How Rachael Holladay Uses Bridge Loans,Syndication, & Hard Money to Get Deals Done

Rachael Holladay (00:00)
it’s all about being able to adapt and being creative, right? And not getting scared. Because again, 15 years, I’ve gone through a couple of different cycles, right? And I don’t think if anybody asked me, was there a time where I thought I would quit, I would.

Micah Johnson (01:45)
Hello, everyone. Welcome to the Real Estate Pros podcast. I’m your host, Micah Johnson. And today I’m joined by Rachael Holladay, who’s been making some serious moves in real estate investing now for the last 15 years. Rachael, welcome in. Glad to have you. Absolutely. I’m excited for you to be here today. You’re there’s some.

Rachael Holladay (01:57)
Thank you.

Micah Johnson (02:03)
Areas in your world where you’re looking for connections, you’re using those relationships, you’re adding tech into your business, a lot of things going on in the capital world, and I’m excited to dive in. So for folks who aren’t familiar with you yet, tell us a more about yourself and what your main focus is right now.

Rachael Holladay (02:18)
Yeah, thank you. So I run a company called Bridgeline Capital. I’m the chief lending officer. We just started the company in July. And so we’re kind of actively looking for some new relationships, new borrowing relationships that we’re working on.

Micah Johnson (02:29)
you

of that. Okay, so take us back. What led us to open in the new one in July? How’d you get here?

Rachael Holladay (02:39)
So kind of an interesting path, right? So I was looking for kind of some side work. And so a person from church actually was like, hey, you should come work for me. I had to Google what hard money lending was on the way over to my interview. had no clue. When he gave me the job, and then as I was sitting there, you know, this was back in

sitting there next to him on a TV tray, just kind of working on hard money stuff. And, you know, fast forward 15 years and $700 million of loans later, kind of here we are.

So went to a couple of different firms and finally realized I wanted to do more of this on my own and kind of take full charge, I guess, if that makes sense. And so that’s what really led to all of this.

Micah Johnson (03:16)
does.

Love that. And you put your time in too. So if you crank that up last year, that means you spent 14 years in the, in the grind there doing what was necessary. And that’s one thing I love about real estate is you can use the career of it to create your path into it. It heavily encourages insider trading. And it’s like the only industry that does that.

Rachael Holladay (03:40)
Yeah,

exactly. That everything is death by fire, right? I always tell my guys when they’re doing rehabs and stuff, I’m like, this is your free university education, right? Like this is how you learn it. You just kind of get in there and that’s how you do it.

Micah Johnson (03:53)
It’s true. it’s there’s so much education out there and education is always step one. I’m not saying folks don’t get the education as you get the education comes those action steps. And if you’ve been to school, you really start to understand there’s the book knowledge, what it looks like, what the process looks like on paper, and then what it’s like to walk it out in real life, the experience of that process. And that is, if you keep your mind open to it, it’s trying to teach you it’s not trying to make it hard on purpose. It’s just the way

All real estate is.

Rachael Holladay (04:23)
Yes,

exactly, Yeah.

Micah Johnson (04:27)
So tell us about the year you have coming up. So you’ve been launched since July of last year. What are y’all excited for? And in particular, those relationships that you’re looking for, who all is out there that you’re trying to hunt down?

Rachael Holladay (04:38)
You know, it’s interesting. So we have a lot of borrowers that have kind of followed me wherever I’ve gone, right? Like, just love working with those guys. They’re great. We know their deals are going to work out. Now, one of the things we’ve run into is a little bit of capital constraints in the market, right? So we’re looking for actually some new syndication partners, some other lenders that are wanting to work together on some bigger deals so we can help some of these guys out, really. So just a lot of new relationships, right? New company, new everything, just kind of building some new relationships, really.

Micah Johnson (05:56)
Man, and that lines up a real estate too, because it is one of the games where everybody can win. When it’s done correctly, everybody wins. And that’s so handy because this is a relationship game. It’s a long-term game that’s heavily built on relationships, because none of us can do this alone. You can’t close a house by yourself, right? You don’t get to walk in with a sack full of cash and say, hey, I want this, right? That’s how you go to jail. Like the first door to the right is, yeah, follow me over here. We got some questions. ⁓

Rachael Holladay (06:12)
Yeah.

Yeah.

Micah Johnson (06:26)
Now, is there, when you’re looking for those syndicators, is there, if someone’s out there listening and they’re kind of interested, but they’re like, is that for me? What’s that for? Take us into that. What’s a strong partner look like there for you?

Rachael Holladay (06:40)
So a lot of other lending companies, maybe smaller size, of like we are, some of them might be looking for another lender group to partner on deals with, really. That’s kind what I mean by some of those syndication partners. We’re always looking for borrowers, too. I don’t want people to listen to this and be like, I can’t go to her with my deal. That’s not what I’m saying at all. But for some of those other lenders that are kind of thinking, how can they expand and grow a little bit, I think a couple of us could unite and take over some of what the big

bigger lenders have taken over some market share, right? And do some more kind of unique deals. It’s all about creativity. That is what I’ve built my business on is people normally come to me, even other lenders, just to talk shop and they’re like, how would you structure this? Because they know I can uniquely get there. And I think that’s why these other syndicate partners are great. Because I can go and say, hey, I know my firm can do two million this way.

Micah Johnson (07:10)
Bye.

Rachael Holladay (07:31)
And another syndicate partner could be like, hey, I could throw a million bucks at it this way, things like that. It just makes everything become a little bit easier of a puzzle piece to put together. That’s kind of more what I’m looking for.

Micah Johnson (07:42)
that makes sense. It’s kind of like shopping in the secondary market. You’re not trying to go raise that money. You’re trying to work with the folks who’ve already raised the money and then start taking down the bigger things. Now, what projects interest you? What are you passionate about there?

Rachael Holladay (07:55)
So I’ve always done a lot of land loans. I really like them. I think, unfortunately, if you have to take stuff like that back, it doesn’t burn you as much from a lender. So I love my land deals. Everybody always jokingly calls me the landlady. ⁓ So I like those. Yeah, I like those. ⁓ We’ll look at everything, though. mean, we’re a bridge lender. Our goal is to help an investor take a property from A to B. How can we best do that?

Micah Johnson (08:09)
Okay, noted.

Rachael Holladay (08:22)
If it’s a new construction, we feel like we can do that rehab. But I do get pretty excited about my land deals, I have to say.

Micah Johnson (08:29)
I want to take just in case we have new, we have new investors and professional investors, but just in case somebody’s out there that heard that term bridge lender and just isn’t sure what that means. What’s that mean for them? The simplest terms.

Rachael Holladay (08:42)
Yeah, so I’m not the person you call because you want a loan for 30 years, right? Like I’m not helping you buy your house. I’m not helping you buy some investment property at 5 % interest. We’re a bridge lender, which is a hard money lender. So we really help you either take it down super fast because that’s what you need to do. Or again, we create that unique financing, right? So can we do it at 70 % LTV, but offer a seller finance second lien, things like that, right? If you need a creative financing type, you need a bridge loan.

Micah Johnson (09:12)
Interesting. Yeah, because that’s another fun thing about real estate. The better you think outside the box, the more problems that you can solve. Because it’s just a problem solving industry. Like those who solve the problems well rise to the top. It’s just a series of them over and over and over again. And if that does it for you, those are the people I find that love real estate, where you enjoy learning and going through the process. It’s kind of life feels like you’re always in a state of discovery.

I think it’s easy to be curious in real estate. You just always asking questions and looking around.

Rachael Holladay (09:44)
Yeah, if I have a clothing that goes too seamless, I’m always like, okay, wait a minute. That was too easy. What’s wrong here?

Micah Johnson (09:50)
Yeah. Right.

We used to call those birthday sales because they only happen about once a year. That’s why they feel so awkward. Like, wait, that was way. Wait, please hold. And, know, talking about that, if you’re listening or watching in,

Rachael Holladay (09:56)
Yeah. ⁓

Yeah, I know.

Micah Johnson (10:41)
don’t be surprised when you hit snags, work with people who know how to work around snags. Cause they’re always there. Right. It’s, it’s, it’s, I get frustrated sometimes for folks that feel.

They watch a lot of stuff and they start getting to the world and start to feel what it’s like. it’s, there’s just annoyances to it. That’s part of learning that you like it. Like I’ve learned that if people stay in real estate longer than two years, you got that bug. You’re like, you’ll keep on doing it and keep on doing it. Cause you started to feel just, it’s an, has an awkward nature to it. Right? There’s, there’s one of my coaches is like, man, that’s just what feeling alive feels like. Right? Cause there is, there’s unknown, there’s uncertainty there.

And the certainty is I’ll solve it when the time is right.

Rachael Holladay (11:23)
Yeah,

it’s all about being able to adapt and being creative, right? And not getting scared. Because again, 15 years, I’ve gone through a couple of different cycles, right? And I don’t think if anybody asked me, was there a time where I thought I would quit, I would.

I mean, there were hard times. There were different. But we just changed the loan types we offered. We changed how we marketed certain things. And honestly, I feel like every year over the last 15 years has just gotten better. It really has.

Micah Johnson (11:49)
it makes sense too, because you’re getting better at it. That’s the beauty of it. And real estate rewards someone who plays the long game because it’s even though it’s always changing the information compounds on itself. It’s just slight little adjustments. And now all of a sudden you have stacked where like you’re saying someone can, someone can bring the landlady a deal that no one else can get done. And it’s just a simple, okay, what are we doing? Moving the parts around, seeing what’s there. Cause that’s

Rachael Holladay (11:56)
Yes.

Micah Johnson (12:15)
I love talking to seasoned people in the industry because you see things other people don’t just by nature of how much you’ve gotten to see.

Rachael Holladay (12:22)
Yeah, yeah, exactly. Yeah, and we get calls from appraisers all the time. We get people that call us and like, what do you think is going on with the market? Because we are. We’re kind of first in line with what we see. And it’s interesting, too. People are always, well, banks are doing this. I don’t really care what banks are doing, because banks are usually a couple of years behind what we’re doing. They’ll stop lending on land, and then we get a surplus of land. It’s great. So I just never let what the banks are doing spook me. To me, that kind of doesn’t really matter.

Micah Johnson (12:40)
Gotcha.

Right. And that’s what the best investors say. The hard markets rise the cream to the top, right? That the best get better here. And it’s what sets them up for that big swing when it comes back. That’s the beautiful part. If you will deal with the hard, well, real estate’s going to reward you. How many times have we seen it? I was thinking about Warren Buffett, but what are you at? 50 cycles by now, buddy. Like you’ve seen it happen so many times where we’re never sure of the trigger, but you’ve seen cycles now where it’s like, okay.

Learn this one, ride this one well, be very intentional, make good moves, and then boom, it’s going to roll back over where you get to rake it in and then ride, rake and ride. There we go. New statement.

Rachael Holladay (13:31)
Yeah,

exactly.

Micah Johnson (13:34)
So what are you excited about for 2020 and beyond? What are you really pushing towards?

Rachael Holladay (13:42)
So doing good deals is always the first goal of ours. We want to do good deals. We want the investors that are doing the deals to really make this all work. I mean, everybody can make money in real estate if everything is done well. There’s plenty to go around. So we want to keep doing all of that. ⁓ It is pretty interesting, too, though. Some of these AI tools that have come in, some of the world is kind of shifting a little bit with how we can underwrite deals, too. So I’m excited to see how we can incorporate some of that into our day to day.

and make this job just even a little bit more fun and interesting and all of that too.

Micah Johnson (14:15)
Is there anything early you’re noticing in that AI tools that y’all are using you can share?

Rachael Holladay (14:20)
Yeah, it’s crazy. I almost feel like AI is like a real person in my house at this point, right? Because I start, like, I just ask it everything, you know, from, I’ll throw appraisals in there and get some ideas. We’ve worked on some underwriting guidelines that we can do within it. I mean, it’s just interesting and also even catching things like fraud, right? Because that is one thing that our industry, unfortunately, can get taken down with quite a bit is some fraud. And so

Micah Johnson (14:25)
Right.

Rachael Holladay (14:45)
I took some pictures the other day, asked AI, and it was like, no, the light is this way and this. These don’t look like fraud. mean, it was pretty good. It was nice.

Micah Johnson (14:52)
That’s excellent. Cause that’s the hardest part. I mean, you got some horror stories coming out of the lending world of fraud and different things, especially in the wires. I remember when that went nuts, man, it was about 10 years ago, all these title companies quit sending in the email in Florida. said, no, we’re to send it directly. You don’t get to send this to them anymore. This is way too much.

And that it is, it just, it’s like that in my house too. On my walks, I talked to it and we have more conversation. know what to do with it. it, it’s handy though, because it’s something that when you train it right,

Rachael Holladay (15:53)
Yeah.

Thank

Micah Johnson (16:03)
You trust it. And that’s big to humans, like our ability to trust something’s information. And when it can dial in that precise, it’s like a secret weapon. It’s really where it starts to stretch its legs. And I feel like it’s what we always want to Google to do. ⁓ It’s just doing that part now.

Rachael Holladay (16:21)
Well, and it’s nice too, because it’s not emotional, right? And that’s one of the biggest consequences of business is when people get too emotional. And it takes the emotion out of underwriting. Just because I think the guy’s great doesn’t mean I should give him $5 million if there’s five different red flags. And I think it helps bring some of that back into our industry too, which is great.

Micah Johnson (16:40)
That’s powerful. That’s powerful. Well, Rachael, I really appreciate your time today. And for those that are listening in that want to learn more about what you have going on, possibly build some connections with you, if there are other lenders out there, what’s the best way for them to find you?

Rachael Holladay (16:55)
Yeah, I think they can go to my website, which is bridgelinecap.com. It’s got all of my contact information on there as well. And they can reach out. I love to talk through deals, give some advice, see how I can help. Even if it’s not something we can fund, I’m absolutely happy to give you some tips that I’ve learned along the way.

Micah Johnson (17:13)
Love that. that’s man, I’m telling you, high level real estate’s full of people like you. It’s one of my favorite things. It’s the abundance mindset. We’re all gonna do our job. We’re gonna get ours and we have no problem telling others along the way. Cause it’s that big. So again, thanks for sharing that. If you’re listening and watching in, go check out that website. Again, we don’t bring random people on the show. We bring in professionals at what they do. Folks who are on the front lines, learning, participating, doing deals on the daily. So if you’re a lender out there, if you’re a borrower out there,

Reach out to Rachael, click on those links, touch base with her and start, you know, win-winning together. High tides raise all ships. So again, Rachael, thanks for being with us today. Thanks everybody out there again for being with us. We appreciate you. If you got value from today’s episode, please like this episode, share it with someone else you think get value out of it. And as always, if you’re not a subscriber yet, you know what to do. Click the button, follow along. We’ve got more conversations coming up with operators just like Rachael.

folks out there building a real business in the industry. Thanks for being with us today. We’ll see you on the next episode.