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In this episode of the Real Estate Pros Podcast, host Mike Stansbury welcomes John Femenia, a seasoned lender in the real estate industry. They discuss John’s journey from investment banking to real estate lending, the challenges faced during the COVID-19 pandemic and rising interest rates, and the strategies for starting a successful lending business. John emphasizes the importance of repeat business, understanding borrower requirements, and the significance of building relationships in the industry. The conversation also touches on personal insights into John’s life and how he balances work and family.

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Investor Fuel Show Transcript:

Michael Stansbury (00:04.526)
Hello everybody and welcome to the Real Estate Pros Podcast. I’m Mike Stansbury. Welcome John Femenia to the podcast. How are you, sir? Great, sir. Before we get started, I gotta do the, I gotta pay the bills. So at Investor Fuel, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs, two to five X their businesses.

John Femenia (00:17.039)
Good, I’m doing well, I know.

Michael Stansbury (00:31.736)
to allow them to build the businesses they’ve always wanted and allowed them to live the lives they’ve always dreamed of. John, before we get into kind of what you’re doing in the marketplace here in 2025, let me ask you this. What was the origin story to getting into real estate as a service provider, maybe as an industry? What were you doing beforehand and like, you know, what caused you to pivot to get into real estate?

John Femenia (00:58.309)
So I finance before, I was in investment banking before. The real estate industry has always been pretty intriguing. So we got started in this business by about 2019. We started kind of, there just a lot of deals. I had a few friends that were doing some real estate deals. So we kind of learned the market about.

how they were getting their hard money loans, what they were doing, saw what a big spread there was on them and kind of learned the market just seeing how they were getting the loans. It’s a big opportunity here. There’s a lot of people who are looking for this type of loans. We could originate a ton of them. And so we got to understand the hard money market, brokered a few loans and then we raised some money and then we really started going after…

know, borrowers and originate, you know, other brokers who we brought in and, you know, our volume expanded. I would say probably wasn’t the best time to start it because then we ran, 2019 was great. 2020 was horrible with the pandemic. So we had to kind of shut down a little bit then. And then, you know, we got rocking and rolling 2021 end of 2020. It was really, really good. And then.

We got hit with the higher rates, which kind of threw a wrench in our model again. But now for the past year and a half, people got used to higher rates, are in a much better spot. I feel like we’re finally in a decent spot in the market. Albeit the volumes are down, but at least everything’s little more settled out. We had two kind of major shocks.

Michael Stansbury (02:32.512)
Right, you had COVID and then you have the high interest rates. and then and yeah.

John Femenia (02:35.288)
COVID and then these, you know, yeah, and inflation, which is the, the inflation was actually a bigger shock than COVID because.

Michael Stansbury (02:41.558)
Right? Yeah. How would you say that affected the, like, how you did business?

John Femenia (02:48.804)
So from us, like we’re a lender, right? So we have, we have sorts of capital. We have equity investors, we have credit lines. And we, you know, we charge our borrowers a certain amount and we make a spread on the difference, right? So before rates were going up, you’re doing hard money loans at, you know, eight or 9%, borrowers are happy, they love it. Rates shoot up and all of sudden you got to have a conversation. You’re like, hey, we got to do your loan at 12 now. And they’re like,

You know, no way. I don’t want my loans on a 12. So, okay, I’ll do it at 11. You know, they couldn’t, they really getting used to it. So, hours spread from being a lender just got squeezed and squeezed and squeezed because we couldn’t pass it on to the borrower. Meanwhile, we weren’t being very greedy. I think what happened is credit lines, first a lot of credit lines got pulled. They just disappeared. No one knew what was going to happen to, you know, values, but you knew that, you know, refinances would be harder, you know, everything else. So, I would say the…

rates going up really fast was harder than the pandemic. The pandemic was short and hard, but at least values expanded afterwards and credit flooded the market. A lot of people had money.

The shift in the higher interest rates was much tougher because you couldn’t pass it on. Now, two years into it, had two things going on. The borrowers didn’t think or just didn’t want to pay that higher percentage rate. And then you had your credit lines didn’t know where the market was going to be. So they jacked up their rates too high. So you just got completely squeezed. Now we’re at a point where all right, borrowers are used to paying north of 10 percent. Capital markets have settled down.

They feel good about inflation. New rates are higher, but they’re not pricing in some huge unknown, which they were. I guess it was July of 2022 when I think the wheels kind of went off.

Michael Stansbury (04:44.608)
Right. And so, yeah. And so those things obviously affect the market. And one of the things I talked to, we get exposure here to some people that have been in the business for 10 or 15 years and then 30 years. But the market cycles and what you talked about earlier is like now it’s just kind of normal. And now they’re used to it. Now they’re okay with it. Because at first, because it happened very fast, the rates were down and then they just rocketed them up.

and it was just a supply shock. was too fast. It’s too fast for our brains to process what is happening. We know we can do it. We know what an Excel sheet looks like. We plug in the numbers. But we didn’t ever think things would pencil again.

John Femenia (05:14.979)
Go fast.

John Femenia (05:21.347)
Yeah.

John Femenia (05:30.757)
The one thing I didn’t think was going to happen, and I didn’t really factor in was I didn’t think, you know, I thought, hey, know, rates are going to come up, volumes are going to slow, probably prices are going to come down. The one good thing is you had that lock-in effect. markets, prices didn’t come down. You know, so I’m in the New York market. also, you know, our headquarters is down in Florida. New York is like still strong.

Florida you’re seeing some lowland prices but that lock-in effect I did not, we didn’t see that coming. So I guess that was good, it killed volumes but at least your portfolio of properties didn’t go into the toilet. Which is, you know, didn’t have this like sudden drop-off in volumes which could have been horrible.

Michael Stansbury (06:10.766)
Right.

Michael Stansbury (06:15.724)
Yes, and so that’s probably the main difference between now and what we had happen, a couple other factors in 2008. But you guys got started around 2019, so were you part of the origin of the group, and you guys started lending, and what did the first couple loans look like? If you were to walk through how would you even get started in the lending business, what did that look like?

John Femenia (06:41.092)
So there’s a few ways you can start a lending business. If you are, there’s a lot of different layers in and a lot of different people in now. There’s a lot of capital that are there for people who want to start a lending business. you don’t need, what I learned very fast, if you want to do a few hundred million dollars of volume, you don’t need a few hundred million dollars of cash. You need…

You can get started with you know, maybe a few hundred grand of cash if you really know what you’re doing You have good capital partners. So we got started with a relatively small amount of cash You know, there was a good market for you know trading loans and selling loans So, you know what? I would say this the lending business unless you are a massive capital source like a large head fund or a you know life insurance company if you’re just a Regular person who wants to get started you need to work in your

Origination game. Okay, it’s all marketing you’re bringing in loans And then what you do is even if you don’t have money you can come to a guy like us It was not a ton of money, but you know probably more you you know You’re once I’m starting out you can table fun with us, right? It will fund your loans and will allow you to look like a lender That’s kind of where this business went is a lot of people said like I wanted a lot of brokers or Really? I’m sorry little lenders are really just brokers

So, the whole, if you’re an originator, your job is to bring in good quality loans that fit a box. If you could do that…

The money is going to follow you right you can either get table funded like we could table fund we could do you know participation agreements with people and Eventually when you build your volume when you get over that the hundred million dollar mark a year fifty million dollar mark a year You could probably raise some money, and then you can then expand the go. Okay. I’m gonna add a credit line I’m gonna add a warehouse line, and then you move yourself up the capital structure where you actually become a real lender So you kind of fake it till you make it

John Femenia (08:42.468)
a little bit. But you know, you know, a lot of these people like I serve the people in these these large places are like, you know, they’re calling people lenders and like, but they don’t have any money. They’re like, well, they’re the correspondent lender. So it really is it’s an origination game. I would say if you’re getting started in this business, one thing we did is we first got started with trying to broker large loans.

Michael Stansbury (08:45.164)
It’s like anything that you’re trying to do for the first time. I like that.

Michael Stansbury (08:56.962)
Right. Yeah.

John Femenia (09:10.338)
I didn’t like it because those loans will die. Like those loans you could work on a 50 million dollar deal thinking you’re going to get a point on it or two points and have a big payday, all of sudden for that loan to die.

So I shifted and then that, you know, all your work for nothing and it goes out. I shifted my focus. What I love is I love hitting not home runs, but I hit a ton of singles. Now I have a business where I close loans every day. We’re closing, you know, an average of a million or two million dollars a day. So those loans are easy to get. And I think the originator standpoint, if you’re going to get involved in this business, don’t chase whales. Chase like just singles. Find a few good bars, few good brokers, because you can make

If you’re an originator, let’s say you close a $500,000 loan, you take up points. That’s 10 grand. You do that once a week, you’re making a good living, right? You’re making a, that’s a lot of money. So I would much rather, and you know what, if one of those dies, who cares? Go on to the next one. Don’t focus on the big loans because they don’t really close a lot. Your value add, you’re not really…

Michael Stansbury (10:12.397)
Right?

John Femenia (10:20.516)
You know, you don’t have a say of how much you know if you bring it to a fund you don’t have much of a value and besides Hey, I found this guy he may end up going around you because the fee is really big You don’t have any say with the fund because yeah Your word doesn’t mean very much because they’re the ones putting all the money on Whereas these smaller loans are just to me they’re a lot easier and you’re helping like real people like do deals and They come back to you

If you find a good crew of borrowers, they’re back to you every single, hopefully, month for a deal.

Michael Stansbury (10:51.79)
Yeah, so my question for you, actually I love the analogy of singles, bass hits. I’ve just for some reason I went back to 1985 in the St. Louis Cardinals. had this, they played whitey ball and they ran, they stole a lot of bases and they just hit singles. They weren’t a big power hitting baseball team.

John Femenia (11:14.723)
Yeah.

Michael Stansbury (11:15.49)
But they got beat by the Kansas City Royals in the World Series. I remember that being like 10 years old at the time. So I love that analogy. Don’t go after the whales, go after the singles and learn how to, I’m sure you have curated some relationships in the business where you’ve got borrowers coming back to you. So you did that starting out and tell us what it looks like today. What kind of borrower are you helping today and for our audience if they’re like, hey, you know what, we love to

to find out more about your lending parameters, what does that look like?

John Femenia (11:51.397)
So I borrowed today our deal guy is obviously a repeat guy, but a guy with or a woman with experience who’s done deals with solid credit. think experience and good credit is key to getting deals done. Can you get deals done without it? Yeah. But I would say 70 % of our business is repeat business. So people come back, they buy one, they do one deal, they see how we are, how we operate.

You know, there’s a lot of trust in this business because you have people who when you go into contract on a house, you’re putting down, you know, hard money on a contract, especially places like Florida. You have a short window to close. You need to call a lender who you know is going to close and is not going to torture you with what you need. So a lot of people, there is a lot of repeat business because it’s

You know, once you get that person vetted and you do the experience, you do the credit, liquidity, and there’s also trust. You know, we can close loan very fast with people we trust. People we don’t trust or don’t know, we really, you you want to underwrite it. So you do get a lot of repeat business.

Ideal people are experiencing good credit You know people always ask like can I do a deal without experience? Yes, but you have to have good credit and good liquidity People ask can I do a deal with no credit or bad credit? but you need experience that right so you need one or the other without experience You need good credit and good liquidity without you good credit you need experience It has to be like mitigating factors people who come and say I’ve never done a deal before I have a 620 credit score. It’s not gonna get done

you know, or I have no money, you know. Other thing is, I think…

Michael Stansbury (13:29.356)
Yeah, and I hear that,

John Femenia (13:34.22)
Yeah, you have to have money like part of the real estate

Michael Stansbury (13:34.904)
No, you go ahead with…

John Femenia (13:39.385)
so everyone wants high leverage loans a lot of you advertise hundred percent financing and you know everyone wants you know ninety percent of purchase you still need to have money and have cash to do it i think the hundred percent financing is a marketing gimmick i always tell people who say i saw an ad for percent financing i said great send me i’ll broker a hundred million dollars of loans to you a

You you put me in touch you can be my broker I’ll send you everything and we’ll do a hundred million dollars of deals if you really have a lender that does a hundred percent financing I would love to find them Because I have so many borrows for you. We’re gonna make a ton of money

We do high leverage loans, know, 85, 90 a purchase, but that still requires money, right? You buying a million dollar property, you’re putting down 10%, you got closing costs, you got carrying costs, you got to have a couple hundred thousand dollars to do that deal. So if you’re a real estate investor, we like real estate investors that know how to find deals and know how to raise some money, right? And that you don’t need to be like a…

you know a Grant Cardone raising money right but you need to be able to club it up some from friends and family.

Michael Stansbury (14:49.984)
Yeah, and so that’s really great advice. I’d say that one of the things I was when I was teaching and mentoring people who wanted to flip houses, I the number one thing is you have to find a deal, a deal that has margin. And if you can’t, no one’s going to finance you. But if you do, the money will come to you. Even if you have tough credit, bad, if you’re able to find a deal with enough margin.

the money will come to you, but you’ve got to have some liquidity and you’ve got to be kind of marked as a person that, I want to not have bad credit for a long period of time. And you know, you’re right about raising money. You’ve got to be able to go out there and talk to people. I’ve been in the business for a while. I no longer have to use hard money lending, not for last 10 years, because I was able to go out there and curate my own.

my own money from other sources. But with that being said, when I get a big deal, when I get a deal that’s out of my range, I have to go back to the hard money folks, but I’ve got all this other capital waiting on the sidelines to help kind of reinvigorate that down payment. So they’re able to say yes to it. So that’s great advice for our audience. So John,

John Femenia (16:04.1)
Yeah, said people get confused about, know, we provide debt, not equity.

Michael Stansbury (16:11.106)
Right. Yep. So John, so you work in New York, but your main office is in Florida. Do you get to shuttle back and forth or you hold up there in New York? Do they make you stay there?

John Femenia (16:21.956)
We go back and forth a lot. So when we started the business, my partner, he moved down to Florida and I kind of chickened out. So my wife didn’t want to move down to Florida a little too hot for and you know, leave New York. I have lived down there before I love it. So I’m back and forth like every other week. So our office is down there in Bay Harbor islands. So you know, North Miami Beach. I would say it does kind of help to have, you know, boots on the ground in New York. I look at properties, I meet with borrowers, especially when you’re doing marketing videos.

New York, there’s a lot of deals here. There’s still the boroughs of New York City, the Bronx, Brooklyn, Queens. It’s a tough blue state, but there are still a lot of deals. So we have a lot of core boroughs and we’ve never had, knock on wood, we’ve never had the foreclose in New York. It’s a nightmare.

Michael Stansbury (17:07.19)
Yeah, we-

Michael Stansbury (17:12.718)
How about that? Oh, I couldn’t imagine. I have a buddy of mine that he is a real estate fix and flipper in New York, not in the city of New York, but actually in the state. And I think close to your capital. And I always had this bias, right? Cause I’m from Memphis, Tennessee, red state. It’s like, how do you even do business in a state like that? He’s like, like.

You figure it out and you do it and he wins a lot. there’s still deals, I guess, in all the states if you’re out there looking and finding.

John Femenia (17:44.868)
There’s deals everywhere. If you know people, there’s deals everywhere.

Michael Stansbury (17:48.143)
Yeah. So John, is, all right, so with that being said, you’re in New York besides lending real estate. What does John like to do? What’s your family look like? What’s, what’s, what do you do in New York for fun? Do you go to Yankee games? What, what do you love about New York? Tell me about it.

John Femenia (18:01.572)
I’m in Long Island. So I’m out just out of the city, you in Long Island. I got a wife, two kids. We use, we have a, we have a little day boat we use. We go out on the weekends in that. And then I golf. I, unfortunately, I can’t golf too much on the weekends now that we have little kids, but I try to get that done. I try to squeeze it in at work. Let’s say that I try to incorporate, you know, work and fun, maybe taking some brokers out or something like that. Nothing wrong with that.

Michael Stansbury (18:28.034)
Nothing wrong with that. Yeah, absolutely. Well, John, where can people find you on the internet? Where can people find your lending business? Tell us about that.

John Femenia (18:31.512)
So, you

John Femenia (18:39.172)
So Lenvent.com, so www.lenvent.com. Reach out to us, Lenvent Realty Capital on Instagram. We’re constantly posting new stuff, which I’m sure you are, I’m you know how that business goes. So you reach out to us then. Now we have a…

We built up, we have a team of account executives, anyone you need, you know, get in touch with, we can loop you in with somebody, we’re doing a correspondent program, people who want to get started in the business, we do monthly training, you know, teaching people how to use hard money. We’re probably going to do some stuff, teaching people how to be correspondent lenders. I think there’s a good, I think there’s a great play in this business. If you want to make money in real estate, but let’s say you didn’t find properties, you can’t really raise money.

could find loans and find that you can make a couple points every loan and it’s a great business to broker loans you don’t need a license and you don’t need money you just need to find people who want to borrow money and if you come to us we’ll teach you how to be a correspondent and how to build your lending business

Michael Stansbury (19:42.381)
Yeah.

Michael Stansbury (19:50.798)
Well, that’s really some good offers there for our audience folks. It’s not only do you need lending, but if you’re out there and you’re hustling and you’re networking and you find that people need to that, have that irritation, they need money for their loans, then you can hook up with John and his team and be a correspondent. That’s awesome. John, thank you for being part of the Real Estate Pros podcast. We’ll put all the information that you listed in the show notes so people can get to you and connect with you. Thanks for everybody for watching.

We’ll see you next time on the Real Estate Pros Podcast. Thank you, John.

John Femenia (20:25.666)
Thanks again, I appreciate your time. Thank you.

Michael Stansbury (20:28.173)
Yes, sir.

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