How to Get Funded Fast: Private Lending Secrets for Rehab & New Construction

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Show Summary

In this conversation, Johnny Robbart from Renovo Financial discusses his journey into the private lending space, the unique niche that Renovo has carved out in the market, and the dynamics of finding investors. He shares insights on the trends in new construction versus rehab projects, the competitive landscape of Tampa’s real estate market, and the volatility of Florida’s real estate post-COVID. The discussion highlights the importance of relationships in private lending and the operational efficiencies that set Renovo apart.

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
    • Johnny Robbart’s Website
    • Johnny Robbart on Instagram

  Listen to the Audio Version of this Episode

  Investor Fuel Show Transcript:

  John Robbart (00:00)
  The way that our process works internally, We’re in 30 different markets across the country. the company hires local loan officers build teams around them. I have an assistant, an analyst and a closer. And within the last two years, we’ve hired a local asset manager who

  who physically goes to the job site. He’s got his iPad. takes pictures determines the amount that was completed. sends that into our accounting team. The accounting team hits a button. The money goes out.

  Dylan Silver (01:55)
  folks, welcome back to the show. Today’s guest is based out of Tampa, Florida with Renovo Financial in the private lending space covering rehab, rental and new construction loans. Please welcome Johnny Robbart. Johnny, welcome to the show.

  John Robbart (02:11)
  Hey, how you doing? Thanks for having me on.

  Dylan Silver (02:12)
  It’s great to have you on here, Johnny. I always like to start off at the top by asking guests how they got into real estate.

  John Robbart (02:19)
  Yeah, so I was working at a nightclub in San Diego called Omnia. They have one in Vegas and they used to have a location in San Diego. So I was working there as a bartender. I made friends with a VIP host. I’m from Boston originally. He was also from Boston where he became friends. He had a client who was working as a partner at a hard money lending company and he was seeing a lot of success. Eventually he got me in and that kind of.

  over time eventually ended up us both being at Renovo.

  Dylan Silver (02:45)
  I want to ask you about the private lending space. actually had a guest on the show here today earlier that’s in the private lending space. Each

  private lending entity is different from every other one. And they also have their own flair and niches that they’re involved in. You’re involved in rehab, rental, new construction loans. How did Renovo really carve out that niche? Also, are they regionally specific? Do you see a lot of deals in the Tampa area, which is where you’re based out of?

  John Robbart (03:15)
  Yeah, great question. So Renovable Financial originally used to be just in Chicago. And because of the laws around foreclosure, it makes being a lender in Chicago kind of difficult. the founders, Kevin Werner and Daniel Rosen, identified that early on and they said, hey, we want to be the best that we can be, best lending partners we can be to investors in the area. So they recognized that two major pain points for

  real estate investors revolved around servicing and around asset management. So when I say asset management, I’m referring to the construction draw process and servicing being the loan servicing company. People collect the payments, who keep tight accounting on how much is owed and handling payoffs. The way many lenders are structured is that they have to outsource those things as a result of who they trade their loans to on the backend. And because of the way Renovos…

  capitalized, we have the ability to do all that in-house, which results in a much smoother customer experience.

  Dylan Silver (04:09)
  You mentioned the draw process. I think of course that makes sense because I’m looking at it from both sides. If I’m lending money, I want to make sure it’s going to the project and not, you know, a car note, right? But on the flip side, as someone who’s receiving the money, I also like that there’s some structure to it. Is this an industry standard thing, this draw process, or is it really different at each lending company?

  John Robbart (04:22)
  Exactly.

  Yeah, it is, it is actually. But the way that it’s done is not always the same, Dylan. So to answer your question, receiving construction draws, I would say, is commonplace if you’re borrowing rehab loans, if you’re taking out a rehab loan from a rehab lender, a bridge lender, that is common. But the way that it’s done is oftentimes where…

  it starts to become more important. what’s more common amongst our competitors is an investor will call in a draw on a Monday.

  Dylan Silver (05:44)
  Yeah.

  John Robbart (05:51)
  You know, the inspector maybe gets out there on a Wednesday and then that inspector writes up a report and gets it to his boss. And then maybe it needs to go to an investor. And then, you know, by that time it’s Friday, then they maybe get the funds Monday or Tuesday of the following week. Just kind of a long time. And if you’re an investor and you’re doing one project at a time, it might not be that big of a deal. But if you’ve got multiple projects, which, by the way, most of these people do, it can become a little bit more cumbersome and it requires you as the investor to become more and more organized. So.

  Dylan Silver (06:14)
  Yeah.

  John Robbart (06:20)
  The way that our process works internally, you had asked the question earlier for regionally focused. The answer is yes. We’re in 30 different markets across the country. And the way that this happens for us is, you know, the company hires local loan officers who have experience in the area and then eventually build teams around them. So I have a three person team. I have an assistant, an analyst and a closer. Those people are here with me. And then, you know, within the last two years, we’ve hired an asset manager. So I have a local asset manager who

  who physically goes to the job site. He’s got his iPad. He walks around the job site. takes pictures with the iPad. He determines the amount that was completed. And then instead of writing up this long report and having it reviewed by a bunch of supervisors and an investor, he makes the call. He sends that into our accounting team. The accounting team hits a button. The money goes out. So there’s a main deal with middlemen.

  Dylan Silver (07:07)
  I wanna ask you.

  I want to ask you a granular question. Maybe give away some of the gold, but not all of the gold here, Johnny. When it comes to finding investors and then also in the hard money space, you’re having to loan money, right? Finding people whose money you’re lending as well. On a high level, these are the two sides of private money lending. Finding the investor who needs the money and then finding the investor who’s lending the money.

  John Robbart (07:16)
  Sure.

  Dylan Silver (07:37)
  Do you feel like there’s one of these that is more important or is it is it you’re constantly needing to do both?

  John Robbart (07:45)
  Yeah, the Renovo financial has evolved over time. So their ability to source capital has changed drastically from inception to now. I imagine in the beginning it was probably much more difficult for them since they were a newer company and not as proven out. With respect to the other side of that, which is finding investors to lend the money to and making sure that you’re lending to the right investors, right?

  wouldn’t say that’s difficult. think that we’ve been blessed and fortunate to be able to partner with some very talented people. A lot of those have come through, you know, cold outreach. A lot of that has come through referrals. A lot of that has come through professional masterminds that we’re a part of. So, yeah.

  Dylan Silver (08:21)
  I want to ask you about new construction. It’s something that I’ve seen a lot of people pivoting to. Of course, new construction is always going to be important. People need housing. People need new housing, right? But also, it does feel like, and I’ve actually had some guests disagree with me on this, but I still think there is some truth to this. It does feel like the market for a lot of fix and flippers, it’s harder to do fix and flip than it was, you know, four or five years ago, let’s say.

  so it does feel like, and I’m a Texas licensed realtor, that at least in Texas there’s a lot more interest and intrigue from folks who might not have done a whole lot of new construction, ground up construction, to pivoting into new construction. Are you seeing any of that trend as well as a whole, or are you seeing people who maybe are on the outside of new construction looking at getting into it?

  John Robbart (09:48)
  Yeah, so I think to initially answer your question, Dylan, a lot of that is market specific, right? So in Tampa, there is more vacant lots than in a market like Boston, where I’m from, or San Diego, where I’ve spent a lot of my life. Cities that are more established tend to have less vacant lots and as such, less opportunities for investors to build new. That being said, rehabs are still alive and well.

  in Tampa where there is a lot of vacant land and there are a lot of tear down opportunities. And I would imagine in a market like Texas, which candidly I’m not as familiar with, I imagine that because there’s still so much undeveloped land and so much room to go, there’s a lot of people who look to new construction. I also, know, just as somebody who speaks with a lot of different real estate investors, I have always felt that new construction sometimes is the shiny object.

  Dylan Silver (10:32)
  Yeah.

  John Robbart (10:33)
  And I got to tell you, I got plenty of guys and gals who are rehabbers who are still only doing rehabs and have not pivoted to new construction. Or if they have, this percent of their business and this percent of their business is rehabs. And I think a lot of that, the one thing that I think a lot of people forget about is the cash conversion cycle, right? You’re not getting into a new construction deal and selling it in four months. But my

  My best rehab clients are in and out in three months on average, right? Which means some of them are doing it less and some of them are doing it in four, right? So if you’re thinking about putting money in and getting it back with some friends, as Kevin O’Leary would say, right? You’re not doing that with new construction, right? And it’s a more cash intensive business. Yes, it’s clearer on the way in with respect to the cost of things because everything you need, it’s not like a rehab where you can peel back the drywall and realize there’s more to it.

  Dylan Silver (11:01)
  Wow.

  Yeah, no holding costs at that point.

  Right.

  John Robbart (11:24)
  But

  you need more cash to get through a project like that. And I think a lot of people miss that.

  Dylan Silver (11:30)
  I’m ask you again, maybe another granular question here. Are you seeing any people who have that longevity in the rehab space? Are they having to make specific pivots based on different markets, even in places where there’s an abundance of land? Places like you mentioned, Tampa, I’m a Texas realtor, so Texas. Are you seeing people make pivots? Are they using a lot of the same kind of metrics to evaluate deals?

  John Robbart (11:54)
  when you say metrics, talking about like how they’re evaluating buying a rehab deal or buying a new construction deal.

  Dylan Silver (11:58)
  Yeah, yeah.

  So buying a rehab deal, but also how many deals that they’re taking on, are people being more selective now than let’s say, you know, a year or two years ago? Or is this, are there lots of people who in your market are buying just as much as they were and are maybe even being more aggressive than they were previously?

  John Robbart (12:17)
  Yeah, I think my answer to that question would be dependent on the investor and how much they have going on. I I think some people might have a full belly if they’re all the way in on projects and they haven’t exited them yet and they’re waiting to see those through before moving on to something new. I think a lot of it is a function of how much they have going on at one time.

  Dylan Silver (12:36)
  This is good feedback to hear. I do want to pivot a bit here and ask you about Tampa in general. I mentioned this to you before hopping on the pod. I’m a big fan of the west coast of Florida and I think that there’s a maybe Floridians don’t see it this way, but maybe some do. There’s somewhat of a competition at least it appears this way between the areas of Florida. You’ve got Tampa and then you’ve got ⁓ South Florida, Miami, Fort Lauderdale, and then you’ve got the other areas as well.

  Central Florida, you’ve got Orlando, you’ve got Jacksonville, feels like all different areas. I am a big fan of Tampa, I’m a big fan of St. Pete, I like that it’s got kind of a different vibe. I’ve heard people say people from the West Coast go to Tampa, people from the East Coast go to Miami. I don’t know if any of this is true, but what’s your take on Tampa versus some of the other places in Florida?

  John Robbart (13:28)
  Yeah, think, well first of all, that last point, I don’t think that that’s accurate at all. mean, the amount of New York, New Jersey, and Massachusetts license plates that you see on the road in Tampa is astonishing. I think people just kind of go to where they like. think…

  I think the vast majority of Florida is awesome. I think it’s just kind of like what you’re looking for, right? So if you’re looking for something that’s more fast-paced, you’re probably attracted to Miami, South Florida. If you’re looking for something that’s like really slow pace and really affordable, maybe you like Jacksonville or Orlando. And if you’re looking for something that’s kind of in between, it’s got some city, but has some nicer areas and some, just kind of like a nice in between, then maybe you like Tampa and St.

  Dylan Silver (14:47)
  I’ve been a big fan. I live outside of the country. I live in the Dominican Republic, but I am still keeping an eye on St. Pete because I do think at some point in time I may do a deal there and I may end up living there. Who knows? I also find it so interesting. It piques my interest. I’m not sure what’s in the water in Florida. It could just be the weather and how great it is, but it seems like a lot of entrepreneurs from around the world and around the United States, once they built a business to assert

  John Robbart (14:59)
  Yeah.

  Dylan Silver (15:16)
  size start moving to Florida, especially in the real estate space and that may even be the case with Renovo to a certain degree. Do you feel like Florida is the real estate capital of ⁓ the US in that sense?

  John Robbart (15:30)
  Florida is the real estate capital of the US. I would say back in COVID times, maybe you could make that argument. But I would also argue that Florida is probably the most volatile, right? And I’m saying that as somebody who packed up their life and moved here, girlfriend and dog, like we came down here, you know, feeling like this was the land of opportunity. And I still feel like it is to be clear. But it does see more of this than

  markets that are more established. instance, Chicago right now is doing really well from a real estate market standpoint, probably better than average for Chicago. But I think there’s a lot of people who came down to Florida during COVID times and I think a lot of people stayed and then I think a lot of people realized like, maybe this isn’t for me. Or they got called back to the office. They were no longer able to work remote. So they were like, well, this doesn’t make sense for me live here. I have this job and that’s more important to me than choosing to live in.

  Dylan Silver (16:20)
  Yeah.

  I’ve heard a lot of this actually, this idea that there is this increased volatility. And it is interesting. It does color things for me a little bit more, maybe in a cautionary way. ⁓ We are coming up on time here though, Johnny. Where can folks go if maybe they have a deal and they’d like to reach out to you? Or if they’re in the greater Tampa area and they’d like to connect with you?

  John Robbart (16:35)
  Thank

  Yeah, absolutely. best thing you can do is send me a message on Instagram. I check it pretty regularly. It’s hard money, Johnny. I don’t have a personal page and a work page. My life is my work. I don’t have much of a personality outside of lending. So feel free to send me a message there. My contact info is in there. You can either shoot me a DM or you can also go to renovofinancial.com slash Tampa Bay and ⁓ connect with us there and see more about our products.

  and that type of thing and see more about what we do.

  Dylan Silver (17:13)
  Johnny, thank you so much for coming on the show here today.

  John Robbart (17:16)
  Yeah, thanks so much for having me, man. It was a pleasure.