How to Systemize, Scale, and Succeed in Private Lending | Nathan Goodhart

Toby Potter here with Global Integrity Finance. We are here today in Dallas at the LeverageCon real estate expo, and you know, when I look around the room, I see nothing but experts in every genre to do with real estate, whether it be lending, whether it be valuations, whether it be the mortgage office. We got our boy here, Nathan, with the mortgage office. And I've known you for what, 5, 6, 8 years?

I was looking, Toby, you've been a customer for over 5 years of TMO. Isn't that crazy?

So I've made this guy wealthy because their bills are up there, but the program is amazing. So, Nate, Thank you so much for coming in here talking with us today.

Absolutely.

Going to educate all our clients on who you are, what you do, how many boats I've bought you, what the size of those boats are, and how big that mansion is that you're breaking ground on.

Only, only a couple of boats there in Hermosa Beach. Yeah, yeah. But no, so I'm Nate. I'm with the mortgage office. We make a loan servicing, a loan management system for private lenders. So believe it or not, we have over 1,300 private lenders in 30 countries using TML.

And you know, the one thing that really still bothers me is that AJ doesn't come to these anymore. AJ the Clown, and AJ, I hope you see this. AJ the Clown doesn't come to these because he's the guy that, that, that talked to us about it at a pit bull conference, probably '18, 2018.

It was probably about 8 years ago when Pit Bull was still around. Now it's the, now it's the MPLA.

That's MPLA. That's where it took over. But yeah. You know, we were just getting into the hard money lending space. We've been doing it in-house. We're going national. We were raising capital, private equity fund, and we needed a platform. We needed something to be able to manage it, be able to do our NACHA files, make sure our investors get their dividends, make sure our clients paid us. See how we disperse? And the mortgage office was the thing that we landed on and have never looked back. Never looked back.

And I guess lenders like your story. It gives us so much joy because, you know, now you went from a, you know, a small family office and I'll put in your logo now on a big building in Dallas.

That's right.

But it's like, look, we take pride in that. I mean, our lenders typically start, they're anywhere from 10, 20, 30 loans on the books. They start raising capital with our reports.

Yep.

It just makes it a lot more professional than an Excel spreadsheet and a napkin.

I'll tell you, that was the one thing that sold me was that investor spreadsheet or what basically it was, it was a Showing their money, showing how it was being diversified, showing how it was the charts and graphs. Exactly. That I didn't have to create no more because I had to spend time on Excel and tell it to chart this or graph that.

100%.

Well, mortgage office does it for me now.

And look, Toby, like at the end of the day, lenders are selling money. I mean, that's what I kind of teach my teams that are kind of jumping in. It's like private lending, you kind of typically stumble into, you know, it's not one of those things that you get brought up on and learning, which is funny, you know, for your grandkids over here, they're going to be a little bit spoiled with being able to find this industry so young. Yes. I guess a question to you, like, how did you find private lending? Like, what were you doing before you became— Great question.

You know, and I appreciate it. So I started in the mortgage industry in 1994, had a mortgage company doing primary resident lending. Okay. At that time, I'd also then bought a RE/MAX franchise, bought a title company in 1998, bought an appraisal company about that same time. And so we had the mortgage company, the RE/MAX franchise, the title company, appraisal company. And so we were rocking and rolling because interest rates had come out of the Carter industry, 12, 14, 16% down into Clinton in the, in the fives, 4.5s and fives.

That was a little before my time. Yeah, I can relate to the 2000s.

Yeah. So, but this is— I'll speed it up. So we were refinancing and doing loans left and right. We built a niche. That niche was the American dream for people that had been turned down. So we were starting to do some owner financing at that time, which were fix and flips today, but I didn't know it. But we were buying properties, fixing them up, owner financing them, then refinancing them into FHAs. And then the crash happened in 2008 and I lost it all.

Wow.

And so I went into the insurance industry for a while because I had to pay bills and I didn't know what to do. I'd sold everything, sold the mortgage company, sold the RE/MAX franchise, sold the title company, sold A lot of the houses that are in Mexico. Yeah, I had about 50 houses. But when I was in the insurance industry, I didn't— it just didn't fulfill me. It wasn't doing what I love to do. So I, so I met a guy in Albany, New York, who was putting on seminars on how to be a commercial broker.

Okay.

And so I went up there and learned how to be a commercial broker and came back and opened up Global Integrity Finance in 2015 and hired a bunch of staff. And all my guys kept saying, hey, you need to get into real estate lending because there's this company down the road, Brent Conrad, who's doing 100% purchase, 100% rehab. I'm like, no, no way. I just got my ass handed to me through the crash. There's nobody doing this crap. These are dilapidated properties. They're asset-based. He's like, oh yeah, no appraisal, no credit. I'm like, what an idiot.

Right.

But I kind of felt, oh, wait a minute. But that's real estate and that's lending, which I know really well, I miss. So we started brokering it out. So of course, we brokered RCN, we brokered the Lima One, we brokered the Brent Conner. And after I did that for about 90 days, 4 months, I liked what I saw. So then I took my money, put it in, built the fund.

Awesome.

Started doing it locally, crawl, walk, run, and then build it nationally. And that's why I came to find you guys. And said, hey, we're going to the next level. We're going to do, you know, X amount each month. We need to be able to manage the fund, manage the contacts, manage everything. And what we're doing on Excel isn't going to cut it. And that's how we got to where we're at.

And that's what happens when you start dealing with other people's capital. Right. You start— you need to start getting a lot more—

you need to be systemized.

You need to be systemized. And it's interesting now, it's— and just to hear your story, you know, kind of starting grassroots with, you know, high net worth individuals. And that's kind of how you've built your fund. Putting your own skin in the game. Now, looking at where the industry has come, it's starting to be a lot more sophisticated with the banking that's coming into the industry. So, I mean, that's what's crazy. You know, you hear names like Blackstone, BlackRock that are buying private, you know, lenders. KKR. It's, it's crazy.

Yeah. Yeah.

And you know, I guess, how are you guys competing against these guys that have the deep pockets that are driving rates down? What are some of the strategies you're using against like, you know, these big players of the world that just get super cheap rates and Yeah.

So it's all relationship-based.

Yeah.

So we, we, we build a relationship that says rates aren't the issue. Sure, you can get a cheaper rate over here, 1, 1.5%, but you can't get the service. Right. And one of the things that's, I think, is a blessing for us is we've stayed small enough that you still get to talk to the CEO.

Yeah.

And you can't talk to the CEO of BlackRock. You can't talk to the CEO at Blackstone. You can't talk to the CEO. You don't know who they are. Yeah.

They're kind of hidden behind the door. They don't want you to know who they are. Yeah.

And as long as you and I have been here, I don't know who the new CEO is of Lehman One. I've never met him, but I knew Jeff Tennison really good.

So it's Josh, who's a rock star.

Yeah. And he obviously to take on that role. But, but I'll guarantee you those clients can't call Josh when he's got a problem.

Sure.

He can't call Jeff Tash. They can't call those guys. They still can call Toby Potter.

Right.

And so we don't try to do $200 million a month. We try to do value.

Right?

And, and, and take care of the clients that have made us who we are. We take care of you guys. You guys helped us get to where we're at. Brett Alzawi, who puts on this deal, is the first guy that said, you got to go to Pitbull if you want to get to the next level. You got to be at Pitbull next week. I handed him a credit card right then and there. Those are the guys we support and build. And it's the same thing with our clients. If you've been with me through the thick and thin, even though our rates have gone up, our service may have declined a little, But you never lost that loyalty. Now we're paying it back to you.

Well, and it's all about the borrower experience. All about the borrower.

That's—

and we were talking about that today at a roundtable. And that's one of the benefits of going to these conferences. You get to talk to other lenders who are in your shoes.

Right, right, right.

But it's like, man, if you're trying to race to the bottom against these companies, you're going to lose. You're going to lose.

At the end of the day, they have the tech stack.

What you need is—

It's like going into a lawsuit against an insurance company.

Yeah.

You're going to lose.

Yeah, exactly. And it's like you really need to focus on like you mentioned, the borrower experience, you know, the fact that you can pick up the phone and talk to some of your investors, right? Right. Yeah. About an issue and they trust you. You know, you've built that over, over.

And they value.

Yeah.

When I reach out to a client, say, hey, I want to talk to you about these last 3 or 4 deals you did and just kind of get an understanding of where you're going. They're like, really? Like, yeah. Is that a problem? No, but I've never had anybody do that.

Right.

And I'm like, well, but you're my client, you're my customer, you're my partner. And that's what I don't think a lot of people understand. For a hard money lender, the, the investor is our partner, right? We have to ensure that they're going to succeed because they've got our money in that product, right? In that asset. And if they don't succeed, well, they go out of the business and we lose money.

Well, even better if they succeed, they tell their friends about it. That's right.

And so when they do succeed, they're a, a client for life.

Yep.

And you're right, a referral partner that just, just brings us business hand over fist.

So what's next for Global Integrity? Like, where do you see this going? What, what are your goals looking, looking ahead? Uh, you know, 2 years, 5 years, 10 years. Where, where do you see this going?

Uh, man, that's a great question, Nate. Um, number one, a lot of time with the grandkids.

Yep. Um, is your goal to pass it down to them one day?

No.

Uh, I was going to say, you got to stick around for a while, man. Young.

Yeah, uh, spend as much time as I can with the grandkids. I spent 30 years getting here. I don't want to lose it, right? But one of the things that we're doing right now, because interest rates are high, real estate margins are thin, we got a lot of newbies trying to get into the industry. And so we're now rolling out a coaching program.

That's awesome.

So we want to be able to bring people on while it's tough, show them how to find properties, how to evaluate it, how to do their scope of work, how to fund the contractors, how to do all the things they do through our level of expertise. And then, and then partner with them, coach them, mentor, partner, fund, and then grow it. So one of the things we're doing, I just wrote a book, it's on amazon.com, it's called The Unshakable Self, and it's, it's a real small book, 70 76 pages, 11,000 words.

That's built for someone like me who can read that. I could read 70 pages.

The meat, the valuation, the insight is invaluable. In fact, if I could give it away, I would. And we're going to do a big promo after this on the book because already the people that have read it have called me and said, holy shit.

What's the biggest lesson you're taking from that book and trying to teach other lenders?

So the book is all about you as an individual Making sure you're grounded spiritually, mentally, and physically, because without that three-legged stool, you're wobbly and you'll never succeed when life kicks you in the crotch. You know, when life hits us hard, if we're not spiritually, mentally, and physically sound, it will beat us up. And most disease comes from people that are emotionally beat up. They're financially down. They have no spiritual support. So we— this book is all about starting that groundwork of spiritual, mental, physical health through daily disciplines so that we can take you to the next level in real estate investing, so that we can mentor and coach you, because now we know you've got a good foundation to build off of, right? Does me no good to go put money into Ryan Harper when he's unbalanced, right? And say, Ryan, we're going to go out here and we're going to flip 50 properties this year, and he's all over the place emotionally, financially, stressed out, everything's a negative. I got to get him Foundation grounded.

Well, you mentioned the foundation and something, Toby, that I've always loved about you, like you and Angie started, like she's been a rock for you.

Oh man.

And you know, I was actually, I am a, I'm a big listener. I don't necessarily read, but I love audio, audiobooks. Yeah. And I was listening to a book, Make Big Happen. Yes. And one of the big things that they mentioned is like you have to have that core family unit behind you. And if you don't have your house in order, how are you going to get your business in order? Right.

And that's what this is all about.

Yeah.

But in order to get your house in order, you got to get you in order. Right. So in order to change lives, in order to make an impact in lives, you have to change you first. Right. If you're not working, let's fix you. This will fix your marriage. This will fix your family. Right. Now you've got that support because you're now a new inspiration to all of them. And then you can grow and build. All you— you can do whatever you want when you get to that point.

Well, and you know, I was kind of going through a rut just about 18 months ago. And you know, even up to 6 months ago, I'm like, man, You know, I feel like I've grown these teams where we're successful and it's like, why am I not happy right now?

Right, right.

So what I started doing, well, there was an imbalance and I started studying again. I became a student again.

Perfect.

And it's like I started reading, I started doing more conferences, I started just getting out there and, and man, I feel so invigorated now and excited of what doing is.

You were missing something. You were strong in physical, you were strong in—

I was content, you know, and it's like, life isn't made about—

You were weak in a leg. So you're filled with emptiness. And because of that, because we are human nature, we need completion. We need that completion. And when we're not complete, we get angry, we get depressed. Everybody reacts differently. And from that becomes nothing good.

Right.

Nothing good comes from that.

Well, you need to challenge yourself. You know, if you're a high, if you're successful, you're doing well in business or whatever your career, and you kind of reach this point where you're still kind of, the line's still going up.

Right.

But you're like, there's nothing challenging you on a day-to-day.

Right.

Then you need to be the one that forces yourself to challenge yourself. And whether that's getting out another business venture, you know, I started buying properties and kind of being a, being a student of what I think. Yeah, exactly.

Yeah. Evolving.

And that's just been, you gotta, if you're seeing yourself in the mirror and you're not happy, it's like, you gotta make the change. You gotta be the one to do it. You can't wait for the world to perform that.

There's two people. There's the people that see themselves in the mirror and say, I'm not happy and I'm going to make a difference.

Right.

Or people that blame everybody else. I'm not happy, but it's his fault, her fault, your fault. It's everybody else's fault, and you can't fix them.

You can't.

You can't fix them. The ones that say, I need to change, I don't know how, that's what this program is for. We give you a 28-day, uh, uh, plan to every day, spiritually, mentally, physically routine, a daily routine to create a habit. And then if you're willing to do that, now I'm willing to invest in you. And take you to the real estate career that you're desiring.

So you mentioned you're starting to coach, coach individuals as well, right? So what they— so how does that process work? So basically they go, they read the book, how do they sign up or how do they get a part of your coaching?

So, so through our program, you do the 28-day course and then we start, enroll, then we'll enroll you into either 90-day or 12-month. And that now starts having the real estate courses in that.

Okay.

And so the first thing we got to do is teach you about real estate, being on the level you're at. How to find good deals, right? When you find a deal, now you bring it to us, and now we mentor you through that whole process.

Okay.

And so, and it may be that, that you find a deal, uh, we can mentor you through it, and you, we can fund it, and you do it. Or now we need to be a partner with you on it because you don't know what you don't know. I'm willing to do the deal with you, so we're now a partner and a lender. And now if we've done 3, 5, 7, 10 deals, now you've learned everything you need to know to kind of step out on your own.

That's awesome. I mean, what a great way to, you know, just learn about the real estate, but also, you know, you're growing people. I mean, who knows, those folks are going to become your borrowers or become your investors one day.

It changes lives.

So how many, how many people are you working with now in your coaching program?

So we have, uh, probably a good 70, 75.

That's awesome. People that are all here in Texas, or is it nationwide? Nationwide. Okay. Yep.

Nationwide.

So what do they kind of do, like a remote? They can like— yeah, it's all remote.

Yeah, yeah. And And, you know, uh, and the other thing that we're getting ready to roll out is— so let's say I have a guy in Florida, maybe I have 2 or 3 clients in Florida that's in our, our mentoring class, and they've got a project. So we're now going to set up in 45 days, set up a seminar.

Okay.

We're going to get 200, 300 people there. Okay. We're going to plot, you know, put them on the platform as they're the keynote individuals that we're representing. Talk about their projects, talk about the how they found it, the underwrite, the scope of work. And then we're going to load up ones that selected the VIP pass, load them up and take them to the projects. Okay. Show them all that we talked about in the classroom.

Well, that's incredible because I'll tell you, you know, coming from, you know, before this, I was selling, you know, just kind of like copiers. I was a copier sales rep before the private lending space 7 years ago. There's not a lot of information on private lending out there. It's like, you know, there's some Investopedia, there are some books, right? You know, you— but there's not really a lot of coaching out there.

And it's— and it's— here's the deal. So the 28-day course, you have to do a, a 25-question questionnaire. This course is customized for you. It's not just a generic boilerplate, here's what you do spiritually, metaphysically. This says, Nate, here's where you're jacked up. Yeah, here's where you're missing and you're going to say that is dead on. We've ran it for probably beta tested about 30, 35 times and every person said that's spot on.

What's your favorite success story of someone you've coached so far?

You know that guy right there, Solomon Roth.

Solomon, I know Solomon.

That guy right there.

And I'll tell you, he started with like 1 or 2 loans. He's like, he started, he's— and I mean, his business already.

He came to me from California, didn't speak very good English. Knew nothing about the industry, but sat there and listened to everything I told him to do and did it verbatim.

That's awesome.

And that's where he is today.

You're going to tell him to buy the mortgage office now, Toby.

Yeah, he does need that next. Yes, he does. That's the only thing he hasn't done that I told him he needs to do.

Yeah. One of these days.

So, hey, Nate, how do the brokers find you guys?

Well, you know, we're online, we're on LinkedIn. You can find us at our website, themortgageoffice.com. I'll tell you, I love coaching private lenders as well. I think that's one thing that, you know, we're really consultants in the industry. We don't just sell software. We're saying, okay, are you ready yet? And in fact, we'll tell people, hey, man, you need to get a couple of loans under your belt. So you need to get a couple more investors. You're not quite there. You're not quite ready for TMO yet. But that's kind of our approach is like, look, we want to celebrate the success and help to really coach lenders along this path. Kind of like what you're doing. Right. But you can find us online, themortgageoffice.com. You can find me on LinkedIn, Nathan Goodheart. You know, if you have any questions, you want to learn more about the private lending space, I'd love to— I'd love to contact you, reach out to you.

So, man, thank you so much.

Absolutely. Thanks for having me.

It's been a pleasure, buddy. Thanks so much.

Awesome. Thanks so much.

All right.