Real Estate Deals Explained

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 on what you do at Temple View Capital and kind of go from there.

Ben Jonas: Thanks for having me. My name is Ben Jonas. I am first and foremost 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, and 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, and having to do it all over again — waiting another six to nine months for another check, running multiple projects at the same time, dealing with contractors, 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. Having a background in investing myself, and also having worked in finance for 10 years prior, it was a very seamless transition jumping into the lending space.

Temple View specifically started out as a fund buying distressed properties and distressed notes, converting those assets into either 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 varies from small first-time investors to very experienced 100-plus unit under management type investors. The market itself is growing, and we're very excited to see what's to come when the stability of the rates finally takes place.

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 that you're buying, the way you're financing it, and the way you're protecting it. 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, that you've renovated the property, that you have all the security in place. But 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 market trends right now — the environment and the changes in varying areas — if you live in an area that wasn't a flood zone, all of a sudden now that's a concern. Or you're in California with wildfires and earthquakes, or even in Hawaii with volcanoes. These are all 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 earlier.

Alex: So Ben, let's go through 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 in 2024 I wish I had focused more on when I started. A lot of the guys I started with are now the guys I'm calling saying, hey, I'm trying to buy this house, do you want to jump on this deal with me because you 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 of the best pieces of advice one of my mentors gave me very early on is that 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 any experience. Understanding that this is ultimately an asset that, if it's a rental, you'll have for a long time. His advice to me was, Ben, no matter what it is, if you buy right and you hold it long enough, you make the money back eventually.

I've seen investors buy stuff that I thought would never make money, but over time as they paid down the debt and values increased — think back to 2018, 2019. In my market in New Jersey, I used to see two-family properties for less than 40, 50, 60 thousand dollars, and I'd scoff at that thinking it was too expensive. Those same exact properties are now selling for four, five, 600 thousand dollars. So 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 this lending space as a broker before joining Temple View, that our pricing bar none on the rental rate side 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.

Outside of that, we're currently offering some promotions with appraisals. And the other thing we're doing — which is a nice feature I'm very happy about — is our partnership with Steadily. Borrowers are completely entitled to get insurance pricing from whoever they want, whatever relationship they have — could be their uncle, their 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 stuff, especially now, at a certain price point. You get a discount because you're able to close faster. So having that partnership with you, it's already embedded in our systems — whenever we submit a loan, we order the appraisal, and part of the process is we automatically request a quote from Steadily. So by the time we get to closing, we have pricing for them just in case their uncle or their friend didn't get back to them in time and they need to close. Having that relationship has made us stand out dramatically in the industry. Borrowers are coming to us knowing full well, hey Ben, do you have an insurance guy you can recommend? And nine out of ten times I'm calling you guys. It's been helping us make a strong push within the rental lending space.

Alex: Ben, would you mind sharing some real-life stories as far as how a successful lending deal came together and how you guys overcame some struggles?

Ben: With any lender, challenges are par for the course. Whenever someone tells you they can close within a certain timeline, you've got to build in some oh-snap moments for stuff to happen. One success story that comes to mind is a borrower who became a friend. He calls me in a panic — he's got to close, and he calls me on a Thursday with less than six days to close by the very next Friday. Because of our partnerships with Steadily and other service providers, I was able to get everything done and together to close within that timeline despite all the issues that came about. We prioritized that loan and moved 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 to satisfy the underwriting requirements. But the key for us has always been finding ways to partner — especially now with the advent of technology and AI — to shorten our closing timeline. I can confidently tell someone, 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 for you.

Alex: Huge value that Temple View Capital brings to borrowers is the speed to close. And what can you share about the fund itself?

Ben: We're a $3 billion fund. We've got plenty of money to lend — we're just looking for the right partners to help us get there 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 the insurance aspect of financing is a universal law.

Ben: Absolutely. Being able to manage expectations — things will happen, that's par for the course. If nothing happens in a transaction, you stop and say, did I miss something? Is something going to come back and bite me somewhere? We pride ourselves in our processes, and although sometimes they can be a bit of a pain, the key is setting the right expectations with the borrower and helping them understand that ultimately it is 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 — maybe some common pitfalls to avoid and tips for success?

Ben: First, I would say be upfront. No one likes to waste their time. I pride myself as a business development manager at Temple View on my ability to really get to the bottom of things when I'm speaking with borrowers, clients, or other partners. I try to get to the crux of it. We'll have a wonderful conversation and be best friends by the end of it, 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. Then we can sit back and analyze what's the best course of action to get you what you want at the time you want it. It may not be the answer you want to hear, but I hate calling people with bad news. If I took the call, I'll come up with a solution before I even tell you this isn't going to work.

As far as tips for anyone looking to get into the space or work with new lenders: 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, so take the time, educate yourself, and ask questions. Understand that the people you're calling are the experts in their particular field and they're telling you what to do to get what you want.

There are plenty of resources. When I started, I burned the boats — quit my job at Chase, emptied out my 401K into all types of courses and mentoring programs to learn as quickly as possible. I would call lenders and constantly pound them with questions even though I had no deals. Some got annoyed and stopped picking up my calls, but others continued to talk to me, and those are the folks that eventually, when I figured it out, were the people I wanted to continue working with.

For anyone starting out, learn from those who've done it before. In real estate investing, do your best to take the emotion out of it. Use the resources at your fingertips. 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 a lot of states 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. Partner with a good insurance company. Shop around, it's your right to go out and find out what's available to you. That's the best advice I can give. Understanding the LTVs and the minutia of a transaction comes later — first, just have the will and don't be too proud to ask a question or ask for help when needed.

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

Ben: Exactly — provide value. And just to add quickly: we're providing a service, whether on the lending end or the investing end. This country has been facing a housing crisis since the 70s, and frankly a lot of things have sped up over the years. The only way we can address it is through financing providers that can bridge that gap and provide people the money they need to create more housing stock — whether it's build-to-rent, straight rentals, or buying a property and renovating it. I live on the East Coast, there are a ton of older homes going back as far as the 1600s. These properties are beautiful, and 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. Having the understanding of that need and being willing to fulfill it is key. As an investor it provides you 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's why I do this and why I enjoy doing it. The money's nice, but the service I'm doing 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 resources and learning opportunities that Temple View Capital may have for borrowers out there?

Ben: Coming up at the end of this month, we're doing a webinar focused on DSCR rental loans. We've done a lot of them and have resources available on our website to teach about the lending process. Our marketing department is also putting together some educational series that we can share with our borrowers to keep them in the know.

Outside of that, there are a ton of resources out there. You just have to be careful who you share your mind with and who's giving you advice. YouTube University — you just gotta be careful, it's free for a reason. Something's in it for them. But here at Temple View, when you speak to any of our reps, we try our best to provide resources to our clients because ultimately the more we help them, the more likely they'll come back to us. I believe this year the marketing department is going to start putting out more educational pieces on our website.

As a shameless plug for me personally — if anybody wants to learn more, I'm more than happy to share some of my resources with them. I'm a big fan of BiggerPockets. I've done a ton of stuff on BiggerPockets, been to a few of their conferences, and read a lot of their book recommendations — it's usually a great source of data and education. But overall, for any borrowers I talk to, especially new borrowers, I take the time to really educate them and point them in the right direction as they go through their process. There's 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: Absolutely. Ben, we're wrapping up here, but I'd love to be able to plug Temple View Capital and yourself one more time. Could you give a little bit of information on how our listeners could get a hold of you?

Ben: You can reach me by email, on my personal Instagram, and of course Temple View Capital is on Instagram and Facebook as well. We'll include the links in the show notes. Reach out, ask questions — we're happy to share, we're here for that.

Alex: Awesome. Again, Ben, thank you so much for joining our call this morning — really enjoyed the conversation and your insights and expertise. And as a reminder to the audience, for more information about landlord insurance you can visit steadily.com. We also have a landlord resources partner directory on our website, which I think is really valuable. Temple View Capital is listed 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 type of rates you're looking for to help you land your investment properties. Appreciate your time this morning, Ben, and I invite viewers to subscribe and tune in for future episodes. This has been Invest Smart with Steadily — thanks everyone for listening.