail on the head. I can’t stress that enough for my clients, because I felt like a lot of my clients who are fund managers, I tell them, “Look, you are in the best situation because you have resilient capital that trusts you. You’re not getting margin calls. You’re not getting burned by risk averse, who only looks at you as a spreadsheet and a number.”

Romney Navarro:
Buy local, baby. Buy local.

Kevin Kim:
Yeah. Yes, support your local industry.

Romney Navarro:
Yeah.

Kevin Kim:
Lets get away from this a little bit. I want to go back to the history of the company, because this is one thing I always do in these podcasts. You told me a little bit about the intro story. You basically pitched a deal to Jadon and then he hired you on the spot, and now you’re business partners. Were you business partners right away?

Romney Navarro:
No, it took a couple years. I was working there, but we didn’t have much of a lending company for the first few months that I was there. Then it turned a little bit more into a thing. As things were settling down a little, that’s when we kind of had that come to Jesus, and here we are man. It’s been 10 years since then. It’s certainly been a ride, but yeah, it took a few years.

Kevin Kim:
Okay. You guys shifted into lending roughly in the beginning stages of what we call private lending, so eight to 10, right, you’re ramping up the lending business. 10 to, I don’t know, 15, you guys are killing it in Texas. You guys have multiple funds. You guys start doing your funds back then?

Romney Navarro:
Mm-hmm (affirmative). We were heavy on direct investors, however. In fact, when we met, we were probably 80% direct investors, 20% funds, and now we’re probably 98%, 99% funds. We have a couple of the direct investors left.

Kevin Kim:
Well when you say direct investors for the [inaudible 00:28:34], you’re placing investors directly on the mount?

Romney Navarro:
Correct. Yeah, back in 2002 in the very first loan that was written, it was some guy that needed some money and some lady that had some cash [crosstalk 00:28:44]. When I did my first loan in 2008, same thing. It was just some lady that needed some cash and some guy.

Kevin Kim:
That’s coming back. It’s kind of weird. We’re seeing loan syndication are now a new topic. I’m like I haven’t done one of these in like four years. These were … California’s always done it here and there, but since the institutional buyers came in, it became kind of a-

Romney Navarro:
Yeah, lowest common denominator, man. We always refer back to it.

Kevin Kim:
Yeah, yeah, yeah. You started with a lot of direct investing, you had some funds. You were about 80/20 with the direct investors. But my understanding is that Noble has also had a piece in the life insurance business. Are you part of that, or are you just part of the lending business?

Romney Navarro:
No, I’m part of all of it. Okay, backing up to about 2010.

Kevin Kim:
Right.

Romney Navarro:
We’ve always been lenders. The entire history of Noble Capital and Streamline Funding has been in the lending space. We just took a little bit of a vacation from it in ’05, ’06, just a little bit. It was like we would do a deal here and there, but we weren’t quite as forward with our lending. In fact, in those ’05, ’06, ’07 days, a lot of the people who were working with and for Noble hae gone off to start their own little funds in little companies that many people who listen to this would certainly recognize. The alumni from those days-

Kevin Kim:
Nice.

Romney Navarro:
… saw an opportunity to turn it into business models. We’ll we’ve always done lending. ’08 came. ’08 the market shifted. 2009 the market shifted. 2010 the market starts recovering a little bit easier in Texas. We never took a bath, as I mentioned though. The coast got smashed. We took a punch in the gut, but worse case, our property values dropped 20% over that entire kind of timeline, so we had a little bit of protective equity and we were good. Well there was still a lot of panic in those days in general. If we think with the panic that we seen recently is blunt, I mean back in those days it was just a long drawn out saga.

Kevin Kim:
Yeah.

Romney Navarro:
Basically, we were kind of captive to the AUM that we had. We weren’t having a lot of success raising money. Well this is an interesting story that I don’t tell everybody either, by the way, but this is the way the narrative played out. Jadon, the founder, being current CEO of Noble, Jadon, in those days we were lean and mean. We had a small staff, just a handful of people, couple handfuls of people, and he’s like, “Look man, this thing is going to stay afloat. We can keep the lights on and this thing can continue to grow,” but “basically,” he’s like, “I need to figure out away to create more revenues for the company.”

Kevin Kim:
Right.

Romney Navarro:
Through friends and family, we’ve had some visibility to other industries, and one of those industries is financial planning. In 2010, he launched a little financial planning company, and that financial planning company was what you could think of, it’s retirement planning to be specific.

Kevin Kim:
Right.

Romney Navarro:
Grandma or grandpa, somebody entering retirement, about to retire or just after retirement needs a little bit of help with their money, and we learned how to do what’s called income planning. By the way, if you don’t have an income plan, this is about the age where you start dialing that sucker in.

Kevin Kim:
Oh yeah.

Romney Navarro:
Even if it’s from a distance, but an income plan.

Kevin Kim:
Oh yeah.

Romney Navarro:
I can’t wait for that income plan to kick in, I’ll tell you what.

Kevin Kim:
Oh man. It’s so far out.

Romney Navarro:
The finish line.

Kevin Kim:
Oh god.

Romney Navarro:
Well I got the good fortune that we’ve got this stuff in-house, but anyway, he figured out how to income plan, and basically what that means is somebody comes to you with so many assets. Call it half a million dollars or a million, whatever the number. It’s like, okay, Mr. Jadon, Mr. Newman, I’ve got half a million dollars, I am 67 years old and my wife is 68 years old and we want to live for the rest of our lives. So with that half a million dollars, we need to stretch that however long we think they’re going to live, and there’s different ways to do that. Some of it is invest in the stock market. Some of it is count on social security, all these different ways. Life insurance and annuities are another way.

Romney Navarro:
We actually got into managed money, which includes insurance products like life insurance and annuities, managed money in and of itself, which is the stock market. Then it was funny, this is a story that I rarely tell. That’s what we did and that’s how we got into it, but somewhere in that first year, it’s funny that you don’t always have the foresight. You kind of stumble across things.

Kevin Kim:
Right.

Romney Navarro:
Sometimes you also feel like you may not have the permission either. Somewhere in that first we had a client come in, it was probably the biggest client that we had sitting across from us at that time. It was about a $3, $4 million book client. That is kind of the status quo today for our business. It was a husband and wife couple, and they noticed some files with some numbers and some things on there, and they’re like, “What is that?” Jadon talked to them, said, “Look, we’ve got a private lending company that basically lends money to rehabbers and/or builders and little developers.” They say, “Yeah, it’s pretty cool and, yeah, people invest in those loans,” but we never thought about talking to our retiree clients about it.

Romney Navarro:
Those people were very curious, knock on wood. We knew this, but it wasn’t part of what we were trying to accomplish. They were accredited, so we’re like, “You interested in looking at what we’re doing over here?” They’re like, “Of course I am.” Long story short, that very first couple that came in with a few million dollars ended up investing in a few deals, and then we’re like, “Huh, this is how we’re going to turn this sucker back on.” You know Chris Ragland. Chris was the one that would, Jadon would have the retirement planning. Chris would walk them through the investing and the loan, and I would, of course, go out there and source the loan and structure the credit around it.

Kevin Kim:
Ahh.

Romney Navarro:
Three man shop.

Kevin Kim:
Right.

Romney Navarro:
The three of us were just doing deals, putting retirement funds at place there. Like I said, we had the good fortune of making sure they were all accredited at the time, but those were direct investments. That’s grown from, “Hey, you want to do this deal on Main Street” to we’ve got a number of organized funds in, as you know, a REIT.

Kevin Kim:
Right.

Romney Navarro:
That’s how it started, and yes, we do dabble in life insurance, but I wouldn’t put it that way anymore. I would say [crosstalk 00:35:35].

Kevin Kim:
It’s more of a wealth management and financial planning. That’s crazy, most lenders who start lending come from that world first, but you guys were in the real estate game before, and then you added this to your business. It’s not the easy business model to add. There’s a lot of red tape there, isn’t there?

Romney Navarro:
Yeah, there is. The other thing though is one thing that we have going against us in private lending, you guys obviously do about as good a job as anybody. Some of your partners at APL are really good at it too. We don’t have a lot of playbooks in our game, in our business.

Kevin Kim:
Right.

Romney Navarro:
It’s like there is not a book I could buy that I would trust-

Kevin Kim:
Nope.

Romney Navarro:
… to tell me how to do this, and there’s very little legislation or compliance that we need to follow. There’s a little bit, you know that. Over there, a ton of red tape. What that does though, it creates playbooks left and right.

Kevin Kim:
Right.

Romney Navarro:
We just kind of found our favorite playbook, the Belichickian playbook and scored a couple … won a couple titles [crosstalk 00:36:34].

Kevin Kim:
You hit the nail on the head there. There’s so much. I always complain about how our industry’s so fragmented and fractured. You give so many different perspectives, and it’s such a local business that you don’t really have a playbook. We’re always working toward that and we want to provide that because what ends up happening is if you have industry standard practices, industry standard approaches of how to operate a business, that kind of leads you down kind of a set formula, but that’s just, there’s no uniformity in this space. It’s kind of funny though, in the conventional market, conventional mortgage market, there is a standard practice. It’s always kind of made me wonder why don’t we have that.

Kevin Kim:
I think someone made this analogy is actually … that’s when the institutions came in, the market shifted toward that playbook. I’m like, yeah, but I don’t … that may be true, but we don’t have the level of insurance that they do in the conventional space. You don’t have the Fanny and Freddie backing you and these government service, GSC services and all this red tape that really provides I guess a safety to this product. I don’t know, it’s one of those thoughts.

Romney Navarro:
You know what though, it will always evolve, and I would just kind of sum that up in one word. I just think it’s maturity. Our industry’s not very mature.

Kevin Kim:
No, it’s not.

Romney Navarro:
It’s been around forever but it’s never aggregated. You guys are doing that. The good thing that the aggregators, like yourself, and aggregators of audiences, not a product or anything like that, of audiences, that’s your specialty. In addition to law, you talk to us in the masses, right?

Kevin Kim:
Try to.

Romney Navarro:
Try to. Well let’s just say most private lenders know Geraci. Most private lenders do not know the local guy.

Kevin Kim:
Right.

Romney Navarro:
You guys do a really good job of that, so the good news, at least from my perspective, is that you do bring some uniformity and some normalcy to the space. The bad news, as we aggregate and we kind of make it a bigger industry is that it shines a different light on us. Now to protect the integrity, groups like yours try to just kind of fight off the wolves a little bit, like stay out of our space.

Kevin Kim:
Right.

Romney Navarro:
Whatever the outcome is, if we get as regulated as the more conventional sources, then we’ll figure out a way to transact in there and [crosstalk 00:39:01].

Kevin Kim:
True. You’re right. We talk about this on the industry-wide meeting with APL the other day. It was the more we come together and the more we try to standardize how we operate as an industry, the less likely we are to get regulated. The more we agree to kind of operate under certain kind of best practices from the space, the less likely congress or the SCC will step in and say, “Okay, you guys need to do X, Y and Z and have these level of operational standards and insurance policies and licenses and all this.” We’ve been lucky to operate in most of the country with a great amount of flexibility. It’s something to think about.

Romney Navarro:
Yeah.

Kevin Kim:
Tell me about, you guys were lean and mean, right? Three guys, you, Chris … shout out to Chris by the way. The man is-

Romney Navarro:
Woot woot. Sorry.

Kevin Kim:
He’s a beast. No joke. That guy, man. That guy has lost so much weight too. He just dropped, what, 100 pounds or something like that?

Romney Navarro:
One million pounds.

Kevin Kim:
One million pounds.

Romney Navarro:
One million.

Kevin Kim:
He’s a giant. He’s already a giant of a man. Now he’s this long slender giant. The man has overcome cancer, he’s lost basically a person. Oh god, I mean, yeah.

Romney Navarro:
He did. He’s underwear modeling now.

Kevin Kim:
He’s underwear modeling?

Romney Navarro:
Yes. He’s on a billboard here in town.

Kevin Kim:
Okay.

Romney Navarro:
Trying to go big time. No, he’s a trip man. I just spoke to … we were texting on some funny things this morning, but I just spoke to him a couple days ago about the market. We’re all speculating a lot.

Kevin Kim:
[crosstalk 00:40:40].

Romney Navarro:
That’s kind of where things are at, but in general, just staying … I used a couple terms on you a minute ago. It’s like cretae focus, focus, focus. There’s no space to draw outside the lines right now. You got to innovate, don’t get me wrong, but remain focused. Don’t do too many things. You’re going to become a mess if you do that. [crosstalk 00:41:02].

Kevin Kim:
That’s why we have [Neema 00:41:03] on our team because Anthony and I are like, “Ooh, shiny. Cool ideas.” Neema is the one that, “Guys stop it. Stop it, stop it, stop it. Let’s focus.” I give him a lot of credit because I’m easily, “Oh, that’s another cool idea. We should do that. What about that? What about this?” That actually was a product of this podcast. That’s why this podcast came out. I was like, “We need to get more content out there and start interviewing some friendly faces in the space to get to know them on a deeper level.” Thankfully this worked out, but a lot of things, you get distracted in a time like this. It’s very dangerous.

Romney Navarro:
Yeah.

Kevin Kim:
Wait, okay, so let’s go back. So we got Chris, we’ve got you, we’ve got Jadon, and then I’m guessing a little bit of staff. How does that become the team today, because now you guys are what? How many employees now? How many team [inaudible 00:41:54]?

Romney Navarro:
We’re about 40.

Kevin Kim:
Right.

Romney Navarro:
About 40.

Kevin Kim:
You go from three, four employees, partners, to 40 and you’re growing. Tell me about that timeframe. What are you doing to grow the company, because you guys didn’t blow up to 100, 200 employees. You guys kept it tight, right? What are you doing to grow? How are you hiring? That’s a good place to start. How are you hiring and what are you looking for when you’re recruiting?

Romney Navarro:
I’ll tell you what, man, that is a question that I will continue to … the answer to that question I’ll continue to sharpen for the rest of my life.

Kevin Kim:
Oh yeah, for sure. For sure. It’s always.

Romney Navarro:
What happened versus how I would do it might be a little different because you got to learn from your past.

Kevin Kim:
Right.

Romney Navarro:
Okay, so it was about five of us. In fact, in those dark moments in ’09 and so, I remembered having very somber conversations around conference room tables, like, “Hey, we’re going to fight. The best that we can do right now is show up and do our best every single day. That kind of sparked a little something inside of us, and that was the beginning of growth. Shortly thereafter, right after we launched the wealth management division, in those days we called it retirement planning, Ragland came onboard and he was a catalyst for growth. That’s in his DNA. We all have different things. Shining objects, for instance. I’m a shining objects guy too. I’m a marketer for all intents and purposes.

Romney Navarro:
I appreciate being able to focus on that. When Ragland came in, we were able to do that. The answer to your question is we finally got the squad in a place where we could actually master our craft.

Kevin Kim:
Double down on what you’re good at. [inaudible 00:43:49].

Romney Navarro:
Correct. Ragland, communicator. Romney, marketer. Jadon, strategist. It’s like boom, boom, boom. Then we have another partner, and we don’t talk about too much. We keep him in the dungeon. His name is Grady and he’s a bean counter.

Kevin Kim:
We love Grady. We love Grady.

Romney Navarro:
He’s the best.

Kevin Kim:
Grady’s the best.

Romney Navarro:
He’s funny.

Kevin Kim:
Grady’s the one that gets shit done though, right? He’s the one to get shit done. We work with Grady on the fund side. We love Grady over on my team. He’s the one that actually … he’s moving the levers, right?

Romney Navarro:
Yeah.

Kevin Kim:
Yeah. Yeah, yeah, yeah.

Romney Navarro:
He’s an operator, but more than anything he’s a finance guy.

Kevin Kim:
Oh yeah, we know that.

Romney Navarro:
He runs our treasury, whereas, like I said, Jadon, vision and strategy, Ragland communications, Romney marketing, the distribution, if you will, and then Grady treasury. That was probably the first thing that was of tremendous value. We didn’t have a bunch … I hope not to insult anybody, we didn’t have a bunch of B leaders or junior varsity players doing big important things. We had the right people, the right butts in the right seats, and then we kind of grew little teams in each of those. The rest is kind of history. A lot of the decisions that we made back then carried through for 10 years.

Kevin Kim:
Wow.

Romney Navarro:
Some of them … by that I mean they were built to last.

Kevin Kim:
Right. You’re lucky in a lot of respects. A lot of firms have trouble with that.

Romney Navarro:
I get it. I could leave the firm for a year and we will still originate loans. That was not the case 10 years ago. It was less the case five years ago. It is absolutely the case today.

Kevin Kim:
Right.

Romney Navarro:
Built to last. Good, check that one off the list. Now you do something else, and we try to continue to grow. There was a little bit of that. As far as hiring goes, that was a bumpy one, dude. The good, in the beginning we were looking for smart and hungry because that’s what we thought we were. Maybe that was the least of the four of us, but smart and hungry. It worked. That one didn’t stick quite as long because smart and hungry, you can’t satisfy that appetite forever. Then we started, as we grew a little bit, and some of those people, of course, stayed and have stayed and continue to be a big part, important part, cornerstone of our business.

Romney Navarro:
Beyond, we graduated from smart and hungry to specialists. That was kind of the next-

Kevin Kim:
Expertise.

Romney Navarro:
… probably learned … yeah, exactly. It’s actually one of our core values is expertise, so we pointed our guns specifically to that. It’s like we never had any marketing. Let’s hire marketers. We never had any official fundraising. Well let’s hire them. We never had anybody beyond Grady do fund management. He’s got a fund management team. Because these people were specialists already, they were the experts. We weren’t. The first thing was smart and hungry. That got us through the lean years, probably cheaper. Then we had to pay a little bit more and get to expertise.

Kevin Kim:
Right.

Romney Navarro:
Then, yeah, culture. Culture’s a tricky one because everything … culture’s always under attack. Good market, bad, culture’s always under attack.

Kevin Kim:
I like that, culture’s always under attack. Why do you say that? Why do you say that? I agree with you, but I have my own view on that. Why do you think that?

Romney Navarro:
It’s very … because even when it’s at its strongest, there’s … I would say the main reason for me is as you grow a company, one person could offset the culture.

Kevin Kim:
Oh yeah.

Romney Navarro:
The way that we looked at it was, look, it’s me, Jadon, Grady, Chris and some staff. I’m not going to name everybody’s names of course because there was a lot of people, that we had our little culture. Our culture was do whatever it takes. Wrap that up and put a bow on it. We hired our first, second, third, fourth, fifth person, the culture was different. It was still do whatever it takes, but with this new cruise-

Kevin Kim:
Were you talking about it, are we talking about the culture and having those values mentioned earlier, or was it a decision to have that installed later?

Romney Navarro:
Yeah, no, we’ve always, since day one, we’ve lived with our core values. This is the culture and it remains the culture. But again, it’s always under attack. Any one of these can be vulnerable if you’re not paying attention to them.

Kevin Kim:
Of course.

Romney Navarro:
Growth is an absolute core value of ours. We’re always seeking to grow. Not just grow the company, but grow ourselves as individuals, grow our people, grow our clients, growth. All things growth. Candor is another important core value. That one’s an important core value because our business is … we’re a small company, we’re a small business. We never want to be a fortune 500 from that regard. We want to have all those assets under management and having them make a lot of money for everybody, but we don’t want to have 17,000 employees. That’s not a gain.

Kevin Kim:
Right.

Romney Navarro:
Candor’s really important because we’re so dependent on one another. Fundraising, lending, fund management, servicing, back office, HR, so interdependent, that any time you don’t get direct and open and honest feedback, something’s bound to go wrong. So candor’s number two. Expertise was instantly our third core value. Someone that I hold onto whenever I’m struggling with something, it’s like why is that not happening? Because we put the wrong person on it, including myself. Expertise. You know what expertise is, I don’t need to define it, but basically being an expert in your field.

Kevin Kim:
Right.

Romney Navarro:
Then finally, and this is because of I guess the responsibility that we decided to take upon us, our fourth core value is stewardship.

Kevin Kim:
Okay.

Romney Navarro:
Stewardship is probably the strongest guiding principle that we have as a company. We have some fun way of defining it, but at the end of the day, whenever I talk to a new person that we hire, it’s like, “Hey, look, if this was your grandma’s money, what would you do?”

Kevin Kim:
Right.

Romney Navarro:
That’s what we mean by stewardship.

Kevin Kim:
Okay. Okay. That’s funny because that philosophy is embedded in a lot of the funds that we’ve worked with over the years. They all have the same kind of mentality and they’re all still very successful to this day is that they treat the capital in their funds like it was their mom’s money or their grandma’s money or whatever. It’s a great philosophy to have. I understand the core values, but going back to culture’s under attack. My perspective on it has always been that culture is under attack from you have institutional attack basically at all times because it’s so easy for even the main players to kind of forget about where you came from or what you’re about because you’re so entrenched in the day to day. But then you also have the risk of these, what I call, toxic people to the culture.

Kevin Kim:
That’s the challenge we find is that they can be fantastic at expertise. They can have amazing expertise, but how do you guys balance it? Someone amazing at their job but just cannot play ball, you know what I mean?

Romney Navarro:
Yeah.

Kevin Kim:
All they want to do is, whatever it is, right? They are difficult, they don’t work well with others or it could just be that they’re just a huge egomaniac. I don’t know, but what do you guys do in balancing that? Every company has gone through that type of challenge?

Romney Navarro:
Egomania, right? That’s a [crosstalk 00:51:36].

Kevin Kim:
It could be egomania, it could be just fantastic at expertise. They’re the best at what they do, but culturally speaking, awful. Whatever reason.

Romney Navarro:
The short answer is you cut it out.

Kevin Kim:
It’s not worth it, right?

Romney Navarro:
Yeah, Chris would laugh at this. It’s basically a cancer, so you cut it out.

Kevin Kim:
Right.

Romney Navarro:
I had to do that a few times in my career and in my tenure, and I remember this one person who fits that bill to a tee. She was an ace.

Kevin Kim:
Right.

Romney Navarro:
10 stars in her discipline. Man, there was just something that … and you always have to reflect a little bit, right? It’s like, “Is it me?”

Kevin Kim:
Right. No. Exactly.

Romney Navarro:
Is it me? The way I’m talking to you, this is the way that we always talk. I’m just kind of … this is me right here. I tend to get along with the majority of people, and further, in business, I have a tendency of following the energy, not necessarily the shiny thing, but wherever the energy’s going, that’s probably the right decision. If the energy’s going in the wrong direction, that was a bad hire on our part. If the energy’s going to towards doing something, say, illegal, bad hire, right?

Kevin Kim:
Yeah.

Romney Navarro:
If the energy’s going to fixing a problem in the right way, perfect. I’ll get out of the way, let them fix it. Well this person just seemed the energy was always going in the wrong direction, and it was more the direction of back to egomania, I believe. It was like it’s not … it’s basically my way and everything else is wrong.

Kevin Kim:
Right.

Romney Navarro:
If you want to cripple somebody or paralyze somebody from advancing, is to have to stop and debate and politic and litigate every decision, and I remember this person was brought in at a high level and a total ace, and by the way, also a sweetheart in this type of talk. Work talk, there was only one way, and we couldn’t deal with that, and that’s just one example, but that is one of those things. It’s like how do you lead, how do you manage? Like I said, I follow the energy man.

Romney Navarro:
If it’s going in this direction and I feel that’s the right direction, however it ends up, it’s going to be okay. We’ll obviously check in and make sure it’s on par with what we’re looking for, but if what you’re trying to do is, not you as the leader, but the person who creates the problem, is just do it your way to prove your worth and your value and your superiority, in my world-

Kevin Kim:
Not a fit.

Romney Navarro:
… it doesn’t work.

Kevin Kim:
Doesn’t work. Yeah.

Romney Navarro:
Yeah.

Kevin Kim:
Noble’s growing over the years. Was there a moment … was there kind of that … I don’t want to call it an ah-ha moment or a Eureka moment, but a crystallizing moment for the company where it allowed you to get to where you’re at today? Well first of all, let the audience know where you’re at today. Let’s talk about that real quick. Where is Noble at today? You have added a REIT to your capital structure. Last I checked it was, what, a couple hundred million under management now or was it more than that?

Romney Navarro:
$200 mil.

Kevin Kim:
$200 million under management. You guys started in ’08 with just doing directs, loans, to $200 million under management. You just opened beyond Texas recently in the past few years, right? You basically did $200 million in Texas.

Romney Navarro:
Yup. That’s where we’re at. Yeah, we’re a local shop with national aspirations. We’re retooling the national launch with the coronavirus thing and whatnot. I use the analogy, we left the port and we saw the iceberg, so we came back in. As we left port, we started transacting and we closed a deal or two in that month or so that we were in market, but now we’re just kind of taking a step back to see what it looks like because what we were and what we are is experts in our market.

Kevin Kim:
Right.

Romney Navarro:
Even if we make a mistake, we have some expertise that could support [crosstalk 00:55:48].

Kevin Kim:
There’s nothing wrong with that. To be able to do that much volume in your home state alone, it’s not easy to say that. I don’t know many lenders even here in California who’ve done that. [inaudible 00:55:59] my fingers. Let’s talk about that. You guys are now at $200 million under management, primarily, almost exclusively in Texas, but was there a crystallizing moment, that moment where you guys, it took you guys to that point? Because we have that as a law firm. We have a pinpoint moment where that was when we started to get serious and we started to just grow massively. What was that moment for Noble?

Romney Navarro:
Dude, I’ll answer yours if you tell me what yours was.

Kevin Kim:
Oh yeah, sure. It’s been a while now. Oh man.

Romney Navarro:
Ahh, the [crosstalk 00:56:33].

Kevin Kim:
Yeah. Honestly, almost five years ago now. Five years ago, maybe even six. We had decided … we had just moved to our new building and we decided that, because we had been doing a little bit of everything. We’d been working with banks. We’d been working with real estate companies. We were working with lender. We’ve been mostly with lenders, but we were kind of all over the place. We decided, you know what, let’s bring on a consultant to get our business serious. Anthony had just joined the Entrepreneurs Organizations, and he started getting coached and we started getting really serious about treating our practice like a business. Lawyers are traditionally terrible business people. Anthony is actually a better businessperson than he is a lawyer. I’ll even make fun of him for it. He’s a great lawyer, but great [crosstalk 00:57:25].

Romney Navarro:
Yeah, sure.

Kevin Kim:
Great visionary. At that point in time, we were kind of trying to figure out who we were as a law firm. We hired a consultant to help us get organized, get our goals in order, get our culture in order, define what our values are and was really the birth of what we know of Geraci today and was not who we were when I first joined the firm six years ago now. That was the crystallizing moment. We got serious about who we are. We defined what we’re about. We defined our values. That year, the following year, we grew 50% and the next year after that we grew 65%, and the year after that we grew 50%. So it was just consistent growth.

Kevin Kim:
We grew so fast that we actually have a lot of stretchmarks right now as a company. We’ve got a lot of things that we need to work out. Growing pains are real, right? That was us. How about you? How about Noble?

Romney Navarro:
We’re on Zoom, so you could probably even show some of the stretchmarks [inaudible 00:58:18].

Kevin Kim:
Right.

Romney Navarro:
Look, we’ve had a couple. We’ve been at it long enough. As long as you guys, like I said, in 2002, the company was one thing. I came on in 2008.

Kevin Kim:
Right.

Romney Navarro:
And here we are in 2020. I’ll say there’s probably three pivotal moments that each were kind of a step towards growth. The first one was, I’ve already kind of told you the ah-ha moment, was when we were creating revenue streams for survival and for … I mean I guess ultimately, in those days, the revenue stream was to support our own personal income. It’s like I want to cover the nut and not put a burden on the rest of the company, so the first thing that we did was launch this wealth management firm, the retirement division. When we realized that there was an interest from retirees in this thing that we do, that was first it started as a light bulb, and then it became the pivotal moment because we realized that it stacked up. If you benchmark what we were doing against things like, just call it the stock market, landlording, even insurance products which are the safest products out there, we benchmarked real wealth.

Kevin Kim:
Oh yeah.

Romney Navarro:
When we … at first we were like, “Well yeah, let’s do this. That’s one way to raise money. Check.” Then it was like, this isn’t the second moment, but this is when it crystallized and it became that first shot out the gates. It’s like, dude, we’re actually doing these guys a favor. Yeah, let’s put 10% of their portfolio into private lending, they’re insulated from the stock market. It’s something different from the life insurance. There’s a negative connotation a lot of times in life insurance, and that moment was important because at that point, we realized marketing was the most important thing.

Romney Navarro:
We started marketing. It’s like, “Look, you don’t have to retire, just with this, this and this.” There’s this old adage called the three legged stool, which is social security, savings and pensions and all three of those things are super brittle at the moment. Some of them don’t even exist. My 13 year old daughter couldn’t tell you what a pension was or is. Probably couldn’t tell you what social security is, I’m not sure. Anyway, that said, those old ways were gone, so we brought in this thing, this private lending, and retirees started just loving it, and obviously it still works in their retirement income.

Romney Navarro:
Fast forward, we were kind of shaken to our core in about 2016, 2017. The guys up at Renovo, shot out to those dudes, we were talking to them about a deal, and we were talking a lot about credit quality. We were talking a lot about a lot of things, but what we were leading, the conversations we were having, we were talking a lot about business. Scale, business, theory, all that stuff. These guys, they’re a lot of things, very fortunate group too the way that they’re capitalized. The one thing that they were was focused and they were focused on the client. Dude, they just had to see it.

Romney Navarro:
We shifted out focus from the funds, if you will, to the borrower in about 2016, and it was just a catapult. If we focused on the borrower success, we’re going to be okay. That was a real important moment. It did so many good things. We also grew 100% like two years in a row right after that, and here we are with our stretchmarks. It was great. Fantastic. The best thing that came of that, well not the best thing, one of the unexpected consequences though, today my book of business is cleaner than its ever been. I have the cleanest credit book that I’ve ever had. I would put it up against anybody’s in the country. My clients pay on time. We’re in the middle of a crisis, 99.4% paid payments already this month. That’s where we’re at.

Romney Navarro:
That was a big important moment for us, and then finally, and this is an interesting one because this one I share indirectly with you, and I’m sure you could retrace these steps because you actually sent me a text to trigger this whole thing. We were in Las Vegas for I believe it was one of your conferences maybe.

Kevin Kim:
We’re in Vegas so often, man.

Romney Navarro:
Yeah, we could’ve just seen each other [crosstalk 01:03:07].

Kevin Kim:
Right.

Romney Navarro:
Somebody tapped me on the shoulder, and they’re like, “Hey, Romney.” It was Carmen from Think Realty. He’s like, “Hey Romney, got something to tell you.” I was like, “What’s up Carmen?” We’re good friends, like, “What’s up?” She’s like, “Well where’s Jadon and where’s Chris? I want to tell you guys together.” I was like, “I’m about to meet them. We’ve got a meeting and this thing.” She’s like, “Well I’ll just tell you.” I was like, “All right, go for it. Spill the beans.” She says, “We just wrapped up our voting and survey results are in, and Noble Capital has just been named the private lender of the year for Think Realty.” I’m like … Think Realty Honors. I’m like, kind of like this. Because we’re all very … you’re your own biggest critic.

Kevin Kim:
Right.

Romney Navarro:
I’m like, “What? I have so much work to do.” It was an award voted on by your peers, so some people were taking notice. Didn’t really mean a whole lot to me. Let me rephrase that. It meant a lot to me, but I was so humbled that I was almost embarrassed to accept it. The reason I said that you have a part to do with this is we show up to Atlanta for the awards ceremony and I guess my assistant put the wrong date on the thing, and I actually missed the awards ceremony.

Kevin Kim:
You made it. You made it. Give you credit where credit’s due. Honestly, this is for the audience. The reception was the day before he thought it was on calendar. I’m already in Atlanta because I’m filming stuff for APL for the class. I’m already out there for like a week. I’m there early, and Linda and I, Linda the director of APL, are talking about the awards ceremony, and I had just confirmed with Romney. He’s like, “Yeah, I’m going to be there. Let’s hang out.” What we didn’t both know was I thought it was one day, he thought it was another day. I was right. He comes about an hour late, like 30 minutes to an hour late, but he’s still there, close enough time to take pictures. Fully dressed, by the way. You were in your shirt and tie, were wearing the full clothes in Atlanta. He came fully from Texas.

Kevin Kim:
You know what, you made the photo, you got the trophy. That’s all that matters. We didn’t really do speeches anyway.

Romney Navarro:
Yeah. You know, it’s funny. I hold those guys at APL, a lot like you guys, Linda and Eddie, in such high regard that just even conversing with them and strategizing with them and getting to know them on a personal level, all those things are very meaningful to me. I forget the business side sometimes. They gave us this thing, I missed the awards ceremony like a total idiot, and you send me a text. I’m in my room.

Kevin Kim:
You were late. You were late. You were just a little bit late. It’s okay.

Romney Navarro:
Again, I didn’t do it for any other reasons I thought.

Kevin Kim:
Wasn’t intentional. It wasn’t intentional. It happens man. These kind of things always happen.

Romney Navarro:
I tell Eddie that, Eddie Wilson at APL, Affinity, and he’s like, “Well we’ll just call you up on stage tomorrow and we’ll do the award there. Let’s just do this phony awards ceremony for you because you’re such a dummy. Maybe we’ll let you say a couple words.” He did. He kind of called me out. Shout out to that guy. He’s another ace. He calls me up on stage and he allows me to say two or three things. I don’t know if I even said anything. I’m pretty sure I did, but [inaudible 01:06:34] the other pivotal moment. This is really important. I get off stage with this trophy, kind of like my water.

Kevin Kim:
It’s a big trophy. It’s a big trophy, yeah.

Romney Navarro:
It was a big trophy, like 20 pounds. It’s in our trophy shelf at the office. Everybody at that conference started talking to me, and everybody starts asking me the same questions, and the question was real simple. It was like, “How do we partner?” I’m like, you remember about a year, year and a half ago, we were talking about a couple of things, some growth strategies that we had, whatever it was. I’ve always had this thing in my back pocket that I want to give. I think if I give, I will receive, but don’t worry about receiving. You just give. Everybody starts asking me, “How do we partner? How do we partner? How do we partner?” I was like, talk about a light bulb, dude. That was a lightening bolt that shot through me at that point. It was at that point that we’re like, “Look, we know what we’re doing. There is no blueprint. Let’s give other locals a blueprint to go and put out $200 million in their marketplace.”

Kevin Kim:
Right.

Romney Navarro:
It was at that point where we realized we actually had figured something out that we could share with the marketplace and in particular with a very hyper local marketplace because that’s what we are. When I say national, doesn’t mean I’m going to learn anything about Atlanta. My Atlanta guy’s just going to get the same tools I got, and he’s going to own the market. That was the third and probably most … should set us up for the next biggest trajectory that we’ve ever had.

Kevin Kim:
Yeah. That was the moment where the private lender network became a reality eventually over the next few weeks, right? Then you guys deployed over at our Innovate show in Newport, and then we all decided to shelter in place. That was the … honestly, though, trust me, I had so many things prepared. I had all these meetings and conferences and all these things that were happening for me this year, and everything just, oh my god. You got to think positively. We’ll get back to it, right?

Romney Navarro:
Oh yeah, we’ll grow callous, and we’re going to get used to, what is it?

Kevin Kim:
Social distancing.

Romney Navarro:
We’re going to get used to it.

Kevin Kim:
Yeah. [inaudible 01:08:48] wear these masks. Have to do it. Have to do it.

Romney Navarro:
You know what I need to stop getting used to is drinking wine, dude.

Kevin Kim:
Oh yeah, staying at home is turning me into an alcoholic. I thought I was one before with the conferences, man. Oof. Virtual happy hours, you don’t have any self-control because there’s no one …

Romney Navarro:
Wine and then food, and then it’s like-

Kevin Kim:
Oh yeah.

Romney Navarro:
Here’s a thing, a bad trait that I’ve picked up in the last 45, whatever amount of days. I never eat dessert except the last of my-

Kevin Kim:
You do now. You do now. Oh yeah.

Romney Navarro:
This morning I had breakfast, and I was like, “Hmm, what can I have for dessert?”

Kevin Kim:
100%. No joke. No joke. Okay, so I want to close out with two things. The first thing, I always ask where do you see things going? We’re in, those of you who are listening in, and we’re out of the COVID-19 crisis, we are in the COVID-19 crisis right now. We are all working from home in our home offices and shelter in place and all that fun stuff. Romney, we’ve had this discussion privately, but where do you see this going? Where do we see our industry going after we’re out and about and back on the circuit?

Romney Navarro:
Yeah. About a month ago, man, you were sending a few emails. Obviously a lot of people were displaced and looking for a home in the panic. There was a global panic. I remember thinking to myself, and I might have even told you this, but I remember thinking to myself, I was like, “Man, we have been planning for this for the last six months of our lives, but it got here a little too soon.” We own a $200 million book of business, we manage $200 million of peoples money, and we wanted to get to a much bigger number before we could capitalize on the entire opportunity. With that said, the narrative that we had pre-COVID is the same as the narrative that we’re seeing during, and as a result, I believe it’s going to be what happens after, and that is the institutional money is not in for the long haul. They’re in for the alpha. They’re in for the rate, the return.

Romney Navarro:
There’s a lot of opportunity on the street right now that is even outside of our space that’s maybe even greater, potentially has greater returns and yields in our space. So I think where things are going is that local money is going to rule. I think local equity is going to rule, at least for a time being. I mean the institutional money is always going to be bigger, and as a result be able to make the rules, but when institutional money pulls out, it’s an opportunity for local money to come in, and that’s where I think the opportunity comes in for guys like us, people who partner with guys like us.

Romney Navarro:
We want to get hyper local, and I believe that, man. I mean sometimes you catch yourself saying something and you’re like, “Dude, did I say that because I’m just making some shit up?” No, it’s like I believe it.

Kevin Kim:
Right.

Romney Navarro:
All of our money is right here in Texas, but guess what. It’s worked.

Kevin Kim:
Right. I echo that. We’ve been telling our fund manager clients, you guys are in the best position possible. You have investor money, you have discretionary capital. They trust you know, they know you. They will believe in your path forward, whereas Wall Street … I mean I had a call with a Wall Street credit desk yesterday and they were just like, “Yeah, fix it and flip it at 85% on the dollar.” I’m like, “No, I’m sorry. No one’s going to sell it to you at 85% on the dollar, especially when it’s a 55% LTV and a 14%.” Investors want that. Why would you … they’re not going to sell that to you. It’s just, I think, yeah, they’re a little bit shortsighted, but I think that you hit the nail on the head, I think people in your position and similar positions as yourselves will see the opportunity, find the opportunity and get it.

Kevin Kim:
I think that’s where we’re … but implicit in that is some contract.

Romney Navarro:
Yeah, and by the way, part two to what I just said, hyper local, absolutely, positively you’re going to win if you are the expert, if you’re the authority. I use the term every once in a while, so people give me a hard time because I put a name to everything, aces. I’ve said it three or four times on this podcast.

Kevin Kim:
Right.

Romney Navarro:
I call an ace an authority, a celebrity and an expert. If you call it aces, with some scarcity. The aces in those markets are going to grab their regional and local market share, but the next thing, you just said it, consolidation, dude. Opportunity to create. You remember when you were a kid, Voltron was like …

Kevin Kim:
Yeah, yeah, yeah, yeah. Exactly.

Romney Navarro:
There’s going to be some Voltrons coming out of this sucker.

Kevin Kim:
Oh yeah. I think so too. We saw that trend already happening earlier, toward the tail end of 2019 anyway, and I think this is just going to put that on steroids. You’re going to see combinations. You’re going to see folks partnering up and joining forces. I think it’s definitely going to happen. My last question for you is for people who are coming up, who are newer to the space. We got a lot of clients who joined the private lending industry two years ago, three years ago, even this past year. What advice do you have for them in this current I guess unprecedented time, but also in the future? What advice do you have for them?

Romney Navarro:
Well I’ll give them advice. It’s tempting to say status quo stuff because generally speaking, that type of stuff is on par with about right, but really I’ve kind of adopted a marketing strategy, marketing philosophy maybe is a better way to put it. It’s a little bit counterculture, and that’s not popular. Counterculture is never popular. It’s never the popular thing. Oftentimes, what I say is if my competition is going here, I’m going over there. I oftentimes, my marketing philosophy is basically go where your prospects or your clients are and your competition isn’t. That’s pretty basic. It’s like one plus two equals three, that’s all I just said here. Go where your clients are and your competition isn’t. If you kind of break that down, it takes a minute to really figure out what that even means.

Romney Navarro:
Yeah, duh, Romney. What I mean is you got to do things a little different. While what I tell you isn’t necessarily the broadest stroke answer that everybody could necessarily get behind, I could tell you that we are going to focus on being different and that will attract the triumph. What I could tell somebody coming into this space is find your niche and do your own thing. If you follow the herd, you’re going to fall off a fucking cliff.

Kevin Kim:
Because there is no playbook, not in our space.

Romney Navarro:
Correct. Correct. I’m going this way right now. I’m making some weird moves that might even seem a little counterintuitive, but I’m doing it to separate myself. I actually have some notes on my whiteboard at the house. I want to come out the other side of this thing as the expert, and anybody entering the space needs to be the expert, and also the person that people remember as the value provider. Value is a slippery slope. What is value? I got an email from your firm yesterday showing me some foreclosure and eviction guidelines going down right now. What do I need to follow here and there?

Romney Navarro:
I was like bullseye. That’s value, you know what I mean?

Kevin Kim:
Right.

Romney Navarro:
Wherever your competition’s going, go the other way. That’s what I’m saying. It might not seem totally intuitive, but again, if you’re just one of the herd, I don’t see a positive outcome there. Half of that herd’s just going to be crushed.

Kevin Kim:
Right. All right. It pays to be unique in the space, and a lot of successful folks have had their strategy. There is no playbook. There is no playbook. I’ve seen business models of all shapes and sizes and all be successful. It’s kind of crazy. That’s encouraging though. I mean a lot of our folks are kind of struggling with what to do. I would tell folks right now is this is the time to get ready. You guys are … for the lenders out there who are kind of like, “What do I do right now?”, you know what you’re going to do on the business side, but get ready. A lot of folks are scrambling, “What am I supposed to do right now?” Get ready. Get focused.

Romney Navarro:
Think, plan, absolutely.

Kevin Kim:
Yeah.

Romney Navarro:
I think so. I’m going to … I know you’re trying to land it, but I’m going to open up a beer, man.

Kevin Kim:
Go for it. We got virtual happy hours is coming up soon, so cheers to you. I’ll show my vape, there you go. All right, guys. I think that’s going to be it for this episode of the podcast. Thank you very much Romney Navarro, AKA, the best hair in hard money. See [crosstalk 01:18:11].

Romney Navarro:
There it is. The first time you haven’t seen him fixed.

Kevin Kim:
There you go. There you go. For those of you who don’t know them, Chief Marketing Officer over at Noble Capital and Streamline Funding, and our friend at Geraci. Hopefully we’ll be able to see you soon at a conference, hopefully.

Romney Navarro:
I can’t wait to hug you.

Kevin Kim:
I know.

Romney Navarro:
That’s how bad I want this to be over.

Kevin Kim:
Exactly. Exactly. For those of you listening in, please check out our website for more episodes of the podcast, and we will also be doing some new things. Look out for a virtual conference coming your way in May. Look out for emails on that. Overall, thank you very much Romney. Really appreciate the time today, and hopefully we can do this in person soon.

Romney Navarro:
You got it brother. Thank you very much.

Kevin Kim:
All right. Thank you.

Romney Navarro:
Cheers.

Kevin Kim:
Cheers.