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Industry Spotlight: Beth Johnson

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April 2, 2021by Originate Report Team

Read the full Originate Report April edition here.

Industry Spotlight: Beth Johnson

Managing Partner, Flynn Family Lending

How has your outlook of the private lending industry changed in light of the new normal?

We’ve always been a little more cautious than our hard money and private lending competitors, so our business model hasn’t changed much. Our LTVs remain ultra conservative and our terms are shorter than a year to help create a “speed bump” should anything happen with the project, the market, or otherwise. In fact, our business has improved and grown in the last year due to our lack of dependency on institutional capital or the secondary markets.  This reaffirmed how reliable and consistent we are to work with–many clients came to us scrambling to fund their deals in the 11th hour because either their lender stopped funding abruptly or underwriting criteria changed, requiring more cash to close.

If anything, I think the private lending industry will become stronger for the smaller, truly private lenders out there like Flynn Family Lending. Tightening credit guidelines and frozen capital markets allowed small lenders like us to shine in a moment of crisis. Investors became acutely aware of how important it can be to work directly with key business decision makers and those who control their own fund sources. Demand for private money will remain strong for the remainder of 2021 and likely beyond.

What are you doing differently today to move your company forward than you were 6 months ago?

Our business model and key differentiation in our market has traditionally been direct placement of whole note investments over pooling funds. Our investors prefer to work with us because they have more control and security being individually named on a note and deed. And, quite frankly, we preferred the more personalized approach and autonomy whole notes provide. However, with the increased volume since COVID, capital deployment can become challenging, at times. As we continue to grow, we finally felt it was time to start a fund (with the help of Geraci – thanks Kevin and Tae!) as a complementary offering for our investors to place their funds. We’re excited for this new fund to be created and with trust already established with our current investor base due to our conservative approach to underwriting, the transition won’t actually be as difficult as originally anticipated.

What are you doing differently today to move your company forward than you were 6 months ago?

It started off with just my husband (my boyfriend back then) and me working on private money part-time as a side hustle to our day jobs. We had only two investors and some of our own funds to lend. After two years and 2x growth each year, we decided to quit our day jobs and do private lending full time.

While we’ve grown substantially over the years, our culture and core values have remained the same. We chose the name Flynn Family Lending in the beginning because we wanted to set ourselves apart from the bigger lenders in our market as a small and local lender who truly cared about its community.

How can a mom-and-pop shop like us compete when other lenders have warehouse lines and large marketing spend? We chose to differentiate ourselves based on the way we choose to approach business – treating others like they are family and ensuring every participant involved in the transaction is well cared for with win-win-win outcomes.

What is something most people don’t know about your company?

I make homemade lunch and snacks for my team several times a week. We truly embrace our brand promise and company culture of treating everyone we work with like they are part of our family. I take pride in making a home-cooked meal for our team. It’s a labor of love and a small token of my appreciation for all they do. I hope they know how much I care about them (and their families) and how valuable I think they are to our success.

What has been the highlight so far in your career?

Everything – this business has become my baby. I can’t say one thing stands out, but for me personally – the less business-oriented one – was the challenge and struggle of building a business with my life partner. We never planned on spending so much time together and certainly didn’t think our business would grow to become what it is today. I’d be lying if I said it was kittens and rainbows all day long. The reality is that we enjoyed the fruits of our labor the first year and after that it was a real issue trying to handle the growth while taking care of ourselves and each other. But we never gave up – on the business and each other – and now we’ve finally overcome the challenges of scaling a company and have grown stronger as a couple and a family. It was not a pretty journey behind closed doors, but I wouldn’t change anything about what we’ve done and how far we’ve come.

What advice would you give to your younger self?

Relax and enjoy the ride. I was so serious as a young professional; always focused on the “next step”. As a young woman, I methodically planned my college graduation, getting hired into my first corporate job, finding and marrying the “perfect” guy, having a baby, working towards the next promotion. And then, in my late 30s, it all came crashing down. After divorce, I lost almost everything I had worked so hard for. But now, I’m far better off emotionally, personally, and professionally than ever before. I would never have had such clarity without losing it all and deciding afterwards to just let it all go and enjoy the ride for once in my life.

All the planning in the world does not always mean you’ll create success. The funny thing is none of ours was planned! I certainly never planned on starting my own business, and we never planned on growing as fast as we did. I never thought I would be helping others achieve generational wealth through real estate and be an influential part of the local real estate community. It’s been one happy accidental journey, for sure, but in all honesty, we started private lending so that we could be at home with our kids more. Our basement is our home office where our team works, and the kids come down often to check in with us.

It has been humbling to experience such immediate success without much control over the process. It hasn’t been smooth sailing, but I never quit. I found that some of my best decisions were made in times of crisis. The establishment of Flynn Family Lending has saved me in some small way – both personally and professionally. I still like to be in control, though, so let’s just call this a work in progress. J

What piece of advice did you personally receive early in your career that has helped shaped decisions you’ve made?

One thing that still resonates with me every day occurred at my first job out of college. I was an advertising coordinator for the Home Depot, which was my first exposure to corporate culture and values. One of the core values was “Do the Right Thing”, which is such a simple phrase – vague enough to mean anything, but strong enough to compel you to act accordingly. To this very day, I strive to do the right thing – for my team, for my family, for my borrowers and investors, for my community. I don’t always make the right choices but it’s my Northern star and a guiding principle in all I do.

Tell us about a person or organization you admire. How have they made an important impact on you, the industry, or the world?

This is a bit cliché, but I would say my parents. They taught me as a young kid that you won’t get rich working a day job. Mom would read Money magazine in her recliner and tell me about what she learned in hopes of instilling personal financial acumen. My dad was a woodshop teacher, and on weekends and summers he would flip houses way before the term “flipping” was even coined. I learned the art of the side hustle from them. Mom stayed at home, and she taught me to take care of those I loved first, and then business comes second. My dad taught me intuition when it comes to real estate that I don’t see as much today. These lessons have served me well over the years and made me a better real estate investor and lender. I would never have gotten into the real estate business if it wasn’t for them.

How have you turned a career mistake or failure into success in your career?

Though I don’t necessarily consider is a mistake or failure, I think my overzealous career planning made it difficult for me to see opportunities beyond myself and my defined goals at the time. I really had no idea I had it in me to run a small business and, to be honest, I didn’t desire to. This accidental journey I’m on has given me so much personally and really allowed me to blossom.

What do you predict for the future in private lending throughout the end of this year and beyond?

As mentioned earlier, I try not to foresee, plan, or predict the future as it hasn’t served me well in the past. I’m trying to live in the moment and solve each day’s challenges head-on and celebrate each success – however big or small – for what it is. But, if I had a crystal ball, I think we’ll see a lot of growth in this sector. Real estate continues to be hot all over the country and affordability and lack of housing remains an evergreen headline the industry. The need for alternative and creative lending solutions will remain strong.

If you had a clean slate to start over and do anything you wanted to do, what would that be?

Absolutely nothing. I believe in the butterfly effect and that if I had the ability to change a part of my past, it could alter where and who I am now. That’s not something I’m willing to leave up to chance. I love where I’m at now and my battle scars are what gives me depth.

How do you want to be remembered? What have you done to cultivate that feeling from others?

I want to be remembered as someone who cared deeply and gave back to others. I cultivate this with others by listening actively, being authentic and vulnerable, and showing empathy.  For my team, I embrace the role of a servant leader and for my family and friends I try to do small acts of service, so they know I’m always thinking of them.