How Technology Is Changing Commercial Real Estate Lending | Jonathan Taylor

Jonathan Taylor (00:00)

And I do have a standing rule. My standing rule is that it doesn’t matter what interaction I have, I take away three key things that I can take to another interaction, no matter what. And that alone has helped me in a way where

If I’m having a conversation with someone around the real estate market in Connecticut and I take three key things, I’m gonna meet somebody there eventually. But I’ll have that in mind, right? you know what? I just talked to somebody about the vacancy rates there or the lending environment there because everything is different. someone said X, what do you think? Right. But it helps you get a little bit more personal with people.

Issa Hanna (01:07)

Welcome back to another episode of the Real Estate Pros Show. I’m your host, Issa Hanna, and today we have Jonathan Taylor here to share his knowledge. Jonathan, welcome to the show.

Jonathan Taylor (01:14)

Hey, happy to be here. Thank you.

Issa Hanna (01:16)

Super excited to have you, man. A wealth of knowledge in the commercial lending space. I told you earlier before we went live that I cut my teeth in the loan game. So I know how it is to be in your industry, but I’ve never done commercial. So I’m super excited to talk to you and pick your brain about that. But before we get started on that, give me a day-to-day in your world. What does Jonathan do every day? Yeah.

Jonathan Taylor (01:38)

a lot of what I do is honestly just a lot of conversations, right? So as we both know being in the space that we’re in, a lot of what we do is relationship based. and I’ve been doing this for 15 years now, being in the financial institution world, working with banks. in investment banking. So what I do now, we utilize technology to make the commercial lending process more smooth and more efficient, but it doesn’t replace the need from getting to know people.

Right. So a lot of what we do is centered around having conversations with sponsors and potential referral partners to our fintech. and just helping people and empowering people in their financing journey from an investor perspective. And a lot of what we do is on the education piece and adding value that way as well. So

Issa Hanna (02:17)

Man, amazing. and I called you, a commercial lending expert. Why I said that is you started off at 23 years old. and you started off at at a regular bank. you killed it over there, you kept getting promoted, promoted, promoted. I’m gonna let you take the floor and give us your origin story and give us your career before you decided to go into business for yourself.

Jonathan Taylor (02:36)

No, I love that. Thank you. yeah, started with one of the larger banks out here in the San Francisco Bay Area back in two thousand nine. started off as a small business banker. I met a gentleman by the name of Robert Contreras, who’s actually my right hand man today. But he was actually my first mentor who got me into, I guess call it the commercial lending world and what did it look like to prospect, yada yada, yada.

and it’s funny I always plug him in this way, but my kids almost fifteen, twenty years later, my kids call him Uncle Robert. So that just also just speaks to just the relationships we like to build. just in the Lindy space in general, but just how beneficial it is. but from there I met another a woman by the name of Stacy Brooks Garcia. She gave me a lot of wisdom at that time and when she said, Hey, yeah, you start at an institution, you do well, and then look for other opportunities. And that just kinda led me

to a path of finding new opportunities in banking and allowing me to create some impact. went around and worked my way up to being one of the leads and in the business development space within commercial lending decided to go out and start my own capital markets firm which I did spent some time in investment banking and then from there I actually ended up thinking about how do I want to create more impact in the space that I’m in.

and what I ended up doing was becoming a chief lending officer of what is called the CDFI fund. and it stands for community development financial institutions. And typically they raise money from banks to help them meet their CRA criteria that’s mandated by the Fed. So my job there was to create and understand the underwriting criteria for underserved communities and then manage business development, underwriting, servicing, closing, the whole gamut.

As well as help raise money for that fund. So we started off at roughly 80 million, helped him get to a hundred million, and then got another opportunity to be an executive at a bank based out of New York, where I managed roughly a 20 person team, manage roughly a billion dollar portfolio, worked with real estate investors as well as operating businesses on the low end 10 million, on the high end a hundred million to a billion. and did well there and

Where I continue to think about the impact that I would like to create in the commercial real estate space. I fortunately for myself, I’ve been in rooms where maybe I wasn’t supposed to be in. and saw a lot of things where I feel even when it comes down to language, the language between a institutional investor to maybe your local syndicator who raises capital for a real estate deal.

To maybe someone who’s been in the residential mortgage space for 30 or 40 years are completely different. and one of those examples are if you’re talking to someone may say, what’s your LTV? And you everyone kind of knows that’s loan to value. But at a certain point, they don’t call it LTV, they call it leverage. But if you don’t know one way or the other, it means the exact same. So I embarked more or less on a way to give folks access to this information and solutions.

so I went out and developed the platform that we have today, which is Carlon, which is a really it’s a platform that utilizes technology to underwrite, size, and find the appropriate lender. and we run the process end to end. So what’s out there today is there’s tools for the space, but there isn’t a solution-based tool that does everything in one house. So right now we’re doing really well. We have a team of eight people.

before we actually released the platform in the last couple months, we actually ended up running roughly 1.7 billion in transactions through the platform. And what the platform actually does, rather than utilizing, say, my intellect on a per deal basis, it actually captures the data from every transaction that we do to make it smarter, more efficient. So every time we put in a new deal, you’re gonna see it underwrite quicker, be more efficient, and also it creates that

packaging and underwriting. And it actually uses that underwrite to match the appropriate lender that’s in our database. And we have roughly 12,000 lenders in our database. roughly 9,000 of them are already pre script for underwriting criteria, geography, loan size, et cetera. So it’s pretty cool. It’s pretty unique, but we’ve pretty much replaced the need for a senior underwriter and closing team within a banking institution. So our goal is to go after

The larger guys that are out there who would with those names would be C B R E Capital Markets JL, we’re looking to capture their market share.

Issa Hanna (07:21)

Man, I love that. and like I said, you learn this game from the ground up, from 23. You’ve been in it your whole adult life, right? you’ve been able to identify you’ve sat back in some of those rooms that you shouldn’t have been in, and you’re like, man, that’s a hole right there that needs filling. This is something I can change. This is something I can refine. the wheel never gets reinvented.

The people that are super good at it are good at keeping that wheel spinning and finding the most efficient way for it to spin. Someone like Jonathan, you guys, who’s learned it from the ground up, who’s done it his whole life, who’s at multiple levels, he knows what it takes for that wheel to perfectly spin and keep it spinning perfectly like that. and I love the fact that you’re integrating with the technology. You’ve developed a platform, all the great inventors, right, in the AI space.

Are people who can solve problems, or people who can make things easier? Those are the people that rise at the top. It’s exactly what you’ve done with Carlon. truly amazing. And I love earlier that you said technology can’t replace that one-on-one, that human contact, right? We need to integrate with it. Let it make it better. Let it help us make our time more efficient so we can keep establishing those relationships. Cause that’s what it’s all about in this game, is business relationships is your network.

man, truly amazing knowledge we’re getting from you right now. we looked into the past, let’s look into the future a little bit, right? Everybody got that five-year plan. You guys just launched your right-hand man is your first mentor. You got a small team of trusted guys ready to take over the world, of eight people. So five years from now, where am I gonna see you guys?

Jonathan Taylor (08:52)

Yeah, that’s actually a really good question. And I actually haven’t told a lot of people this. So this will be your first take. And then we’ll talk a little bit about it. So intentionally, capital markets is actually a part of our growth plan. It’s intentionally our first phase, mainly to enhance the platform, get it to a point where it’s reading data, capturing that data, et cetera. the next phase for us is going into servicing. So while we’re capturing the data from the relationships that we’re generating.

closing deals, et cetera, managing those relationships, getting our name out there, going into servicing pretty much allows us to continue to hold on to those relationships and manage the loans that we are now placing with the funders that we’re working with. So it actually deepens the relationship from the lending perspective because lenders are getting to know us from the way that we’re able to underwrite, close, and service transactions. But we get to stay a part of these borrowers’ lives and help them grow and see them kind of mature through the

commercial and investing journey. but also what it does where we’re probably a little bit more unique is that we’re built so that my eight people is the equivalent of maybe a 40 or 50 person team. Right. So naturally we’re able to actually charge fees that are less than market, but we’re gonna do the same thing in servicing. So we can build there, but we’re also on a path to actually become a bank. So we want to be one of the first commercial real estate

fintech banks that exist, where we’re developing an entire ecosystem where it’s capital markets servicing and banking into one, centers strictly around commercial real estate and on the banking side, be able to provide working capital loans to the industries that support commercial real estate, which most people may not know. it’s hard for contractors and other type of real estate supporting businesses to obtain financing because of the way that they collect their

how they collect their revenue. So just being again a part of the game, I understand how to mitigate that risk from a from an institutional standpoint. so essentially once we’re fully been in the banking world, we can do our lending to commercial real estate investors, lend to the industries that support commercial real estate, but also then utilize our capital markets arm to de risk our portfolio so that we can stay as clean as possible. So

That is the actual journey that we’re embarking on today.

Issa Hanna (11:36)

Man, spoken like a true pro in the game, right? five year plan. You know exactly you have the vision, right? You have the goals. You’re not gonna be happy at where you are right now. You’re going into servicing loans, right? truly unbelievable. Somebody who who’s been in the game for years. I like I was telling you earlier, I had a mentor who owned her own lending institution. She didn’t even service her own loans.

The fact that you’re going into that, such a super great idea. you can tell that you care as well, right? So as a f as an agent who sold hundreds of first-time home buyers in my career, I always held myself to the utmost integrity. I always cared about my clients. and in return, my clients always referred me to everybody, So the fact that you’ve got eight guys, you guys are running like a company of 50.

and you guys care, right? And it’s like a homegrown company, one vision. truly amazing. These are the type of people you want to do business with. Investors at home, this is exactly the type of guy you want to do business with because he understands the game inside and out. You might be doing something for the last ten years that could be totally wrong. Jonathan be able to identify that just because he knows it so well.

Truly, truly impressive, Jonathan Man. Amazing career you’ve had up until this time. I want to get some advice now for my young professionals, right? We’ve got a lot of new realtors, not a lot of new LOs, a lot of new professionals in the space. They don’t know where to start. we kept talking, we touched on it a little bit. Your network is your net worth. you you’ve heard it said multiple times. So if you had to tell these young, new guys.

One piece of advice on how to get that network the first business relationship established. What would you tell?

Jonathan Taylor (13:14)

I would always say your mentors are likely gonna be folks who you’re not intending to be. So, it’s one of those things where someone told me very early on, because someone who’s gonna be your mentor, they’re more than likely not even looking to be one. They just end up happening, right? And being not necessarily aggressive, but being proactive in a way that just gets your name and get what you’re looking to do out there is just the most important.

And also just being real and honest about where you are. in my career, I’ve just been vulnerable enough to say, Hey, look, I don’t know X, Y, and Z. And I would just love to learn. And I do have a standing rule. My standing rule is that it doesn’t matter what interaction I have, I take away three key things that I can take to another interaction, no matter what. And that alone has helped me in a way where

If I’m having a conversation with someone around the real estate market in Connecticut and I take three key things, I’m gonna meet somebody there eventually. But I’ll have that in mind, right? you know what? I just talked to somebody about the vacancy rates there or the lending environment there because everything is different. someone said X, what do you think? Right. But it helps you get a little bit more personal with people.

and I would also say just, being proactive, things that I did as a young buck in the game, is I would go on LinkedIn and I would message hundreds of people and go, hey, look, I’m at this point in my career, I would just love to connect and have 10 to 15 minutes of time. And over that time, I’ve just met people over the years who’ve been and very impactful in a variety of ways. even to the effect of I’m just a kid from Texas who

My father’s a software engineer, moved us to California. But for a variety of, I don’t know, I guess call it three to four years, the majority of the deals that I close were for Israeli investors in Israel. Cause I met someone and I started doing webinars there. And now someone that I just actually closed a deal with last week is an Israeli investor, is a good friend of mine. Right. But people ask me often, how do you meet these people? Let’s put myself out there. I’m genuine. I’m just I’m a sponge.

So that’s the advice I would say. And then I would also say, which is something that’s more near dear to myself, is to look to be the smallest fish in the biggest pond. So right, so we can get comfortable in a way sometimes where you kinda you make some progress, right? But just understand that there’s always a bigger pond out there and don’t be afraid to level yourself up. because the more that you continue to do that, you’re just gonna continue to get access to more information and more opportunity.

Issa Hanna (15:33)

Truly amazing. the how-to on how to establish and grow your network. it is all about, it is all about just being that sponge, soaking up as much knowledge as you can, bring it into interactions, making things personal, right? You don’t want to just start selling yourself to somebody who’s never met you. a lot of times when I meet clients, if I just randomly meet somebody, I’m not even going to bring up.

that I’m a real estate guy. I’m just gonna connect with them and maybe bring it up towards the end, something like that, or find a way. It it’s about connecting with people. and that is truly as much as everything changes in the professional world with tech, with AI, with everything, you still need that personal touch. So man, amazing, amazing advice. And you’re a kid from Texas, you moved up to the Bay.

And you’re doing business with people in Israel. that is the power of literally marketing yourself. There’s a power of reaching out. truly amazing. You young guys, if you didn’t catch what Jonathan just said, rewind and take some notes because that is like I said, that’s the how-to on how to establish the network. I want to give you the floor now, Jonathan. if I’m sure people that are at home watching this or in the car listening to this are like, I need to get involved with that guy. If they did want to get involved with you, how could they reach you guys?

Jonathan Taylor (16:43)

Yeah, you can reach us Carlon.io. that’s our website. You can always just shoot me an email, Jonathan at Carlon.io. I have an open door policy. You want to have a conversation, you have questions, we’re here to really just help people get to that next level. and we’re more than happy to give advice on whether it’s career, whether you want to get into the commercial lending space, if you’re thinking about getting into the investing space.

essentially what I typically do on a weekly basis at this point, I’m taking institutional knowledge and then breaking it down to levels where folks can understand. I literally I just did this yesterday where I had a meeting in San Francisco. There was a gentleman who’s been trying to develop I think two duplexes in San Francisco. his father bought this land for twelve thousand dollars. And they’ve been on this journey for the his father’s been doing it on trying to do it for almost fifty years.

His son and who I met with has been doing this for almost twenty years. And I met with him and he’s like, I just no one’s been able to help me. And I sat down with him for about an hour and gave him a whole blueprint of how he can actually get this deal done. And now we’re actually proceeding to get that done. Where he’s actually met all of the criteria to actually have the deal financed and be able to provide affordable housing in his block in San Francisco where no one has taken the time to do so. Right. So

That alone is why I do what I do. and just being able to take away some of the smoke and mirror, but also make it relevant without using a ton of jargon, yada yada yada, right? And just make it you you’d be surprised how quickly you can get involved in this space, do good and do well. Doing good is by being able to empower communities and people, no matter where you’ve been from, right? No matter where you’re from, where you’ve been your journey.

Anybody can kinda start doing this and just kinda where it can take you ’cause I’m a testament to that. So just wanna pass that down. So that’s how you can get a hold of me and I’m always open to a conversation.

Issa Hanna (18:25)

Truly knowledgeable guy, full of integrity, just wants to help the community. And yeah, that’s why we do it. The good ones in the space, right? when you help that father and son that you helped out, man, that the sense of the reward that you get from it, there’s no commission check that can match that, right? When you help somebody truly help their lives out because you have the knowledge to take them to where they want to go and you make it easy for them and stress free.

And they get to the finish line and now they’re thanking you. that is why we do it. That is literally why our profession exists. so I love that you said that. and I think we’re gonna end on that today. We’re all out of time. I wanna extend an invitation for another episode. We need to do a part two with you. so if you’ll have us, I would love to have you back on in a few months.

Jonathan Taylor (19:09)

No, I love that. I love the comeback. I love this.

Issa Hanna (19:12)

Jonathan, it was truly an honor, brother. And then to my viewers at home, if you enjoyed my conversation with Jonathan and want to see more like it, make sure to hit like and subscribe. I talk to people every day that can bring us different knowledge on every aspect of real estate investing. Until next time, The Real Estate Pros, are out