Eddie Wilson, CEO of the American Association of Private Lenders, describes himself as a serial entrepreneur. After completing a degree in business management at Emory University, Eddie served as the president of Affinity Worldwide and continues to head Think Reality as the group’s CEO in addition to several philanthropic efforts with his wife, Misty Wilson.
The American Association of Private Lenders, or AAPL, was formed in 2009 as the first national organization that represents private real estate and peer-to-peer lending. Since its inception, the organization has served as a touchstone for private money lenders, hard money lenders, mortgage managers, and brokers from across the U.S.
As the chief executive of a national lenders’ association, Wilson said his day-to-day operations can be broken down into three distinct categories: the culture, or keeping a keen eye on the attributes of the company that matter the most; advocacy, which includes time spent in Washington D.C. fighting for private lenders; and ethics, which encapsulates making sure members are on the same page with the organization’s best practices. This relative normalcy, however, quickly dissipated at the onset of the 2019 novel coronavirus.
“When the coronavirus began spreading across the country, my focus went more towards our internal team, creating a culture that was sustainable internally, because everybody went to a remote workspace,” Wilson said. “For the most part, everybody worked from home for the better part of two months. One of my main missions is trying to keep our team engaged and keep them positive. I believe that a leader should always be the positive voice of the organization.”
This positivity, he said, remains crucial during a global health crisis such as the coronavirus. Whether this means checking in with team members during Zoom calls to make sure everyone is adapting to new realities and new work environments or determining areas of opportunity for the association, Wilson said that as CEO he takes a measured, holistic approach to internal and external areas of concern. Ultimately, he said that his focus is “keeping everyone positive and moving forward.”
During a period of collective concern, Wilson said it can be difficult to find a silver lining among the seemingly never-ending stream of nationwide angst. He added that little things, such as checking in with employees, make a world of difference. As important as these individual measures, he added, is looking back at how private lending survived – and thrived – after previous periods of economic downturn.
“Private lending found an extreme opportunity on the other side of the last recession, so I say to myself and my team ‘let’s position ourselves to be ready to help those who are going to take advantage of the opportunities that present themselves,’” he said. “I also believe that it’s important to turn outward and focus on philanthropy as well. I own orphanages and feeding centers all around the world; they are part of my outreach, and I have a great passion for them. I think that in tough times, you have to take the focus off of yourself and begin to help others. Once you do that, your outlook and perspective changes.”
Speaking to this mindset, Wilson said that at the core of AAPL is a desire to help private lenders from across the country through every possible scenario, whether those situations are positive or incredibly difficult.
“Yes, we have to look towards the future and the opportunities that are coming down the road, but even more so we are focusing on our constituents. We have hundreds and hundreds of private lenders across the country who rely on us for data, rely on us for information, and news and networking,” he said. “We get on the phone with our members and see if there is anything they need, if there is anywhere they are struggling and we could offer support. At the end of the day, we are going to move forward healthy and strong, looking towards the future and pursuing opportunities as they come our way. An association should function like this, and an association should serve as the backbone of an industry.”
When thinking about the role that AAPL plays in the private lending sphere, Wilson said that there is a large onus on the association because of its position as the largest group of private lenders in the country. Because of this positioning, he added that it is important to perpetually be at the cutting edge of the lending field.
“One thing we have to stay focused on is that one lender doesn’t represent the entire industry,” he said. “We have to look at the collective whole. Even though many lenders are struggling, there are many more lenders who are still finding opportunities – we have to make sure that our messaging is broad enough so it doesn’t highlight a singular person’s plight, we have to function as the universal voice of reason that says ‘look, the industry as a whole is struggling to a degree, and some have lost secondary market capital that allowed us to thrive and survive in the time before the coronavirus.’ More important than this, however, is serving as a beacon towards the future.”
Wilson, who has been in real estate in various forms for nearly two decades, said he remembers all too well the tumultuous period of the 2008 housing crash. Even though that series of events had disastrous consequences on some areas of finance, he added that private lending thrived in its aftermath as investors shied away from institutional capital.
“There were many people who suffered [during that time], but that downturn was the single greatest catalyst for growth in the private lending industry. For those who survived and then saw their strongest days after, I think there are important parallels to draw between 2008 and now. There are certainly better days ahead, and going back to AAPL as an industry leader, there is a huge onus on us to not paint the current situation in a negative light. If we were to do that, there would be implications throughout the broad spectrum of private lending.”
When thinking about how times of stress – or times of opportunity – impact lending professionals, Wilson said it is important to extrapolate upon the ethics component of the association. When new members of AAPL are brought on board, they agree to follow the association’s code of ethics, which was created and is updated as needed by an elected board. In addition to lessening some of the stigma surrounding private lending that endures today, the ethics pledge ensures that every member is on the same page in terms of the association’s goals.
“We have a member database that many people use to look for private lenders,” he said. “The AAPL member emblem does hold clout in the industry, and the first thing we do when borrowers call us to vet a particular lender is to check to see if that individual has ever received an ethics violation. Part of the reason we do this is because when we go to Washington and advocate for less governmental regulation on private lending – in order for us to keep strong and nimble – we need to be able to show the legislators that there is a code of ethics our members abide by. This helps show lawmakers that we take the ethics of the industry very seriously.”
Returning to the aftermath of the 2008 crash, Wilson said that some people were skeptical of the blossoming private lending sphere. Intermittently referred to as hard money lending, the institutional failure of the housing market left some borrowers with a bad taste in their mouths. Even though Wilson said he is the first to admit that there is no easy “remedy” for a negative perception of private lending, he added that time – paired with the ethics component and dissemination of information about private lending – helps even the toughest skeptics see the many positive attributes of private lending.
“In the aftermath of 2008-2009, the government was overreaching in its regulation and was really restricting potential growth for real estate investors,” he said. “That curtailed progress led to a vacuum, a vacuum that allowed private lending to really step up and fill a void in the market. If there are great deals, the money will always follow, and money always finds opportunity – that’s how we got to where we are today.”
Wilson said that private lenders were able to offer capital at only a percent or two higher than traditional bank lending; this opportunity helped bolster the economy after 2008, and in his eyes assisted in the pre-coronavirus economic boom. When thinking about the aftermath of the pandemic, Wilson said that he believes private lending will step up to the plate again.
“I think that our sphere will play a major role again, and I think we’re poised and ready,” he said. “There is ample capital moving out of other discretionary funds and moving towards the single-family rental market right now. To some degree, banks are regulating to take advantage of amazing developments, and private lending is becoming the conduit for that capital. There is massive growth right now in the private lending industry; yes, there are traditional hard money lenders, maybe someone who has raised discretionary capital and they’re lending it, but there are also many people who are becoming involved with wholesaling and fix and flip properties. There is more self-directed IRA money today than ever before in history, and that capital is waiting to be injected into the marketplace.”
One area of private lending Wilson said he is keeping a close eye on, however, is governmental regulation of the space. Over the next five years, he said that varying degrees of regulation will either assist or hinder private lending.
“As a whole, regulation will either help us deploy capital, or it will create a roadblock or bottleneck for capital re-entering the marketplace. The way we look at this, at least from AAPL’s perspective, is that reducing regulations allows for the better flow of capital getting from the source to the intended user,” he said. “Because we’re not servicing the consumer market, we should be released from even some of the current regulation that is on us. Of course, from a legislative perspective, risk has to be managed, but we are going to continue to fight to reduce regulations that sit over the top of the market.”
These battles, Wilson said, are being fought in Washington – but as individual states review and regulate the private lending space, he added that more concentrated lobbying efforts are needed in order to curtail stringent regulation. In Florida, for example, where there is a litany of self-directed IRA lenders, recent government scrutiny has made it more difficult for these people to inject capital into an otherwise thriving marketplace.
“Many residents in Florida, who often skew older, have high amounts of wealth and are trying to find yield for their retirement dollars, and the regulation is to a degree that they cannot deploy that capital in a meaningful way into investment opportunities,” he said. “As any industry grows there is naturally going to be a certain amount of scrutiny, but what we want to prevent is overzealous regulation masked as consumer protection.”
When Wilson is not fighting these battles on behalf of AAPL’s nationwide network, he said that he takes great pride in the philanthropic work he engages in with his wife. Together they have founded over a dozen orphanages and feeding centers around the world and have found a passion for what Wilson calls ‘cause capitalism.’
“I am a capitalistic person and believe that a business should have a purpose and make money for everyone involved,” he said. “But in addition to this component, I am a firm believer that the cause side remains important, especially today. I believe that capital should advance humanity as a whole, and all of the businesses I have been involved with have a cause component embedded in them. I have a coffee roastery called Because Coffee that brews great coffee and supports great causes. In the end, what I want to do with my family is create change in people’s lives – if you can tie causes to capitalism, it really puts life into perspective in a number of ways.”
Putting life into perspective, Wilson said, may seem difficult during the current period of collective strain. Although this may be the case, he added that focusing on the future, his family, and the state of private lending helps alleviate anxiety about the 2019 novel coronavirus.
“We don’t know for sure when the economy will clearly open back up,” he said. “Economists make different forecasts about reopening, but there are so many contributing factors. There are many variables, but I think in a short time we will begin to see a correction to what the market is experiencing. The reality of our current situation is that I believe private lending will play an expansive role in our nation’s recovery, and the degree to which we can deploy capital through private lending will potentially make that recovery quicker.”
As for Wilson’s work-from-home routine, he said that it has been amusing to watch parents flood social media feeds with questions like “how on Earth do I solve this geometry question?” On a more serious note, he added that he commends his team for their ability to adapt to new workplace realities.
“I know and fully realize the level of stress that my staff is under by trying to maintain productivity levels while also homeschooling their children. With both parents working at home and e-learning happening at the same time, there are bound to be some humorous moments but I can’t wait for all of this to end and for us to return to some sort of normalcy. With that said, however, I don’t think we will ever return to the ‘workplace’ as we know it, and the functionality of in-person office space will change.”
Looking forward, Wilson said he hopes to see the association’s membership bolstered with the best and brightest private lenders in the country. Although the rest of 2020’s events, such as the association’s annual conference, are likely to look different than past years, he added that the ‘small but mighty’ team at AAPL is working diligently to stay on top of not only the coronavirus, but trends in private lending.
“We strive to offer the best for our hundreds of members,” he said. “I’m proud of what the association has become, and I know we will get through this situation together and emerge stronger than before.”
For more information about the American Association of Private Lenders, or information on how to join, visit aaplonline.com
