The Achieve Podcast - Benjamin Birch (Stratas)

Welcome to another episode of the Achieve Podcast, the show where we highlight leaders, creators, and entrepreneurs— those who are building meaningful businesses, shaping their industries, and having an impact. I'm Taylor Baker Baker, your host, and excited today to be joined by Benjamin Birch, the CEO of Stratus, and you can find them at stratusfinancial.com. Benjamin, thank you for joining us today.

Hey, thanks for having me, man. I'm happy to be here.

Oh, my pleasure. And so for those getting to know you and the company a little bit, give us the backstory on how you got into this space and this niche and who you're currently serving.

Uh, yeah, sure. Um, so I actually started my first business when I was 21. I got into the construction space, actually. So we were, uh, you know, building and designing custom homes, and I ran that all the way through roughly around 2020, 2021. And, you know, during that period, um, you know, COVID hit, obviously a lot of changes happened. It was actually great for our construction business because interest rates dropped and it kind of exploded at the time. Um, and, but, you know, I was kind of ready for a transition. You know, it's a business where you can make a lot of money, you know, but it's a very hard business because there's so many factors out of your control. Every time you're running one of these jobs, you have about, you know, 20 or 30 different companies that you kind of have to get all on the same page, show up on time, and you have— you're at the mercy of weather and everything like that. And that kind of always just drove me crazy. And I really got it to the point at the end where I was, you know, working maybe 10 hours a week and it was kind of running all on its own. And I think, you know, when you're kind of an entrepreneur, maybe like more of a workaholic mindset, you feel like a little useless after a while and you want, you know, sort of a new challenge. So at that time, obviously, uh, you know, business funding started to explode during that time because there's a lot of businesses that needed capital. I mean, it was huge during that time. So I decided to, uh, you know, start a business into that industry. And, you know, we did well on that, and that kind of led me into commercial real estate brokering, uh, or, or mortgage brokering, uh, you know, from that business. And, you know, when I discovered this, it was kind of like, wow, Now I have a way to take, you know, my, my previous experience and this new, new venture and kind of combine them into like a perfect, like symbiotic, uh, way. And once we did that, it just, it's just exploded. I mean, it's, it's been crazy. Uh, you know, I can't imagine, or I wouldn't have been able to imagine, you know, where we are today and all the things that have happened. And, you know, it's kind of just month by month we just keep growing so fast and it's just a little bit hard to wrap your head around because you've just got your head down and you're working so hard and you don't really have time to sit back and realize even what's all transpired. But yeah, it's just been a great journey. And so now our role now is we place debt, sometimes equity, but mostly debt on commercial real estate projects, large-scale projects. Typical size is going to be you know, somewhere between $20 and $100 million. We have some projects that are going to be bigger than that, but that's kind of more of a sweet spot. And, you know, developers come to us where they can't get money from institutional banks and they need some more of a creative capital stack, and we're there to fill that niche. So, you know, a lot of horizontal development, vertical development, and primarily I would say multifamily and hotel, uh, would be like the asset classes that we, that we work in. And, you know, we built a team up now of about 15 people. And, uh, yeah, it's just been, it's just been really amazing. I mean, this— so up to before this year, you know, between the business funding and the commercial real estate, we did about $1 billion in financing. This year alone, we're on track to hit $2 billion this year. So it's, it's been, yeah, the growth has just been crazy. And it's, it just kind of seems like everything is just working out in our favor and kind of a almost like mysterious type way, you know, where you're like, there's something like going on here with our momentum that is a little bit unexplainable for us even. But it's just, yeah, it's just been super exciting.

What— that's amazing. What would you say has been some of the contributors to that growth?

Well, you know, obviously having a great team, right? You know, we'd be nothing without the team that we have. None of these deals would go through if I didn't have all these guys on the ground. You know, reaching out to people, working hard. And, and, you know, when we— you know, we are— we pay out commissions to our employees like way higher rates than any other company. I mean, we're splitting 50/50 with every single sales rep. So they are like a partner on all these deals. So they are kind of all their own owners of every single project. And by doing that, we've had an insane amount of dedication. I mean, these guys are working 7 days week. I see messages coming through on the CRM all the way till, you know, 10, 11 o'clock at night. They're up the next day at 5, 6 in the morning because, you know, we're at West Coast, we have to catch the East Coast people, they're up way before us. And so, you know, that dedication from the team because they really feel like they're a part of it, they're getting their fair share and everything's even, that has been huge. And, you know, people thought I was crazy for giving out those type of commissions, but I think we've made 10 times the money by taking— by only you know, taking half that commission, and, and we can all win together, you know what I mean? So that's been one that's been huge. And then two, we have built out so much, uh, you know, software and technology, um, you know, internally, that has helped us move really quickly and kind of make decisions very fast. And so we get that feedback from, from sponsors all the time that our speed is like, you know, way ahead of all the other brokers that they've worked with and kind of our professionalism and the way we set everything up. You know, we really pride ourselves on that. Um, so that's been huge. And then obviously, uh, marketing-wise, we get almost all of our leads from paid ads. And, and a big contributing factor to that is the fact that, you know, we've tied in everything that we do in our CRM to send that data, you know, that offline data back into our marketing platforms. And, and you know, that those sort of things take months, And a lot of people just don't have the, you know, the tolerance to spend all that money on ads and go through that pain without any results to finally get to the point where those systems have kind of learned enough information about your business to really just deliver consistent leads that are super high quality.

Yeah. So what's been working well as far as your marketing and outreach to attract and retain good clients and customers?

Well, you know, our marketing, you know, content-wise is very basic. Like, we're not We're not shooting any, you know, complicated or over-edited videos. It's really just simple, you know, photo ads with kind of straight-to-the-point filtering language. So they know right away that, you know, someone can read that and know, hey, my deal doesn't qualify or it does. And then, you know, like I said, the offline data, the things that happen offline, you know, we mark leads with certain— through certain automations. In the CRM, and then that feeds back into the system and kind of helps churn that audience. But it's a little harder in the finance space because you do have a lot of restrictions on how you can market. There's, there's not a lot of ways you can narrow down your or filter out your leads because it's technically discrimination. So by using that offline data, it kind of does it in a, you know, kind of a backwards way of, of filtering, you know, those, those leads that are coming in. And then retaining, I mean, it's just our guys are just so responsive. They'll answer a message, they'll get back to someone any day of the week, any time of the day, you know? So, um, the, the sponsors really feel like we care because, you know, you, you might send yourself off to some of these private equity lenders if they're dealing with it directly and you might not get a response back for a week, if at all, because they have so much deal flow coming in. And I just tell the guys like, you cannot let any lead go without a response. In 24 hours, even if you don't have an update, it takes 5 seconds to send them a message and say, hey, hey, you know, hey Taylor, we're still working on your request. We don't have anything new to share, but I just want to let you know that we're trying to progress our way to like the next phase or whatever. Right. So, you know, that's huge. People want to feel like you actually care and you're empathetic about their situation and also giving them products and doing things that might not be as advantageous. You know, it's not in your favor as far as what you can make commission-wise, but it's in the best interest of the client. And I always tell them, you know, put the client's interest way above your own commission because at the end of the day, it's about creating a lifelong relationship, not a one-off transaction. That's just such a, you know, why try to get rich all on one deal? You can make 10 times the money by doing the right thing in the long term.

So true. So true. I love that ethos. So Where do you still see more opportunity or money on the table with it?

Uh, well, yeah, so our next big transition that we are going to be, um, you know, launching for, for next year— we might even get it done this year if we, if we can get everything lined up— but we are transitioning to become a direct lender ourselves. So, you know, that's kind of always been the goal, to become a direct lender in-house and, you know, not be at the mercy of you know, all these other decision makers and capital groups and trying to get things pushed back. We want to be control of the process start to finish. So, you know, we've been, I actually just got back from New York and we were meeting with some credit funds there that are going to, um, you know, get, hopefully give us access to capital. So we're working on that, those relationships. But I would say, uh, you know, without a doubt, we're going to be in that position the start of 2027, but we might even make it, um, maybe in the last quarter of this year if we, if we get to it. Because there's so much money out there, private money in commercial real estate is really exploding, and there's a lot of capital that's trying to be pushed into it. So with our deal flow and our setup, we're kind of like a perfect match for these groups that are looking to find somebody that can do high-volume deals on a national scale.

Wow. Okay. Now, looking at your own journey, what would you say have been some of the biggest turning points that have had the greatest impact on how you think about and run your organization?

Well, yeah, I mean, obviously one of the biggest turning points was just us transitioning into the commercial real estate space and kind of having that mindset of like, if you're going to be doing the same process with finding these clients, qualifying them, assembling their file, why wouldn't you just do it with bigger numbers? Like, it doesn't make any— you're doing the same amount of work, So instead of doing a $150,000 business loan, you know, do a $50 million commercial real estate loan because it's the same amount of work, it's the same process, but the numbers are bigger and it's gonna pay, you know, 10x or, or more. So that was, that was a, a big one. And also just, you know, you gotta, I think every entrepreneur goes through this, but you have to be able to kind of take your hands off part of the process and delegate things out and Trust your people, let them make mistakes. You know, it's not always gonna go well at first, but that's just the only way that you can scale. Because if you're trying to wear every single hat in the business, you're just capping yourself and you're never gonna be able to grow at all. So you're gonna have to be willing to just say, you know what, it might not be as good for the first 6 months, but after that point, it gives me the breathing room to kind of look into the future, into the next thing. And you know, we're hiring a lot more back office people right now. and I'm having to kind of, you know, take my hands off a few more things, which obviously if you're like a perfectionist type person, it drives you a little bit crazy.

Yeah.

But it's, it's just what you have to do. And, and, and also just admitting that, you know, there's people that specialize in certain parts of your business that are gonna be way smarter than you, at it because they've been doing it longer and that's all they do. So you just have to, you know, let them shine, let them take over and just keep focusing on, on what's gonna be driving the business forward and how are we going to evolve in the future to keep growing, you know?

So yeah, that makes a lot of sense. Now, kind of shifting gears a little bit, with all the talk and buzz around AI and automation, where have you guys found ways internally to utilize some of those tools?

Oh yeah, we have tons of AI inside of our system. You know, even just, just, you know, for example, like our lender database, like, right? So The, the worst thing, you know, if you're a broker, your real customer is actually the lender more over than the sponsor, because you could have a million deals coming through, but if you have no one that's gonna be able to get them done, it's just a bunch of imaginary commissions. You know what I mean?

Yeah.

So, you know, we built out this lender database, uh, with AI and we keep adding in feedback as we send deals. So we, because we really never wanna send the same deal to someone twice, just a different scenario where it's the same kind of, you know, decline reason. Because after a while they're going to go, man, these people aren't even listening to me, you know, because they just submitted something that I just told them last month we couldn't do, you know. So that has really helped us, you know, tune in to who to send deals to. And, you know, when we package a deal, we create like a 10 to 20 page summary of the financing request. You know, this is probably one of our best things in the process. We get a lot of good feedback on it. And once we get that request approved, we drop it into that database and then it spits out a spreadsheet with the exact lenders to match it with. And usually it'll give about 3 to 5 lenders at this point because it's so well trained. And, you know, we have like 200 private equity groups in there. So how could you possibly mentally manage all that feedback and even remember who to send it to or what they said last time? And you're— are you going to search through your old emails? You know, that's kind of a ridiculous way to do business. So, you know, we, we throw it through there, it matches to like 3 to 5 people, and almost every time we're getting term sheets back from the, from almost all the lenders on that list. So that's been super helpful, um, you know, for us. And then adding in all the files, uh, you know, that we receive on the projects into, you know, kind of project folders with AI. And then you're able to just quickly ask it questions if, if a lender has you know, some sort of really specific question about something in the business, instead of having to go through and search through all the files and figure that out, you can ask it a question through that system, to that project. You get an answer back in like, you know, 10, 20 seconds, right?

Yeah.

And it's amazing to me how many, even like big equity groups that, you know, in this business that they don't use it at all. And I'm just like, how could you? Like in today's world, you're just going to get smoked by everybody that, that you— it's going to, it's going to be a part of every single thing that we you do it top to bottom. It just is. So you're going to have to embrace it and get in early on or you're going to get left behind, you know?

100%. Well said with that. So Benjamin, if you had to think about one constraint to focus on and solve over the next 90 days, what would it be?

That's a pretty good question. Um, I, you know, honestly, our constraint right now is You know, it's kind of a basic one is we just need more back office people into the business because we're— the guys have just been crushing it over the last few months and the amount of deals that we're pushing through has just been insane. So that has definitely been a constraint of, you know, getting those deals, you know, the final summaries done and then sent off to the lenders. And then, you know, even having some of these groups having access you know, to enough, uh, uh, having enough of an appetite to even take on our deals. I mean, I've had some lenders recently tell us that we have to stop sending them deals because we've like completely filled up their, their pipeline right now and they can't, they can't take anything else. Like we've like tapped them out of what they're capable of doing at the moment. Um, so, you know, that, and, and that's another reason why we want to become the direct lender because it's just the last thing that's out of our control that drives me insane of where I just want to be able to take it all the way through to the finish line because I, we don't want to be at the mercy of that. So I would say, you know, you know, getting access to, to more capital is always something that we're looking for. And then we just need more back office manpower at the moment because we, we just have too many deals getting pushed through right now. It's just been really hard to keep up, honestly. Like people say, like work-life balance, it's like, There's zero percent balance in my life right now. That is not even a question.

Gotcha. And so, yeah, and the numbers you're pushing, the growth you're having is impressive. So when you look at your own journey, the wins, the mistakes, what lessons stand out to you?

Um, yeah, I would say that's a pretty good question. So let's see. You know, maybe taking some, some smaller steps, you know, with the growth sometimes. Like, it's good to have people on your team that are kind of more of the brakes, or they'll kind of slow you down a little bit. Because when you're an entrepreneur, you just want to push everything so through and you want to keep growing. And, you know, it's just so fun to see it go. But sometimes you need those checks and balances in your organization to kind of be like, hold on, let's just instead of taking this big leap, let's maybe do this one smaller step and see how it goes and then push through because you know, you can grow too fast and everyone has seen it so many times in business and just completely destroy what was a really great company just because you just didn't have the patience to have that more of a long-term vision instead of kind of that short-term mindset. And that's, you know, a lot of the teachings of like Charlie Munger and Warren Buffett, who have been kind of like, you know, mentors for me in a way. I've like obsessed over their content just because, you know, there's so many great lessons that you can learn from them, and they've just seen it all. And that's the mindset they have, that delayed gratification for, you know, kind of that bigger, more sustainable outcome in the future. So yeah, I would say, you know, thinking long term and not just trying to, to, um, you know, grow at all costs in the beginning, which I think is kind of the mindset of a lot of these, especially Silicon Valley type companies, is it's like whether it makes sense or not, just grow as fast as possible. Right. And I think you've seen so many of them crash and burn. Yep.

Yeah. Yes. So last question for you then. When you think about the next stages of the business, what are you most excited about?

Well, yeah, I mean, I've gone back to it a few times, but obviously becoming a direct lender, it's just been a goal of ours for so long. And to see it like so close, like you can almost reach out and grab it. It's, that is just so exciting and it's gonna be incredible. Our sponsors are so excited about it cuz they love working with us and they prefer us to have, you know, control of that process. So, you know, I'm really looking forward to that and, you know, we're gonna continue to grow and, you know, this might sound crazy, but I'm not gonna stop until we're the biggest private equity group in the country in this space. Like that's my goal and I, I hope one day we can, you know, take this company public and, you know, ring the bell on Wall Street. And, you know, and all this stuff sounds crazy to you maybe, or someone watching this, but if I would've told you what we're doing now and I would've told you 2 years ago, that's what we were gonna do, you would've said the same thing. You would've been like, this guy's nuts. Like, how is he, how is he even gonna do that? And here we are, you know? So I think you have to have those big goals and, and kind of the bigger vision and you know, you have to just be relentless and kind of stubborn, um, in your, in your pursuit of that. Because, uh, you know, I refuse to accept anything less than that.

I just refuse. I love the ambition. It is amazing, the vision, the drive that you have to achieve it. Any final thoughts for our listeners or others on a similar journey?

Well, okay, I, yeah, I would say one you know, this all sounds like, oh, everything's just been progressing and going up. These guys, you know, your viewers watching, they have no idea how many things I've tried. 90% of the stuff that I've tried has failed, okay? But the 10% makes up for the other 90. So, you know, don't get discouraged. Keep trying new things. Even if something fails, you're gonna end up gaining a lot of skills that are going to help you with the next thing. Like, you know, I've, I've had so many entrepreneurial things that have crashed and burned and just, they just maybe weren't a good fit for my skillset. And, but, you know, during that time I learned a bunch of skills that were transferable to the, to the next thing that I tried. And you just kind of keep building and learning. And also you just have to keep pushing through because it's kind of like that, that meme, if you've ever seen of, you know, where those two guys are mining for like gold or diamonds and it's like those two tunnels and the one guy, is walking away with the pickaxe over his shoulder and the other guy broke through to the other side. And that is really the case sometimes. If you can just somehow keep it together, push through, pay your bills, whatever you have to do to break through that other side, you'll get there eventually. And the people that make it are the ones that just refuse to, to, to quit. And I mean, I, I'm just like, been a business owner for so long, it's just kind of my mind. I'd rather be homeless than go work for somebody else. So you just have to have that mindset, I think. To go through all those hard times. And also, you know, if what you're doing is about— it's just about the money, you're just— you're going to lose 1,000%. Any of the ventures I started that were— it was just like, oh, it's going to be so lucrative, but I didn't have a passion for what I was actually doing. All of those failed miserably. But the one that you would do for free because you love it so much, like, I never feel like, oh, I have to do this or I have this whatever. I feel like I get to do it on a daily basis. I feel really lucky to be doing what I'm doing. So, you know, that's— it's just so much easier for you to stay motivated if you have a passion for something that, you know, you're doing something you enjoy. It's so much easier.

Yes. Yes. So true. So for those who want to learn more, who want to connect, LinkedIn, obviously, but stratusfinancial.com, anywhere else you want to send them?

Yes, yeah, go to our website stratusfinancial.com if you're looking to, you know, um, if you have— if you're, if you're looking to get some financing, you know, we'd love to help you out and see if, and see if we can make something work. If you're even a broker and you're looking to get some of your deals done, you know, we have co-brokers coming in all the time, so that's fine. We're happy to work with brokers. And like you said, you can connect with me on LinkedIn, but if you go to our home page, you know, my phone number and my email are right there on the home page. So if you want to get a hold of me You can call that number, you can email me. Um, you know, I prefer phone calls. If you look at my business card, the only thing I have on there is my phone number, you know. So it's my kind of mindset is if you want to talk to me, just give me a call. And I do get that sometimes where I— like the other day I had a younger guy called me, he wanted to get into real estate investing and he was just asking me advice on like all the things he needs to do to be able to obtain financing, you know. And I was happy to talk to him for 20 minutes because, you know, people did that for me when I was younger and taught me things and kind of took me under their wing. Um, you know, so you kind of have to pay that forward. And you have no idea, maybe that kid comes back in 5 years and he's some superstar developer and he becomes a great client. You know, you just never know.

Yes, I love that ethos, that thinking, that way of being, uh, abundance mentality. That was beautiful. Well, thank you, Benjamin, for coming on and sharing your wisdom, the passion, the growth that you guys are experiencing. Like, this is awesome to see, and And I'm excited to see you passing that $2 billion mark and beyond.

I appreciate it. Well, I'm happy to be on here today. It was a lot of fun.

Hey, thank you. And thank you to our sponsors of today's episode, Achieve Fractional, which provides fractional executive leadership for growing businesses. And if you enjoyed the episode, share it with a friend, with a colleague. If you're not sure with an investment group, with what you're looking at, if it's a good deal or not, or the options that are available, reach out to Benjamin and the team. They'll go through it, they'll walk you through and let you know the pros, the cons, the concerns, and how to best approach it. So reach out to Benjamin and the team, and we'll see you in the next episode of the Achieve Podcast.