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New England Private Lending with Cardinal Capital Group · Private Lending Insights

• [00:00:00] Welcome to Private Lending Insights. I'm your host, Rocky Butani. In this episode, I interviewed Briana Hilt, who's the co-founder and CEO of Cardinal Capital Group. Cardinal is a boutique private lending firm that's focused on New England, mainly Massachusetts. Uh, but they, they lend in Connecticut, Rhode Island, New Hampshire, Maine. [00:00:24] They have done a little bit of lending in the southeast, but that's not their focus. So in this interview, we talk about what's happening in the Northeast. Uh, we touch a little bit on, uh, what's happening in the private lending space right now. In April, 2025, uh, we talked about, uh, Cardinal Capital Group's lending activity. [00:00:45] Talked a little bit about the company, and then we get into specifics of some of the different markets that they lend in. Uh, each state and each metro area within those states. I've known Briana for many years. I first met her when she worked at a, a foreclosure company outta San Diego back in 20, maybe 16, 17, 18, around that time. [00:01:07] And, you know, then she, she left that company and started brokering loans. So she was successful at that for several years and, uh, sometime around 2021, she just, you know, she started this company. And what Briana's accomplished in private lending over the last few years is incredible. It's so impressive and it's been fun to watch over the last several years. [00:01:31] I hope you enjoyed this episode and I'm sure you learn a lot about New England. And with that, let's get started. Here's my interview with Briana Hilt. Briana, thanks so much for joining me for Private Lending Insights. How's everything with Briana and Cardinal Capital Group? Everything is great with Briana and great with Cardinal Capital Group. [00:01:51] Busy but good. Great, great. So your lending is all focused in New England, uh, for the most part. Tell us about what's happening in your market and, and private lending in general at this time. Yeah, so I think, you know, you and I met obviously in California and I was living out there for a while. I'm originally from, uh, the New England area, western Mass. [00:02:19] And I think that for me, I just noticed that California was saturated with private lenders and that the New England market really needed more options for lending and, and, and, and better private lenders to, to choose from, in my opinion. So I made the decision to move back to the East Coast in 2019 and I just looked at a lot of historical data, you know, kind of in Massachusetts and how well that market's maintained throughout. [00:02:50] All the ebbs and flows of, of the economy and the country and things like that. And so I kind of decided to make that my priority market. So we do a lot of volume in Boston, which is a very strong market. And just, you know, obviously we, we wash everything from market trends and things like that, but as has really held up strong even throughout everything that came with Covid and, you know, the, the, the volatility in the economy and the markets and inflation and all that. [00:03:18] So things are going really well there and we've definitely made our footprint there. And then we decided to kind of expand into the other New England markets, kind of having the same methodology of like, well, how well have these markets done, you know, in any kind of volatility or situations that, you know, since oh eight to now. [00:03:38] And they were all holding up really strong. And so we've really started to break into those markets in the last year or so as well. Great. And right now we're in mid 2025, so it's April 22nd. Uh, you know, it's, it's a bit early, uh, in this whole crisis, but, uh, a lot of people are talking about the trade wars and what's gonna happen with that, how it's gonna affect private lending and real estate investing. [00:04:04] Uh, so obviously it's a little early to tell, but just, uh, as of today, uh, have, have you seen anything that, uh, uh, that it's negative, negatively affecting your business or, uh, your investors? What are you hearing from your borrowers? I think the majority of the conversations I'm having right now are with starting with clients, with, with borrowers, because I think they just wanna know how to hedge their bet if, you know, the cost of items and things like that go up, which is, it feels very reminiscent to. [00:04:36] 2020, right. During Covid. 'cause it was kind of the same thing. You know, you had a shortage on a lot of materials. You had a markup on all these materials you had. I mean, I remember watching lumber costs just go through the roof, right? So it's kind of like, luckily I've been through this, you know, already. [00:04:53] And then I don't think any of us were prepared for that, right? Not only were we looking for toilet paper, but we were looking for cheaper lumber and trying to help our clients with that stuff. So I think we implemented some processes from then that we kind of stayed true to, right? We always kind of suggested to our clients like, Hey, you don't know what's gonna happen. [00:05:11] Maybe add in a contingency into your budget. And if you have, you know, a 10% contingency, that should probably hedge the bet of, of any of these costs kind of fluctuating. Especially when it's like an 18 month to two year construction loan. You just don't know. Right? And so that's what we're advising with our, with our clients in regards to our investors. [00:05:29] They, they haven't really been too anxious about it. If, if anything, I feel like it's. Driving more interest into funds for, you know, like a, a real estate fund like we have, because I think they're watching the stock market and seeing how that kind of goes up. And luckily, because in my opinion, a lot of the items and things that are, that are materials are made here in America for, uh, for building. [00:05:56] So, you know, a lot of our clients are still really developing and, and not slowing down with that. So therefore, our fund is still generating really great returns. And when you're looking at options right now as an investor, we have a really strong history, even through COVID and when things were bumpy and, you know, 22 in all those years. [00:06:16] And so for, for, I think for us, our investors are like, well, as long as you're still lending and you're lending to the same type of caliber of clients, we feel really good. So, you know, that's, that's how I'm feeling about clients and investors in regards to. Capital markets. I mean, I'm always watching that carefully. [00:06:35] I think that's a lesson I learned throughout the last four or five years. I didn't really decide to start Cardinal in an easy time of life. So I'm always kind of just watching to see how they are reacting capital markets and, and things like that. But so far it seems like, you know, everybody's just kind of paying attention and seeing what's gonna happen. [00:06:56] And I think that a lot of us, I think all of the groups across the private lending space, learned habits and things like that, to kind of plan for situations like that, that I think that, I think most of us are feeling much more prepared in my opinion. So, and that's, that's what I'm seeing on my end. Great. [00:07:14] And I think with investors, uh, you know, they, uh, they typically look at equities as, as, Hey, if that's volatile, then let's, uh, get into, into fixed income. So I, I do, uh, think that, uh, that a lot of investors may, may be attracted to mortgage funds and, and investing in notes, uh, at, at times like this, where Yeah, where it's just a, a safer steadier return than what they're, you know, than what they're getting with the stock market. [00:07:41] Yeah. I mean, I, I said, I've said to every investor I've ever spoken to, you know, real estate is the most tangible asset in my opinion, that there is, and everybody needs a home, right? Whether they're renting that home or they own that home, I mean, everybody needs a home. And so it's, it's something that, in my opinion, there might be ups and downs, there might be things that happen, but it's, it's always going to be a necessity of life. [00:08:03] So, and, and because of that, and because it is a tangible asset, in my opinion, I feel like it's a very strong one to invest in. Yeah, it's not a plugger pitch into my fund. That, that's just my genuine Sure, genuine feeling on the whole thing. And I'm not endorsing it 'cause I'm not a securities broker, so. [00:08:21] Correct. But, uh, but no, that's okay. That's, I mean, you're, you're a fund manager. You're, you're the issuer, the sponsor, you're, you're allowed to pitch that, so No, no worries there. All right. Let's talk about, uh, Cardinal's lending activity. So you're a fairly new company started, like you said, during covid or, or around that time. [00:08:40] So, so around a, a four or five year pulled company. Uh, you know, when I look on for Casa at. At your lending stats, from what I'm seeing from, for 2024, your loan volume's around $450 million. Uh, or it's more than that. That's probably a low end number. Uh, over 200 loans. Your average loan amounts about $2 million and 86% of your loans are for properties in Massachusetts. [00:09:10] Does that all sound about right? Yep. Wow. So that's really impressive. I mean, I've, you know, for, for a newer company to to, to be doing that kind of volume is, is quite remarkable. So, so, so how did Briana and the Cardinal team break into, into Boston and just take over the place with, with private lending? [00:09:31] Well, so I mean, uh, as mentioned earlier, I'm from Massachusetts and I think that there, that is like a huge precursor. It's funny now, like being on both sides, right? I've lived in California and luckily even when I was living there, I kept my Massachusetts area code of my phone number. So way back when I was a broker, I think that was like my intro. [00:09:52] They were actually answering my phone calls, right? But, and I've seen a lot of California lenders try to break in and, you know, outta state lenders try to break into the market and it's just, it is such like a. True patriot states. Like, you're either from here, you're not, I don't care. You know? And so that gave me an easier entry point. [00:10:10] Right? And then I think that with, with the way that that market functions as well as it's also a very like, relationship-based state. And so like, you know, you're not getting undercut like you are in other states over a quarter point. It's like, it's like showing that you can close for that client and showing the proof that you can, can facilitate that loan carries so much more weight. [00:10:34] So even as rates have kind of gone up and down, if they trust you, they trust you, period. Point blank. So we've really kind of like, when you think of the, you know, your flywheel with your business and like what. Brings in revenue, right? Is it, is it ads? Is it marketing? Is it referrals? Is it, you know, what, what is the real driver? [00:10:52] Uh, we didn't even really, we hired our first sales person like six months ago. It was all repeat, you know, referral. John was happy. So he introduced us to Joe, and Joe was happy. So he introduced us to Tom and it was, it was a lot of that. And then I think we just scaled off of that, uh, saying like, well, what did that client really like so much? [00:11:12] Was it our speed? Was it our creativity? Was it our. Our ability to find a good structure for the loan that made sense. And we, our box was more fluid and, and what was it that they really loved? And, and then we kind of took the answers from everybody throughout the years and just really build off of, off of that to the point that we had to start hiring additional salespeople to help with the influx of business and then, you know, the spillover and to the other local markets and trying to handle that growth as well too. [00:11:39] So it, I'm, I'm really excited to see what we can do once we actually have more of a forward facing, you know, we just hired a marketing team, we just hired some salespeople and what can we really do when we have that behind us? Because, you know, our team was, was smaller and hardworking and, and now we're really trying to grow kind of in the right way so that the people that are learning about us from those referrals, well now we're. [00:12:03] Other people are, are hearing about us that are in maybe a neighboring state or something like that, that wouldn't have found us because there's not that many options. So I'm really excited about that, that growth. But I think that our, putting the relationships first and really making sure that the client, the clients were happy, I think was one of the main drivers for, and being born in the state and, and having that as well too, is a huge piece, I think. [00:12:29] Wow, that's impressive. Well, you know, from what I know about the Boston market, uh, you know, just from being this business for a long time, I've, I've had relationships with a few lenders in Boston that I've never met before, but, uh, but they seem to be lenders that have been around for a long time. Right. [00:12:45] You know, your traditional hard money, uh, lenders, you know, and then, and then you come in and, and you know, you have significant market share. Uh, what was it that that would take. A real estate investor that's doing business with, with, you know, an established Boston hard money lender and, and make the switch over to Cardinal Capital Group. [00:13:07] Was it more pricing or was there something else besides that? You know, when you think of the Boston market, yes, there was a handful of, of, uh, private lenders, but then also too, like one of my bigger competitors were, were, you know, local banks and then, you know, those groups were being. Regulated in ways that we weren't over the last five years. [00:13:27] And also dealing with much different, you know, if, if, if something happened in the real estate market or if something happened with interest rates or something happened with inflammation or inflation, it was one of those things where it was like, well, uh, oh, we gotta squeeze our allocation limits. Like, Hey, Rocky, we used to lend 10 million a year to you, but now we have to pull it back to five. [00:13:43] And so like, some of that created a lot of space because those guys that you like, I couldn't get them away from first, you know, from one of the bigger banks out there. I couldn't get them to come to us when those situations happened. It opened up opportunities to be like, well, I can go up to 25 million at least with you a year. [00:14:00] Maybe you should try us. And then I, I always say like, get 'em over the fence once, right? Like, get them in the door, get a deal done with us. Let me show you what I can do. I'll put my money where my mouth is if you're not happy. Don't call me again. If you are happy, keep us in your Rolodex. And if you're planning on doing, you know, 20 million a year in volume, average loan size, 2 million, 10 deals a year, that's, you know, we're a good option to have. [00:14:23] And then what I started to notice was that people are, people are easy creatures to figure out, right? Like they, they, I don't know about you, but like, are you calling every single year to get like 80 different insurance quotes? Probably not. Like if you're, if you're comfortable, you're happy, you're satisfied, you're probably just gonna hit the like re-up button, right? [00:14:41] So like we became that re-up option. It was like, well I just closed with the Iraqi, I have your full file. I know, I know what you're looking for. What kind of structure? Here's the terms I can close in three business days. How's that sound? And it was just like, rinse, repeat. And so we really grew that with the more bankable clients, with the clients that were working with some other private lenders. [00:15:02] I think again, it was just more of like the way that I was. Speaking with them in a sense of like, well, I'm the owner of the company and I really wanna earn your business, so if this is what it's gonna take, I'll make this kind of acceptance to give you this really rock solid deal. I can't guarantee you I'm gonna do that every single time 'cause I'm giving you the lowest rate possible, but please just give us a try. [00:15:24] Get in. And then again, it was like once they kind of came in, then usually they were pretty sticky in that regard. And so really putting the clients first, really having a lot of different options. I think that was another thing too, is we like to provide options to our clients. Like, well, you tell me what you want. [00:15:39] Which is really kind of the opposite of what a lot of people do, right? It's like there's some of these websites you go on, you get an instant term sheet. Well that's great. And you know optically that works. A lot of times, but that doesn't always work, right? Like, I mean, what if they don't want that much towards their initial and they want more interest reserves? [00:15:57] Or what if they, they put in a budget, but now this whole thing with the trade wars is making them think like they need more. So I, we always try to have that client facing piece where we're like, you tell us what you want. And I really think that that's been a really strong avenue to take with the clients. [00:16:13] Great. Well, let's talk about the loan types that you offer. Are you mainly doing rehab value add construction projects, or is it bridge loans? Is it long-term rental? Tell us a little bit more about the types of loans. Yeah, so I think we do a really good variety of different loans. We definitely do a lot of value add, whether that's fix and flip, or whether that's ground of construction. [00:16:35] And then typically, if the client's exit is to hold onto it, we'll always, you know, try to work with them on the long-term takeout. If that option is there, if their exit is to, to sell it, then we have products where we can say, okay, well, you know, you're, you're done with your rehab, now you have all this equity sitting in this project, and. [00:16:55] As you know, the east coast is obviously an extremely seasonal market, right? It's like, I can't tell you how many clients are frustrated when they're finishing their project and it's like right in early October. Because if you don't hurry up and get that thing listed, you know, after Halloween it kind of like everybody goes into their hibernation and has their holidays and then when the flowers and the, the, the trees get leaves again, then they come back up. [00:17:17] So it's, we have really great bridge products as well too, where we can say, okay, your project's rounding the end, end here. You have all this equity sitting in, sitting in it. I know that you client like to buy in the winter because that's when you can get a great deal. So, you know, what if we pull some cash out of this project and help you go find something else? [00:17:37] And there's like so much hesitancy in our industry about like midstream refinances or pulling equity out, and it's like we put on our hats like we're the developer and we're like, well that's not really fair. If I completed this project or I got it, 95% complete there and I put all my skin in this game and I really worked hard. [00:17:54] And I wanna pull some money out to go buy another project. Why aren't you supporting me in that? So we, you know, we really try to help with that. So I, I'd say we have a wide array of those type of products and it just really kind of, again, catered to what the client needs essentially. Uh, since you mentioned about, uh, you know, taking, uh, equity out or refinancing mid-project, uh, what are the risks to lenders in, in those cases, and, you know, for people who, who are wondering what, what's the big deal with it? [00:18:24] Why do lenders shy away from those types of loans? Yeah, I think so. Most lenders shy away from those loans, especially when they didn't have the original loan, because typically, obviously it's, it's what they call an an, an broken priority, meaning that the, you know, the project's been worked on and you don't really know necessarily where the risk lies. [00:18:45] Because, you know, if Rocky is my client and you know, has he been a good, good boy? Has he paid all of his subs? Is he gonna have all the lien releases and everything that he needs? Right? Like, you don't wanna come into the loan and take over risk that you shouldn't have taken, right? So it's like as long as the client is ethical and performing in the appropriate way, then most likely their subs are all paid. [00:19:09] They don't have any weird liens. And you should be able to just kind of like slide in and assess where the project is and say, okay, this is. This is the project, 65% complete. And I think that's where also too, we're a little bit different because we are, we're really good at, at construction and assessing, like you have a lot more than $500,000 to finish this project and you're not gonna get it done in three months. [00:19:31] Like we, we've all done a lot of construction ourselves, and so we can kind of look at the deals like that, but that is typically the. The concern with these midstream refis is, you know, they don't want to take on any additional risk than they need to. They, it's kind of hard to confirm exactly how much money the client has put into the project unless you have a trail of inspections. [00:19:51] And so I think that's the original kind of like fear. But for us, obviously, because we have that knowledge base, it's pretty easy to get an appraisal and see, okay, if he bought it for this and the project's in this position, he definitely spent what he's claiming he spent. And as long as you can get clear title showing there's no liens outstanding and things of that nature, it's really not that complicated. [00:20:17] And I think it was like one of these like taboo things that everybody was like, oh my God, don't touch it, don't touch it. And we were like, but it's a need. I mean, and if you actually think back to what was happening during Covid, I, I mean all of these like local towns who used to have, you know, 10 people working in the town of. [00:20:34] Wellesley Mass is, you know, town hall doing all of the zoning approvals and all of the permits and plans. There was such a lack of everything slowed down, right? So like a project that would take two months to get permits, all of a sudden took six months to get permits. A project that would take six months to get per permits was taking a year. [00:20:53] So if we're out there giving 12 to 18 month loans for rehab and they're not even getting their permits for six or seven months, then you have to be able to have an option for a refinance for them, right? So, uh, I think it became pre pretty clear to see who was manipulating the system and who was actually just like, unfortunately facing all of these delays. [00:21:12] And so you just switch up your underwriting and it's not that complicated in my opinion. Yeah, definitely. I, I've, you know, I've heard about, you know, where there's investors who, who come to, to our platform and they're, they're looking for a refinance and, and they just completed a rehab. And, you know, the question is, well, why doesn't your current lender give you a refinance? [00:21:33] Oh, yeah. Why don't they extend the loan? What's the problem? You know, what's, you know, have you not been paying? Or what's the hair on it? And, uh, and that, you know, in the cases where, uh, there's no issues, then I've, I've always been baffled of why, why wouldn't a lender not wanna refinance it and keep, keep that customer? [00:21:51] And, and sometimes it could be, you know, just their capital structure where they've, maybe they've sold the loan and, and the, you know, there's no option. The, the loan holder or the note holder wants to just get paid off, you know, according to the term. Correct. Yeah. I, I think back in the day, lenders had more ground to stand on with that. [00:22:09] Like, why isn't this lender doing the refi? But then being a lender who's been going through everything you go through the last four or five years, it's like, there's so many reasons why this borrower could be coming for a refi, right? Maybe that that capital behind that lender isn't not such a great place right now. [00:22:26] Maybe their backing is not so hot right now. Maybe they don't have the capital stack they once had. Maybe they can't sell the loans right now, so therefore they can't go do a refi themselves. Maybe they didn't have the appropriate extension offer even in the client's packet. I mean, I've seen and heard everything you can imagine. [00:22:41] So it's, it's not really that cookie cutter like, oh, there must be something wrong here. And if you're a good underwriter, it's very easy to figure out if something funky is going on in two minutes. Right? So it doesn't need to be that. That's scary. You can push all of those refis right over, right over to, to cardinal. [00:22:59] Sounds good. Uh, okay. Let's talk about, uh, the lending guidelines. So if, for any real estate investor out there who's, you know, their rehabbing properties or their building properties in New England, uh, what are your requirements? And, and let's start with rehab projects, if it's gonna be a fix and flip. Uh, what do you require from the investor, from the, the borrower? [00:23:23] And what are some of the, the. Guidelines as far as how you structure the loan with leverage? Yep. So we look at projects kind of similar to a lot of people look at them, right? It's like if you've only done one project, your limited experience, if you've done somewhere from like three to eight, three to nine projects, you're probably considered more experienced. [00:23:42] And then if you've done 10 plus projects, you're considered institutional in the last like three years or so. So based off of that, let's assume someone's either higher experience or, or considered institutional if it's just your standard. I'm gonna buy this single family and I'm gonna fix it up and flip it. [00:24:01] We'll go up to 85 or 90% of the, the purchase price. We will lend anywhere from 90 to a hundred percent of the budget, and we'll also typically lend at least six months of the interest reserve into the loan. If there's more room, we'll lend the entire term of the loan and all of that circles back and is predicated off of the after repair value. [00:24:20] So all of that's subject to, or less than 75 of after repair value, which is also something that I think kind of sets us apart because a lot of people are timid after 70 and I. Because we really hone in on the markets that we're at. It's like, well, the variations we've seen in this market aren't that wide or that crazy. [00:24:37] So being at 75 pretty consistently. And, and the good thing is, is most of the deals don't even need to be at 75 because the, you know, the values are really there in those markets. And so that's kind of typically, you know, up to 90 loan to cost and up to 75 of Afterpay value for those fix and flip type deals. [00:24:55] And then when it comes to ground up construction. Uh, similar, like we can go up to 75 after pair value, typically 85 of loan to costs, which depending on whether there's permits in hand or not, that's usually up to 75% of the purchase price, plus the construction, plus the interest reserves. And that's really critical for us. [00:25:16] Like we, we have noticed that a lot of our clients thrive with the interest rolled into the loan because they wanna be building, they don't really wanna be dealing with accounting. And so it's, it's not even like it's that big of a deal, but it's like when you gotta log on, you got seven projects going on at once, you gotta deal with the balancing and all the stuff with the servicer. [00:25:33] It's not that fun. Uh, so we find that they thrive when that that's kind of taken care and a tear of for them and they can just con continue on with the project. So that's kind of the, the guidelines around those. And in regards to like doc collection and things like that, we're, we're really easy to work with. [00:25:51] You know, we. We can get appraisals back in, you know, a couple of days, title orders and end very quickly. So like when I think of the client and what they need to give to us, it's pretty simple, right? You know, it's a, if we haven't worked with them before, it's a personal financial statement that we can review and accept. [00:26:09] If you have one on your own template, driver's license your track record to verify that you've been pretty experienced. And then it kind of comes down to like those entity docs of that asset, right? So collecting those entity docs and a couple months bank statements and kind of good to go, we'll take care of getting the appraisal and the few other things, you know, if it's a ground of construction project, the plans and the permits that you do have if you have them already. [00:26:32] But we try to do a lot of the work for the client as well too, you know, so if it is a refi and I can, we can go pull the articles for them and do certain things to make their list of, of items needed from, from this to this. We try to do that. But, you know, unlike banks and things like that, we don't need taxes, we don't need anything crazy. [00:26:51] It's a pretty simple dump doc collection to be honest. Great. And what about for investors that are not as experienced, where they're not institutional and they've, they've only done, let's say, one project in the past? Yeah, so I mean, all that would really do is maybe reduce the leverages slightly, right? [00:27:09] You know, we're not against working with newer people. Everybody's gotta start somewhere. And oftentimes the people that are, are, are coming, uh, in to do their own projects. They were a sub, you know, usually, like, you'll see a subcontractor say, I'm kind of sick and tired of being, making the money for everybody else. [00:27:24] I want to come in and do my own project. So they usually have some kind of experience whether they were a real estate agent or whether they were a subcontractor. And so there's, they, we definitely give credit for those things for sure. And we look at those things And so, uh, the only thing it will do if they're truly like a zero, like, I just watch HTTV and I wanna go do this myself. [00:27:45] The only thing that it would affect really is just kind of like, uh, slightly reduced leverages that way for a lender, from my perspective, it's just kind of like, well, let's get through the first one. Let's watch you take it from start to finish. Let's see you sell it off and transact. And then just even that one gives you so much credit, right? [00:28:04] Because it shows that you can not only find the project, run the project, guarantee the project, and sell it off that that's, or exit it. That is, that's, you know, monumental. So when you talk about lower leverages, what, what are some of the numbers? Do they have to bring in 20% of the project costs? Typically? [00:28:23] Yeah. Typically it's 20% down instead of the, you know, 15 or something like that on a fix and flip. And then it's, it's usually just that though. It's usually like just put a little bit more money up towards the front. We don't try to harm the loan from the backend, right? Like, we're not gonna not give you your budget or your interest reserve. [00:28:39] So you might just slightly have more to put down in the first place. But that's, that's really kind of it. We'll still offer the interest reserves and the budget and things like that. Okay. And how about on the, uh, completed value or after repair value? Would that go down to 70, for example, instead of 75? [00:28:57] Roughly. Yes. Yep. And then, like I said, if, if this is truly first, first, yes, it would be around 70 if it's their first, but they've been a real estate broker for 20 years, we try to give them credit otherwise. And when we can give them credit otherwise based off of an exception, then we can get them back up to 75 of after pay value. [00:29:18] And that's kind of what I was talking about with our flexibility essentially. Okay. All right. Great. And let's go back to interest reserves 'cause I haven't heard of too many lenders offering that. Yeah. You know, construction loans, I guess it's a bit more, uh, a bit more common than a rehab loan. But even in construction, I, I, I think there's a bunch of lenders that, that don't do interest reserves. [00:29:41] Talk about that a little bit and for people who are not familiar with that, tell us how you approach that and how it works. A lot of clients. Or especially, I think it, it all started because of the projects that we were doing in, in Boston, right? It's like you're doing these like, pretty complex projects that you're maybe rehabbing four units at once, right? [00:30:01] And so like, maybe the overall loan is slightly higher and it's, you know, a cost that they were like, oh God, should I add this into my budget? How should I account for this cost? Should I go raise more equity? Like, well, how do I look at this? And for us, because the sales prices were so good, uh, my average in the last five years, my average, my average LTA RV in Boston is 68. [00:30:23] It's sub 70. Even though I have the ability to go up to 75, even when I roll in interest reserves and all this stuff, it's still below 70. So with that, it, it's, we kind of looked at it in a way of like, well, if I can give them what they need towards the purchase, give them what they need for their budget and give them the interest reserves, which not only protects me, but also protects them in a sense. [00:30:43] And be below 70. Like how is that not a no, you know, a no brainer. And so, uh, the conversation with the client is, listen, if you take this and abuse this, right? Like if you don't start rehabbing, if you don't start working on your project, then there's not a reason, right? There's not like, oh, I'm struggling to get the permits because of X, Y, and z with the town then, you know, obviously that's your loan's gonna if you go into default if you don't perform within a certain period of time. [00:31:10] So it's kind of one of those like adult conversations that's like. Hey, this is an added benefit and if you treat it the right way, you can get it in all of your loans. And I think it will help you because I think that you'll notice that it's just like anything else in life, right? The the best developers, the best contractors, they really wanna be at the project working on all of those things. [00:31:32] And they typically have somebody else in the project that will help with kind of like the numbers and all of those things. But it's like, pick a lane. Do you wanna be better at construction or do you wanna be better at running the numbers? So as an added benefit to just kind of have this reserve that goes to the, to the servicer once a month and takes care of that payment, as long as you go build, you're gonna be great. [00:31:51] And that's like what we'll say to the clients. Like, you focus on building and getting this project from A to Z. If you face a delay or something comes up. Give us a call because we'll wanna kind of re-look at that and how's that going to affect the loan. But assuming that the project kind of picks up and you can go right away, uh, let us worry about this and not you. [00:32:09] And so, yeah, it was one of those, again, taboo things that people were like, oh my God, Cardinal is crazy. But the next thing you know, like our portfolio is performing at an extremely high level, our default rates are extremely low and. I don't know. I look at it like, almost like parenting, right? If you say to your kid, I'm gonna put a tracker on you, I'm gonna watch you all night long 'cause I don't trust you. [00:32:28] They're gonna be more tempted to be like, well why not? If you say to them, I trust you. Here's a cell phone, call me if you need me. You know, people take pride in that. So when you say to these clients like, I'm gonna provide you with this most client, most lenders will not, and then they go do one deal where they realize, wow, it's actually a lot better to go borrow the interest at the interest rate that they're providing, rather than raising it from an equity guy that I have to go pay 20 or 30% on. [00:32:56] I actually profit more. So this is, this is really appealing to me. They get all motivated to go get their project done in a better way and it's actually helped yield us grab much more institutional clients because the banks will say. You know, Hey, Rocky, we'll give you this deal, but we want you to roll into an escrow account or to a bank account, six to 12 months of interest reserves, and you need to forward, you know, face that you have to put that into the loan before we'll lend to you. [00:33:23] And next thing you know, you know, if you're going with that bank, you're putting 20% down plus fronting six months to a year of interest reserves, you're putting like 40% down. And where do you think they, they're getting that money from? They have to either go raise it or bring in another partner and give up some of their profit. [00:33:39] Whereas if we look at the loan in totality and say between the, you know, the down payment, the budget, and the interest reserve, if all of this collectively is sub 70, why, why wouldn't we give them that reserve? I mean, that's my method to the madness, but I, it, it works. It's been working now for 11 years for me. [00:33:59] And w Banks typically will, will make you put that money in an escrow account or, or, or just have it upfront. But most other private lending companies, as far as I know, they just tell the bar, Hey, you just need to make these monthly payments and you don't have to necessarily put an escrow account, but we wanna see that you have the cash flow or you have, you have the liquidity to make these payments. [00:34:23] Yeah. So what you are doing is, is you are just billing it into the loan so they don't have to worry about it. And they don't have to separate, you know, they don't have to put that money aside, they just, they just borrow a little bit more to pay for interest. Because I mean, it's a double-edged sword, right? [00:34:37] It's like if you're the type of lender that wants to go capture the top developers in the country, well then guess what? The top developers in the country are gonna have a lot of projects going on at once. And that, and that's, that can get, you know, I don't care how much money you make, it, it becomes a lot when you're managing all of these things at once, right? [00:34:55] Possibly the cost of the budgets going up 'cause of the, the tariffs or, or, you know, uh, fluctuating interest rates and, and taking on more projects or hitting those seasonal, uh, uh, monthly roadblocks where you're like, well, I tried to sell it off in September, but I didn't get it on time, and now I have to hold the loan for six more months. [00:35:12] And so there's all these variables that come in play with these top developers. And if you take that part out of it, if you just say, you know, get your project to a point where it's in, you know, uh, a completed. Place or just focus on getting the construction done and on schedule, then oftentimes that's what happens. [00:35:32] And you know, if you're like below 70 and God forbid you have to do a refi and I can go up to 75, well then I have room to look at that again if I need to. And so it's really worked out really well. Is that, you know, gonna work with every single client. Is everybody, you know, gonna follow super perfectly? [00:35:49] Probably not, I'm sure. But it's been working really well for a very long time. And I think that again, it clears the space in their mind to just say, I just am gonna go build this thing. Right. And, and they don't have to worry about all of the, uh, you know, accounting stuff that comes along with it, essentially. [00:36:09] Love it. And do you do that both on rehab projects and ground up? Yes. Okay. We do it on every type loan type that we have the room to do it, we do it. Great. Uh, let's talk about the, the asset classes. So you're mostly lending on residential investment properties, but do you lend on multifamily where there's five or more units? [00:36:31] Yeah, we do, you know, with those, uh, that's typically more up to like, I mean, I would say up to 20 units is kind of like our sweet spot on those. I, I think that's going to grow more, but if I had to kind of put like a unit count on it, I would probably say that's it. But our average is probably that, like, you know, one to four resi. [00:36:50] We do a lot on that a lot more, but probably 65%, 70% is that. Okay. And, and the Boston area, I'm assuming that, uh, the, the two to four unit properties are, are, are popular, right? Where there's, there's a lot of buildings that might have, uh, even mixed use. Maybe they even have a retail, uh, unit on the ground floor. [00:37:14] So most of your projects are, or duplexes and, and triplexes and maybe even four families, right? Yeah. We do a lot of that. You see a lot of those, like two to four units for sure. In the more residential neighborhoods, they're typically just like, it's a two to four unit, right? And then there's certain pockets of the city where you will see that fifth unit in that fifth unit might be one of those retail spaces, or that six unit might be the retail space. [00:37:38] And there's five above, but like your standard, I'm driving through the city of Boston in all the different pockets. You see those one to four, you know, multi-level deckers all the time. That is probably one of our most popular loan products because, you know, the client will buy it as a one building multi-family, four units. [00:37:58] And then condo conversions in Boston are obviously very easy to do. So they're just kind of like essentially rehabbing four little mini projects at once. Right. Which, from a perspective of planning out your budget is super easy to do. 'cause you're like, well if the units are all around the same square footage, then my, my four, you know, budget is the same for all four units. [00:38:18] My window budget is the same for all four units. So they kind of do the four, four projects at once and then exit them off and sell them as condos. We do a ton of those. But yeah, we've definitely had some five to 12 units that definitely have like a commercial piece in the bottom. And is, is mixed use. We have those as well too. [00:38:35] Okay. And do you do any other types of, uh, properties? Like do you do any retail or industrial properties? No, we don't do that. I think that if we didn't have such a strong book of business on, on the other products, I would love to do some of that stuff someday. I just think that we have such a strong book and, and need to service those, those, those other types of loans that it's not quite there yet. [00:38:59] All right. Makes sense. Yeah. All right. Next I wanna get into talking about, uh, about the company and we'll talk about some of the different markets, but let's take a quick break and we'll be right back. Support for the show comes from Ross Diversified Insurance Services. All real estate investors and all private mortgage lenders need insurance. 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All right, and we're back with Briana Hill. So, so Briana, let's get into talking about the company, Cardinal Capital Group. Tell us about your operation. You know, your, how many people you have, all your different departments, you know, your offices, where are you guys located? [00:40:32] Uh, and, uh, then we'll go from there. Yeah, so we have a, uh, brick and mortar in the south end of Boston. That was, we opened our doors in September, so we bought that, rehabbed it, and got our team in there. Great location. We, I, I love, that's like my, my baby. So that office is great. And then I'm currently in our office in West Hartford, Connecticut, which we have, uh, I think Connecticut's definitely our second strongest market. [00:41:02] We're really breaking into Connecticut. And then we just closed on our third office that's mid rehab now, uh, in the Connecticut shoreline in Madison, Connecticut. And that's primarily because, you know, these were the two, I feel like Boston and Connecticut are very central to kind of the markets that we're in. [00:41:22] And our team was getting built out pretty heavily in Massachusetts and Connecticut. So there was the need for kind of both offices, well now three offices, team wise is, I think there's like 20. It's growing quite rapidly. I'm not really used to it. I think there's 25 of us now started with four three and now there's 25. [00:41:44] So that's growing rapidly. What I'm learning with that is that one hand feeds the other. You know, I had to hire a bunch of operational people to kind of really help us get the, the engine running the way I needed it to, and now it's like, whoa, we're getting more business so I need more front facing sales marketing type people. [00:42:03] So that's been a lot of the growth there as well. And yeah, I think people are just kind of bopping around, you know, the sales and marketing teams are kind of like all over the place, right? We had, uh, content shoots today in, uh, I think up by the Cape and then, you know, we have some in New Hampshire and Maine and all over the place and it's kind of a combination of, you'll see more of the operational people in the office and some of the more front forward facing people kind of out and about throughout New England. [00:42:29] So that's how that's working now. Uh, in terms of your capital, uh, tell us a little bit about how the capital's structured. You manage a fund and, but tell us a little bit more about that and, and how, how you lend. Yeah, so we, we have our own fund that's rapidly growing as well. I think when our fund, we got on the Fidelity platform and I think when you, you know, get on there, that's kind of opened up the floodgates. [00:43:00] And so we are, we have our own fund that's growing quite rapidly. Obviously we have a lot of volume as well too, so we have some capital, you know, strategic capital markets, partners that we sell our loans to as well. And we have obviously, uh, access to like a credit facility if we need it and things like that. [00:43:19] So that's, you know, kind of our, our capital stack situation. Okay, great. And then if you take on a new real estate investor, a new borrower, are you typically meeting them in person and going to the property to do a site visit? Well, I was, not anymore, but my team typically is, yeah. I mean like, you know, luckily a good. [00:43:41] Bulk of our business was already these, like, established relationships. It was a really interesting thing, right? Because it was like I was moving from the west coast to the east coast in 2019 really gearing up like, oh, yay, I'm gonna go meet all of these clients. You know, there's probably 80 of them back then. [00:43:57] And I was like, I'm gonna go have coffee with every single one of them. I could, I could close my eyes and hear their voice and pick them out, but I hadn't really met them. So make these big, grandiose plans and then all of a sudden, boom, covid hit, right? And it was like, oh, wait a minute. No, I, we can't, I can't come see you. [00:44:12] So, so then obviously as time has gone on, I've met tons of them and we've had, you know, networking parties and events and things like that. But now I think, you know, new prospects, new clients, things like that, we definitely, they're meeting somebody on our team depending on who it is, right? And who's the salesperson. [00:44:28] And, and then typically, we're we. Asset management and our draws team is usually going to the properties. And so it's kind of nice for clients 'cause they have kind of like, if their front person as a, you know, a contact point, they have asset management for any of their draws and servicing needs, who they talk to at any point. [00:44:49] And then we have some kind of business development like client, how you doing, you know, type people in the company now. So they're the ones that are gonna be sending you your birthday card and, and, and your gift cards and things like that. And so we've really gotten to a good rhythm of like, yes, there's more of us, but we all serve different needs and, and how can we help you? [00:45:07] What do you, what, you know, what is it that you're looking for? And so that's kind of the approach now. So you've been growing quite a bit the last year especially, right? Uh, you know, you, you're growing in, in size in terms of the operation, but, but you're also growing out your, you know, by having offices in, in these other markets and, you know, so, so most of your businesses in is in Boston Metro right now, as far as I know, you lend in Connecticut, Rhode Island, New Hampshire, Maine. [00:45:41] That pretty much covers, uh, new England, but which, which parts of New England are you most aggressive with, with your expansion? It sounds like Connecticut, because you're, you're opening up a third office there. So what are some of the areas there that you're excited about? I mean, according to the data, you can see, like on Four CASA and stuff, I think that, uh, you know, Connecticut, I think it was like there was. [00:46:08] Uh, I think it was like a third of the volume that that mass saw in private loans, you know, so, so there's definitely like a need. Uh, so that, that was partially happenstance, but also partially like looking at the data, like, wow. Okay. And, and you know, obviously you have a big group like RCN, who's hub is in Connecticut, but they're very focused on nationwide, whereas like, you know, I, I, I've done that in the beginning of my career as a broker. [00:46:33] I was nationwide and I, that's not, you know, we're more of like a. I want to really be a very strong boutique, yet institutionally backed group. I'm, I'm not trying to be this nationwide corporate lender. Like I think you lose your touch when it comes to that. And that's not my, that's not my brand and that's not my mo. [00:46:52] So for us, I was like, well let's look at this in phases, right? Like what are the next five states we really want to attack and grow our presence? And, and then once we kind of handle that, we by default get some business in Florida and North Carolina, South Carolina, those markets. 'cause you get a lot of snowbirds who. [00:47:07] Leave here in the winter and they go out that way. So there's other markets and things like that that we're slowly expanding in organically. And then there's states that like Connecticut, that were like, well, you know, buying another brick and mortar. You know, getting more branding, getting more billboards, getting more looks, getting more this and that. [00:47:24] And that was definitely intentional in the sense of the size and the volume in the state and what's needed in the state, in my opinion, which is. Is somebody like a Cardinal who has a lot of different options from a financing perspective. And so, uh, definitely Connecticut. And then we're kind of organically getting, there's this, like, this weird crossover between Mass and New Hampshire. [00:47:47] And there's a lot of cool spots of New Hampshire that are really getting built up right now, especially like on the border of kinda mass in New Hampshire. So there's a lot of development there. You know, Salem, New Hampshire, Portsmouth, New Hampshire. We're getting a lot of stuff in those areas. And then like, same thing with Maine, you know, it's like. [00:48:04] There's Portland, Maine, and, and you know, UNK port and some of those areas that are, are in need of, of private lenders. And so like same thing, you kind of, you do alone there with a developer or two, and then they're like, well, my buddy needs you. And it kind of just slowly grows that way. But yeah, we feel very comfortable in those states. [00:48:22] We know those states very well. We all kind of grew up going and visiting those states. And so we have very good idea of value and how the value has, has increased in those areas. And so, uh, it's very easy for us to, to comp, underwrite and look at those type of properties in, in those different markets. [00:48:37] For sure. So let's talk about Connecticut a little bit more. So you've got a, an office in West Hartford, but then you said you, you've got another, uh, office that you're building out now on the coast. Are, are they just such different markets that, that you, that you would need a, a second office in that state? [00:48:56] I think so, yeah. I mean like West Hartford is like more of like your. Urban, cute, adorable city. You know, it's not like Boston City, but it's a city and you definitely get a different array of, of properties here, right? Like you drive around downtown, west Hartford, and there's, uh, I'm looking at tons of, you know, 80 unit, a hundred unit multi-family type buildings. [00:49:19] And then you have like your two to four unit town home, and then you have tons of single families, right? So there's definitely more of that. But then there's just, there's just a whole different realm of, of, you know, on the, on the shoreline, it's like you have, you know, some cool properties where the properties being lifted because it's on the ocean and it's just, uh, although they're only maybe 45 to 50 minutes apart, I felt like the volume that we were starting to get kind of. [00:49:47] In the shoreline. And then obviously being on the shoreline, you're also closer to those areas of like, you know, Greenwich and Norwalk and those areas that are kind of closer to New York where you get a lot of commuters. And so those are also different types of assets and things like that. So it just felt right to have the, the two different offices and the different spaces. [00:50:07] Plus this office was just too, too small as we're growing. So, so, uh, kill two birds is a one stone in that regard. Okay. And with Connecticut, uh, are you doing a lot of loans, you know, closer to New York City where it's like New Haven and then you get into Bridgeport, Stanford and that area? We're starting to, yeah. [00:50:27] I mean, we, we definitely think, I think we're moving that way, right? I mean, we, we had some here in the local area, in the West Hartford area, then we started to. Kind of get our brand out there in the shoreline, and then that kind of by default now you're, you're encroaching on New Haven and then next thing you know, you have some people up in like Litchfield County or like up in that, you know, like I was mentioning up in the, the kind of Norwalk heading towards New York area. [00:50:52] So yeah, we're kind of getting inquiries from all over the state. Nice. And do you do anything north of Hartford? Well, I guess north of Hartford you have this long stretch and then you hit the Springfield Mass. The mass, yeah. Is that an area that you're excited about or, or looking to expand? Yeah, I mean, I'm from Western Mass, so it was one of those things where it was like, oh my God, I remember. [00:51:15] I remember when I went to go do one of my first loans, like, you know, 11, 10, 11 years ago. And being in Western Mass, everybody was like, what? What is it? Hard money, pride, money. What is that? So there's definitely such a need right there. I mean, there's like, it is like there's still so many developers there are locally that are like, I didn't even know you. [00:51:33] You people exist, right? So, but there's a lot of development that happens. So yeah, very excited about that. That Western Mass pocket for sure. Okay, we'll come back to, to mass in a bit, but I, I wanted to cover some of the smaller states since we were talking about, uh, the expansion and, uh, opening up new offices. [00:51:51] And, and so with that, let's, let's go into, uh, into Providence or in, into Rhode Island. Rhode Island. Sure. Uh, Providence, just, you know, looking at a map just seems like, like a sister city to Boston. Is it, I mean, do you get a ton of people that just live in Rhode Island and then commute to Boston for work? [00:52:11] Yeah. Or vice versa. Yeah. Yeah. And the funny thing about Rhode Island is like, if you ever meet anybody from Rhode Island, it's like, try to tell that person from Rhode Island, that Rhode Island is not the best state in the country, right? Like, talk about Die hard. It's the same thing. There's like this mutual love for like, well, I'm from Mass. [00:52:29] I think it's the best. Well, I'm from Rhode Island. I think it's the best. And then it's kind of like, well, if I'm from Rhode Island and I'm going into the city in the winter, I love it. And if I'm from the city and I'm going into Rhode Island to enjoy the beaches in the summer, I love it. So it's just this like mutual, you know, respect. [00:52:43] But Rhode Island is awesome. I mean, it's, it's the same thing. It's, it's you, I mean. I love seeing the projects there because you do you, one moment you have, you know, this kind of multifamily project that's in downtown Providence. The next second, you know, you're looking at this like historical two unit in Newport, Rhode Island that's right near the center. [00:53:04] And then the next minute you're dealing with like a fix and flip beach cottage. It's like it's, you get, it's like for me, I'm extremely visually driven and I love, like coming on, you know, guilty pleasure for me is like coming onto credit committee and seeing like all these different diverse projects in this, in the little, you know, the little state of Rhode Island. [00:53:24] It's super cool. I love, I love looking at these new markets more and more for sure. I've heard of a bunch of lenders out there that, that just avoid Rhode Island. Is there anything regulatory going on there where, where lenders are just not willing to lend in Rhode Island? No. I mean, there's just some more small complications, but, you know, luckily from, I mean, we, we always have been so focused on that stuff with, with especially having like GSI and people like Tom Haida and compliance people who always kind of guide you. [00:53:54] It's like, you know, it's the same thing with like, uh, Vermont. There's something with like, you know, if you're gonna do a private loan, it has to be over a certain size and there's like, there's small things like that even in Rhode Island, but it's not anything crazy or over complicated. And I think because we're used to some of the ways that we're operating already in the, in the states close to it, it's not that far off. [00:54:14] And now it might feel overwhelming for somebody who's like lending across the country. But for us, I mean some of those, uh, compliance tactics and things like that, we've already been used to those things. So, and you know, Rhode Island's a small. State, but, but you've got providence and then you've got south of that. [00:54:32] It just seems like there's all these little islands and all these little coastal areas. What parts of Rhode Island tend to hold the most value or, or be the most desirable if, if you get out of, let's say the city of Providence? Yeah, I mean, obviously. Newport, right. Is, is very popular. The areas around Newport, like Jamestown is awesome. [00:54:55] Narragansett, Rhode Island is a great little coastal pocket town that like everybody loves. And then, you know, you have like some of the areas around there, uh, that are becoming more popular because they're, like you said, they're easy commute into the city or you know, easy commute. Into, you know, Providence or to towards Boston, but you still get that coastal feel. [00:55:16] And so we kind of look at Rhode Island in a, we don't really have like a, do not lend part of Rhode Island. It doesn't really work like that. Right. Uh, 'cause even little pockets of, they're like, what was that town? I've never even heard of that. Next thing you know, that town's trending and it's like, you know, it's, it's selling off, uh, houses in, in, in, in a lot faster speed than maybe another area. [00:55:40] So we kind of are open to the whole state. I think we look more so like to the asset class towards the area, right? So like single families we're definitely more in that, like kind of those coastal areas and more of the inland suburban areas. And then some of the more like multifamilies are kind of like, you know, like you were saying outside of providence and things like that. [00:55:58] But you know, there's a lot of little in, you know, inward towns that we as well look at and we're really starting to pick up some momentum there. So, I don't know. I'm excited to see what comes. Definitely, let's go up north a bit before we come back to, to math. Okay. And, and let's talk about New Hampshire. [00:56:18] Sure. 'cause this is also another state where I don't see a lot of lenders that are excited about it. It's, most of the state is, is rural and, and there's not, they don't have really big, you know, populated cities. So are you lending in the parts of New Hampshire that are, that are just north of the Massachusetts border? [00:56:36] Like your Manchester or Concord? Yeah. Yeah. Uh, there has definitely been a very strong movement there. And like I was mentioning, I think a lot of our builders that were very big in mass we're like, well, wait a second, look at all this opportunity in New Hampshire. And so I think there's a lot of that spillover for sure. [00:56:56] Definitely looking right over the border of mass in New Hampshire. But then there's also like, there's so many, again, like Portsmouth, New Hampshire. I don't know if you've ever been, but you need to go. It's fantastic, but it's such a historical, charming city that. You see a home that's really, really old and historic right next to like a brand new ground up construction home. [00:57:15] And there's so much like, you know, there's so much commercial, uh, upgrades that are happening there, right? Like brand new restaurants and brand new, all these things that it's really driving people to go there, to visit there to say, oh my God, I love this. And then looking for like a secondary home. Well then that's driving more construction and more development. [00:57:35] So when it comes to New Hampshire, yes, there definitely are very rural areas. You, and, and, but you know, when, when it comes to the rural areas we're looking at like, well, okay, it might be rural, but is it, are there still trades happening here? Like, are are properties still selling here? 'cause there, there's markets for that. [00:57:53] And so we kind of do like a deeper dive on our underwriting when it comes to that. But yeah, by default, you know, like Salem and New Hampshire's really, really booming right now. Uh, and then obviously the outs outskirts of, of Portsmouth and a few other areas, but. We still look at it the same way we look at Rhode Island, you know, sometimes we hear a town and we're like, what town is that? [00:58:14] And then, you know, you pull up maps and you're like, oh, okay. I can see why that town is doing well. It's only five minutes from blink or close to here. And, and so yeah, we've, we've definitely been excited about the expansion there. And you get some seasonal, obviously, properties that pop up. But there's also, again, like you said, there's like, there's no private lenders out there. [00:58:35] There's none. So I feel like we're very needed in that state. Definitely. And you're probably even more needed in, in Maine, 'cause that's another state where, where people don't wanna lend. 'cause it's just, to most lenders, it's just such a, it's so small. It's small markets and, and it's also, you know, similar to New Hampshire where it's just spread out and, you know, what are your thoughts on Maine and what parts of, uh, the state are you, uh, lending in or, or excited to lend in? [00:59:03] Yeah, I think, listen, I, I look at Maine like. When you just said that, it made me think like, do you wanna be a, you know, do you wanna be a a, a smaller fish in a, in a, a bigger pond, or do you wanna be a bigger fish in a smaller pond? And so for me it's like we're that big fish in that pond now. And although, you know, it's not like I'm looking to go do 500 million a year in, in Maine, but I mean, we definitely could assist with a hundred million. [00:59:31] At least it, it's needed, right. And so like, but Maine is one of those awesome, we were comping a property the other day and it was like, I, we, we look like to look at the projects and we're on an aerial view. And I'm like, wait a second, isn't that like the, you know, president Bush's retreat? It's like, it's such interesting stuff, right? [00:59:48] That you're just like. Where am I? But Maine is so charming and you know, there's areas like York, Maine where you have this like gorgeous home on the cliffs that needs to be like rehabbed because it has been passed down from family member to family member. And now some developer bought it and he wants to make it 10 times better. [01:00:06] And you know what that's gonna do for that market, right? That development of that project. Like I was mentioning earlier, obviously Portland, Maine, we do a lot, uh, the cute little coastal towns like, like Kennebunkport and things like that. But, but Maine is, uh, similar to like Portsmouth, New Hampshire. It's like it's got this great center, this center's on the water, you know? [01:00:27] Portland is like, you know, becoming busier and busier. More and more people are moving there and it's like they're moving there and they want rehab properties. So it's like, you know, and there are more needs, especially like in the Portland, you know, downtown for like, you'll see more six unit, eight unit buildings being, you know, kind of built for like the, the starter condo or the starter home for these families. [01:00:48] And so I get really excited about helping an area. Kind of, uh, grow and expand and, and, and their values kind of, uh, improve. So like, that's why I think I'm excited about these smaller towns, and I saw that in Boston in smaller pockets, that it was like we were kind of ahead of the curve. We were like lending in these areas before, like everybody was like, you're lending in where, and then all of a sudden now their values have gone through the roof. [01:01:14] And so I think that's what I'm the most excited about with some of these smaller pockets of, in these smaller towns and states. But the data is the data, right? It's like if, if the property, you know, if there's trades and properties are selling, then there's trades and properties are selling. If it's more of a coastal town where the homes get passed down from family to family, you can see that data. [01:01:32] You'll know that's there, but the values are there, right? So it's, it's interesting and, and I'm, I'm excited about Maine. Great. Uh, now let's go back to Vermont. 'cause you, you touched on it a little bit, but what's the deal with the state? I mean, why, uh, do they not want anyone to lend to their, to their constituents there? [01:01:52] I mean, I mean, it, it, like no one can lend there. It's just, uh, what, what's the deal with it and is there even any desire if, if the regulatory environment wasn't so harsh? Yeah, I so. Full transparency with, with, with Vermont. Uh, our, our legal team was like, listen, here's, here's what you need to know. And I, I, I can't remember the exact, because we've only done a handful and it's something that we're looking more into, but it's, it's something along the lines of like the, the loan, which has to be held by an entity, which, I mean, that's private lending 1 0 1, but, uh, it has to be over a certain dollar amount, and I believe it was a million dollars or something like that, which. [01:02:28] In theory, it's not hard for us, like we do million dollar loans all the time, but there's not necessarily always million dollar properties in Vermont. So it's a little bit stickier from that regard. I, I honestly feel like it was one of those things that somebody just made this rule years ago and then, and then stuck with it. [01:02:44] Like, I don't really truly understand, but we did a few loans in the compliant fashion that we should, and then it became this thing where like, oh, there's this private lender there that can do some stuff, and it is like this, you know, okay, are we open for business in Vermont? So we definitely, we do loans in Vermont, but again, we have to meet these kind of guidelines, which don't scare us. [01:03:07] It's just an added piece of, okay, does it, is it eligible or not, essentially, if that makes sense. Sure. And you know, unlike the other parts of, of New England, like, you know, it's not, you don't really drive to the more populated, uh, parts of Vermont very easily. Right. Where, where if, let's say from Boston as, let's say the central hub, you can drive up the coast and you can get to parts of Maine, you go down to, to Rhode Island, you go over to Connecticut. [01:03:38] But, but Vermont, it seems like it's just a bit. I, there's such a big gap there. It, it would just probably take forever to drive to wherever you're gonna lend on a property there anyway. Yeah. Yeah. I mean, it's one of those things where like, you definitely have to look at it in a, with a certain lens, and you have to kind of know what, what, what part of the market you're lending into. [01:03:58] I've seen a big movement in like, obviously it's, Vermont has a lot of ski resorts and things of that nature, so you're definitely seeing more opportunities for like additional, you know, single families and like a development that's near where some of the lodging is and things like that. So it's, again, but it's, it's, again, it's another cool element in my opinion, of lending that you're looking into. [01:04:17] Right. And I think that's what I love so much about these smaller independent states. It's like, I, I really like knowing the nitty gritty about these states instead of just saying, yeah, sure, we're a nationwide lender. Like then I'm not a master of any of these. So, uh, I think we have a pretty good grip. [01:04:34] Even in Vermont, even though we don't do a ton there, we really did our, our homework on, on kind of like, what parts do we wanna lend into, what parts can we lend on in, and, you know, what type of assets are we expecting to see? And so, yeah, I think that that one is a little bit harder to really like break into and say, let's take off and, and, and, and in Vermont. [01:04:55] But it's, it's definitely charming. There's a lot of value add that needs to happen there. And I think that for the right loans, we, we definitely would, would do them. Alright, and then let's bring it back to mass. So, so Boston is, is an amazing market. Every lender in the country, if they're, if they lend in the Northeast, they, they love lending in, in Massachusetts and, and more specifically Boston Metro. [01:05:22] So, so before we come back to Boston, let's just talk about mass in general. So you're from West Mass. Uh, I, I find there's a lot of lenders that only wanna lend in, in Boston. They won't, they won't go as far as Wooster or, or Springfield. What's your take on, on the western part of the state? Obviously you were born there, you're from there, but in terms of lending, uh, what's your take on it? [01:05:45] I, yeah, I think that's ridiculous and I think that that's also something that happens. I was guilty of that. I mean, like when I lived in California for. 10 years when I first moved back here and I had all these loans that I was doing that were in California and then, and then in Boston, I was like, why do I wanna go do this $250,000 loan in Worcester? [01:06:05] Like, that doesn't make any sense. Or why do I wanna do this loan in Springfield? Like, 'cause I mean, I grew, I grew up outside of there, so what Springfield was versus what it is now is like radically different. Right. So, so I was guilty of that too. And, but now, you know, there's been such a movement in like. [01:06:22] You know, in Worcester, in Springfield, you know, sounds ridiculous, but Springfield put in like an MGM Grand Casino, which really just drove a lot of, uh, of, of people traveling and it's a hub for business in Springfield. So they really did a good job with like putting in all these brand new developments and things like that, which really drove up more places for people to stay or more people who were relocating here for work, which then helped all the subsidies and sub towns around that. [01:06:49] So again, because I'm from here, trust me, there's definitely markets that I'm, like, parts of the areas that I'm like, nope, not touching that. But then there's all these areas that are like. $400,000 little fix and flip single family. And what about all those realtors and those brokers and those developers that are local to those areas that need somebody like, like a, like cardinal, right? [01:07:09] So definitely doing more volume in Western Mass. And that, I mean, but then you, like you have the Berkshires and you have all these gorgeous areas as well too, which almost reminds you of like Vermont in that sense. Like, oh my God, here's this gorgeous home that hasn't been touched in 20 years and there's so much charm to it. [01:07:25] And like, those are my, my real like loves is to see a historical home revamped. And so, so you have that, you know, that part of Western Mass you have kind of outside of Springfield, which there is a lot of new development happening in the city, which is then by default helping some of the values outside of the city. [01:07:41] And then obviously Worcester is like. You know, there's so much going on over there. They have like a mini like, you know, uh, it's like the Red Sox farm team and all this new stuff going on and all these new big developments that are happening there. Obviously there's colleges and things like that. There, there's a easy commute to the city. [01:07:59] It's kind of this like super central area, like you were talking about earlier. It's like, you wanna get to Connecticut, you wanna get to the city of Boston, you wanna get to Rhode Island, go to Worcester. It's not that, you know, so, but again, all these, you know, old two to four units as well outside of the city where now these college kids need a place to live. [01:08:17] And so you see these developers really kind of like revamping that market. And if the deal pencils, why would we not look in that area? Right. So yeah, we definitely, we're open to all of Massachusetts. Obviously we're very, very busy up, you know, in, up near the city and, and the outskirts of the city. But by default we've become much busier throughout the whole state. [01:08:39] Okay. And what about, uh, what about Cape Cod Martha's Vineyard? Nantucket are those areas that you've done deals or are willing to lend in? We've done a lot in Martha's Vineyard. We've done a lot in the Cape Nantucket. We've done a good amount too. I mean know, which is, those are kind of deal by deal. Case by case, you know, basises in a sense, the cape is easier, it's more neutral. [01:09:02] It's like, you know, you can find a couple of easy, like $800,000 single family fix and flip type deals in the Cape. But then, you know, when you're dealing with the areas where you wanna talk about how the trade wars and the tariffs could affect things, it's like, well if you're already shipping materials on a, if you're already getting lumber and things like that on a big boat over to the island, that stuff, you know, could get more expensive and things you have to think about. [01:09:25] But you know, it's, I love. Martha's Vineyard in certain pockets of it, like Edgartown. And I grew up going to those places, so it's super cool for me to like, go on vacation with my family there and be like, we did that house and that house and that house and that house, but, but any, you know, high end luxury. [01:09:42] It's the same for California when I was doing it there too, you know, it's like you have to look at a house in, in, you know, Beverly Hills or Malibu the same way you would if it's this like $9 million single family luxury home in, in, in Martha's Vineyard or Nantucket. So, you know, again, the data is the data and if the deal makes sense, it makes sense. [01:10:00] And if it doesn't and it's just, you know, person's trying to get way too much money for the property, then we have to be the, the ones looking at those things. But yeah, we do a lot as well in those markets too. Great. And let's bring it back to Boston. What parts of the city are you most active? All of them. [01:10:18] Okay. Um, alright, how about, how about this, how about, tell us, tell us about some neighborhoods that are, that are up and coming in terms of, uh, rehab and construction activity. So, one that I'm very biased on because I love it in our city, our offices there, but is the South end because it's like this pocket of like right near like BA Back Bay and Beacon Hill and it's really like historical and, you know, the, the, the street that our office is on, it's like all those old school like bricks that are just like, you're probably gonna break your ankle. [01:10:52] But it's so historical and it's been there for so long. So I am, I love. Love, love, love the south end. And I think that there is gonna be such a movement there for, for development. And it's one of those areas where it's like you have these like gorgeous, you know, uh, brick row houses and that have been there forever and they're all getting updated and the rooftop decks of them are getting updated. [01:11:18] And you have like this prime view of the city and it's so close to everything, but then you like turn down a couple of streets and it's like, well, there's this building that hasn't been rehabbed in 80 years and it just so happens to be this like, talk about what you were saying, commercial with like six units above it. [01:11:33] Right. And we've been getting a lot of those lately, which I love that. So I'm very, very big on those areas. And then what I was referring to earlier was like kind of what, you know. Five, six years ago was East Boston, which was, you know, this, this area where people were like East Boston, like who does, who does East Boston? [01:11:54] But then it was like this domino effect of some people started to rehab these condo conversion deals in East Boston and now it's completely redeveloped and it's continuing to be redeveloped. So we look for little pockets like that to see kind of like, well, where, where is that happening? They had some really cool stuff that came out in Cambridge allowing like more units. [01:12:15] And I think everybody in the city of Boston is really big on on proposing more, more housing. We're also seeing those really cool commercial office building conversions into condos, which. You know, most lenders are like, no, you know, don't touch that. And I'm like, why? Like if, you know, if the mayor wants more housing, the z you know, the, the, the zoning boards are approving the plans, why not? [01:12:39] Like, you know what I mean? And they're in such cool parts of the city that you would've never been able to access before when they were just like office areas or commercial spaces. So I, that's what I also love about Boston is that I love, you know, one little thing gets passed and then it's like, everybody's like, oh my God, I had 12 units approved here, but now by this new thing that passed, I can put 22 units here. [01:13:01] And it's just like this constant want for growth and, and housing and, and I think that's what I love the most about, about the city from this perspective of, of lending. Sure. And what about, uh, let's talk about the values in, in Boston. It seems like it's one of those markets similar to the San Francisco Bay area where Right. [01:13:23] It, it just, it's always gonna hold its value. You've got, you've got so many economic factors. You've got, uh, you've, it's a big financial center. You've got all the universities. Has, has there been any, any major changes in values in Boston over the last five years? No, I mean, the, it's the, you know, the way that the values appreciate and things like that have been pretty rock solid to your point. [01:13:48] Yeah. Lots of schools, lots of, uh, you know, Mecca for, for, for finance, medical right, some of the best hospitals in the country, like Boston Children's Hospital, as you know, alone this year saved. Two little babies' lives that are important to me. Like they, and, and, and luckily the people lived close to the city, but people fly all over the country to come there. [01:14:09] So it's like you have this like combination of the education, the medical, and the finance, and it's just a very, people wanna be there, right? And so the values, if anything, they've been consistent and, and I, I feel very comfortable with the values there and, and you know, how strong of a market that I think it is. [01:14:34] And so I think moving back here five years ago is one of the best career decisions I could have ever made. Right. Because, and, and I think a unique thing too, which is like, I feel very. I personally would be scared if I was still lending in certain pockets of California. But there's also this environmental piece too, right? [01:14:52] Because it's like I, you know, everything with like the wildfires and everything that's happening, it's like, it's a whole, as a lender, that's a whole other fear. You have to think about like, how many assets did I have that could have possibly put burnt down? Or developers are thinking that way. And so we've been seeing more like, you know, LP investors who are actually feeling more comfortable from an environmental perspective of, of lending here. [01:15:12] I mean, yeah, we have snow storms and lightning, but like that's kind of it, right? We don't have earthquakes and we don't have, god forbid, these fires and things like that. So there's that, that new piece as well too, which in, in the last year of LI can't even tell you how many people I've personally met that have relocated from California to either like the Connecticut shoreline or to the city of Boston. [01:15:35] And so, yeah, I mean, I'm very excited about New England obviously. So I think that there's a lot of growth and a lot of. Stability in what you can rely on from an asset, in my opinion. Amazing. Well continue dominating that market and, and growing the business and, and helping real estate investors grow their businesses as well. [01:15:59] Thank you. That's the objective. Alright. Alright, Briana, that's all I had for today. All right, Rocky, so yep. Thank you for joining me. Thank you for helping me, and we'll see you soon. Okay, bye-bye. And that's a wrap for this episode of Private Lending Insights. You can find Cardinal Capital Group listed on private lender link.com. [01:16:18] Simply do a search in any of the New England states and you'll find them listed there. You'll find a link to their profile, check that out to learn more about their guidelines, and then you can call 'em, email them, or send 'em a detailed loan request form. They pay us a monthly fee to be listed so there's no fee to reach out through the website. [01:16:37] When you reach out, please be sure to mention that you found them on Lender Link. Thank you for tuning in and listening to Private Lending Insights.