From Investor to Lender: Rich Lennon’s Journey in Private Money Lending

Mike Hambright (00:01.034)
Hey everybody, welcome back to the show. Today, I’ve got my buddy Rich Lennon here. We’re gonna be talking about private lending. So sometimes people do this as their only business. More and more, there’s a lot of people that are real estate investors that are either doing this on the side or transitioning into lending. It’s a great business. It doesn’t fit everybody, but we’re gonna talk about the pros and cons of kind of private lending and maybe adding that to your other things you do or just focusing just on that. And we’re gonna learn a lot more about Rich, the master of private lending today. So Rich, how are you buddy?

Rich Lennon (00:30.028)
I’m doing great, Mike. What a nice, generous introduction. I appreciate that.

Mike Hambright (00:33.8)
Yeah, yeah. Well, I’m excited to talk with you about this today. I think I told you before that my wife and I have thought a lot about starting a hard money. Well, we’re going talk about hard money versus private money in just a minute, but I still refer to it as hard money. But private, private lending business, you know, here in the DFW market, I think, you know, I’m at a point in my career where I probably shouldn’t be taking on many new things because I have so many other things going on and so many things that are really great. you know, it’s nice to get to a point to where you can do stuff that you don’t have to do that you kind of just focus on.

Rich Lennon (00:44.748)
Yep, yep.

Mike Hambright (01:03.714)
stuff that you want to do. one of the things that I like, and we’re gonna talk about today, that private money is a little bit of an easier business to kind of manage on an ongoing basis. It’s not quite as much of a hustle as some of the other businesses that we’ve probably both been a part of before. Yeah, yeah. But hey, I know you didn’t come out of the womb being a lender, and I know you’ve got a background that led you here. Tell us a little bit about your background and kind of what brought you to this point.

Rich Lennon (01:05.25)
Yes.

Rich Lennon (01:20.194)
Yeah, for sure. It is that for sure.

Rich Lennon (01:31.182)
Yeah, sure. I started buying homes as a professional in 2011. Prior to that, I owned a rental or two, kind of an accidental landlord, right? I had sold the property, moved into the next one, didn’t really have to sell the first one to keep the second one. So it was an accidental landlord before that. But 2011, I moved to Richmond, Virginia, basically because my wife told me to. And we, well, she was working at that point and I started buying

single-family homes. but, my goal was, at one point my goal was to buy 10 single-family homes a month. I will tell you I never got to that. The most I ever got was eight, but my general deal flow was three, four, five deals a month, and I did that for a decade. And I sold the flips to eat. It turns out that those kids like diapers and they like food and equity didn’t really matter a whole lot to them.

Mike Hambright (02:29.292)
Hahaha.

Rich Lennon (02:30.056)
And of course those flips paid for the employees and buying those homes is a full business. And I was fortunate enough or smart enough or lucky enough to keep about half of those that I bought. And I did that for 10 years. And it was absolutely the BRRRR method, which I’m sure you and all of your listeners are very familiar with, of a buy.

renovate, rent, refinance, and then repeat. I did that for a decade and it was awesome. And I equated that to the way I built my wealth.

Mike Hambright (03:00.948)
Yeah.

Mike Hambright (03:04.765)
Yeah, that’s great. Same thing. I I’ve talked about this before. I flipped hundreds of houses in Dallas and I have a rental portfolio. In hindsight, I kept, you know, 10 % or so of the deals that I’ve done. Of course, hindsight is hindsight, right? I wish I had kept way more because the appreciation has been… I never banked on it. I actually had a mentor early on, one of the biggest property owners in the DFW area. This guy owned a couple thousand rentals. And he was like, you’re never going to get any appreciation in Texas. It’s all about cashflow.

Rich Lennon (03:18.188)
Yeah.

Mike Hambright (03:34.802)
But the reality is, is the cash flow has never been that great, but the appreciation has actually been ridiculous. And I think, you know, there was a point in the last 15 years where Texas just spiked in terms of population increase and all that. And so the appreciation has been real. I didn’t count on it, but that in fact is where I’ve gotten all the benefit from.

Rich Lennon (03:55.182)
Yeah, that’s really good advice. Your mentor was, in my opinion, spot on. And I don’t anticipate any appreciation. I do it all for cash flow. And the appreciation is just part of the bonus of it. I don’t know. Well, I do know Texas. I have a fair amount of investor friends in Texas. And similar to Virginia, which is where I live, very similar to Texas, just since COVID, we’ve been up 40 to 50 % in just.

Mike Hambright (04:20.927)
Right.

Rich Lennon (04:21.432)
four or five years, and no one could have predicted that. I mean, there’s truly a Black Swan event, and certainly I benefited from it, but it was not part of the business model.

Mike Hambright (04:23.593)
Yeah.

Mike Hambright (04:30.622)
Yeah, yeah, it’s good. It used to be like, hey, it’s the icing on the cake if you get it.

but it turns out that that layer of icing is pretty thick and I like it. Thick and sweet, yeah. So Rich, what do you call it? Hard money or private money? Like there’s a lot of names for it. I know a people have generally moved away from hard money because it sounds like, if there were this spectrum of like private lending to like loan shark, it tends to like have the, know, feeling of it’s a little bit closer to loan shark. So I think a lot of people, I don’t think many refer to themselves as a hard money.

Rich Lennon (04:38.762)
It is very thick at the moment. Yeah, for sure.

Mike Hambright (05:05.058)
But what are your thoughts?

Rich Lennon (05:07.438)
That’s a question. I prefer, I refer to myself as a private money lender. And the way I differentiate private money lender from a hard money lender, as a private money lender, it’s my money. It truly is private, it’s mine. And therefore, if there’s an issue, if there’s a concern, projects go late or there’s problems, I’m a phone call away, I’m a human being. You can get me on the phone. I’m not some big giant bank. I’m not a hedge fund. And I do think that the hard…

do think the hard money lenders tend to work off their points and they tend to be brokers. And they’re brokering it for a big pool of money and then they’re placing that pool and then they’re just earning the points off of it. And as a private money lender, I’m all about compounding my money, making my money grow. And for me, that’s the big differentiator.

Mike Hambright (05:56.276)
Yeah.

So Rich, know you work with a lot of people and you help people start their private money business as well. is this, I mean, I guess the benefit of, you know, a lot of us that have been in the business for a long time, I would say, not that I ever call myself this, but I guess I would refer to myself as more of a real estate entrepreneur because I do a lot of things in real estate. I started with one thing, flipping houses. And then at some point, a couple of years later, I started coaching and we built a rental portfolio. And then we started doing multifamily syndications and stuff just

kind of got bolted on over the years. I guess people can do private money just as a standalone business or they can do it as a one of the businesses, I guess, of the things they do. Right. I mean, what are your thoughts on that in terms of people doing that? Because sometimes people are so distracted. They’ve got too many things going on. But I think one of the benefits of private money and you’re in your own market is if you’ve been in the business for a long time, you have the confidence of not being able, know, if you have to take the house back, which none of us really want to. But if you do, you know what to do.

Rich Lennon (06:28.29)
Right? Yep.

Mike Hambright (06:56.908)
with it, you’re not afraid of that. And you’re gonna be a better partner for those you’re lending to because you’re gonna keep them safe because you know where the bones are buried, right? But what are your thoughts on kind of doing this full time versus, I guess, one of many things you do?

Rich Lennon (07:10.03)
I think money lending is just part of the journey. And I was fortunate enough to start lending fairly early. So I started buying homes as a professional in 2011. I really got into self-directed IRAs in 2013. And lending and doing deals in those became part of the business. I always told people my goal every year was to not make any money. And that means that I would make

all the money that was necessary in the LLC. And then by the end of the year, putting all the deals into the IRAs where they’re tax free and a much, better taxable environment. And so I did that for a long period of time. I encourage everybody to do it. In 2020, when COVID came, I had 14 employees and I just said, you know what? I’ve reached the magical number that I had set for myself a long time ago. And I just stopped buying houses, kind of shut everything down.

Mike Hambright (07:46.397)
Yeah.

Rich Lennon (08:05.774)
And when you do that and you’re buying a lot over the course of six or eight months, the money comes back, right? It’s always in projects or it’s in a house somewhere. You know how it is. Your money’s always out on the street. And so the money really came and started to pile up. And I just started lending as a way to move the money. I now had time on my hands because I wasn’t in that business. It’s a very all encompassing business. It runs your life.

Mike Hambright (08:13.866)
Yeah.

Rich Lennon (08:34.702)
I just started lending in 2020, so I put more and more money out on the street. Then I learned how to do arbitrage, and so I learned how to make 30 to 50 % returns on my money, which is what I strive to do. And I’m doing that for what is, I hope, just a period of my life. When you’re earning money at that clip, you only need to do it for half a decade or so to really come up with an impressive number. And then I want to go and be that lazy money where I just have someone else use my money. I want to be…

you know, a non right now I lend at, you know, around 20 % would be a fair number. But I want to go back to that 10%. Like I’m just the old man on the cruise ship and someone else is moving my money for me. So this part of the journey is just a part of the journey. It only lasts for so long.

Mike Hambright (09:14.599)
Ha ha.

Mike Hambright (09:21.396)
Yeah, yeah.

Let’s let’s I want to break some of that down a little bit. Let’s talk about kind of lending in your IRA and so or 401k whatever whatever you might have and so You know, I know just to kind of tee this up that a lot of folks that are listening to this if you’re if you’re You know a pro real estate investor you kind of understand self-directed IRAs and 401ks, which is what we’re talking about here you’re not gonna you can’t lend through each raid to you got to set up a Self-directed account which is easy to do but let’s talk about the benefits

benefits of some of them are obvious, but let’s talk about some of the investing in your IRA and your 401 if you have a solo 401k or something like that.

Rich Lennon (10:01.12)
And this, I think the solo 401k is the most powerful vehicle. Solo Roth 401k, especially when we’re earning money at like 30 and 50%. I think the Roth is absolutely the way to go. And that means sometimes we have to convert it and maybe lose some money on the front end. But I think Roth is the correct vehicle. And the 401k, now I will tell you, I have all the buckets. I have Coverdell’s and HSA’s and Roth’s and 401ks. I have all the buckets, but that one is the best one. And of course the main benefit is

Mike Hambright (10:04.042)
Yeah. Right, yeah.

Rich Lennon (10:31.15)
the taxes. When we lend money, it’s on schedule C. It’s not active income, it’s interest income, but it still is like squarely on schedule C. And as a guy who focused on not making any money for a lot of years, when you’re making money outside of an IRA and it gets taxed on schedule C and you’re not buying real estate, it can be very expensive to pay that tax bill. So the IRAs are crucial.

Mike Hambright (10:59.36)
Yeah, one of the things that I did is, so I’d been, we’ve been putting money into a Solo-OK for a long time. Cash was piling up, it was just sitting there. I was like pissed all the time because I’m not using it, but I have so much going on. But it was broken across, like you said, traditional Roth accounts, HSAs, like all sorts of accounts. And I finally just broke down and…

created an LLC that like five of our self-directed accounts owned varying portions of them. So it’s not owned by my Canbride or my wife. It’s owned by our accounts. And we were able to have those five accounts. our HSA was the smallest one because you have limitations on what you can put in there. And then all of sudden we went from relatively small balances to across all these accounts to a decent amount of chunk of change all in one LLC. And then I just had checkbook access. So I could write a check to

Rich Lennon (11:27.992)
Mm-hmm. Yep.

Mike Hambright (11:52.85)
invest in deals or to lend, right? And so that is if in fact we get started that’s in fact exactly what we’ll do is we’ll lend from that account. It just makes it easier. I mean not taking anything away from the self-correcting companies but once you have checkbook access and you can wire money or write a check for something instead of having to fill out a bunch of forms every time, it changes everything.

Rich Lennon (12:04.972)
makes it lot easier.

Rich Lennon (12:13.32)
And it’s speed of business as well. I often think that what we really offer as private money lenders is speed of business. People reach out to me and they’re like, it’s Monday and they need to close on Friday. And like, I feel like that’s the norm instead of the exception. And so if it’s at the custodian, it’s hard to get it. And so the custodian isn’t very fast and they don’t care. And I’m not to say they’re not trying to provide a good customer service, but they service a lot of people and they have a process and a system.

Mike Hambright (12:26.078)
Yeah.

Mike Hambright (12:39.924)
Yeah, they have a process.

Rich Lennon (12:42.28)
and you have to go through it. And I don’t use a LLC checkbook. I use trusts. I’m a big proponent of trusts. Now it’s the exact same thing. I mean, there’s really no difference as you described it with the LLC. It’s the same as a trust and your entity that you have is just owns the piece of that. You to be very careful with the trust or any self-directed. You have to make sure you follow all the rules and the rules are intentionally difficult.

Mike Hambright (12:48.479)
Okay.

Mike Hambright (13:08.405)
Yep.

Rich Lennon (13:10.958)
The IRS won’t define what a service is. And they want the option to come in and take all of our IRA money at one point is what, in my opinion, is that they’re doing. But you do get comfortable. You get comfortable if you’ve done enough of them. And if you educate yourself well, yeah, the checkbook LLC or the checkbook trust is the way to go.

Mike Hambright (13:33.716)
That’s great. Yeah. And one of the things that, you know, I know you know, but not everybody knows is you can borrow, you can lever up your money, right? It doesn’t have to just be your own money. So if you do have a small balance in a self-directed account, you can borrow from others and they can, you you pay them an interest rate and you’re probably, like you said, arbitraging that rate to a higher rate. mean, and by the way, if you do it in your self-directed account, all of that is either deferred or tax free, right?

Rich Lennon (14:02.072)
Yeah, although if you leverage, you are subject to UBIT. And so if you leverage inside the account, so what I, I like a fractionalized note, which avoids UBIT, which is I put my money in the note and then someone else puts their money in their note. But now we’re both investing and therefore they’re not lending to the my IRA. Therefore I’m not subject to UBIT. And so a fractionalized note is the way I kind of counted that thing. But.

You can wrap your money, some people call it a wrap and it’s very similar to a fractionalized note, and you can earn 30, 50, 100 % returns on your money by doing strategies like this.

Mike Hambright (14:39.476)
Yeah, that’s awesome. the way you structure, would you mind just elaborate, like how do you structure that where, I mean, the end result is still the same for you, right? Where let’s say they’re lending to you at eight or 10 % and you’re maybe lending on the other portion at a much higher rate, but the blended rate is say 12 and two or something like that, right? Yeah.

Rich Lennon (15:01.292)
Yep, that’s exactly right. I’ll just break it down. I give an example that I that people seem to be able to understand. My average loan is about $200,000 and I lend my money to my borrower at 20%. And what I do is I take $100,000 of Rich Lenin’s money and then I go out and find a partner and I call the partner, I call him lazy money. And just to be clear, I want to be lazy money one day. These are lazy money for me is defined at

people who are more concerned about the preservation of capital than they are on the return of capital. And if you can give them a very secure spot at an extremely low loan to value and give them 8%, 9%, 10 % return, it’s a very good product for them. And so I lend it to the borrower at 20%. I take my $100,000 and I take their $100,000. And let’s just say I give them 10 % return on their money. And so we lend $200,000 at 20%.

In a year, that’s $40,000 of interest that we collect. Now, $100,000 of that was my lazy money, and I give them 10%. So at time of payoff, they get $10,000 of that interest, plus their principal back, they get $110,000. And Rich Lennon gets his $100,000 back, plus the remaining interest, which is in this case $30,000, and now I get $130,000 back. So.

I get $30,000 interest on my $100,000 and so it’s a 30 % return. And I call it squeezing the money. I don’t know why, I just do. And you can squeeze it even harder if you’re young and a whippersnapper and you’re willing to work hard. You could only put, $50,000 into that deal and then your private, your lazy money will put $150,000 into that deal.

So in the end, they get $15,000 interest for a return of $115,000. And I get $25,000. I get the remaining difference between the $40,000 of interest that was charged to the borrower. And so I get $25,000 return on my $50,000 investment equals a 50 % return. And I did that for a long time, but the money grows fast enough.

Mike Hambright (17:12.384)
That’s awesome.

Rich Lennon (17:16.184)
that eventually, because you have to do twice as many deals. The first deal I got to put out $100,000. In the second deal, I could only put out $50,000. So I have to do twice as many deals to get that 50 % return. So that’s a young man’s or young woman’s game.

Mike Hambright (17:30.654)
Yeah, yeah. Well, and to be fair for anybody listening right now, that is what Chase does. They’re going to pay you a half a percent maybe on your savings account and they’re going to lend it out at seven or eight percent. So they’re basically levering your money. Probably it’s not 50-50. It’s like, you know, five percent to ninety five percent.

Rich Lennon (17:35.754)
yeah.

Rich Lennon (17:42.818)
That’s exactly right.

Rich Lennon (17:48.342)
Yeah. And then I think they lend out $7 for every $1 in their deposit. So they’re getting like absolutely insane returns and we’re just doing it on a private level.

Mike Hambright (17:53.344)
Yeah, at least. Yeah, that is what lenders do. So for anybody that thinks this is complicated, that’s what all your banks, the banks that you put money in, that’s what they’re doing. Yep.

Rich Lennon (18:00.75)
Yeah, that’s right. And so the lazy money can either put the money in the bank and earn half a percent or 1 % in interest, or they can give it to you and you can give them 10%. And I think one of the things I do that I think a lot of the lazy money really prefers is I take a first position loss. So we each put $100,000 in. Rich Lennon loses his $100,000 before lazy money loses any money.

Mike Hambright (18:27.7)
Yeah.

Rich Lennon (18:27.726)
And therefore, they’re really in the deal at around 30 to 35 % loan to value, earning a double-digit return. And so it’s a really good product for Lazy Money.

Mike Hambright (18:36.222)
Yeah. And I think for a lot of folks that have always been interested in real estate investing, but they…

just don’t have the time. mean, you know, as an active real estate investor, it is a job. It’s a, it’s a real business, lots of problems and stuff like that. I mean, you know, the, the, HGTVs of the world made this look unrealistic, right? but the truth is, is, everybody ultimately, you know, when I started this business, I wanted mailbox money. I thought I was going to get rich from rental properties and I didn’t get rich. Now I’ve built up a lot of wealth on paper, mostly, right? but the truth is, is everybody ultimately wants to be passive and be the

Rich Lennon (18:47.903)
yeah, it’s a lot.

Rich Lennon (19:06.914)
Yep, right.

Mike Hambright (19:12.418)
And so this is the perfect tool for that, right?

Rich Lennon (19:13.1)
Yeah. Yeah, it really is. And the hardest part about getting used to it being a private money lender versus the business owner is when you’re the business owner, you, when the money is low in the account, you start to freak out a little bit. Like, so when I was flipping all those homes, if I went below like a quarter million dollars in the account, I would, I would be nervous. And for money lending, it’s the exact opposite of where you’re not supposed to keep the money in the account. You need to have it out on the street moving. So there is a mind switch there.

And sometimes it’s hard to do them at the same time. And that’s kind of where those IRAs become very helpful because you can’t touch the money to your 59 and a half anyway. So it allows you to begin to play the game of growing money in those IRAs when you’re still running that business. And I found that to be very effective.

Mike Hambright (20:00.35)
Yeah. Yeah, that’s awesome. Yeah. And it gets the point. you know, Rich and I are, we’re wise men, but we’re not young men anymore. I don’t know how old you are, Rich, but I know. Yeah. Hey dude, look at.

Rich Lennon (20:09.692)
I got the gray hairs, got them. I’m in mid 50s here.

Mike Hambright (20:13.384)
Yeah, I got a whole set of it here, yeah. But you know, the reality is, this is gonna sound like a first world problem, but you get to a point where once you’ve built your business up and you have an active business, like it could be flipping houses, it could be coaching, it could be education, it could be other products, it could be anything, right? But that’s like your active business. And it’s hard to focus on keeping your passive money busy.

Rich Lennon (20:29.72)
Yep. Yep.

Mike Hambright (20:37.248)
I know this sounds like a first world problem, but like you got to keep your money busy. Like this is my problem. I have invested in a bunch of, I’m a GP in a bunch of big multifamily syndications. And at some point by design, that money’s coming back. And in fact, I have a bunch of money coming back over the next couple of years. And in my mind, I don’t want it to come back. Cause now I got another problem. I got to figure out how to put that out again. Otherwise it’s going to sit in an account and earn zero. And I know that sounds, you know, it’s a first world problem, but it’s a problem that I have is like, and others do too, right?

Rich Lennon (20:56.898)
Yeah, that’s exactly right.

Mike Hambright (21:07.202)
other business. I’d say this, there’s a lot of, I think, folks that are in the…

service industry like if you’re in HVAC or roofing or whatever like these guys generate a lot of cash like their business isn’t the cash Conversion is real low and they can generate a lot of cash like you got to put it somewhere And so you can put it into your business you could add more marketing you could build up a team and stuff like that but at some point the cash machine kicks off a lot more cash and This is a great way to invest in real estate. You’ve got firstly indeed a trust so you’ve got very little risk if you’re working with somebody that knows what they’re doing and It’s a great way to earn

Rich Lennon (21:16.216)
Yeah.

Mike Hambright (21:41.298)
cash and kind of you know I’m sure the people that you work with that invest in your deals like the burden is on you this is why you get a higher return than they do because you got to find the customer you got a service alone but here’s the other thing you’re laying in bed at night thinking about how to keep their money busy right because you don’t want to give it back to them because they don’t want it back right yeah

Rich Lennon (21:50.285)
Yes.

Rich Lennon (21:56.556)
Yes. They don’t want it back. That is absolutely correct. As soon as you give it back, they’re calling you up and they’re like, I need to move the money. Yeah.

Mike Hambright (22:04.468)
Take it, take it, I want this money, keep your money. And you’re like, well, I don’t have anything right now. And so you’ve, you that burden has shifted from them to you to keep it busy.

Rich Lennon (22:12.674)
Yeah, and that’s what Robert Kiyosaki was talking about in his four quadrants, is the investment quadrant. maybe it can be referred to as a first world problem, but when you get there, you have to invest and you have to move the money. And you do have to spend some time doing that. And I will say we have the best commodity in the world, and that is money. You can go into any room in the world and say, who wants money? And every single person will raise their hand.

I’m not saying you should give your money to each one of those people that raise their hand and you should probably negotiate a couple of things, but it is way easier to move money than it is to move properties. But you have to move the properties first. I do think you have to go through that. If you don’t go through it, you might end up in a situation where you don’t really understand what’s going on and now your money’s out and it’s exposed. So I do like the journey of

Mike Hambright (22:43.763)
Yeah.

Mike Hambright (22:55.326)
Yeah, for sure.

Rich Lennon (23:11.65)
hey, I’m a real estate investor, I reach a certain level, and now I have a little bit of time, and now I really want to explore what that fourth quadrant is all about.

Mike Hambright (23:20.234)
Yeah.

Yeah. Rich, how do you compete with, there’s like huge national lenders, hard money lenders or private money lenders. There’s other local folks that are lending out there. Like for folks that want to do this or folks that are doing this or even yourself, like how do you stand out? Like you don’t want to be in this rate war. Like you don’t want to like offer the, I mean, I don’t know exactly what your model is, but I’m pretty sure it’s not to necessarily be the cheapest money in town, but it’s probably to be the easiest.

Rich Lennon (23:49.634)
It is not.

Mike Hambright (23:50.882)
to use. the rate war in terms is like a race to the bottom. And that is one of the things that I think the national lenders can compete best on is rates and terms, but they’re not as fast as somebody that’s local probably. But what are your thoughts on like, how do you compete and stand out against the big boys and others in your market?

Rich Lennon (24:09.804)
Yeah, well, first of all, I am definitely not a race to the bottom. I am one of the more expensive lenders in my area. And I get the business because I just do good business. And that is I answer the phone when it rings. And so I automatically eliminate 95 % of the competition when I do that. And I do what I say I’m going to do, which is the next one. So I’ve never had anybody

Mike Hambright (24:29.696)
which is crazy but yeah

Rich Lennon (24:38.05)
that I’ve promised to have money where it was supposed to be, not be there. And so not only does that happen on an individual level, but now you have the reputation of doing that. And then the next one is on those big chains, sometimes people will go with them first for those low rates, but they always end up coming back to me or someone like me because I’m local and I can pick up a phone and I can walk them through issues. Like we’re both in the deal together and if there’s a problem, it’s something that I can help with.

And, you know, Richmond City, like trying to get a permit out of this place is insane. get like it’s three to four months to get a phone call back. And of course, they spend millions of dollars on the permit. Police who run around and as soon as you deliver a dumpster, they have to stop work order. But so I understand it and they can they can call me and they can say, hey, this is what’s really happening. I have a feel for it. And I think that local touch is the huge advantage over the national ones.

Because you’ll never be able to compete with a hedge fund that’s trying to earn 7%. You’re never going to compete with that, nor would I want to.

Mike Hambright (25:41.31)
Right, right, right, yep.

Rich Lennon (25:44.302)
So just good business. And it really is as simple as that. It was the same thing when I was flipping homes and being a wholesaler and buying. was like when the phone rings because you spend all the money on marketing, I don’t know, you might as well pick it up. that was really, I think, the big differentiator because so many people just struggle with running a business.

Mike Hambright (25:57.576)
Yeah, imagine that.

Mike Hambright (26:04.338)
I say that all the time, like most small and medium businesses could easily double their profitability if they just improve lead intake and follow up, which is crazy, right?

Rich Lennon (26:13.26)
Yeah. Yeah. And I don’t have a burning desire to have to deploy all the money. Now, say I have a, what most people would consider a large amount of money deployed in Richmond. But my attitude has always been, hey, I don’t have to deploy the money. If I don’t deploy it, if the deal’s not good, if the partner’s not good, I just won’t do the deal. And I’m okay with that.

Mike Hambright (26:33.77)
Yeah, awesome. What do you see going on here? I know interest rates are kind of up, like, you know, there’s always people that are selling houses, there’s always people in distress situations, so the market still moves forward. But if you had a crystal ball, what do you see happening over the next year or two even? Do you have any idea?

Rich Lennon (26:51.626)
I don’t know. Well, we’re not the prices are not going to drop unless we solve inventory and if so if inventory doesn’t come back to the market then I don’t know how we’re gonna have any type of price correction. Do I? Sorry, I’m gonna scratch this road here.

Mike Hambright (27:06.548)
You’re

Rich Lennon (27:09.462)
I don’t see a huge growth like we saw in COVID. I don’t see the interest rates falling back down to the 3 % and 2 % even at times. Yeah, yeah, but probably not in our lifetime. It’d be some other crisis that will have to happen. Some other Black Swan event that’ll move that down. But I expect a 3 to 4 % modest growth over most cities and most sectors. There are some that really got out over their skis.

Mike Hambright (27:18.986)
No, maybe never again, yeah. Sure. Right.

Rich Lennon (27:38.104)
So there are some markets that are already pulling back a little bit. But I’ll tell you in the local market here, secondary markets, and most of the investors that I talk to around the country, it has slowed down in terms of the growth. But the demand is still high. And the supply is still low. And so I don’t see a way that that can be corrected unless it’s a truly black swan event that we just can’t predict right now. And yeah.

Mike Hambright (27:51.616)
Mm-hmm.

Mike Hambright (28:02.046)
Yeah. Awesome. Well, Rich, know you also help people get started in this business, but it’s such a good business for you that you show others how to do this. If they want to learn more about you or how you help others get started in this business, where should they go?

Rich Lennon (28:17.134)
Sure, I have a podcast. My podcast is called Growing the Money. And I talk about taxes and I talk about lending and really go through the nitty-gritty rules of how to do self-directed IRAs and stuff like that. And if they’re interested, I have a blueprint to my model that’s available at my website, which is just richlennon.com. people can go there and check it out. And if they’re interested in a growth call, they can fill out a form. And I’m happy to talk with people.

Mike Hambright (28:47.102)
Awesome. Thanks for sharing your story and sharing some knowledge with us today.

Rich Lennon (28:51.79)
No, Mike, I had a really good time. really appreciate you having me on.

Mike Hambright (28:54.366)
Yeah, awesome, Rich. Thanks for joining us today. And everybody, thank you for joining us today. I hope you got some good information out of this.

Rich Lennon (28:56.845)
Yep, absolutely.

Mike Hambright (29:02.728)
Lending intrigues me a lot, because again, I want to be the bank. And I am the bank with large multifamily syndications. I think one of the benefits of guys like me and Rich, like in Dallas for me specifically, is there’s eight million people here and I’ve done a lot of business here. I have a lot of connections here. And so I don’t want to be the biggest lender in town. But if I were to start it, and if this resonates with you, if you were to start it in your market, you could probably hang your shingle and be in business pretty quickly just by those that know you.

Rich Lennon (29:07.117)
Yes.

Mike Hambright (29:32.642)
and know what you’ve done. So food for thought. So I hope you guys got some good value today. We’ll see you on the next show.