What made you want to do the work you do? Please share the full story.
I’ve taken a rather unique route to get to where I am in real estate lending. My focus had been in real estate during my time at San Diego State University and I later obtained an MBA degree. Nonetheless, before getting into the industry, I worked for over six years in the e-commerce industry at AutoAnything. The majority of my work had to do with analyzing numbers, overseeing marketing channels for the online shop and working out how to generate profit for that particular company. I enjoyed this work, but real estate was a field of study I was always keen to pursue. My father Don Hensel launched North Coast Financial back in 1981, so I was connected to the field even before I joined it.
In 2015, I decided to work with my father at North Coast Financial and this turned out to be the right decision. For me, one of the advantages of working in private money lending is that every loan case represents a unique problem. A borrower may be looking for a fast loan to acquire an investment property or they might be going through a complex inheritance or a property that didn’t meet the traditional financing requirements. There is much more to it than simply approving loans according to the numbers.
How is AI changing your business? What changes are you making to adapt?
AI is significantly transforming the way borrowers do research about their financing options prior to contacting any lender. In the past, a person in need of a hard money loan would search for information online, visit multiple websites, and contact different lenders. Today, they can leverage an AI tool to find out what kind of loan they need, which criteria lenders are looking for, and if private money is appropriate for their situation. The leverage the borrowers would get through using this technology is enormous.
In a company like North Coast Financial, it is very important to provide clear, digestible information on hard money lending since that can be a confusing topic, especially for those who have never used it before. Borrowers have many questions regarding interest rates, closing times, property lending rules, and the process that follows upon a loan due date. I want borrowers to know the answers to all of their questions regardless of whether they have visited our site or asked an AI assistant for help.
Tell us about a time where you saw a surprising outcome that you did not expect.
When I began my career in private lending, the realization that borrowers don’t always opt for the funding option with the lowest interest rate was shocking. My previous experience in e-commerce, where I had years of experience dealing with pricing, competition, and customer behavior, made me conclude that interest rate is always the key to making the right choice. Being familiar with the world of financing for the real estate market I noticed that the cheapest financing option is not always the right one, especially if there are deadlines to meet.
For instance, an investor might find a really good deal but be under pressure. Though the interest rate on a private mortgage might be higher than with a traditional bank, it is crucial for the borrower to close the loan on time to accomplish the goal of making the purchase. That pretty much changed my views on lending. I understood that offering the lowest possible rate is not always the best approach. Sometimes it all comes down to the ability to provide the borrowers with immediate funding if there is a pressing need to close the loan.
What is a habit you try to stick to and how has it helped you?
One habit that I try to maintain is being open and honest with borrowers early on, particularly if I suspect that there is a potential problem with their loan. Since time is often a big factor in private money lending, it helps to avoid the unnecessary wait of having to find out that there is a problem with a loan after being led to believe that it is fine. Whenever I see an issue with a borrower, I would like to simply address the case swiftly although it may be uncomfortable for them.
I have realized that being direct from the start makes the whole process easier for everyone. The borrowers know where they stand and do not waste any time on a deal that is not going to go through. This practice creates room for trust as well. People do not expect every loan case to work out perfectly, but they trust the lender to be honest with them.
What achievement are you the proudest of and why?
I take great pride in being a part of my father’s legacy, which started in 1981. When I became part of North Coast Financial in 2015, I was immersing myself in an enterprise that my father has worked on for years. We have been able to grant lending in real estate in California amounting to over $1 billion, so I feel satisfied by knowing my role in the preservation of the reputation that generations of family has earned. While opening a successful business is one thing, keeping faith in it over time is what really matters.
What is your favorite book and why?
One book that speaks to me is The E-Myth Revisited by Michael E. Gerber. One important point is that just because someone is good at their profession is not the same as being good in business. You must have systems and processes which enable a company to operate smoothly. Having worked at a small lending company, I understand this. If you are involved in everything from loan inquiries to closings, a good system is very useful.
What advice would you give to your younger self and why?
I would tell my younger self not to stress too much about needing a perfectly linear career. I studied real estate but then spent six years working in the e-commerce channel before moving to North Coast Financial. At that moment in time, it would have appeared that those two industries are unconnected. In retrospect, the analytical skills I gained and my ability to understand a company’s financial performance as well as its operations turned out to be invaluable in the lending industry.
Who has been your biggest mentor in life (personal or professional) and how have they helped you?
Yes, it’s definitely my father, Don Hensel. He started North Coast Financial in 1981, and I joined him in 2015. My experience of working with him has taught me things that cannot be learned from the textbooks, among which the importance of judgment in private lending stands out. Numbers are important but knowing how to distinguish between good deals and bad ones and anticipate potential problems only comes with years of experience. Having someone with years of experience at his side has proven invaluable.
Are you willing to be a mentor? If so, how should someone contact you?
I’m pleased to pass on my knowledge to others who are passionate about real estate and private money lending because I know how important it is to learn from experts in the field. I’ve learned so much from people with experience in the industry. Please feel free to contact me directly through the website of North Coast Financial (link below). I would be glad to talk about this topic.