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Terry Painter of Apartment Loan Store: “Managing with encouragement instead of a big stick is the first one”

Managing with encouragement instead of a big stick is the first one. The second is the importance of admitting to your employees when you have made a mistake. Years ago, I had a loan officer who was very talented and always closed his loans as proposed. But he was shy, and not a great salesman […]

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Managing with encouragement instead of a big stick is the first one. The second is the importance of admitting to your employees when you have made a mistake. Years ago, I had a loan officer who was very talented and always closed his loans as proposed. But he was shy, and not a great salesman when it came to competing. I decided to give him some constructive criticism, but he felt I belittled him for having the lowest loan production and he quit. From this I learned that it was much better to start out by bringing up a staff member’s talents and achievements first and then setting production goals together. I called the guy and told him I had made a mistake by not bringing up how much I valued his great talent in analyzing deals correctly and that he had saved our company a lot of time, headache and money by doing such high-quality work. He asked me if I would help him be more competitive and he came back.


As part of my series about the leadership lessons of accomplished business leaders, I had the pleasure of interviewing Terry Painter. The author of the recently published The Encyclopedia of Commercial Real Estate Advice, Terry is the founder of Apartment Loan Store and Business Loan Store, two mortgage banking firms specializing in commercial lending in all 50 states since 1997. He has been a top producer for Lasalle Bank and Lehman Brothers and is known for his exceptional investment consultations and stratagems. For 18 years Terry has spoken nationally to commercial real estate investor groups and real estate professionals about commercial real estate investing and lending. For over 20 years, Terry has built strong correspondent relationships representing Fannie Mae, Freddie Mac, FHA/HUD, Life Companies, Wall Street conduits, Hedge Funds, Regional, and National Banks. He is a member of the Mortgage Bankers Association and the Oregon Bankers Association.


Thank you so much for joining us! Can you tell us a story about what brought you to this specific career path?

25 years ago I owned a small fast food chain of French restaurants in shopping malls called “Deli La France”. What I loved the most about this job was designing and building the restaurants, putting the menus together and training the staff. I get bored easily so, about 6 months after opening one, I had no interest in working there anymore. I would start obsessing about opening a new location. This trend started putting a lot of strain on the relationship with my wife and my bank. They both wanted me to slow down and told me “no more restaurants”. I went ahead and built another one financing it from an equity line of credit on our home. Finally, I got it. I needed to find a new career where I could work on putting deals together without risking everything I owned.

Then one day, a banker buddy told me that what he loved about his job was that he got to work on a new deal almost every day with passionate entrepreneurs — and he didn’t have to risk his own money. A lightbulb went off in my head. I thought, “That’s what I want to do”. This was 1996 — I was in my mid-forties, and I knew that if I didn’t make a career change then, I probably never would. I rented a cabin in Bryce Canyon National Park to contemplate this. I opened a copy of Entrepreneur magazine that I had brought with me, and there was an ad that jumped out at me; it said, “Own Your Own Mortgage Company Doing Business and Commercial Loans”. For 10,000 dollars, this company that trains loan officers called “The Loan Consultants” trained me to do what I have been doing for the past 24 years. I still use their methods for training new loan officers today. Everyone I knew told me I was crazy, that I had no experience doing loans and I would fail. The only one who believed in me was my mom.

Can you tell us a story about the hard times that you faced when you first started your journey?

The first thing I did to start my new business, Business Loan Store, was rent an executive office suite and buy 3 suits. Actually, before that, I took out a large yellow page phone book ad. Wow! After that ad came out I thought I had hit the jackpot. Selling money for a living was going to be easy. My phone was ringing off the hook. The problem was that most of these borrowers did not qualify for my loans. They didn’t have enough credit, cash, or experience. It was quite a learning curve to figure out how to screen borrowers correctly for the underwriting guidelines for all the loan programs I was trying to do and often I got them mixed up. So, for the first 9 months, decked out in my suit and tie, I essentially played loan officer. I was living on my savings which were running low. To pay the bills I started packaging SBA loans for a 1000 dollars each for other lenders. What I didn’t know was that I would be getting highly skilled at originating SBA loans for small business owners. This opened so many doors.

Where did you get the drive to continue even though things were so hard?

Because I loved putting deals together and put so much time into it, I got good at it. By 2007, I had 14 incredibly talented employees and we closed 79 million dollars in loans together. Then in early 2008 the great recession hit. Most of the loans we were originating were sold on the secondary market. But the underwriting guidelines for the large institutions that were buying them changed practically every week, getting more stringent. The result was by the time we were ready to close, the guidelines for the loans no longer qualified. I liquidated my retirement so I could keep my employees working. I had no idea that the recession would completely wipe out my business. To survive, we went down to myself and 4 employees in home offices. I never had the thought that I would not make it back. My mom told me when I was a kid that I could do anything I set my mind on. I guess I believed her. I just kept going to work every day hoping a loan would close. Eventually the US Government started buying mortgage-backed security bonds and we had a new source of liquidity to rebuild the business.

So, how are things going today? How did grit and resilience lead to your eventual success?

Today, things are good. I spend most of my time doing what I enjoy the most — assisting my loan officers put challenging deals together and writing. I’m especially proud of my company, Apartment Loan Store. It is one of the most successful online commercial loan platforms in America. Being an author has been the icing on the cake.

Can you share a story about the funniest mistake you made when you were first starting? Can you share a story?

I tell this story in my book, The Encyclopedia of Commercial Real Estate Advice. In my second year in the mortgage business, I booked a 2,000,000 dollars loan for a rock quarry business that wanted to build a rock crushing plant. This was the most technical loan I had worked on as it involved appraisals for the land, the new building and a lot of heavy equipment. I met the owner many times at the site and worked over four months on putting the deal together. I got the loan approved for SBA financing and congratulated the borrower and myself. As we were getting ready to close, the attorney for the title company called and told me my borrower did not own the business or the land. Whoops! I believe the guy I was doing the loan for really believed he owned the business. He had bought it on a land sales contract that was not recorded. He had missed 3 payments which put him in default on that contract. The original owner decided to take the land and all the equipment back. I really felt stupid. That’s where I learned how important it is to read a preliminary title report thoroughly on day one.

What do you think makes your company stand out? Can you share a story?

First, I am very proud that we have a 97% success rate of closing our loans as proposed — which is not easy to do. This is because we make sure that whomever is going to approve the loan preflights the entire submission package at the beginning. This can be a credit manager or a loan committee. Secondly, we are an advisory firm and we guide our borrowing clients in the direction that not only fits their goals, but also is going to get the job done. Often we have to redesign a deal to make it work. We have a client right now that has a fabulous piece of land that they want to develop. They can literally build 850 apartment units in 4–5 phases. Although they have experience with development, they were not financially strong enough to take on such a large project so we helped them arrange a stronger partner to join them.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

It’s really important to plan ahead to have enough capacity. There is a great need for what we do as commercial mortgage bankers and brokers. You can easily find yourself working 60-hour weeks. I’ve always made sure I have more staff than I have deals so we don’t all burn out.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Towards the end of my first year when I was still struggling, I met my banker friend Jerry Burns for a beer. He’s the one who inspired me to get into commercial lending. Surprisingly, he asked me if I could help him by taking on some of the business loans his bank could not do. When this happened, his customers would be mad as hell and often take their money out of the bank. My loans were easier to qualify for and my money sources did not take deposits. So, this was a perfect fit. Soon, I had 5 banks referring loans to me with complete underwriting packages, and my business soared.

How have you used your success to bring goodness to the world?

I have closed hundreds of commercial real estate loans with experienced commercial real estate investors that are wealthy. But just about every day we get calls from investors who have little money or experience to buy a property. Many of them just have so much excitement that I am hesitant to put that fire out. Instead, I direct them to instructional material on our website and tell them if they find the right property with many upsides, I will help them get started. For years, I taught seminars for new investors on how to identify a good real estate investment, how to evaluate it, how to raise investors and how to finance it.

What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.

Managing with encouragement instead of a big stick is the first one. The second is the importance of admitting to your employees when you have made a mistake. Years ago, I had a loan officer who was very talented and always closed his loans as proposed. But he was shy, and not a great salesman when it came to competing. I decided to give him some constructive criticism, but he felt I belittled him for having the lowest loan production and he quit. From this I learned that it was much better to start out by bringing up a staff member’s talents and achievements first and then setting production goals together. I called the guy and told him I had made a mistake by not bringing up how much I valued his great talent in analyzing deals correctly and that he had saved our company a lot of time, headache and money by doing such high-quality work. He asked me if I would help him be more competitive and he came back.

Third is failure to time-manage deals. If you ask my staff what my favorite saying is, they will tell you “Time is Not Your Friend on Real Estate Deals”. I learned early on that not time-managing a deal is a big mistake for real estate brokers, lenders, and borrowers. During my second year in this business, I was working on a RV Park loan. It was taking forever to get the financials from the seller and the listing agent. Everyone, including me, was being so nice about it. The bottom line is that no one was willing to take responsibility for time-managing the deal. Months went by and when we finally had what we needed, the sellers got divorced and the deal crashed.

The fourth thing I wish someone had taught me before I started leading my company, which is also illustrated in the previous example, is that as a leader, it is important to get into the face of your colleagues to hold them accountable for their agreements. My problem early on was that I genuinely am a nice guy. I learned that I needed to be firm, yet polite, in getting other people to keep their time commitments and other agreements.

The fifth thing, and likely most important as a leader, is to not micro-manage your staff. This means hiring the best people you can find. Better yet, finding people who can do it better than you can. I have always been really good at crunching the numbers on a deal. At the beginning, I would always check the math of my loan officers. Then I started hiring ones who were even more talented than me in doing that task, and I had much more time to run the business.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

My wife and I spend our winters in the Dominican Republic. Jeffri is a Haitian man that takes care of our home there. One day I asked him what his dreams were for his future. He told me he was very thankful to have a job, but has always wanted to own a store. We made a loan to him to open a sporting goods store and he has been very successful. So, raising funds to help people that are unemployed or in third world countries start their own business and educating them on what it takes to be successful would be my movement.

How can our readers follow you on social media?

Facebook: https://www.facebook.com/apartment.loan

YouTube: https://www.youtube.com/channel/UCXUOB1gJYTmcsBAMMhBuPpw

Apartment Loan Store: https://apartmentloanstore.com/

Business Loan Store: https://businessloanstore.com/

Book website: http://theencyclopediaofcommercialrealestateadvice.com/

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