EPISODES
Episode 15.
Jeff Tennyson, CEO of Lima One Capital
I caught up with Jeff Tennyson, CEO of lemoin capital, to talk about crazy home price appreciation, home inventory and it’s impacts. Two Thousand and twenty two on word and trekking gorillas in Rwanda, for real. Jeff sent me a picture while he was over there. He was six feet away from a gorilla. That gorilla looked hungry and Jeff was mighty close to Mr Gorilla. You roll the dice on that one. We kicked off the episode reminiscing about some of our favorite podcasts of the year that I always enjoy swapping stories with Jeff and I hope you enjoy this episode. Thanks for listening. You’re listening to the real estate of things podcast. Welcome to the real estate of things podcast. I’m your host, Dalton Elliott. Jeff Tennyson, my guests this week. Thank you so much for joining Dalton. Thanks, it’s great to be with you. Live in the real estate of things studios and you know, before we get too far into this, first of all I just want to say thanks for doing such a terrific job leading this podcast. I think you launched it in September and I’ve been so impressed with not only the guests you’ve selected to kind of talk about the real estate of things, but the content and message and learning and education that’s been done by this yeah, yeah, thank you for that, Jeff, and you really hit the nail on the head. It’s all about the guests and I see myself as someone who just tries to bring out inside. It’s just tap into the brains of these amazing people. It can’t do it without every guess, every week, ones like Tencia James, you know, just an incredible human being, an an episode I really enjoyed recording. I was our first time sitting down talking. She’s an emergency medicine physician, she’s a triathlete and she’s a real estate investor. I don’t know where all that time in the day comes from, but she manages to perform in all these buckets at and incredibly high level. And one thing that resonated with me from that episode was her thoughts on dollars versus…
…doors. She’s gotten into the multi family investing and in the multi family space so many people talk about I want to get to x number of doors, five hundred doors, a thousand doors. Her focus is really on dollars. She has an income target and that’s all she focuses on. Doesn’t matter how many doors it takes to get there. It’s like how can I most efficiently get to this monthly income level? So that was that was a great episode. Yeah, I mean that’s, you know, the ones that obviously the ones that stood out to me throughout the year. Of course, people like my good friends Gary Beasley, John Hornick, Leonard Rosen. You know, I just think I’m very respectful of the those guys. Really believe that the work that Leonards done with the National Private Lenders Association, it’s something that’s been that’s not only been really helpful to private lenders across America already, but is continuing to add value from the work John Hornick does in the legislative side to the work others are doing. I know you’re involved actually on the ethics committee and and trying to really create an environment for the private lender industry that we’re no longer hard money lenders are no longer not respected in the mortgage platform. We’re truly making a difference. You know, people like, you know, Chris npie, who is, you know, the opportunity zones that he’s working. I mean also many of these people, you know John Curry, at sea time to kingdom on the work they’re doing and acquisition and development that will help create environments and and you know, it makes me think a lot about really what we’re doing at Lemoin capital, where our mission statement is to improve neighborhoods across America so that families can live the American dream. And that’s really what private lending is all about, is we’re improving neighborhoods. Every single loan, every single project, every single opportunity that we had to do what we…
…do as private lenders is improving neighborhoods and those neighbors it’s those neighborhoods, as they get improved, are shared with families who particularly we just you know, finished when my favorite holidays is and thanks in Novembers, thanksgiving, and you know, when I sent the Thanksgiving message out to our employees a few weeks ago, I highlighted the fact that we should be proud of a company that the loans we make and the things we do are helping family sit down at tables that we create help create those neighborhoods that create that family dream. And I think you’ve done a really good job with the real estate of things, a highlighting the variety of things that are going on across the private lending industry. And Yeah, I hope we continue to find good ways to do that. Yeah, yeah, you went down just a handful of the incredible guests and really excited about two thousand and twenty two. Right. You mentioned that. We started this podcast in September, so it’s only a few months old and we are already knee deep in figured out who’s going to be on the podcast next year. So so incredibly excited to continue to grow on the podcast side. Any hits you can getea teasers or hits you can give us for people to Blatch for you get? Yeah, you’ve got my interest. Well, I’ll give you a couple we have in the hopper. We’re chatting with a lot of athletes are on the docket for next year. Right. So you think about especially on the NFL side of the fence, we have started chatting with a couple of folks who used to be in the NFL. They got out and still relatively young and a lot of them did well in the NFL. I think the League minimum is a couple hundred thousand bocks, even if you’re on the practice squad. So you’re making good money no matter where you are. And you know, looking to the future, you know I’m maybe in my late s early S. got out, have some cash. What do I do now for the next few decades? And real estate investing is an incredibly attractive opportunity because they have that flexibility and they have some dry…
…powder sitting around so to be able to build up some good residual income. So that’s a teaser of a bucket that we haven’t had anyone on that side of the fence to date, but in two thousand and twenty two we’re going to have a bunch of athletes cruising through. That’s awesome. Well, I just again congratulations on on a terrific podcast series and and and you done a terrific job through two thousand and twenty one and I know with the work that you and your team were doing, we’re just get started. I mean, you know, I was looking you and I were chatting about viewership yesterday. If I think, and you know I mean what many podcast take six to nine months to do, you’ve been able to pull together and in less than three. So I think that’s just the the the think that what’s to come and you know, I encourage our listeners to keep listening to it. Our job, your job, is to keep providing good content that is meaningful and entertaining and thoughtful, and the more we can be through the real estate of things that leave one help sponsor thought leader for our industry and help our industry grow and develop. That’s what we want to do. I love it. So let’s let’s dig into you a little bit. You’re the guests I get. I get to pick you apart this week. So you let the cat out of the bag. You’re the chief ex ecutive officers a lemoin capital, I. really the nation’s premier lender for real estate investors. A lemoin capital lens nationwide, right across a wide product set, everything from rehabs and rentals to new construction and multi family projects. And lemoin capital is not your first Rodeo, right. You have quite a mortgage industry petigree. You have, at least to me, a literal lifetime worth of experience in the space. So Walkway through the history of Jeff Tennyson. Well, yeah, since you’ve told me, we’ve got to keep this the close to thirty minutes. I’m not going to much time on that, but you know, I’m originally for I grew up in northwest Arkansas. So I’m a razorback fan and you know, real excited actually about the razorbacks football. We’re finally actually playing a pretty…
…decent football season, so that’s kind of fun to watch. But and Wi those small college in Arkansas, got an accounting degree, Spencer of time in public accounting, got an NBA at Harvard Business School and spent some time and investment banking. And then, you know, I did I really wanted. I got the entrepreneurial bug and it got a chance to do a subprime mortgage start up in one thousand nine hundred and ninety seven. And you know, we grew it from roughly fifty employees to over one fourteen hundred. You know, six point eight million was their production the first month I got there to the company and we grew that too almost two billion a month. And you know, it’s interesting. You know, we’re working on two thousand and twenty one budgets or two twenty two budgets or Lemolne and you know, stuff that takes us a year to originate today. You know, we were doing in a month back in the in the in the go go subprime days. So that was really it was. It was a incredible ride and an incredible hurrying experience to grow a culture and grow a company from fifty people to one thousand four hundred people be one of the top five subprime lenders in America. It was incredibly horrifying and and the depressing almost to see that fall apart through really some misguidance by an entire industry that did not respect or support some of the things that were ultimately put in place, and we’ll talk about some of that later, but I learned a lot through that. I spent time in various sponsor startups and bank spotsored mortgage platforms after that and then blackstone was in the middle of creating invitation homes and they recognize the primary reason these real estate investors were needing to sell their rental properties to invitation homes because there was no liquidity in the market. And Blackstone, being smart people, and people like John Gray and others that blackstone were so, you know, thoughtful and visionary and what to do. They’ve thought, wow, we need to help create a lender who would provide this liquidity to these people as they buy their property so…
…they have more liquidity to spread around, and asked me to start a company called beat to our finance. At that time really the only competitor was Aupan called first key, which no to exist, and so then shortly thereafter Bethel Brian at colony came in and colony finance was created. So, you know, we just came back from the single family rental I am in and Scottsdale and you know, in that early two thousand and thirteen periods there was only three of us on the panel about what was going on in single family rental and that was the business purpose lending space. And today to see that today be to ours. Now Foa, finance of America commercial colony is now corvested, and then there’s been a whole group of people who have been created from that and as a result, I think what’s exciting is we now truly have an industry that’s developed from that. And actually good Mondor Christensen and I think chatted about that a couple weeks ago on this podcast, where it’s now a it’s not just a trade any longer. It’s an industry, and so I feel really I’m really excited that my mortgage background was able to help me make a meaningful impact. That’s a brand new industry that really didn’t exist other than that the local hard money level. And so I was kind of finishing up the project for Clayton Holdings when John Warren, the founder of Lema one, reached out to me to be effectively the interim CEO while he ran for Governor of South Carolina. Sounded like an interesting reason to kind of come off the sidelines and come off the beach and and help do something for a friend, and so that’s what got me to Lema one capital. At the time we had, you know, sixteen employees. We were doing at twenty million a month, primarily in fix and flip and I bet I saw an amazing culture, a great opportunity to build something truly unique in the business purpose lending space. And and so today, you know, Lema ones lending in forty six states will originate you know, almost five, almost one point five billion dollars and loans in two thousand and twenty one. I was doing something today for…
…someone in that represents almost FIVEZERO loans that we’ve made into neighborhoods across America so that those neighborhoods can truly be improved, be different and that families could truly live the American dream. So I’m really proud of what we’ve created at Lema one. I’m energized every morning recognizing the purpose and values that we create for industry and I hope that all of our my private lender colleagues will recognize that and and celebrate the same thing. Yeah, yeah, I can’t imagine the viewpoint you have of kind of watching the mortgage industry and these couple of niche industries within over, you know, really a span of decades. I got into this space. My Day job is at lemo on capital and I got into this space in June two thousand and fifteen and we were doing a couple million of months here when I got here. Just incredible growth between then and now. So, you know, trying to stretch my mind back to nine, late s early to thousands, it’s just been a wild ride for my short period and hearing everything over the years from your perspective just all the more crazy. And a beautiful thing is that you know we’re not finish right. I know big part. You mentioned the two thousand and twenty one production. Big Part is two thousand and twenty two production. And that number is bigger than two thousand and twenty one right, and just keeps on going up and up. Yeah, you know it’s interesting. We’re we just came off our executive leaders off site to really plan for two thousand and twenty two and you know, we’re beginning to look at two thousand and twenty three, two thousand and twenty four. We’ve even got really long term vision. What if twenty thirty four look like? And while you know that’s not really clear, there’s that’s a really blurry you know, what is it going to take to have the infrastructure and opportunities that that creates? And we think, you know, I think that the message that delivers not only to our people for stability and…
…growth, but to our industry, because we do think there’s a lot of opportunities ahead in our industry, that that private lenders, business purpose, lenning, whatever we want to call it, have a really key row role to play and a great opportunity. So on that a little bit. Yeah, I was born into the building boom of the s and then that moved into the early s. Then you had the great recession, hit housing crash. Now we’ve been on really a decade long term. Even with covid being thrown into the mix, American housing has remained incredibly strong to a pretty wild ride over the last few decades. But how would you describe that optimal, healthy American housing market? Like think think is if you were explaining it to a CASSID clindergarten students? I know we’re such a jargon laden industry. Is there such a thing? Is kind of a realistically achievable optimal housing market, or is it just always kind of a roller coaster? I think that’s you know, if you look at the historical statistics, you could not conclude anything other than there’s going to be a consistent volatility in the housing particular the mortgage market, and primarily that’s so much rate driven and and I think you know part of the stuff that we’re seeing today as a direct result of the feds involvement and and all the things that you know that they have put money into the system, they’ve kept inter strates low and as a result, people have been able to take advantage of that through housing. I think the other thing to keep in mind of the pandemic and the recession and the reason we went through a quick recession and or coming out really quickly is it wasn’t a housing issue. It was truly a social issue from the pandemic and many ways. I talked earlier about the subprime industry and what we learn from that. While those of us in the in the mortgage industry, were very concerned that we would be overregulated with many of the things that came out as a result of that, I would argue many of those things that they did put in place.
Tighter respere rules, tighter tiller rules, ability to repay, you know, all the different things that they they better disclosures, all the things that help make that market more credible and transparent helped avoid the situations we saw in the subprime collapse. That did hurt because we see when he when customers overspend on Housing and over leverage on housing, it will eventually cycle out and you really have to cycle through the downtime just like you do had the things in the uptime. I mean where we are today. I don’t know if you can ever have a perfectly healthy housing market, but I do think we have a healthy housing market today, and that’s driven by a couple things. Of course, there’s certain pockets that’s got home press appreciation a bit out of control. California comes to mind. Certain areas of Florida, primarily the leisure areas, beach how home second homes, those kind of things, seem to be way out of at a line. Those will regulate themselves through supplying to man. I think the pandemic has moved people out of some of those high rent districts, for lack of better description, into more reasonable areas for housing prices and that’s caused that those two increase in meaningful ways as well. But you know, inmatory continues to be a challenge for us at Leama. One one of the biggest barriers to our people to having more successful projects is finding inventory to rehab to rent, to do all the things that go in that. So, until you know when, invatory is still, you know, kind of a four month and we you know, historically a healthy housing market would say housing inventories closer to a six seven month range, and so we still have some work to do there. But you know, I think we’ve got a healthy economy, we’ve got good opportunities interestingly, I just read a stat from Red Finn yesterday that said, you know, eighteen percent of all the home purchases and the queue in quarter three were from real estate investors. So I think the real estate investor market helps to continue balance which not just people wanting…
…to occupy the homes living in it, but real estate investors, because of the work the private lenders have done to allow that liquidity, are another buyer of those homes to keep things more stable and more active. Yeah, I was cruising through red fin to and saw an article about, and something you mentioned, a really home price appreciation pushing people to more affordable cities. It just because home prices have been on a nationwide tear for the last eighteen months, call it. So it’s a relatively long feature and it’s a nationwide so you have home price appreciation pushing and then they also talked a little bit about kind of major adverse weather events. You know, every hurricane season seems to be a new record hurricane season, which I grew up on the coast, coast to South Carolina and and very familiar with the workings of hurricanes coming and going and I don’t think I would live on the coast again, being twenty eight years old, I don’t know if I’m terribly bullish personally on having a primary residents that’s that’s pretty close to the water. So so what impact you think that has on it? And do you think that this push more affordable cities is is this kind of a permanent fixture where you’re just going to have a real population shift out of your coastal areas? And I think it’s way too early to raise the victory flag outside of the primary industry markets. You know, the New York, The Dallas, the Miami, the San Francisco’s, the La’s, you know Chicago’s. I mean there’s primary cities in America that I think they’re going to continue to have, really continue to have strong activities. However, I think what’s in what’s will change is I think we are demonstrating, and you know, I was reading a an article from McKenzie today about, you know, what CEOS were talking about with people coming back to the office and, you know, in the remote work and the impact of that. And I think more and more CEOS that I talked to and…
…interact with are saying, you know, we’re going to need to get our people back into the office in some way and flexibility. So now the sudden, unless you see these corporate offices relocating their headquarters to some of these cities, people have vents you are going to have to get back into and be able to get to these place is on a routine basis, and so perhaps for people like us that means, you know, short term rentals, short term rental business and other kind of things are going to be really opportunistic because people are going to need to be there for two or three days a week to two or three days a month, and that’s going to create some of those markets. At Lema one, we’ve always focused on what we call the second and third tier markets. We think those were just great basic plate, great places to live, great quality of life, balance values. So you typically don’t have huge spikes and huge declines like you have in some of these Florida, California, northeastern markets. And so we think that will be because now people actually there is going to be a group of people that can work promote forever, and I think they’re going to choose to have quality of life and living the lifestyle is going to be more important than living in a major city, particularly as the millennials have families and grow and one to be more it spend more time with their families, they’re going to want to live one more differently than an hour and a half commute from Manhattan out to New Jersey. Yeah, that makes sense. One more question tied onto this. During Covidge, with with housing being on fire, my wife and I heard a lot of friends and Co workers who were ready to go on the house hunt and got into the crazy bidding wars right I went to go see this house on a Sunday there. It was the first day of showing. They there were fifty other people there and ten offers got put in within the first half hour and offers going above ask. My guess is that so many people settled…
…on their home purchase. Like this is not my dream home, but it’s the closest thing that was available that I could buy. Do you think that there’s going to be kind of an influx of homes hitting the market, two thousand and twenty two, two thousand and twenty three, of people who just got into homes and like, I’m ready to get out of this house because I don’t love it, I like it and it was just a place that was available. I think imagory is going to play a big role in that. I think two things are going to play a role. One is inventory. Can I and then many of many of these folks found houses and areas they wanted to live in. It was close to work, it was close to family, and so I think those emotional and social ties are going to prevent them for just saying, oh well, we’re going to go to our greenhouse but it’s, you know, twenty thirty minutes away. We picked this for a reason. Will probably adjust to it. So I think it’ll have some impact. But the key is inventory, and then the key is what is my work going to require me to do, because I think the other thing we saw through this as people bought larger homes than they would have bought two years ago because they need an office for one or both of them to work in, because they’re working from home and they need space to do that. And so I think, you know, we may see it and increase. You know, be interesting. Maybe it’s a good real estate of things. PODCAST. Option is to get a builder, a Nationale Builder, and to see what’s the what’s the trends on them, on the on the on what you guys see going out with home sizes and and what’s going on, because I think that perhaps we’re going to be seeing people looking for you know, we kind of had a smaller downsizing after the after the housing crisis. We may end up having people getting bigger homes because they need more space. That makes sense, I you know, I think about the home I live in. We bought it five years ago and it’s geared for our anticipated life right. But if my wife and I both started to work at home and…
…with a ninety five pound dog, then that changes the dynamic a little bit. So it seems like the remote work play is going to continue to kind of effect housing much beyond where we are today. Can I ask you a couple of fun Quirky questions get to know Jeff a little bit more. Sure have had it all right? Sports, let’s start with that. Where we you know, kind of football season going on. Shout out to the Dallas Cowboys, hoping to prayers always. What did you did you play any sports in school, Jeff, very poorly, but I I grew up in this small I mean, you know, I had forty three people my graduating class in this public high school. So we couldn’t even have enough. It didn’t have enough students to feel the football team. So the only sport we had were baseball and basketball. I tried to play both. I was, I. E. Spent Way Too much time on the bench, even in that small environment doing so. So actually ended up realizing, you know this, I’m just not any good at these basic sports skills and I’d be better off leading the team, and so I became them the manager, the equipment manager, of basketball team my freshman year of high school and by my senior year I was the assistant coach because I mean I knew all the players and was able to kind of so it was funny. I look back on that and some of the leadership and things I’m doing today were there as well, because it’s just leadership just always been a real passion of mine and to look back and see that I even did it in high school it’s it’s kind of fun to think about. Hey, guess that’s now. That’s kind of your professional sport leadership from high school through to today. So it’s it’s worked out well. If you could, if you could get paid that, I don’t know if I at the real estate of things is like Jeff. We’re going to sponsor you. Will pay twenty million bucks a year and you can play any professional sport. What would it be? What would it be? Golf?…
Is that? That’s my guess for you. Yeah, now, it would definitely be golf. I love being outside, I love the beauty of a golf course and it would absolutely he go off me and, you know, hang out with rory and tiger and and all those guys and they you know, I’d teach them leadership. I make sense. I Formula One is mine. I get get paid to drive car two hundred miles an hour. All your events are in just wonderful world class cities all over the plays. You Monaco, Austin, Texas, Mexico City. That seems like a fun one. Well, you know, that’s that’s I’ll plug. I’ll plug our head quarter city in Greenville, South Carolina, being MW driving performance center. Anybody you know, anybody listening to the real estate of things, and encourage you to take a look at the being of driving experience at Spartanburg, South Carolina. Will we won’t pay for the driving experience at lean one, but we’ll host you in our office and and let you meet Dalton Elliott and maybe he can give you a quick shout out on the real estate of things. I love it. That is that is a fun experience. Tabby, my then girlfriend, now wife, got that for me freshman here at College. Had No clue. Went and did the factory tour and then driving on the track for was like an hour and a half after and just an incredible facility that we have up here in Greenville. Any but they make all of the xthrees and x fives, I think, in the world. All of them are made in Greenville Right. All of the ex series, so all the fubx series three through seven, I think they have now, all are made in this in the Green Bowl plant. It’s fascinating and plant terms are worth the visit. Yeah, for sure. I’ve one more question and we’ll let you off the hook. All right, you get exiled like Napoleon right there. I get out of here. You can’t live in the US anymore. Would take your passport away, but we’ll give you another passport anywhere you want. What what country other than the U? Ask if you had to pick,…
…where would you live? Where would you set up shop? You know, if you’d asked me this two months ago. It would easily be Santorini, Greece. It is just the most beautiful, blue, peaceful to look at the the agency and all the things that you see there. I mean the pictures you see of the white buildings in the and the and the blues is exactly what it’s like. It’s just such a however, I just came back from Rwanda and it was such a beautiful country I might actually move to Rwanda and find a way to hone a coffee plantation there and build do caught do a Rwandan coffee and ship it to the US. I would buy that coffee and a heartbeat. Only you got to put your face on the packaging like he and I got a picture from you while you were over there of you standing, look like six feet away from a gorilla that was probably twelve times your size. I don’t know. He was looking at you a little hungrily. You’ll need to watch your back if you set up shop over there. Yeah, it was. You know, we just my wife and I just came back from the trip there a couple months ago now, and truck and gorillas in Rwanda is an experience of the lifetime. So I would you know the one, the one free get, the one free advice item today on the real estate of things. You had good thing. You got to listen to the whole thing to get this last little nugget right is take a trip to Rwanda. It’s an amazingly beautiful country and spending an hour observing guerrillas of the wild is one of the most exciting outside adventures we’ve ever done. I love it. Beautiful Node to end on. Jeff Tennyson of Lemoine capital, thank you so much for carving out some time to chat with me, Dalton. Thank you. Thanks for for giving us a really great blessing with the real estate of things this year. And, you know, happy holidays to you and Tabby and your family and, you know, Happy Holidays and Mary Christmas to all of our listeners across the world. You know, I’m so…
…excited about two thousand and twenty two and what’s going on. We got some really messy things going on externally in our country, in the United States, but I really do believe, you know, the best is so much yet to come with the opportunities in the private lending space and and you know, I can assure you and everybody listening that Leman one capital will be a big part of that. So thanks for allowing that, thanks for allowing me the time on the show and we’ll look forward to listening to great things coming in two thousand and twenty two. I love it. Thank you and to everyone saying thank you. Thank you so much for joining us me on this journey. You know, we’re winded down for the year and look forward to hitting the ground running in two thousand and twenty two with a jam packed list of guess. So thanks again for listening and Nope you enjoy ringing in the new year. Take care. Are you a real estate investor looking for the right lender that can finance all your deals and help you scale? Lima one capital has the best suite of loan products in the industry, Barnet, whether that’s fix and flips, fix and holds, building new construction or buying rental properties, they have incredible financing solutions for it all. A reliable comment, since Linder is one of the most important parts of your investment team, and that’s exactly what you get with Lima one. Let Lima one capital show you how they’ve helped thousands of real estate investor scale and increase their wealth. Check out Lima onecom or call eight hundred two five nine zero five n ninety five to speak with the consultant and preparation for your next project. Thank you for joining us today on the real estate of things podcast. Subscribe and tune in weekly for new content from the industry’s best while we continue to unpack the nuances of this dynamic market. Follow US across social media for additional insights and analysis on the topics covered in each episode, and remember to rate, review and share the show.
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