Asset Based Lending For Real Estate Investors With Zero Experience

Hey everybody, Toby Potter here with Global Trinity Finance. Hey guys, we are here in Dallas today at LeverageCon. Um, man, amazing turnout. I think I saw on the registry about 500 people, uh, from lenders, appraisers, attorneys, Anything you need to be able to get into the real estate industry as an investor, here's the place to be. And if you're not here, well, you're missing out. But the good news is that we've had the distinct honor and privilege to meet with our boy Matt with Asset Based Lending, and we're going to talk about what asset-based lending does, how it can impact and help investors grow and build their book of business. Matt, welcome to the show, buddy.

Thank you, Toby, for having me.

You bet. So tell us about where you guys are at, where you're located, okay, what state you lend in, and tell us about the product and programs.

Okay, uh, ABL, asset-based lending. Uh, we're based in Jersey City, New Jersey.

Yeah, we will hold that against you.

Right across the Hudson from, uh, Manhattan. Yeah, uh, I'm personally and physically, I live in, uh, Chicago.

Oh, so Windy City.

Yes, yes, but Windy City because of the politicians, not, not the actual physical wind.

That's exactly right.

That's exactly right. But, uh, so we We lend to real estate investors.

Okay.

We help them scale. We start with new investors all the way to experienced.

Okay.

And we specialize in ground-up new construction, fix and flip, DSCR, rental purchases, and, uh, refinances.

So you have the whole buffet.

Yes. For an investor.

Great.

Awesome product suite.

Yep. So tell us a little bit, let's go into right now, uh, there's kind of a pullback. I'm sure you guys have seen it too in the fix and flip world. Kind of been transitioning to DSR, but on the fix and flip, what are you guys seeing as a trend of growth, decline, stagnant? Where are you at on that?

I see as of late and this year of 2025, it's steady. So there's still deals out there.

Yep.

Okay. Some people are coming out of the woodwork, mainly newbies.

Yeah. Yeah. Lots of newbies.

Lots of newbies, which fortunately we actually our company was founded and started and built on helping new investors in the business. So we still, sorry, we still do, uh, uh, ground, or excuse me, fix and flip for brand new investors, zero experience.

So is that leverage different than from an experienced investor? How does that work? How does that help you guys protect the asset and the money?

So based on a certain credit score, the leverage will adjust. So if they're, uh, below a, you know, you know, between 680 and 700 FICO score, we'll do 80% loan to cost.

Okay.

So 20% skin in the game for them. If they have a FICO score of above 700, 85%.

85%.

Yeah.

Now if they're below a 680, are we— we're out? Well, if they've got lots of capital.

Yeah. We— it's on an exception basis.

Okay.

And if there's some mitigating factors.

Yep. You know, so it's not that they, uh, have got bad credit, but they're limited and they may be maxed out on some credit cards because—

yeah. And sometimes a bad credit report isn't necessarily that bad. It's more, it's some, you know, it could be, hey, they were shopping for a car and, right, and the dealership accidentally or purposely pulled their credit 10 times, uh, or they've got— yeah, exactly. Or, you know, they've got some utilization, they've got some maxed out credit cards, but all their bills are paid on time, right?

No, no late pays, no charges. So there's something we can look at.

And then, and then also, uh, they might have, you know, maybe $150 medical charge-off that pops up one month and then their score plummets.

And I do love— so when we got back, we got in the business 30 years ago, medical collections was profound and it didn't matter. I would, you know, clients say, well, we just got— went to the doctor last month and we have a payment plan and I already have a collection. Yeah. And so I do love that the government removed that off of credit reports, but every now and then one will pop on there. Sure. And it's easy to get removed, but it does. Affect the credit score.

It can, but again, we might overlook that or they might, we might say, hey, do you happen to have a payment plan or something that shows that you either satisfied it or that are working? And if they show that, oh, then it's, then you're, it's fine.

Uh, so if, so that's what we look at on a brand new guy. So now I have an experienced, what we call institutional investor who's done 10, 15, 20 deals. Do I get a higher leverage or lower, uh, interest rate? What's the difference?

Absolutely. So the, the more deals you do, whether it's with us or just in general, is going to grant you higher leverage, lower rates and fees.

Okay.

So because it's that, it's, you know, we know that they know what they're doing.

Yeah.

And the risk is mitigated.

Yeah. And that's what we try to explain to everybody out there, that it's a risk-reward situation. We teach our guys, does it make sense? And everything of that deal has to make sense. The credit score, does it make sense why it's below a 680? Does it make sense that this property, uh, is going to perform like they said or not? You know, are they buying a property that no houses have moved? And why do they think they can sell it at this price? So on and so forth. So we try to do a common sense underwrite. I think you guys are right in that timeline.

Absolutely. You hit it on the head. Common sense underwriting.

Common sense underwrite has to be our world. Yeah. And it's, it's some of the things after COVID that really kind of set me off was that we got away from the common sense and we got into these grids.

Sure.

You know, we got into— you had to have 3 to 5 deals minimum.

You had to fit into a box.

You had to fit into a box. I'm like, that's not what private lending got started. When it was conceived in 2010, 2011, it was about, does it make sense? Can we make money on this deal together?

Sure.

Me as the bank, you as the flipper investor. Can we both grow from this deal? Was the bottom characteristic.

Absolutely. And we, we want, I say this to all my clients, I want you, we will do everything in our power to make you successful.

Yeah.

Because we want you to succeed. We want you to make as much money as you can on that deal because we want you to come back and do another one.

Do another one.

Right. Or, and then do another one.

Right.

Or two at a time.

Right. Right.

Or three at a time.

Yeah. It, it does. It's a true partnership. Yeah. It does you guys no good to do a one and done.

No.

No. It, it's, it's, it's so much more beneficial financially relationship to do 10 deals, 20 deals, 30 deals, and to get a partner for life. Yeah. Right?

Yeah. And, and what's great too is when a client stays with us or any, or any lender, they build that relationship, they build that trust factor. You'd be surprised at what they can end up doing.

Right.

Meaning the underwriters start to know their work.

Right.

The people in the company know their, their deal, their process. I don't want to say things to just get rubber stamped, but they get streamlined. They, they flow a lot easier through underwriting and through, and then also they can use that as leverage to say, hey, I've done all these deals with you, right? We've built a good relationship. I want to do this now. And this is not necessarily in your wheelhouse.

I want to step up a level. Yeah.

Can we, you know, we'll get a little creative.

Right.

And, and because they've earned that trust with us and they've proven that they know what they're doing and they paid us back. So now it's kind of like you can do whatever you want, right? If you've got a funky deal you want to bring to us and try, we'll probably say yes.

And if you can explain to me how you're going to perform and how this deal will work, I probably will believe you because you've shown that you perform.

Absolutely.

Yeah. Yeah.

It's kind of like with a lot of things in life, right? You know, it's relationship, relationship, trust. Yeah.

Yeah.

Prove you prove your track record.

Yeah. And I don't say you have to prove, but you've earned the right now to step up. Earned the right. Yeah. Yeah.

You've earned the right. You performed.

Um, so do you work with just, uh, uh, individual clients or brokers, or how do you guys work?

Both. So we, we, uh, direct— we work direct to client and then broker. We're very broker friendly. We love brokers.

Yeah. So on your broker side, let's talk about that a little bit because there's a lot of brokers here. This is a broker network.

Sure.

Um, do the brokers— are they white labeled? Are they— how, how, how do I not lose my client if I send a deal to you? Because they could go straight to you.

I get asked that all the time. And I, and honestly, it's, we have, I mean, we have a broker package just like everyone else where they, you know, we sign documents saying, hey, we're not going to solicit your accounts. We're not going to do anything or go behind your back or anything like that. But when you work with me or my LOs direct, I mean, it's, that's a relationship too.

Right.

And it's a trust. Why, why would I jeopardize and steal one of your clients? The mouth that— bite the hand that feeds me.

Happens. It does.

But why would I jeopardize one deal, one borrower, and lose the possible 30 or 40 different people that you were going to send me? I don't understand that. We don't work like that.

But Matt, that's common sense. And a lot of our brokers don't resonate that way. And I will say that most of them have been burnt. That's why they're concerned.

Which is fair. Yeah. And I agree. But I, Again, when they come to me and ask me that, I just tell them I'm not gonna do it. Trust me. Uh, I will, you know, I don't, I want this as a true partnership and I'm just not gonna do it.

So back to the question. So are the brokers white labeled or are they on just on the HUD as they are?

Not, they are not. Uh, we don't do, uh, at this time we don't have a white label program. So, uh, if they, yeah. Charge an origination, it will be on the HUD.

Charge on the HUD. Okay.

But we have a broker incentive program, right, that we offer brokers. If you build a relationship with us and keep sending us deals, then we, ABL, will pay you a yield spread on the backend.

Nice.

That will not be on the HUD. Right. It's basically, it's a check that we write to you and it doesn't affect the borrower, meaning the borrower's not paying for it in rate or in fees. It's truly a thank you. Here's a little, and is that a little incentive?

Is that a merit earned deal spread? Correct.

Yep. Yeah. I think it's, uh, I have to check our, our, it's actually, we just launched this new broker program about 2 weeks ago.

Okay.

Uh, so I think it's like the first, uh, 3 deals.

Perfect. Perfect. So what else? So are you guys are nationwide?

Yep. Uh, we, I say nationwide, there are. Like most lenders, I say nationwide, uh, but there are a few states that we do not lend in. Um, but most clients are not doing deals in those states, so it's easier just to say nationwide.

So we do the same thing. I say nationwide other than Montana, Wyoming, South Dakota, North Dakota, because if there's more cattle and trees than people, I'm out.

Yeah, right. It's same thing. Uh, North Dakota, South Dakota.

Yep.

Um, actually, we don't lend in Hawaii or Alaska. Um, again, I don't, I don't get a lot of deals, uh, for that. Um, in Nevada either, uh, we don't lend in Nevada because, uh, it's the state law requires you have to have an office or a brick and mortar to lend there. And we just don't do that. And we didn't, we haven't decided to cheat the system by opening an office, like a rework office or something.

Yeah, exactly.

We just, we just don't do that.

So yeah, cause it, it's just, I don't think there's enough volume to support all that. So we, we looked at it too. And I think, correct me if I'm wrong, you had to have a brick and mortar and you had to have a W-2 employee. Yeah, correct. So now I got workman's comp, I got insurance, I got all this. If I'm not doing $2 million a month out of that state, it's not worth it. No.

So we let the lenders that have their— that's their wheelhouse.

Yep.

Enjoy.

So, what are your sweet states? Do you have a specific area that you like?

Well, yes. So we started and were founded in New Jersey. So that New England, East Coast is up.

Connecticut, all that area.

New York, New Jersey, Connecticut, all the way up to Maine. And then south as well.

Straight down the coast.

So like Florida, the Carolinas, Georgia, and then just migrates west.

So you guys pretty much start in the north.

Texas is a great market.

So basically East Coast. States other than California.

Yeah. Oh, but we, I mean, we have, we go all through the Midwest too, but yeah, those are your sweet states.

Yeah. Coastal states. Nice.

Exactly. And Texas.

Yeah.

Texas is great.

If you're not in Texas, you're missing millions and millions of dollars. Oh yeah.

There's so much, there's so much business here.

Texas is, uh, you know, everybody talks about that we're kind of in a real estate recession. Texas hasn't seen shit.

You know, and that's the thing. Everyone talks about that. Uh, it's slowing down or it's a recession. There's deals out there.

There's tons of deals out there.

There's deals out there. It's just, you know, there's deals.

The problem is, Matt, is that in 2016, '17, '18, '19, you couldn't miss. You could go buy any deal, you could rehab it and sell it and make a profit. I mean, you didn't have to know squat. Now the margins are a little tighter, it's a little thinner, and so people have to work a little harder.

Sure.

And that's the only difference that I'm seeing. Exactly.

Yeah. And that's— and I've kind of educated and kind of mentored some of my newbies and some, even some brokers when they complain to me that it's slow.

Yeah.

And they're like, oh, there's no deals out there. Oh, there's deals.

There's deals.

But you have to kind of go the old back, the old school way.

That's right.

You know, knocking on doors, you know, finding distressed properties in the, in the market that you want to invest in.

Yeah.

Um, you can't just sit on the couch and, and scroll the MLS and be like, I'll take that one.

Yeah.

No, you know, you have to go to the old, old school measures and, and you gotta, and our industry was founded on the driving for dollars philosophy.

Sure, you're driving neighborhoods, you're looking for tall grass, you're looking for—

absolutely—

flower beds, you're looking for mail piled up, and then you're trying to find who owns it and chase them down. Yeah, that takes time, it takes energy, but that's where the deals are.

Those are your off-market.

Those make $50,000 to $100,000. So, so you spend 6 months and then you spend another 6 months, you find it Then take 6 months to rehab it. He just made 50 grand. Right.

But when you just, you also said that's work.

It's work.

Like, like anything in this, you have to work for it.

All right. You know, we got spoiled. They got spoiled.

Exactly. Well, and that also weeded out a lot of people too.

Yeah, it did. Weeded out a lot of the people that weren't truly committed to the future. They were only committed to today.

Sure.

You know, it's easy today. I'm in it. You know, balls to the wall, running and gunning. Oh, now it's a little bit hard. I'm out. This still doesn't work for me anymore. Right.

Right.

So it did weed out all that, uh, shit.

Which is okay.

Yeah.

Which is okay. Cause there's, again, there's still plenty of deals and, um, if you've got a good product and a good company and, you know, it's, there's, there's relationships there and you stay steady.

Absolutely. Absolutely.

And, uh, and ABL is that we, you know, we have a great product suite. We have a great leadership team. Um, it's, you know, we make good loans.

Now, do you guys have branches in other states or is it just New Jersey?

Uh, just New Jersey. So, but we've got— yeah, that's our main, um, office where we do all of our processing and underwriting. I actually take that back. We have a South Jersey office as well, but everything's in New Jersey.

Everything in Jersey.

Yeah.

Okay. So how do our listeners come find you guys? Where do they find you and how do they connect with you, Matt?

Uh, well, I mean, we've got a website, um, www.ablfunding.com. Uh, you know, I'm based in Chicago, but we've got reps in, uh, you know, a lot of states throughout the nation, but you can go to the website. Um, and we, all of our pictures are there. All of our information.

Yeah.

Um, but you know, we're, we're around, we, we attend all these conferences. Um, we're always out and about. Um, you know, planting our flag and, and getting our name out there.

Making it happen. Hey everybody, this guy's the real deal. I know these guys. I've, I've, I've butted heads with them. For the last 10 years at these shows. They are amazing. They got a great product, great program. Like, share, subscribe. Go look up Matt, get lit, get your funding set up, especially for you newbies. And we say newbies less than 5. In my world, less than 5 is a newbie because you still don't know what you don't know. But this is the guy when most people will tell you no, this is the guy that will do it. So go find them, hook up, get educated, and make it happen. Thank you for watching.

Thank you.

Thank you, Matt.

Thank you.

Appreciate it.

Appreciate it.