- 2:15 Meet Garrett Keillor: Introduction to Garrett, his background, and why he’s the go-to expert in alternative financing.
- 4:00 Garrett’s Story: How his father’s career in lending influenced his path and led to the founding of Lenders Academy.
- 6:01 Understanding Private Lending: Differences between private lending and hard money loans, and why investors choose these options.
- 10:06 Real Estate Scenarios: Insight into commercial real estate deals, including cannabis warehouses and high-value properties.
- 14:52 Marketing for Lenders: Garrett shares strategies for building a strong pipeline and acquiring clients in the lending business.
- Website:https://lendersacademy.io/
- Website: https://garrettkeillor.com/
- Website: https://team-collective.com/associates/garrett-keillor Linkedin: https://www.linkedin.com/in/garrett-keillor-43328489/
- Contact Number: 843-619-3005
- Email: corwyn@corwynmelette.com
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
ROBYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology that provides you with the tools you need to start and build your successful real estate career. Call me today, Robyn Collins, R – O – B – Y – N Collins with Red Robin Homes at 843-557-5003. Again, that’s 843-557-5003 or visit us at redrobinhomes.com/joinexit and make your exit today
CORWYN:
Hey, I’m your host, Corwyn J. Melette, broker and owner of Exit Realty, Loca in beautiful North Charleston, South Carolina.
Guys, if this is your first time listening to this show, hey, you are in for a treat because our mission is very simple. That is to empower our community through financial literacy and real estate education. Guys, we are legacy building. That is what we do. So I want to give a quick shout out to all those who listen to us faithfully, who tune in from downtown Charleston all the way out to Monkey’s Corner, from Hollywood up to Awanda. You guys rock. I really appreciate you. For those who get us on various apps, whether it be for our podcast recording or whether it be on our radio station app, guys, 106.3 FM. If you’re listening to us anywhere, I want to say thank you for tuning in. So I want to take this moment and say, hey, this is another one of those episodes where, look, you want to pay attention. You want to make some notes. So grab your pen and paper because, look, we got a guy today. This guy’s going to blow your socks off. I know I had to take mine off. He literally had me over here shaking and sweating a little earlier because this guy is it. He is the truth. When we talk about money, we talk about moving it. We talk about helping investors, making things happen. He is the contact. He is a resource for you to make these things happen. So I don’t want to hesitate any longer. Let me introduce to you all Garret Keillor. Now, Garrett is the founder of Lenders Academy and the managing partner of Keillor Capital. I love that word capital. We all do. We love money, right? So with that being said, we want to get into a conversation with Garrett today. So Garrett, thank you so much for coming on the show.
GARRET:
Wow. Thank you so much. That was an amazing intro.
CORWYN:
I don’t know if I’m available for hire. Perfect. Well, Garrett, look, if you don’t mind, give our buyers that intro to you, 30,000 foot view of you, who you are, what you do, and let’s get into to pick some pieces out of that.
GARRET:
Yeah, absolutely. So like you said, founder of Lenders Academy, that is, of course, a community ongoing support for people who want to replicate my hard money brokering business, right? So I have nothing to do with my students’ business after except to provide support. We’ll get into that later, but we’d like to start with my story. It’s pretty simple and it’s not a very exciting one, but I’m very thankful for it, at least the early stages of it. My father happened to be a lender for nearly 45 years. I worked for all the major banks and managed thousands of employees on the consumer mortgage side, of course, funding billions of dollars in transactions a month. So immediately I got sort of a mentor-mentee relationship within real estate, within financing from like a crazy early age, like 14 years old. Later, got my real estate license at age 18 when I was legally able to. And then it’s kind of crazy. I see some kids doing wholesaling at 16, 17 years old, buying rental properties. Amazing that they should maybe make the real estate agent’s age requirement lower. But later on, I was doing some real estate work in high school, later went to college at the University of Arizona, and then moved directly to New York City where I jumped on with our family company, Keillor Capital, became a partner there. And it’s a little different than what I teach, but generally the bread and butter within Keeler Capital is that we are providing private lending solutions versus what’s traditionally known as hard money. I guess it’s interchangeable, but there is some nuances attached to both. What we do at Keeler Capital is we physically find unique deals that require money from literally high net worth individuals, right? So maybe it’s a multifamily building. Maybe they need $20 million, $10 million, whatever it is, and a bank won’t lend on it because there’s five tenants not paying and it requires rehab. And it’s got a few quirks that a bank will just automatically stamp it and say, absolutely not. Unique lender that will look at every scenario. And we don’t have to do that many loans, right? We do high loan volumes down to low loan volumes. We’ll do construction loans and fix and flip loans, luxury fix and flip loans. We do a lot of loans in Southern California, as well as Washington, like the LA area, Hollywood area, Hollywood Hills, San Francisco, right? All the places with very high, both purchase prices after repair values and loan amounts, right? When you’re lending. And so as time went on, I built out our brokering business, which is for more of the cookie cutter deals, the smaller deals that don’t really require private lending solutions. They more so require high leverage solutions. So think like a fix and flip that requires 80 or 90% of purchase price, because it’s a fix and flipper who’s got a ton of experience under their belt, ton of projects, and they’re doing 10 a month, or maybe they’re doing 10 a year. They need to maximize by putting as little down into each and every project that they do. So we’ll go ahead and broker those out to funds, to other larger lenders, whether we just straight broker them or are taking on correspondent lines or warehouse lines from our other larger lenders that allow us to white label those funds. I found it super difficult to scale that business on the brokering side, only because there’s so many products that we can offer our clients.
And it takes a lot of knowledge and without being a successful lender already, or a broker already, it’s hard to get people started. So I found that there was a lack of knowledge in the space. I more so started creating Lenders Academy for people I was going to hire. I later said to myself, you know what? I’d rather educate people so that they can create their own business. I don’t want to be the guy who’s taking from them every single deal. I would rather teach, provide them what they need, provide them the knowledge, and provide them the capital backing them so far to build a massive community around lending. It just isn’t there, right? You go look on Google if you want. There is no education platform that teaches financing, whether it’s consumer lending, let alone hard money lending, right? So it’s become that solution. I hope that makes the sense to the listeners.
CORWYN:
That does. So Garret, that’s interesting, because my mind, I’m trying to think, have I ever heard of anything like this? And I haven’t. So for our listeners, and Garret, let me get you to do this for us, because not all of our listeners, those who are investors may be familiar with hard money or private financing. And I know that’s what your group does, is that what I tell people, I explain to investors kind of that hybrid. Hard money investors usually are strictly points and all this stuff going and coming, very short time period on financing. Don’t carry one note or what have you for an extended period of time. It’s usually six, maybe 12 months. And I said, with private financing, you can get longer the rate is going to be a little bit better. And the fee structure is a little bit different, a little bit lower as well. Is that sound about correct?
GARRET:
Yeah, totally correct. I mean, on the private side, we’re again, doing lower leverage. So when there’s investors, I’m physically raising money from individuals. Those investors want to know that there’s protective equity. They want a good return, something like 10, 11, 12%. Funny enough, we have a nice little system. When people invest in our loans, they get essentially monthly payments directly ACH into their bank account. So this is exciting investors. I don’t know if there’s investors out there, but more than welcome to join us, as long as you’re accredited. But for those who don’t know about what true hard money is, or what the landscape looks like, there’s many lenders out there, larger institutionally backed lenders that are considered hard money lenders that will provide say 80% of purchase price or 90% of purchase price, as well as the rehab costs associated with a project to ultimately get it to the value that it needs to be to sell it and make it a profit. So I hope that answers your question.
CORWYN:
Yes, yes, that definitely does. So your company, you may mention your dad has been doing, I’m assuming he’s the founder of the company, but short version in this arena and space for what I would assume is, if not all your life, most of your life. You guys, you may mention of new construction, fix and flip. So you guys kind of cover the entire gambit, including commercial or you’re only focused on residential?
GARRET:
We do commercial as well. We’ve done something as interesting as cannabis holding warehouses in deep California. We’ve done, funny enough, for someone very famous, I’m not going to mention their name, but a larger founder of a tech company wanted to buy an entire pier in Huntington, California for their family, just to put their boats on. So we helped them with a $9 million loan on a $14 million property. They ultimately just wanted to buy it before their big payout came, right? They wanted to cash out a little early. We’ve done Christian schools in Tacoma, Washington. We’ve done a number of things. I think the largest to date that we’ve done in a single loan is a $30 million loan for a shopping center, full construction, the land, well, for exactly $30 million plus some rehab capital.
CORWYN:
So you basically, what I’m hearing and what I’ve heard so far is essentially you’ve said, okay, well, look, as a company, this is what we have done. This is how we’ve managed to do it. I say, you figured out, you went in and essentially pulled the pieces out and put together a process that was followed, the roadmap, and now you’re helping people. You’re essentially assisting people, giving them the roadmap so they could work to do the same. Does that sound correct?
GARRET:
Exactly. To replicate my brokering business, I thought at first, why not just do the whole thing, private money side, as well as the brokering side, physically raising capital versus having the capital sit there. The nuances, the differences, I should say, being that one, you got to be an experienced lender already, right? Maybe you’re a broker before, start doing private money, physically raising that cash. Or if you’re a fundraiser, you just have to learn the lending side. On the Lenders Academy side, what we offer is teachings to get you from start to finish, whether you’re already in real estate or not. If you’re just starting, you can join our program and go from knowing nothing to being able to lend hard money, physically knowing all the ratios, all the math, all the vocabulary, all the teachings as far as bringing in loans, marketing, processing the loan, collecting documentation in the right way, collecting pre-screening loans so you’re not wasting time on loans that will never happen. All the things that build what is a sales pipeline, at least in a hard money sense, and then physically funding those loans. At the end of the day, you’re just middlemanning between the investor, the capital partner, and the borrower. The really cool thing about our program, and this is something that took a lot of thought, was how do I make it so that they get all the knowledge, plus there’s a million and one scenarios when it comes to real estate, let alone lending, lending hyper-specific. There’s restrictions on even acreage. If you’re going to buy a property that maybe is on one acre versus 25 acres, there’s restrictions. Every lender has restrictions on acreage and how much they’ll allow in terms of a property if you want to lend on that property. Again, the beautiful thing, I like to chop it up in value, what’s in the course. 50% of the value is the knowledge and the organization of the knowledge. We’re going from start to finish, but the other 50% of the knowledge is the buildup of the lenders that we have on our capital partners list. We’ve narrowed that down from about 200 different lenders that some might’ve been other brokers, but some might’ve been lenders who just weren’t that great at processing loans. Maybe they took too long and they’ve lost us transactions in the past. I’ve narrowed down that 200 lender list over the last six years down to 25 lenders, and I’ve sectioned them out into fix and flip lenders, construction lenders, the best in those arenas, rental lenders, short-term rental lenders, construction lenders, I think I said that already, rental portfolio lenders, and then private lenders. I’m physically on that list, but we have some competitors that are on there as well. They might do other states or they might do the same states, but I wanted to give whoever is a student of mine the full capability to have an organized list of who they’re supposed to take a loan to and who will pay them out the most for that loan, who will give their clients the best pricing so they’re competitive in the market, et cetera. They have every tool necessary when finishing the course to go ahead and just start doing loans, hammering out calls, doing loans. We also have a marketing module within that course that helps you. It’s the same strategies I use, whether it’s creating referral partners like mortgage lenders and real estate agents.
We even go to divorce attorneys a lot to send us loans. Funny enough, we had a situation about a year or two ago where a divorce attorney brought us a loan. The client happened to be getting divorced and they owned a property free and clear. It was about a $5 million property. The man had to pay out his wife, I think, in the next two weeks. We got him $2.5 million in cash, pulled cash out of the property. We got him in two weeks. Tons of different marketing strategies and ways to get loans in, but that is obviously, aside from the knowledge, one of the most important things. All you’re really doing is money’s behind you.
It’s ready to go. Where do you get loans? How do you find loans? How do you talk to clients? How do you sell loans?
CORWYN:
This is probably a moment, opportunity to bring some of this around because most consumers don’t understand that business owners, someone with high net worth, while they have a lot of money, cash, assets, or whatever, depending upon how it’s structured, it may or may not be feasible for them to get financing in a traditional realm from a bank. Because if all these assets or businesses or what have you, respectively, have their own budgets, capital, all that stuff as an individual, you can’t use that to purchase in a traditional fashion or manner. But on the profit side, okay, we can see all this. We can take all this factored into and give you an approval based upon that. So that is a reason why someone with money makes the decisions to use this type of financing, because it’s the financing that they can do based upon how they’re structured that works. That’s massive. So for Lenders Academy, who’s the ideal candidate? Who should be saying, hey, you know what? Oh, I need me some of that.
So who should be reaching out to you and saying, okay, look, this is the direction I want to explore. What is an ideal, if you will, candidate looks like?
GARRET:
Are you talking about students or borrowers? So students, we found immediate success, at least in terms of bringing on students within people who are already in real estate. They don’t have to be in real estate, but we just happen to have, and we’ve been running ads, funny enough, 90% of my calls are with people who are real estate agents, real estate wholesalers, real estate investors. They’re attempting to take the loan originator out of the equation. And I’ll go through those three examples. I think that’s a perfect direction to go in for this talk. Real estate wholesalers, what do they do? They find a stressed sellers who want to get out of the home. They ultimately wrap it up in a contract and they go ahead and sell that contract to an end fix and flipper for a fee, right, an assignment fee. Well, a lot of our students happen to be wholesalers. They’re wholesalers who haven’t thought about ever becoming the lender in the transaction as well. They could earn a 15K assignment fee. What’s stopping them from being the lender, helping their end buyer become the lender in the transaction? If we’re talking, yeah, if we’re talking a million-dollar loan, they might be charging 20 grand for the assignment, but they might be charging 2.5% on the actual loan, earning another $20,000, $25,000, almost doubling. Now, some people might be saying, okay, well, most wholesalers have end buyers who are cash buyers. Well, if you bring in good deals, you’re going to have multiple buyers. It doesn’t mean if the buyer wants the deal hard enough, they will almost be forced or almost have to use you as the lender to actually acquire the assignment. If you have three buyers who really want the deal, be like, hey, guys, happy to give whoever wants the deal, but you have to use me as the lender. So that’s number one. Number two, we’re talking about real estate agents, specifically real estate agents who handle a lot of investment property buyers. Those real estate agents are able to add another tool to their arsenal. They can offer financing. Again, they can be the real estate agent. They can be just the lender. They can be both. Again, we don’t do owner-occupied properties. That leads me to a good point. A lot of people might be asking themselves, what kind of licensing do you need? Well, to broker loans, at least on the non-consumer side, the non-owner-occupied side, the business purpose side, you don’t need any licenses within, I want to say it’s 36 states. California, you would need licensing, at least a real estate broker’s license. But for example, in Texas, in Florida, in Nashville, you don’t need a licensing at all to at least broker, at least middleman the deal to a larger lender. Now it’s state per state, so don’t quote me, but I’ve been doing loans like this in states that do not require licensing for a long time. I don’t want to get anyone in trouble. So it was important for me to speak with our real estate attorney and lending attorney many times in advance to figure that part out. Let’s go to the third type of person that’s been the lowest hanging fruit in terms of getting people into the community. That’d be real estate investors. And it sounds like a lot of the people listening are going to be real estate investors or aspiring real estate investors who want to build a portfolio who are maybe doing transactions already, whether it’s fix and flip or et cetera. I myself own a $12 million portfolio, mostly in Scottsdale, Arizona. I must’ve saved myself $300,000 in origination fees alone across all of those transactions being my own lender. Aside from that, or at least being the broker within my situation, aside from that, I was always able to get the cutting edge rates. One lender might say at the time, I think rates were, was that 4.75 on a essentially business purpose loan that’s non-owner occupied, 4.75 with two bank statements and an application and a credit check, that’s no income requirements. That was a great loan for me. And it answers something you mentioned right before I started talking, but there’s so many people who get wrapped up in doing loans with banks because it might be a little cheaper and it typically is. But there are so many restrictions within those banks about how many properties can you have. How much income are you making? None of our loans are based off of personal income, not debt to income ratio that say Chase Bank or Wells Fargo will use, block mortgage or any of these consumer loan companies. We’re going off of, does the meal, does the deal make sense? Will you be able to make the payments for a certain amount of time? Do you have a good credit score? We do loans for people who have bad credit scores. That’s another reason why someone would come to us versus a bank. We have lower bars when it comes to barrier to entry in terms of getting a loan. And it’s back to being a real estate investor.
Not only did I save on the origination fees, but I was able to save on processing fees. And I was able to keep my finger on the pulse when rates were changing so drastically, so quickly. So at that time, we didn’t know if they were going up next month, down next month, they were flopping all over the place. And so whatever the rate was across all of our lenders, I was able to make sure I was getting the lowest rate. And that brings me to my next point is that a lot of lenders make more money. Honestly, it should be illegal, but a lot of lenders make more money for upcharging you on the rate. If they’re giving you a loan and the lender that they’re working with to get you that loan says, Oh, they can have a 5% rate and they agree to a 6% rate. Guess what? They make more money. So from a real estate investor’s perspective, I would hate for someone to do that loan and be working with me, but also be working against me.
CORWYN:
Yeah, that makes perfect sense. So that man, thank you so much for that. So Garret, man, look, you’ve been getting into the sauce, bro. I’m loving this because you’ve been talking about those things on the backend. So for someone who may have interest in exploring this, definitely don’t want to get necessarily cost out because I want people to engage. Sometimes when you tell someone a cost, they automatically check out on you and they can’t get past that. But how does someone find out more information, set up either, I don’t know if you guys do a consultation or what does that look like in the beginning to see if someone is a good fit for this and give them, if you will, the ins and outs. How do people reach you for that?
GARRET:
100%. So they would go to lendersacademy.io. You’ll book a call with me. It’s not going to be another someone who does sales for me. It’s going to be directly with me. We’re going to vet out whether the program’s right for you. We’re going to vet out whether you’re right for us. Basically, remember, we’re connecting you with very sophisticated lenders. So we don’t let everyone in. But with that said, we’re happy to do phone calls with everyone to make sure that everyone gets a chance at joining the community and growing this, what I think is a good cause, because there’s just such a lack of knowledge out there when it comes to financing and want to get this community up to a thousand people in the next year or two. All are welcome to take a call. Would love to see everyone on that phone call.
CORWYN:
Sweet, sweet. So Garret, I call this kind of a mic drop question that, hey, what’s hindsight? You can knew what you know and all that stuff. And look, you technically you came into this business with that, your father being in the business prior to and that exposure. But if you could, what do you wish you would have known back then that you believe would have helped you be much further than where you are now?
GARRET:
Everyone needs experience in some industry. I think at a certain point, it’s okay to work for other people. It’s okay to build your knowledge base. In fact, you should find a mentor. At some point, you need to stop building someone else’s dream. That’s number one. You need to build your own business. Once I went independent in one or two of my companies, starting a company, I never looked back. And I told myself I’m never working for someone again. Number two, networking is everything. Networking for me is what I spend the most time on. We have nearly a hundred million dollars to fill on our private side. And every person you talk to is another opportunity. And so networking, networking, networking, get out there, go to meetups, do whatever you can to make connections and find out what people are doing. There’s a book called Never Eat Lunch Alone. So that’s another point. I think the last thing I would say for the listeners is this is the most important thing. Whatever business I have ever started, I’ve always tried to make the product or the service 5x the value of the cost. So I believe our academy, for example, if we’re going to use Lenders Academy as an example, I believe Lenders Academy should be a $20,000 offer. So with that said, 5x the value, right? Make it a no brainer. Whatever you’re doing, make it a no brainer. Do not waste your time, but also make sure that people know that you’re offering something that is 5x what they’re paying for. And that’s about it. That’s the secret of life.
CORWYN:
That is impressive. That’s impressive. So Garrett, I want to thank you, man, for taking time out of your busy schedule to be on here with us today. You’ve dropped some real nuggets, some wisdom for us. And I really appreciate you again, taking time out of your busy schedule to be here with us.
GARRET:
Of course, Corwyn. Thank you so much. I appreciate the opportunity.
CORWYN:
More than welcome. For our listeners, guys, look, your mind should be blown. Some of y’all ought to be laid down, hold on, prostrate in the flow. I mean, just throw down because about this opportunity, this information that you got today, as we always say, we want you to take, we want you not only to listen to it, but to digest it so that you can regurgitate it. So you can use it later because this is the time for you to act. So guys, please make sure that you tune in. Anything you think you miss, you want to go back to, please check out our website, go to your favorite podcast app, look for exit strategies, radio show, and make sure that you listen to this episode with Garret. Again, I appreciate you. I thank you so much for being a part of the Exit Strategies Radio Show family. And we’re going to have you back in the future because I’m waiting for somebody to tell me, hey, I signed up because if they don’t, they’re going to be in line behind me. You hear me? Because we coming. So again, thank you so much for taking time out for our listeners. Hey, y’all know how I feel. Y’all know how I say, always put the two of those things together. And I give it to you this way, which is I love you. I love you. I love you. And we’re going to see you guys out there in those streets.
Also listen to Episode 90 with Kevin Amolsh- How to Finance Creatively with Private Lending.
