For people who want to get into real estate but don’t want to be a landlord or go through the tedious and time-consuming process of flipping properties themselves, private lending is a great option to invest in. Mark Atalla swears by this! Mark is an industry-leading private lender and the author of the new book Money Matters. Mark is the Founder and Managing Partner of Carlyle Capital. With over 18 years of experience in the private lending space, he manages plenty of clients, brokers, and investors who trust Carlyle Capital for their lending needs. In this episode, Mark describes what private lending is all about and the different types of lending. He also discusses how he got started in the private lending space and shares some tips for success in real estate investing. Tune in and leave with some great takeaways!
—
Watch the episode here:
Listen to the podcast here:
Money Matters With Mark Atalla
Why Private Lending Is The Best Option When Investing In Real Estate!
I’m here with my guest, Mark Atalla. He’s an industry leading private lender and author of the new book Money Matters. Money does matter. Mark, welcome to the show. It’s a pleasure to have you here.
I’m blessed to be here. Thank you for having me.
Money does matter and I like to talk to guys who understand money. For the guys who don’t know you quite as well as I do, tell us a little bit about yourself, when you grow up, your family, and a little bit of that.
I grew up here in California, born and raised. My parents came here in early-’70s trying to chase that American dream. My father did okay for himself with his own little mini empire, and I always wanted to follow his footsteps and build an empire of my own if I could. I started living with that entrepreneur mindset at a very young age, seeing him go through everything that he went through, building everything he was able to build.
I went to college, graduated in 2007. I got my company started and been doing lending since I was eighteen years old, and that’s where I took a little bit of a turn from what the family business was to just trying to make my own stand per se versus following the father footsteps, it was much easier for me. I’ve been doing it ever since. It’s been a long bumpy road and it’s not as glamorous as it promises you but it’s been enjoyable, I’ll be honest. I enjoyed it and I’m curious to see what the future holds for us hereafter this whole virus.
For those of you reading a little bit later in time and space, it’s early May 2020 and it’s the Coronavirus pandemic. The world’s closed down. Businesses are fucking going bankrupt and things are happening that are out of a movie. Here we are entrepreneurs watching our fellow entrepreneurs sink and going to red and stuff and it’s heartbreaking to watch, but in these moments, either contract or expand. We’re here doing our thing and the show must go on, the networking must go on and you’re working your ass off.
You get a hundred no’s before you get one yes. Just keep fighting through adversity and hang on.
I wish I got to enjoy this thing. It’s nice to take the time off and enjoy the time with your family. Fortunately and unfortunately, depending on how you look at it, we’ve been very busy. A lot of the institutional sectors are shutting down. The private sector is the only sector that’s held itself up somewhat, depending on what type of lender you are. We’ve been busy and we were trying to grow and take advantage of the situation and see what we can do.
Before the virus and stuff kicked in and all, the world totally flip-flopped and changed. Looking back on your company and your history and stuff, I’ve been checking you guys out, doing cool shit. I can see you’re funding stuff and multimillion-dollar double digits. It’s big money and business. It’s no joke. I’m curious from the standpoint of someone who’s reading, who’s like, “That’s cool, but how the hell do I lend out $20 million to somebody? What does that even mean?” Take us back a little bit when you started on that journey, how that looked and some of the challenges you faced and becoming who you are here, who can create these types of deals. How did that look on the come up?
It wasn’t glamorous. You sit here and you see all this stuff on the media or what have you. At the time the first downturn happened in 2008, 2009, I was probably lending for a couple of years. I was young 22 at the time 23 maybe. The world was clashing, and all the institutional banks would shut their doors. I was out of a job. I didn’t know what to do. I was young. I was still in college. We had relationships with certain family offices that were open to lending and nobody was on at the time, as I’m sure you remember. That was a niche that I have that separated me from everyone else in the business.
It was the whole world of private money that I knew nothing about. We closed a couple of transaction, a couple of deals here and there and began to turn it into a little bit of a niche. It’s turned into what it has now. I never knew that was an opportunity at the time and just fell into it, and then you start closing deal after deal, referral after referral, you start working a small operation, 1-man, 2-man operation at best when we started.
It was me and money manager that had a close family relationship with, and there were deals that came across the table that we liked and some that we didn’t. We started executing what we could and it led to a strong type of work for us. We got introduced to a lot of high-profile deals over the course of years because of people hearing. We did close certain high-profile individuals. That trickled from there to be honest. Ten years in the making, it didn’t happen yesterday like it looks on my mind.
That’s important for people to understand. When you look at people’s social media highlight reels, it’s like, “The guy is high-rolling.” Let’s talk about you. Your Instagram‘s fire, straight up. It’s awesome. It’s Rolls, yachts, and high-living. You’ve earned it and you live that lifestyle, but people need to understand that the work that goes in behind it is where the action is. A lot of people think, “If I get a Bentley and take a picture of it, I’m rich now.” It’s the opposite of that. It’s craziness. There’s a funny saying I hear people say and it rings totally true, “This overnight success. It’s awesome. It only took ten years.”
That’s what people seem to forget. They don’t understand that it takes a lot of hard work. We fail but it was never always. We’ve had deals and relationships that went sour. You don’t see that stuff. You don’t see any of these, blood, sweat, and tears that we had to go through. You get 100 noes before you get 1 yes. It’s how much are you okay with putting up with 100 noes? You keep fighting through adversity.
That’s a lesson that you can learn from sales.
That’s just life but people don’t understand that for some reason. I don’t know why.
Maybe something that would help them. It helped me understand when I was learning sales. The more noes you get, the closer you are to a yes. You can go into the day looking for noes like, “Fuck another no, yes. I’m that much closer.”
I do the exact same thing.
You’re like, “I’m one step closer to that yes. Only a couple of more. The numbers speak. Every six is a yes.” Play the odds, play the numbers.
It’s not just scrubbing through deals that you think are doable deals. Brokers telling me, “It sounds like it’s good. This is nice.” Checks out and there’s something they’re not telling me that you find out 45 days down the road. Those close in 2 or 3 weeks. You didn’t think I was going to find out? Those are the noes that I’m talking about. It’s not just a sale.
“Do you want to buy this stuff? Yes or no.” It’s fucking tedious. I’m not going to lie to you. It’s draining. It’s overwhelming at times, but that’s what you have to go through to find those high-profile deals that work. I can’t tell you how many high-dollar amount deals that are out there, but are they doable? I’ll tell you right now, it’s doable. That’s why we’re calling you. That’s why you got to be diligent at finding all of it and making sure that we can make something out of it. I’ve been through a lot of that.
Maybe for the readers who aren’t completely familiar with the different types of lending, you do private lending and we said they have to come to you. That might’ve gone right over someone’s head really quick. Can you explain what that means a little bit? Why do they have to come to you? What is a private lender?
We do a lot of loans that most banks won’t do for whatever reason, whether it’s higher leverage, higher risk, or higher pricing. We’re investors and developers ourselves. If you want make sense and we can make sense of it. We do the deal. We get a lot of clientele who can go institutional but prefer not to because they’d rather not pay so much in taxes.
They’re not showing so much any tax returns. They don’t have enough millions of dollars parked with their real private bank to go borrow very cheap money. They come to banks like us to where we see the opportunity. I consider ourselves a much cheaper partner. We get what you’re trying to do. You want to buy this thing. You want to fix it and flip it.
You need money to acquire and money for the rehab. This is what we do. Obviously, we’d rather work with people who have that proven track record. Granted we will deal with individuals that don’t have much experience with the pricing and set up the deals a little bit different, but those are all deals that most institutional banks would even be able to wrap their head around, let alone approve.
That’s been a very good niche was. We’re just a short-term bridge lender where a guy like Aaron finds a good deal on a commercial building. You want to buy it, rehab it, and sell it one day. In order to go through that process with your institutional bank, it’s 45, 60 days. Time kills all deals. The seller wants to sell it.
“Here’s your preapproval letter.” Sometimes deals fall apart. They are fully qualified to go with their institutional lender. It takes them so much time to where they call guys like us who can execute much faster. It’s been a decent niche for us over the years, and I’m curious and interested to see where it’s going to go from here, because I do believe it is the future of banking.
I was literally thinking that. You took the words right out of my mouth. I was thinking two things. I was thinking, one, it’s the future of banking because it’s more personalized. It’s the age of partnership and networking. It’s obvious to me, you know a guy who knows a guy, you hook up and chat about it and make a deal.
You can never communicate any easier than now and people are understanding that. It’s the age of networking, that’s the first thing. The second thing after this crisis that the world’s going through, the economy is going to take a shit for sure. I can’t not, in my opinion. It’s on its way now. All these people who unfortunately are upside down, they’re going to be having to foreclose like golf places and stuff. It’s not evil to take advantage of these situations because when someone contracts, someone else expands, there’s going to be a ton of opportunity out there.
It is very unfortunate, but you don’t want to prey on people going through tough times. They probably dealt that unfortunately. I’ve been on both sides of the spectrum. You got to be smart enough to learn from your mistakes. It is going to bring a lot of opportunities. Unfortunately, a lot of people are going to end up losing their homes. It was very similar in 2008, 2009, 2010 downturn. Unemployment now is higher than it was back in the downturn and see how quickly that can rebound that fast.
It’s the highest it’s ever been or some crazy shit, other than the depression.
I don’t know the exact figure but it’s mind blowing.
It’s craziness.
Back to your sense, the personalization, you don’t get that with your institutional banks. Aaron goes to Bank of America and wants to get a loan for a property that he wants to fix up and flip it. You can’t sell that dream to that person. You can’t sell that vision because they don’t understand it. It’s like, “It has to fit our box. This is our box, Mr. Aaron. If it fits here, great. If it doesn’t, good luck.” You can’t force a square peg in a round hole. I agree with you there for sure because it’s way more of a personal experience. You can’t automate that. I don’t know how else to explain it.
You’re in the industry and you’re all in on it and you’re doing very well with it. A question I would have for you on your business side of things. Do you do international or are you just in the States? How does that look?
We have different family offices that invest with us internationally. We haven’t done any deals internationally. We’ve been presented the opportunity with international luggage, tricky. We haven’t gotten our hands on enough of it to try to scale it, so no, we haven’t. We’ve had the opportunity, but if we don’t know it, it doesn’t make sense. It’s uncharted territory for us, we’re not too comfortable expanding into yet, but who knows? You never know what the future holds.
Private lending is the future of banking.
That’s a good lesson. If you don’t know it, don’t do it. It’s one of those things entrepreneurs have the shiny ball syndrome in general and it would be very easy for you to be like, “Greece collapsed. Let’s go over there. Over there, boom. There are shits going down all over the place.” Why not just go in there? We don’t have the specialty in that at this moment yet so we’re going to stay in our lane and focus. Focus is the word here. It’s not to say you won’t in the future. It means you know what you’re doing now and you’re focusing on what you can control on and crush at the moment.
It’s all about scalability.
You mentioned big deals with influential people and obviously, people that are flipping properties in the 8-figure, 9-figure area are some pretty cool individuals. A lot of eccentric entrepreneurs and interesting personalities. Not to say any names or anything. We’re not going to go there. Do you have any interesting experiences or anything that pops out in your mind that maybe it would be fun to talk about?
The first thing I want to share about that, we’re called private money for a reason. If you and I did a transaction.
That’s a good lesson.
It’s been fun because you come across your desk or your office. You’re like, “I know that guy. This is cool that I’m doing it.” You become friends with these people and it’s endearing to see your career go from a young kid doing institutional loans, barely knowing that he was talking about at the time. Eighteen years old to coming at the age of 35. It’s very endearing and it shows that the hard work is getting noticed because you’re getting these as a referral. You’re not getting these as chasing these individuals around.
These people come from different brokers, money managers, or people that have heard of deals that you’ve done and you come highly recommended to them. It’s been a very endearing experience because I’m not going to lie, a lot of these people are mentors in the business that I’m able to work with. It’s like, “I know who you are. You’re building an empire. That’s the empire that I want to build one day.” To be able to collaborate with these people, it’s amazing. I want to tell you about individual stories.
I don’t want you to go there. That’s why I was treading lightly. I just wanted to get a feel for what it’s like because I’m sure and certain in the realm that you’re working, that you’re dealing with some pretty high-profile, pretty cool individuals, I’m sure it would be a cool experience and also fulfilling in yourself to know that, “This is where I’m at now.” Since you’re doing a lot of referral-based business, which is also an important lesson for people to understand. Referrals are massive. It’s the bread and butter of almost any business. If you can get referrals over trying to get a cold lead come in, it’s like night and day experience. Let’s talk about referrals. Do you have any referral lessons or best practices that you want to share?
For me, we’re quick to turn down deals and that turns off a lot of people, but I know what we can execute on it and I know when we can. You do what you say. You’re going to build a reputation for yourself, giving a bunch of yeses, when in reality it’s a bunch of noes. No one’s going to call you. No one’s going to be happy with that service. It’s being able to look at something and knowing what you can help with. Truly executing on which you’re saying you can do. It’s going to be made of your words, simple. What I don’t understand is how’s that so hard for people to get? Being a human 101. It’s not hard.
A lot of these people on the different hands on these big profile deals. “It’s a great deal. It’s very much that deal.” I can tell you how many calls we get here a day, and sometimes I have the time and I pick up the phone out of curiosity in these calls, what do they got. I pick up the phone and, “Can you do this? Can you do that? Can you tell me a little bit more about the deal? What do you know about it?” They know nothing.
I’m like, “I can’t tell you what I can do if you don’t even know what you’re trying to shop here.” It’s been a big key to our success. It’s unfortunate because we upset a lot of people by giving quick noes, but I’d rather be honest and give a quick no on something that I know is farfetched and we can’t do versus giving you a maybe or a yes and let me see what I can do. Let me see what I can do is going to turn into you wasting your time, that borrower’s time, and that broker’s time and you get nothing in return.
The two biggest takeaways I’m getting from you here are, number one, don’t believe that it happens overnight. This shit takes work, grinding, and effort. It’s a roller coaster up and down over time. The second thing is be a man, a woman, or a company of your word and do what you know you can do and don’t overextend yourself because you think maybe you could.
Find that 1, 2, or 6 things for us that you’re good at. Here are the six programs that we know we can knock out of the park. Anything that fits out of this box, don’t even take it as a maybe. It’s a call from my friend, Aaron. Here’s his number. This is his specialty. That’s what he does. I want a referral for you. You don’t pay me anything. If he becomes highly-referred. I know we can execute what you need.
I can do it, call him. That goes a long way. Continuing simple business, it’s not hard. I wanted to reiterate something before I was interrupted. You were asking me, what it’s like to work with these high-profile individuals and people. Aside from the fact that it is endearing, it’s reminiscent of, I don’t know if you’ve watched this Jordan documentary, The Last Dance. Have you watched it?
No. I’ve heard of it but everyone keeps saying to watch it, maybe I should.
It’s like an eighteen-year-old Kobe Bryant coming into the league. This guy’s eager, hungry, and he’s willing to try to crush anybody and anything in front of him. He’s going up the iconic, Michael Jordan. How do you beat this guy? You figure out what his moves are. You learn everything that you can from him and then you try to do it a little bit better. That’s what for us as a company, for me as an individual is what we’re trying to do. If you see this competition out there, you see there’s a greater individual who’s done these very high-profile things, and you try to learn from that. That’s what we’re doing here, too.
Surround yourself with people who have what you want, emulate it, put your own spin on it, be a man of your word, and understand that it takes effort and an extended period of time. If you do all of that and you sign deals in the middle of shows because you’re a busy rockstar, you can be like Mark. You can be a jet-setting rockstar. It’s inspiring and it’s also grounding to hear guys like yourself talk this way, because it’s super important, especially in this age with social media and stuff being so crazy with people showing their highlight reels and stuff. People need to understand what it takes to create the highlight reel.
There’s no shortcut, too.
Private Lendings. Nitpick their brains and ask them a million questions.
We’re talking about Jordan and basketball. How many shots and practices did they do to get the highlight reel for winning the championship. You see the picture of them with the trophy, but you don’t see all the practices. Same as entrepreneurship and the early mornings, late nights, the travel, the phone calls, the noes, the falling on your ass, and the digging yourself out of problems. All of it. It’s all there and people need to understand that it’s not easy, but it’s worth it if you want to live that lifestyle that you choose rather than being put in a box. Tell us a little bit about your book. I saw you co-wrote a book called Money Matters, which is awesome. What’s up with the book? It’s on Amazon?
It is on Amazon. You can buy it. It highlights ourselves as a company, as lenders as to what we offer and what we can do. It highlights a little bit of our journey. It shows you all the ins and outs of the private lending sector and what you can take advantage of as an entrepreneur. Understanding of some of the programs that we can offer. It’s a short and sweet book and I highly recommend it for anyone who’s interested in doing what we’re doing or leveraging what we’re able to offer.
Both sides of the coin. People who are looking to be lenders get into lending or people that are being like, “I want to develop and flip buildings and do commercial.” The various things that you do. I want a part of that, so they can learn about you that way.
You’d be surprised as to how many people don’t understand what private lending is. You would be very surprised how many people call here a day and like, “I didn’t even know this existed.” Even the last several years as a realtor. That’s why we’re such a niche market. I do believe that we are the future. I tell all our peers at this business all the time, even our competitors. There’s enough market share for all of us. I wholeheartedly do think that this is the future of banking.
I’ve been saying that for years and I’m not even in that space. I’m a fan of it. I watch it. I play around with some stuff now and then that I won’t get into here. It’s the age of information that is past us now. Now it’s the age of partnerships and this is it. Why would you go to a big institution that’s going to probably deny you? Second of all, if they bring you in, you have to conform versus going to a partner like you who understands the dream and is like a partner in the business.
I got to ask you. What would you tell somebody who’s possibly reading and they’re like, “I don’t know what this is so much, but I do know that I understand real estate is a good investment. I want to flip commercial spaces or buildings. I want to start buying parking garages or something?” What would you tell that guy or gal who’s curious about it? They don’t know where to start. They don’t have a whole lot of leverage or experience, but they’re looking to go that way.
If it’s something that person is truly passionate about, your biggest key is educating yourself. Learning from all the people who have done it before you. We’ve done it successfully and learning from not just the success that they’ve had but the failures that they’ve had, because you can learn a lot more from the failures that they’ve had than the success that they had.
The success is like, “A, B, and C equals D if I follow it.” There’s a lot of that in between where things can fall apart that most people aren’t aware of and that comes with experience. The only way you’re going to learn that is by learning through others’ experiences. Find these people and nitpick their brains, ask them a million questions.
I remember when I used to meet a lot of my mentors I would have. A line of questions is already ready for him to go because I don’t want to forget it. Each of them was just as important as the other. It’s like, “How do you do this? How do you do that? How can you do this? How can we do that?” It’s being able to leverage those people’s hard work for yourselves. That’s a great key to anyone’s success, to be honest. It’s got to be something that you don’t want to give up on. You’ve got to be truly passionate about it. It’s one thing to be curious and it’s one thing to truly want to do it.
That’ll get you out of bed in the morning when it’s raining or pick you up when you fail and you’re like, “Shit. I’ve got to go again.”
You got to understand that everyone has failed. Not everyone has succeeded without failing. That’s where everyone gets discouraged, it’s when they feel that first time, that second time, and that third time. All the time in the world, I couldn’t tell you how many times I failed in my life. Nobody sees that.
There’s also this misconception of people comparing themselves to each other, looking at year twenty and the other person is on year two, they’re like, “This guy, he’s crushing.” The guy has been doing it for two decades. Think about all the shit he’s gone through to get where he is now.
Everyone’s journey is different. It’s hard for everyone to accept that for themselves. I’m hard on myself. I could have done this years ago if I was much more organized. If I was much more diligent, I do it to myself all the time, but this way you keep yourself sharp. You don’t use it as a tool to bring yourself down and use it as a tool to encourage yourself. That’s where a lot of people get it confused.
Mark, it’s been a pleasure. I could talk money all day, but I want to let you get back to your deals there. For the readers here curious about finding you, checking you out, grabbing your book, finding you on Instagram or every social channels, where can they go check you out?
My email is Mark@CarlyleCap.com. The book is on Amazon. If you Google or if you search my name, it’ll pop up on there as an author. You can buy it there. Instagram is @TrademarkMark.
Go to his Instagram and check that out. It’s inspiring stuff. That’s the shit that I like to look at because it’s inspiring. Work hard, play hard.
That’s the whole goal behind all that. It’s not just show you all this cool shit. Anybody can have some cool shit. The idea is to inspire you and show you the journey. This is what happened and this is how it happened. You can do it, too. We aspire to inspire. What else are we trying to do here? I’m not here to try to throw anything in your face. There are guys out there that have made ten times more.
Everybody’s on their journey. It’s awesome. Mark, it’s been a pleasure.
Thank you. I appreciate it. Thank you for your time and I hope we get the chance to talk again soon.
Important Links:
- Money Matters
- Mark@CarlyleCap.com
- @TrademarkMark – Instagram
- https://www.Instagram.com/carlylecapital/
About Mark Atalla
Mark Atalla is the Founder & Managing Partner of Carlyle Capital. With over 18 years of experience in the private lending space, he prides himself on finding unique strategies that have given him a reputation for underwriting and understanding even the most complex transactions. While attending California State University Fullerton, he began his financial career at Newport Lending Group and worked his way into the mortgage industry from the age of 19. With success in lending that exceeded his more tenured peers, this gave him the confidence to start his own company at the young age of 23. Carlyle Capital has grown into a top Southern California private lending firm which has funded numerous unique projects across the country. Mark manages a large book of affluent clients, brokers, and investors who turn to Carlyle Capital first for their lending needs.
Love the show? Subscribe, rate, review, and share! https://www.aaroncivi.com/podcast/