How to Avoid Predatory Lenders in Real Estate Investing (Wall Street Insider Explains)

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Show Summary

In this conversation, John Grace shares his extensive experience in banking and real estate, discussing the challenges and opportunities in the current market. He emphasizes the importance of access to capital, creative solutions for funding, and the value of mentorship in navigating financial crises. John also highlights his client-driven approach and the joy of working with people he enjoys, while providing insights into the evolving landscape of real estate financing.

Resources and Links from this show:

• • • Investor Fuel Real Estate Mastermind
    • Investor Machine Real Estate Lead Generation
    • Mike on Facebook
    • Mike on Instagram
    • Mike on LinkedIn
    • Seal Rock Endeavors Website
    • John Grace on LinkedIn
    • John Grace’s Phone no.: (612) 440-6673
    • John Grace’s Email Address: [email protected]

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  John Grace (00:00)
  because it was a safe place to be. What we did not know at the time is the Sea Lions also got on the rock when there was a great white shark looking for an early dinner.

  I used to have friends who would paddle their boards out there and they were worried about getting bit by a sea lion and about 20 feet below them was something with a much bigger bite.

  Q Edmonds (01:54)
  Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I have another fantastic guest. This I have someone that has 35 years in banking, 25 years on Wall Street. So listen, when you talk about funding solutions, finding creative ways to get funding, is your man. And I’m so excited that we get a chance just to peek through his lens. So that’s when we come talk about all this experience. We get the peek through his lens.

  see how he do things, see how things have served him well throughout his career. And so I wanna introduce you all to Mr. John Grace. Mr. John, how you doing today,

  John Grace (02:31)
  You’re

  doing very well. How are you doing today? Happy New Year.

  Q Edmonds (02:35)
  Same to you, man. Happy New Year’s. I am doing great. Today has been a phenomenal day. And he keeps getting better because I get to talk to you. So I’m super excited. And Mr. John, listen, I’ll be honest. I kind of want to dive in. I want you to tell people what your main focus is these days. You want to us a little bit of an origin story of how you got to where you are and how you got involved in banking in Wall Street. We’d love to hear that. And then if you don’t mind telling us what part of the world are you in, Mr. John. And so the floor is yours, sir.

  John Grace (03:04)
  Well, my company is Seal Rock Endeavors, and I’m just going to slide over. ⁓ There is Seal Rock. I grew up on a beach in Southern California, and Seal Rock was about half a mile offshore of my home beach. And as a kid, I noticed that whenever the weather was bad and the seas were rough, the sea lions got on the rock.

  Q Edmonds (03:13)
  Yes sir, I see it.

  John Grace (03:32)
  because it was a safe place to be. What we did not know at the time is the Sea Lions also got on the rock when there was a great white shark looking for an early dinner.

  I used to have friends who would paddle their boards out there and they were worried about getting bit by a sea lion and about 20 feet below them was something with a much bigger bite.

  ⁓ But let’s kind of fast forward. As you said, I’ve been in banking for 35 years, 25 years on Wall Street, working with JP Morgan Chase and Citigroup. I went through a lot of the financial turmoil and crises of, you know,

  the 90s, the 2000s, the 2010s. ⁓ But I’ve had lot of, as I said, lot of experience seeing where we are, seeing what we can do. ⁓ And that’s kind of brought me to where I am. I have been a C-level executive in a couple of financial institutions. And about two years ago, I saw that banks really pulled back.

  aren’t really lending for commercial real estate or investment properties anymore. Whole story there. That’s a whole nother podcast. But what I saw was a market opportunity. There was a demand that and there was a gap, frankly, left by the bankers. And I’m a former banker and I understand why. But I went back to my network and I have about 35 to 40

  private non-bank lenders who want to fill the gaps that have been left behind. And that’s what I’m doing and that’s what I’m really enjoying these days.

  Q Edmonds (06:12)
  Thank you. Thank you for the story about steel rock. love it. Thank you. I mean, I found so much, know, just it was was it was really poetic, you know, and I love it, you know, when when, you know, they would get on that, you know, the rock, you know, for safety. then we saw some of the shark. I was like, that’s poetic in that series at the same time. Like, I absolutely love it. And, you know,

  John Grace (06:34)
  One of the things I do is I help people get the money they need. ⁓ But because I can recognize a shark after 25 years in Wall Street, I’ll keep them away from those sharks. The whole purpose is for you to be successful. getting bit by a shark does not bode well for success.

  Q Edmonds (07:01)
  So I love it. I love that. And I want to pick your brain a little bit, kind of just like when it comes to your personality, when it comes to your personal strategies, like I have a saying when I say destiny has no wasted moments. Kind of meaning like as you go through life, there are certain skills and tools that you acquire that just help you be who you are and help you be successful at what you do. And so are there core strategies, core

  skill sets that you know you have identified in yourself that make you want to look out for the shark, that make you want to really help your clients. Like what are some core values that really help you be kind of focused on what you do?

  John Grace (07:42)
  I think there are, I think, and I don’t begrudge the very successful makers. Jamie Dimon, I think got a bonus package of $700 million this year. good for him. ⁓ He doesn’t need my help to make any more money. So what I want to be able to do is to take what I’ve learned over those decades. ⁓

  You know, what’s my network? Can I connect somebody with the right person? ⁓ What skills do I have? I can structure deals. I can think out of the box. ⁓ What’s that experience? it’s here’s where I can kind of take everything I’ve learned over this time period and use it on your behalf. And that’s really what I want to do.

  Q Edmonds (08:35)
  Yeah, absolutely. You love it. So after 35 years knowing what you do, does it still come easy or ⁓ are there still some adversities that you face? Do you bump up to like difficulties at times?

  John Grace (08:49)
  Oh, there’s always adversity. I would love to say it comes easy, but that just does not happen. I will be honest, I have earned every one of these hairs. Just to have a hair like the top of your head. No more. So you always have to be alert. I think that’s one of the things I like about what I’m doing now. I get to focus on the problems.

  Q Edmonds (09:01)
  Yeah, I think that’s

  All right, cut.

  John Grace (09:19)
  and try and find the solutions. And sometimes the solutions aren’t ideal. And I had somebody today or yesterday call me and said, I need this. I said, well, let me be frank. You will probably get a better reaction if you go to your local bank. I’d love to help you. It’ll be more cost efficient for you to go to somebody else. Because it wasn’t that complex a problem. I was able to give them some advice, let them benefit from.

  all the gray hairs I’ve earned, but let them save some money as well. So that’s kind of what I’m doing. don’t have to, you going back to the shark analogy, take a bite out of every everybody I see. ⁓

  Q Edmonds (09:49)
  Yeah, yeah, yeah.

  I love that. absolutely love that. think that gives us shining into your personality and to who you are really wanting to look out for people. you kind of talked about this a little bit, but I want to just ask you explicitly, what are the next real goals for you? Like, what are you looking to solve or scale next?

  John Grace (11:05)
  Well, I have a variety of clients and it really is client driven. ⁓ I am working with a client who wants to build a multifamily residential unit. It’s a big one. The problem is bank, it might be too big for some banks because they don’t want to make that sort of risk. I was a chief risk officer. I can pick out a pretty good risk. I think this is a great deal. I don’t understand why the banks walked away from it.

  So it’s to my benefit. I’m working with all sorts of different deals and they can be big, they can be little. And I can also say, as I said, this is, I’m not the right person to solve this problem. Go here. So every day there’s a new goal. How do we kind of move through, focus on the problems immediately in front of us?

  I’m always looking for new clients, as is anybody else, but I’m also looking for new lenders and new investors. Because that way I can offer a broader range of solutions to people who need those solutions.

  Q Edmonds (12:20)
  So listen, you’ve talked about clients, talked about investors, you’ve talked about your network. And so I want to talk about relationships because it seems to me that relationships are important to you. So what is your perspective on building relationships? Is it a positive thing? Has it helped you out? What’s your, what’s your ⁓ vantage point on building relationships?

  John Grace (12:45)
  I am a very social person. We might be talking in two dimensions, but we’re talking, we’re relating, we’re kind of developing a relationship and to be able to discuss really important issues. ⁓ And so it is, yes, I get paid for what I do, but so much of what I enjoy is working with people.

  And so ⁓ there are two benefits, obviously, getting paid. We’re all here for the money. Yes, sir. But also to work with people I like to work with. As you can imagine, in banking sometimes there are some unpleasant personalities. I don’t have to work with them anymore. I get to work with who I want to work with, who I choose, who I like, who at the end of the day I can say, well, that was fun.

  I don’t have a boss, know, except perhaps for my fiance who wants to know how much money I’m making. But that’s what we do.

  Q Edmonds (13:50)
  That part.

  Yeah, yeah, yeah. I love it. I love it, Mr. John. 35 years of experience, 25 years in banking. Is there something that a subject that we haven’t touched on yet that maybe you want to talk about? Or is there any kind of like motivation, inspiration, ⁓ education that maybe you feel like people need to hear from you? I would love for you to give to our audience. Yeah.

  John Grace (14:18)
  I had a mentor who gave me the best advice I ever gave. I was a young analyst sitting in a trading room or standing in a trader because I was kind of, as I said, goggle-eyed at all the red numbers flashing on the screen. And he walked up to me and said, if we don’t lose our heads, we’ll be fine. Now, I have carried those words with me throughout my life and throughout my career.

  And yes, are there moments where you just have to kind of stop, take a deep breath and center yourself? Yes. But we can always look for a solution. is never. There are sometimes where we were one into dead ends, but we want to look at all the possibilities here. And so the question is not to get panicked and just to keep looking.

  and think about different ways. So one of the things where people have trouble sometimes is having ⁓ the down payment or the equity. Well, there are a couple things you can do. There are all sorts of different programs. That’s why I have over 40 lenders. So I can find a program that would meet your needs. But are there ways we can

  Get equity, show a lender you have equity. Yes, there are. Are there ways we can come up with equity? And this, by the way, can go from a small project, say $150,000, up to $25 million and beyond. Everybody is always looking for cash, liquidity, equity.

  And these are kind of where we start off our conversations and say, well, where do we go from here?

  Q Edmonds (16:53)
  Mr. John, sir, I thank you so much. I want to thank you for coming through today. If someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can I get in contact with you,

  John Grace (17:05)
  Well, I have a website. It’s called, not surprisingly, Seal Rock Endeavors. So you can Google Seal Rock and you can find my contact information there. You can also text me. My phone number is area code 612-440-6673. I have a presence elsewhere on the internet, Facebook and…

  I guess it’s Instagram. I’m doing a little bit of a boomer thing here. ⁓ And you can write to me directly. I have an email, John Grace, G-R-A-C-E, that’s all one word, at Seal Rock Endeavors. And it’s S-E-A-L. There are the seals. Rock, R-O-C-K. And Endeavors, E-N.

  Q Edmonds (17:38)
  Gotcha.

  John Grace (18:00)
  d-e-a-v-o-r-s dot com. ⁓

  Q Edmonds (18:05)
  I love it. Such a phenomenal name, John Grace. In just a phenomenal mantra, it’s seal rock. Like it just all just sounds like it all ties together. all makes sense. so this is John.

  John Grace (18:16)
  would love to say I take credit for it. came up with the name because I like the name, but I had somebody ⁓ who developed my website for me and she said, this is a great story. How come it’s not on your website? And I said, well, because I’m a banker, not a marketer.

  Q Edmonds (18:34)
  ⁓

  Well, there you go. That’s why you build great relationships, to work with people that can see different things, and that’s how relationships work. So Mr. John, thank you so much. Thank you so much for your time. Definitely thank you for your story. Definitely thank you for your perspective, the way you think, and bringing that to our platform. I know that people really got some real genuine jewels out of our conversation today. And so I just want to say thank you again for being here.

  John Grace (19:02)
  It was my pleasure. Thank you very much for this opportunity.

  Q Edmonds (19:06)
  Absolutely. So listen, you can’t tell me you did not get the value from Mr. John and his conversation. Listen, definitely check out Mr. John, but definitely make sure you are subscribed here. You do not want to miss out on these amazing conversations. So Mr. John, I thank you again. Thank you. everyone else, absolutely. everyone else, happy New Year.

  John Grace (19:25)
  Peaceful

  and prosperous.