Fred Assini, CEO of Alpha Funding Partners, says the lending field is one of the most challenging – yet most rewarding – career paths a person can venture down. A native New Yorker with over 30 years in the lending industry, Assini completed a degree in finance from Saint John’s University and laced up for the world of private lending.
In October 2019, he took on the position of Alpha’s CEO after managing a nationwide mortgage business known as First Rehab Lending. Additionally, Assini has experience managing a general contractor company, which helps with understanding the needs of his clients. Alpha Funding Partners, the direct private asset-based lender, began serving the Northeast United States in 2007 and has expanded operations to California and Florida in an effort to work with realty companies directly – the group meets the needs of real estate investors, developers, and builders nationwide.
Alpha Funding Partners has a focus on residential and commercial properties and has provided $150 million in funding ranging from $100,000 to $10 million. Currently, Alpha offers an array of products from ground-up construction to mixed-use, multi-family, fix and flip, buy and hold, and rental properties.
Looking back on his early days in private lending, Assini said the mentorship he received at the onset of his career was invaluable, adding that mantras such as adaptability and compassion for clients have stuck with him to this day.
“I’ve spent my whole life in lending, from home improvement to mortgages, and it all began with an invaluable opportunity,” he said. “When I was really young, a vice president took me under his wing and showed me the different blossoming areas of lending, igniting my passion for the industry from the start.”
During the 1990s, Fred said there were rarely institutional buyers and the industry looks nothing like it does today – the focus, he added, was on private capital.
“Lending was all private capital, and it was based on your [loan-to-value ratio,] your own private money, and your own book of business. That grew to the point when you would loan someone money, the banks began paying attention to that, and the government also stepped in and gave people capital to buy and renovate dilapidated housing,” Fred said. “The business wasn’t as strong during this transition period, and then of course things came to a grinding halt during the housing crisis in 2007-8.
Like so many lending professionals, Assini said the tumultuous aftermath of the housing bubble cast doubt on the future of private lending. Despite this trepidation, he said that he adapted to the depressed market and moved forward with a positive attitude, an attitude that was often not shared by other professionals in the space.
“Eventually, the markets began to correct, and lenders and their borrowers dug out of the recession, ”he said. “I have been impressed with the ways in which private lending has grown over the last decade. Institutions began coming in, which was interesting because it was never hedge funds that would take interest in private money. After the housing crash, however, they took interest and said ‘we like this asset class.’”
When institutional players began taking an interest in private money, Fred said that he partnered with institutions and hedge funds, servicing loans, and performing in-house inspections and draw administration. Assini’s experience in the field, he said, has encompassed every aspect of a given deal from selling capital to working with institutional lenders to work within guidelines and service loans. He added that Alpha’s approach is highly involved, as investors themselves are on the ground – this not only leads to involved customer service, but a litany of repeat business from borrowers of every stripe.
“It’s a cliché to say that I’ve seen it all, but it’s important to remember that no two loans are alike,” he said. “Part of what makes private lending an exciting career is that there are so many factors that can influence a development, both for the better and for the worse.”
One aspect Fred said has changed drastically during his tenure so far in the space is the ubiquity of technology and Alpha’s focus on automation. Far-removed from the hand-written spreadsheets and reams of paper that were commonplace even20 years ago, he added that the dissemination of technology has bolstered communication during the coronavirus pandemic.
“Technology, I think, is everything now. Right now, we’re in the midst of not only having some good technology, we’re even upgrading it,” he said. “We’re upgrading it because once we’re in a post-COVID marketplace, there are going to be a lot of new players coming in, and some older players moving out. Some larger, more institutional lenders were forced to pause when the virus began spreading across the country, so during that time of pause was an opportunity to upgrade.”
Before the coronavirus pandemic, Fred said he thinks it was much easier to receive capital for a deal. Now, with more caution being exercised when disseminating loans, paired with new borrower metrics like a FICA score, it is of the utmost importance to stay on top of technological trends. Alpha, he added, has been ‘virtually shaking hands’ with clients throughout the pandemic.
“There are a lot of people right now who are looking to diversify their portfolios and say, purchase a house to rehab,” he said. “When we look at potential borrowers, it is all about experience in the field. In my opinion, Alpha Funding Partners has done a phenomenal job securing our book of business and we have had no disruptions in our draws and inspections.”
Fred considers this feat especially remarkable given Alpha Funding Partners’ geographic location, New York. One of the early epicenters of coronavirus in the country – not to mention a state with one of the most populous cities in the world – the uncertainty surrounding the spread of the virus caused a certain amount of angst among New York-based lenders.
“I don’t think anyone knew it would spread across the country like it has,” he said. “The early hotspots have been replaced with different areas of the country, and I think the best path forward is to keep our ear to the ground and realize we all have to do our part.”
When thinking about the economic ramifications of COVID-19, Fred said he has been surprised by some of the areas that have seemingly expanded this year – Alpha is on track to reach$200 million in funding in 2020.
“You’re always going to have people who are looking for deals during a depressed period, some people are going into the stock market and others are looking at real estate,” he said. “At first, we were worried about the prospects of single-family homes in New York, but we quickly realized that some people are moving away from major areas and are choosing to settle down in single-family housing in more suburban settings.”
Paired with this boon, however, is a current lack of fix and flip properties, he added. Coming out of the 2008 recession this asset class was immensely popular because of widespread foreclosure surplus, but this excess has since dissipated to a certain extent. Moving forward, however, Assini said he feels confident about the housing market’s ability to correct after a period of uncertainty.
“The housing market is great right now, and the fact of the matter is that people are always going to need a place to live,” he said. “Right now, we’re seeing that people don’t necessarily want to live in apartment buildings and higher density housing because of the pandemic, but those choices and preferences are likely to change. It is a highly fluid market and what we try to do at [Alpha Funding Partners] is work with our borrowers to adapt to different markets.”
During the onset of the pandemic, Assini said that his team had numerous discussions about how lending would most likely be impacted. Instead of focusing on the negative ramifications of a depressed market, however, he added that the Alpha Funding Partners team focused on potential pivot points for the firm. Paired with this forward-thinking attitude was a commitment to providing the best for Alpha’s borrowers, implementing social media and digital marketing to share updates and important information.
“Being situated on the East Coast, where a lot of the early cases were, we first determined that we needed to protect our assets. We made sure that we reached out to all of our customers, we asked them how they were doing, where they were at with different projects, and we supported our customers throughout every step of the process,” he said. “You don’t want to be stuck with a bunch of houses that aren’t finished; no one wants that. So, we worked with borrowers to put a framework in place that ensured our projects continued.”
This change in customer communication, Assini said, was acritical aspect of the group’s early coronavirus response. While less seasoned professionals approached the crisis with intense apprehension, Fred added that his experience during previous downturns –such as the financial crash of 2008 – allowed him to approach this period of uncertainty with a levelheaded attitude.
Working with borrowers to resolve concerns around funding and project completion was largely hassle-free, he said, given the ‘all-star clients, ’including the group’s work with institutions to finance loans. More than 50 percent of clients in the book are repeat customers, he added.
“I think having a relationship between borrowers and lenders is critical because that trust can lead to a deal going well even during hard times,” he said. “I think…we implemented all of the right tools pre-COIVD, because none of us knew how good or bad this was going to be, and we have been able to support our customers and support the market.”
Outside of the borrower/lender relationship, Assini said that he has been blown away by his employees’ ability to adapt to a rapidly changing situation. A tower is only as strong as its foundation, he added, and he said he ‘couldn’t be prouder’ of the work that has been done behind the scenes so far during the coronavirus pandemic.
“Our employees are doing great,” he said. “I think everyone was so scared going into this, myself included, because we didn’t know what sort of consequences a pandemic would have on our bottom line. With the technology we have today, and the people running that technology, our operations were seamless during the transition to remote work.” Although technology – and its presence in the lending field – is constantly changing, Assini said there are still some aspects of the remote landscape that seem peculiar, such as visiting a doctor via Zoom. Even though this is the case, Fredadded that remote functionality has allowed his team to facilitate communication – both internally and externally – in ways that would have seemed outlandish a decade ago.
“The products that we have now would have made my head spin 20years ago,” he said. “Recently we had a marketing meeting where we had one person in California, one In Florida, another person in London and I was in New York. It’s fantastic– I’ve found that these meetings are so much more productive over Zoom then they are in a meeting room, and during the pandemic so far my whole way of thinking and working and utilizing technology has changed.”
Technological advances aside, Fred said a crucial aspect of Alpha Funding Partners’ ability to provide value for its clients is the experience his team brings to the table. From his first day as a bright-eyed, fresh college graduate to his current position as the group’s CEO, he added that every period of triumph – or period of uncertainty – is an opportunity to grow a knowledge base that ultimately assists both the clients and Alpha.
“Every challenge is a learning opportunity,” he said. “It is tremendous to build relationships with buyers, with employees, and co-workers. I always find myself looking back on deals that have been completed and saying, ‘how could I have approached this differently?’ I think looking back but also looking towards the future is important in our industry.”
In addition to viewing the lending industry through a holistic lens, Assini said a major differentiator of Alpha Funding Partners is the in-house draw administration process. Some firms, he added, have a detached mindset towards the loans they service, which leads to a less personal borrower/lender relationship.
“We’re boots on the ground people, and we are the type of people who want to get to know our area, our clients, and any project we fund,” he said. “We want to know our market so we can provide the best value possible. Having a good customer relationship is a huge part of that process, and part of what makes Alpha such a successful group in the space.”
Many CEOs, he said, are experiencing periods of strife during the pandemic. At Alpha, however, strong borrower relationships – paired with an all-star servicing team – make his job ‘a whole lot easier.’ But like so many professionals in the private lending sphere, Assini said he is looking forward to a return to normalcy.
“I hope, and I think I can speak for everyone in lending, that we see it get on its feet like it was before, and it’s already starting to move in that direction,” he said. “Values are already high in some markets and because of that, speculators are holding onto the properties in those areas. As a whole, the rental market is growing, and younger people are showing an interest in rental properties. Like I said before, I think our team is well-situated to keep our eyes on trends in the industry.”
Keeping an eye on these trends, Assini said, will ultimately allow Alpha Funding Partners to expand its current operations, continuing the top-tier customer service that has allowed the firm to provide over 350 loans so far.
“We’re planning on expanding this year. We’re in a number of states right now, including New York and New Jersey. Ideally, we want to become a more regional private moneylender,” he said. “We’re zeroing in on different areas we want to expand into, and we’re focusing on a holistic approach to entering those markets.”
Looking forward – to the not-so-distant future when the coronavirus is in our collective rearview mirror –Assini said he is excited to continue providing the very best for Alpha’s borrowers and employees.
“This year has thrown a lot at us, but you have to see the forest through the trees,” he said. “I think we’re on the right path to create the best value for our borrowers and continue to grow those relationships that are vital to our expanding book of business.”
To learn more about the services offered by Alpha Funding Partners, visit alphafunding.com.
