Real Estate Deal Structures 101: Your Guide with Temple View Capital

Alex Reeves: Hey everyone, thanks for listening in on our podcast, Invest Smart with Steadily. This morning I want to thank Ben Jonas here joining us from Temple View Capital. He's been in the real estate investor lending industry for quite a while now and he's got quite a few insights on insurance and the lending industry as a whole. So Ben, I'd like to let you give a brief background to our listeners about what you do at Temple View Capital and kind of go from there.

Ben Jonas: Thanks for having me. My name is Ben Jonas. First and foremost, I like to say I'm a real estate investor myself — been at this now for the last 10-plus years, probably flipped upwards of 40-plus properties in that timeline. I've had rentals, sold them, and kind of regretted it. Now I'm jumping back into it again.

As far as my background, I joined Temple View about three or four years ago. I started shifting over to the lending space because I quickly realized that flipping is fun, it's sexy, it's exciting, but it's also feast or famine. You go from making a ton of money, then give half to the IRS, having to do it all over again, waiting another six to nine months for another check, running multiple projects at the same time, and dealing with — or rather babysitting — contractors. All of that excitement was a bit too much for me as I'm getting older, and I decided it's time to seek some stability. Being that I had a background in investing myself, and also prior to this I worked in finance for 10 years, it was a very seamless transition jumping into the lending space.

Temple View specifically — our company started out as a fund buying distressed properties and distressed notes, converting those assets into properties they'd take back to sell back out. That eventually progressed and morphed into what Temple View is today. We are a nationwide lender based out of Bethesda, Maryland. Our primary products are Fix and Flip loans, ground-up construction, bridge, and — the topic of the day — DSCR, debt service coverage ratio loans. We lend nationwide from New Jersey, where I'm based, all the way out to Hawaii. Our clientele vary from small first-time investors to super experienced 100-plus unit under management investors. What we've found is the market itself is growing, and we're very excited for when the stability of rates finally takes place to see what's to come.

Alex: Ben, would you mind giving a little bit of an overview as to how real estate lending and insurance play a critical role for investors, touching a bit on the peace of mind and protection it offers?

Ben: Absolutely. The best way I would explain it — think of a three-legged stool. You have the asset you're buying, you have the way you're financing, and you have the way you're protecting. From the protection aspect, there are varying ways you can do so. If it's a property you're holding as a rental, you want to make sure you have the right property manager helping you deal with the tenants, you renovated the property, you have all the security in place — and the big crux of it at the end of the day is insurance. Nobody really likes talking about insurance, primarily because it's like, "Oh man, I'm paying for this thing every month," but it's the one thing you care about the most when you're in trouble and you need that payout.

With our industry specifically regarding DSCR, insurance is the most vital item. With the market trends and the environmental changes in varying areas — if you live somewhere that wasn't a flood zone and all of a sudden that's now a concern, or you're in California with wildfires and earthquakes, or even in Hawaii with volcanoes — these are all the things you have to take into account specifically with DSCR because that will make or break a deal. Having a good insurance company that can give you accurate, fast pricing is a central part of that three-legged stool I mentioned.

Alex: So Ben, let's go ahead with a hypothetical situation. Let's pretend that I'm in my 30s, an inexperienced millennial investor looking to get into the industry. Would you mind going through the basics of real estate lending terms in more simplistic terms for us?

Ben: Absolutely. It's all product specific. I'm a big proponent of value add — being that I have a flipper background, I'm always going to lean more towards that. That's one thing I love about real estate: there are a thousand and one ways to make money doing this. You can start as a flipper, you can start as a wholesaler — someone who just takes a contract and assigns it to someone else, no risk, just your ability as a marketer — or you want to be a landlord, which frankly, looking back to 2019, I should have focused more on that when I started. A lot of the guys I started with are now the ones I'm calling saying, "Hey, do you want to jump on this deal with me because I have some cash?"

For someone starting out, my best advice would be to really take stock of where you want to be in real estate. One piece of advice one of my mentors gave me very early on: buying right is the most important part of it. No matter what happens on the project — whether you go over cost, which is going to happen, or you have some sort of insurance issue, a claim you have to put in — buying right is your primary way of protecting yourself in any transaction, especially when you don't have experience. His advice to me was, "Ben, no matter what it is, if you buy right and hold it long enough, you'll make the money back eventually."

I've seen investors buy stuff where I'm thinking, "You're not going to make money on this," but over time as they pay down the debt and values increase — think back to 2018, 2019 in my market in New Jersey. I used to get two-family properties for less than 40, 50, 60 thousand dollars, and I'd scoff at that thinking it was too expensive. Now those same exact properties are selling for four, five, six hundred thousand dollars. That's the beautiful thing about real estate. For anyone starting out, don't be afraid to jump in, don't be afraid to make mistakes, it's all part of it. If your end goal is to hold long term, just bear down — you'll make it back. It's a long game. It's the Warren Buffett model: buy and hold, sit tight.

Alex: Absolutely. So Ben, how does Temple View Capital go about structuring your real estate lending opportunities?

Ben: One thing we're doing primarily right now — we have a few promotions going currently. From a pricing standpoint, I can say with complete confidence, having started in the lending space as a broker before joining Temple View, that our current pricing on the rental rate side — excuse my expression — smokes everyone else. It's really aggressive because we're making a big push to be known in the industry as a strong, go-to DSCR lender, debt service coverage ratio lender.

Outside of that, we are offering some promotions with appraisals. The other thing we're doing — and it's a feature I'm very proud of — is this partnership with Steadily. Borrowers are completely entitled to get insurance pricing from whoever they want, wherever relationship they have — could be their uncle, a friend who's an insurance agent, that's completely up to them. But speed in our industry is paramount. Being able to perform within a certain timeline allows you to buy at a certain price point because you're getting a discount for closing faster. Having that partnership with you guys already embedded in our systems means that whenever we submit a loan, as part of the process we automatically request a quote from Steadily. By the time we get to closing, we have pricing for them just in case their uncle or friend didn't get back to them in time and they have to scramble right before close. That relationship has made us stand out dramatically in the industry — so much so that borrowers are coming to us saying, "Hey Ben, do you have an insurance guy you can recommend?" and nine times out of ten I'm calling you guys. It's a great partnership and it's been helping us make a strong push within the rental lending space.

Alex: Ben, would you mind sharing some real-life stories highlighting how a successful lending deal came together — some of the struggles you overcame and how your strategies came through for that success?

Ben: With any lender, challenges are par for the course. Whenever someone tells you they can close in a certain timeline, chances are you've got to build in some "oh snap" moments for stuff to happen. One success story that comes to mind — a borrower who became a friend called me in a panic. He had to close by the very next Friday and he called me that Thursday — less than six days out. Because of our partnerships with Steadily and other service providers, I was able to get everything done and together for him and close within that timeline with all the issues that came up. We moved the loan to priority and pushed it ahead.

On the other side of things, bad things also do happen — it's always a function of the deal itself and how quickly the borrower can get documents and paperwork to satisfy the underwriting requirements. But the key for us has always been finding ways to partner with vendors that embrace technology, including AI, to shorten our closing timeline. I can confidently say to somebody, "Hey, you have a loan you need to close in 10 days — yeah, I can meet that deadline if you let me use my resources to get it done." I can count plenty of instances where I've had to meet deadlines and was able to do so because of partnerships with companies like yours.

Alex: Huge value that Temple View Capital brings to borrowers is your ability for speed to close.

Ben: We're a $3 billion fund — we've got plenty of money. We're just looking for the right partners and the right borrowers. Having that partner as part of your transaction will help you grow, especially for newer aspiring landlords or existing ones looking to grow their portfolio. Having lenders who are willing to roll up their sleeves, make concessions, and make deals happen for the people willing to work with them — we're all for it.

Alex: What I'm hearing is speed to close, and time kills all deals. Whatever we can do to help speed up that insurance aspect — in real estate financing it's a universal law.

Ben: Absolutely. Being able to manage expectations is key. Things will happen — that's par for the course. If nothing happens in a transaction, you stop and say, "Did I miss something? Is this going to come back and bite me somewhere in the future?" We pride ourselves in our processes, and although they can sometimes be a bit of a pain, the key is ultimately setting the right expectations with the borrower and helping them understand it is ultimately for their benefit. At the end of the day, we're lenders — if we don't make loans, we don't get paid. So the motivation is shared.

Alex: Ben, could you provide some practical advice for viewers on how to approach real estate investing and lending — some common pitfalls to avoid and tips for success?

Ben: The first thing I would say is be upfront. Nobody likes to waste their time. I pride myself, as a business development manager here at Temple View, on my ability to get to the bottom of it when I'm speaking to borrowers, clients, or partners. I try to get to the crux of it. I can sit there and chat you up and we'll have a wonderful conversation, but ultimately you called me for a reason. I am a subject matter expert in my particular field. So when I ask you questions, be upfront and honest, and then we can sit back and analyze what the best plan or course of action is to get you what you want at the time that you want it. It may not be the answer you want to hear, but if I took the call, I'll come up with a solution before I even tell you something isn't going to work.

As far as tips for anyone looking to get into the space or work with new lenders: just be upfront and honest. If it's a new relationship, give yourself the time, especially if something is brand new to you. Don't be afraid to ask questions — there's no such thing as a bad question. If you're working with someone who can't take the time and patience to go through the transaction with you, find someone else. No one will care more about your business than you. Take the time, educate yourself, ask questions, take notes, and understand that ultimately the people you're calling are experts in their particular field and they're telling you what to do to get to what you want.

When I started, I burned the boats — quit my job at Chase, jumped right into real estate, emptied out my 401k into all types of courses, mentoring programs, and so on, just to learn as quickly as possible. I had lenders I would constantly pound with questions even though I had no deals. Some of them got annoyed and stopped picking up my calls, but others continued to talk to me — and those are the folks that when I figured it out, I wanted to continue working with. So learn from those who've done it before, and especially in real estate investing, do your best to take the emotion out of it. "I think I can get more money than Zillow is telling me," or as a rental investor, "I think I can rent this house for this much" — use the resources at your fingertips to actually run the numbers and make money.

Partner with the right vendors — Steadily and other groups — to help you get your project in order, whether it's a Fix and Flip or a buy and hold. Have the right partners in place: your title company, your attorney. I know there are a lot of states that don't require attorneys for a real estate transaction, but I always highly recommend it to any newer investor — hire an attorney. That's their job to protect you and go through the transaction with you to find any pitfalls. Partner with a good insurance company, whether it's Steadily or someone else — talk to multiple, make yourself as aware as possible, and don't always take the first answer you hear as the right answer. Shop around. It's your right to go out there and find out what's available to you. The first thing I'd say is just having the will and not being too proud to ask a question and ask for help when you feel it's needed.

Alex: That was great. I'll just add — there are so many coaches and communities out there for the real estate investing world. Shameless plug here, including Temple View Capital — you guys are on our partner directory on our website. We've got a landlord hub for resources, and we recognize that there might be a lot of vendors we partner with that could be of value to our clients. Temple View Capital is on there as well, to help our clients however we can and vice versa.

Ben: Provide value — exactly. And to add to what you said: we're providing a service, whether on the lending end or on the investing end. This country is facing a housing crisis that's been around since the 70s. The only way we can address it is through financing providers that can bridge that gap and provide the money people need to create more housing stock — whether it's build-to-rent, straight rentals, or buying and renovating a property. On the East Coast there are a ton of older homes, some as far back as the 1600s. These properties are beautiful, but if there's no money to renovate them, what's the point? You have to have something in it for you at the end of the day. As an investor, it provides you the cash flow and the freedom to live the life you want, but you're also providing a service — renovating homes for your tenants to move into. That to me is why I do this and why I enjoy it. The money is nice, but the service I'm providing for the greater good is ultimately my satisfaction.

Alex: Can we talk a bit about the importance of ongoing education and navigating lending, with a nod to the resources and learning opportunities that Temple View Capital may have for borrowers out there?

Ben: We actually have a webinar coming up at the end of this month — a teaching webinar regarding DSCR rental loans. We've done a lot of them, and we have resources available on the website to teach about the lending process. Our marketing department is also putting together an educational series to keep borrowers in the know.

Outside of that, there are a ton of resources out there. You just have to be careful who you take advice from. YouTube University — you've got to be careful. It's free for a reason; there's something in it for them. But we try our best here at Temple View — anyone who speaks to our reps, we try to provide resources to our clients, because the more we help them, the more likely they'll come back to us.

Shameless plug for me personally: if anybody wants to learn more, I'm more than happy to share some of my other resources with them. I'm a big fan of BiggerPockets — I love BiggerPockets. I've been to a few of their conferences, I read a ton, and their book recommendations are usually a great source of data and education. For any borrowers I talk to, especially new ones, I usually take the time to really educate them and point them in the right direction. As I said, there are a thousand and one ways to make money in real estate — just let me know where to point you and I'll let you know where to go.

Alex: Well Ben, we're wrapping up here. I'd love to plug Temple View Capital and yourself one more time — I really appreciate you joining us this morning. Could you give a little bit of information on how our listeners can get a hold of you?

Ben: If you have show notes, I can provide my contact info to include there. You can reach me by email, on my personal Instagram, and obviously through Temple View Capital's Instagram and Facebook. Reach out to us directly, ask questions — we're happy to share, we're here for that.

Alex: Awesome. Again, Ben, thank you so much for joining us this morning. Really enjoyed the conversation and your insights and expertise. And guys, as a reminder to the audience — for more information about landlord insurance, visit steadily.com. We also have a landlord resources partner directory that I think is really valuable, with a ton of different resources and vendors we partner with. Temple View Capital is on there for lenders, so if any clients or borrowers out there are looking for a good lending company, Temple View Capital is great and Ben can help you get the rates you're looking for on your investment properties. Appreciate your time this morning, Ben. And to our viewers — please subscribe and tune in for future episodes. This has been Invest Smart with Steadily. Thanks everyone.