Private Lending Insights

RBI Private Lending interview
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[00:00:00] Rocky Butani: Welcome to Private Lending Insights. I'm your host, Rocky Botani. In this episode, I interviewed Andres Cs from RBI Private lending. They're based in Miami, Florida. They've been one of the top lenders in Florida for the past few years. I've known Andres and its partners since 2018 when they were only lending in Florida, and it's been fun to watch them grow into a big, national private lending shop.

[00:00:23] Rocky Butani: We start by talking about the state of private lending. And as of April, 2025, we talked about RBI's, private lending activity. We talked about capital markets, a little bit about the company and their history. And we finish off talking about Florida and all the challenges that they're seeing. And we talked about the different markets in Florida.

[00:00:45] Rocky Butani: I hope you find this episode to be insightful. Let's get started. Andres, thank you for joining me. Uh, how's everything with you and RBI private lending in Miami? At this time, I.

[00:00:56] Andres Saias: Everything's good here. It's uh, it's still very, you know, very. Warm weather and everything is, is, is, is good. Besides everything, uh, overall

[00:01:09] Rocky Butani: can complain.

[00:01:10] Rocky Butani: Good. Glad to hear that. So we're, we're now in April, mid-April 2025. Uh, tell us about some of the trends you're seeing and in private lending. or in the real estate market in general. Uh, as of, uh, you know, Q1 of 2025.

[00:01:27] Andres Saias: Well definitely we, we are RBI have been very focused on the Florida market. Ever since our, we started, uh, back in the early 20, uh, late 2015, early 2016.

[00:01:39] Andres Saias: Uh, and up until I would say 2021 2022 we started to branch out to other states. So I would say that, uh, it was about time 'cause we started to see a little bit of a slowdown with, as most of people have seen with the inventory that is rising here in the, in the state of Florida. So be, we've been. Uh, focused on growing over the last year and a half or so, other markets.

[00:02:04] Andres Saias: Uh, I think that we've been, we've been, uh, very aggressive in trying to, to, to, to obtain market share in other states and while continuing to do so be consistent with our LTVs and our guidelines, uh, here in Florida and ha that has allowed us to position ourselves, uh, into even a better. A better position here at at the state of Florida.

[00:02:29] Rocky Butani: We'll come back to getting more into what's happening in Florida and we'll get into a lot of specifics. But before we do that, do you have a lot of investors in Florida that you do business with now that are looking to start doing business in other states?

[00:02:45] Andres Saias: Yes. I would say that there's a lot of investors that, for whatever reason, not only investors, but also general contractors, that they were doing a lot of work for other.

[00:02:55] Andres Saias: For, for, for our borrowers here in Florida that they have been moving to other states, uh, maybe the Georgias Carolinas, uh, where they're seeing that the, the, the margins of what they were doing here have been shrinking. So they've been looking for other opportunities elsewhere. So yeah, that's how, uh, initially that allowed us to.

[00:03:16] Andres Saias: To maybe start grasping other markets as well. 'cause we, we, you know, we, with the good relationship that we have developed with these borrowers, we were also able to, to get our foot into other states as well.

[00:03:30] Rocky Butani: And with all the, what's happening with the uncertainty around tariffs, has that started to affect your business or your borrower's businesses?

[00:03:42] Andres Saias: I would say that hasn't. Made an impact quite yet. I would say that there's, there's a sentiment overall that smarter investors are still, um, you know, maybe a little bit pro, uh, taking a little precaution, uh, with the, with the market, maybe being a little too conservative with, uh, you know, not too make, uh, uh, any deal out there happen.

[00:04:07] Andres Saias: But, but I will say that we've been. Making, uh, uh, seeing any major changes so far. Although we foresee that this, of course, is gonna have an impact down the line sometime later this year, but for now, I would, I wouldn't be, I. I, I haven't, we haven't seen much changes with regards to change orders or anything like that, other than the usual.

[00:04:31] Rocky Butani: Do you anticipate the, the way it's gonna affect our business first is with, uh, the, uh, the increased pricing on materials?

[00:04:40] Andres Saias: Yes. But I also think that there's, uh, as, as we already know, um, one of the biggest drivers here in the, in the real estate market in the US has been over the last few years, and the talk of the town has been.

[00:04:54] Andres Saias: Um, the, the lack of inventory, right? So, although yes, it's gonna become less affordable to build new houses, there's still, uh, a need for them. So I think that that's something that it's gonna make an effect and it, it, it will in a way for saying it is gonna cancel out the effect. And I think that we're gonna start seeing, uh, as maybe in the shorter term.

[00:05:21] Andres Saias: A little bit of a, a decrease in production, but then overall, as we expect, rates eventually will come down. Uh, but that's the dissipation at least. So that's gonna ultimately, uh, have a positive impact throughout the, the entire, uh, industry.

[00:05:40] Rocky Butani: Do you have any concerns about the credit markets with the, the recent spike in, in the, the 10 year treasury?

[00:05:47] Rocky Butani: Uh, do you think that has or will have an effect on, uh, on our industry in terms of capital?

[00:05:55] Andres Saias: I think that definitely there's a, uh, I wouldn't say a concern, but there's, uh, something that we need to be a little bit more. Uh, looking into it, I think that there's a lot of volatility, but at the same time, we see, uh, the capital providers, they're changing.

[00:06:12] Andres Saias: Um. They're changing guidance, they becoming, some of them are in fact becoming more aggressive. So you're seeing a little, a lot of mixed signals out there. You're seeing on one end, the latest news, uh, was that Avi stopped doing loans in Florida and stopped doing loans nationwide, I believe in, uh, with all, with regards to refinances.

[00:06:30] Andres Saias: But on the other end, we're starting to seeing, uh, other aggregators or other lenders trying to do as many securitizations as they can. So they're trying to, um, deploy. All the capital that they can while, while they're, while they take advantage of this high rate environment so they can lock up rates. So we're seeing a little bit of mixed signals.

[00:06:51] Andres Saias: Um, is, is too. Soon to tell what's, how the, how this was gonna play out. But, but I think that if you, if you continue to be consistent with the programs that you have, be meticulous with the borrowers that you choose. Look at the experience, the FICO, everything that, that, uh, a typical lender must follow and, and be, and have your processes in order.

[00:07:15] Andres Saias: I think you're gonna be, or you as a lender are gonna be just fine.

[00:07:19] Rocky Butani: And as far as the, the ones that are really pushing the securitizations while interest rates are high, is that because they're anticipating that interest rates are gonna come down later in the year? And is that something that you feel is gonna happen as well?

[00:07:35] Rocky Butani: I.

[00:07:35] Andres Saias: Yes, correct. I, I mean, I don't have a crystal ball. I would love to have one. But, um, I think that, uh, the, the, the, the sentiment is that at some point down the line this year, maybe second half or towards the end of the year, the, the rates are gonna, I. Uh, dropped significantly and, um, compared to what they've, they've had over the last year or so.

[00:07:59] Andres Saias: So I think that, uh, these, uh, lenders or aggregators that have been trying to accumulate as much as, as many loans as possible, they're, they're, they're foreseeing that, um, so yeah, they're, they're, they're being aggressive, as aggressive as they, as they can get.

[00:08:15] Rocky Butani: Okay. Let's, uh, talk a little bit more about your lending activity.

[00:08:20] Rocky Butani: Um, so I, I, lately I've been spending a lot of time on for casa. Mm-hmm. It, it's a, it's a very useful platform, um, that gives a lot of insights into, uh, what different lenders are doing. And, and from the data that I found, it looks like. In 2023, your volume was, was just under 500 loans that you funded, uh, in that year.

[00:08:41] Rocky Butani: And then for 2024, it was around a thousand loans. Does that sound about right?

[00:08:47] Andres Saias: Yes. Uh, it's a little for, Casa has, uh, it's, they're done. They have done a really good job, but I think that there's a little bit of, they, they left, they left a little bit of the, a few loans out there. But, but yeah, the bulk is there is, is is mentioned.

[00:09:01] Andres Saias: Um, yeah, definitely has been a remarkable, I. Um, growth, what we've experienced, and again, I would say that it's, it's not that we just found out how this, uh, business work, it's just that we've been so focused for the past decade in establishing in learning, in, uh, in seeing how the business works and.

[00:09:26] Andres Saias: That's when we, that's when we decided that it should have taken off and that we, over the last two years is when we, we, we saw the opportunity that we, we, we could see just more than just the fund that we would manage and maybe do as many loans as we can, uh, with the correct borrowers, with the right projects, and with the right capital.

[00:09:46] Andres Saias: So we tried to put everything together and we were focusing. Most of the time, uh, in building the team, now we have the team. Now it's a matter of growth and that's where the stage that we're at right

[00:09:58] Rocky Butani: now. Okay, great. And then we'll come back to the capital side, but in terms of just getting more borrowers, uh, I mean that's a, a significant feat on its own.

[00:10:09] Rocky Butani: Uh, what do you think was, has contributed to the success of you being able to, to get that many loans and that many new borrowers just in that span of two years?

[00:10:19] Andres Saias: I think that we've been very aggressive in, in, in bringing the top quality talent to our team that can bring, um, can bring business from day one.

[00:10:29] Andres Saias: I think that we also offer a lot of support. I. For our team, uh, we provide a lot of leads. We provide, again, being in business, especially in Florida, where we're from, uh, allows us to, there's a lot of word of mouth. People know who we are, so that, um, that it's a, it's a snowball effect and that has, uh, really paid off well for us.

[00:10:54] Andres Saias: Um, so I would say that, uh, little bit of combination of, of everything and of course the product. Um. It's as good as anybody's out there, at least for our RTL Pro uh, program. Um, it's just a matter that we've been focused so much and obsessed with, uh, with the quality service and the, and the customer retention, which is, which we, we all know that this is a key in this business.

[00:11:22] Rocky Butani: And in terms of, uh, growing the team, uh, you just mean that you have. Different loan officers or sales representatives in different areas?

[00:11:31] Andres Saias: Yes, we, we've brought, uh, we brought a lot of, uh, salespeople in, in state of Texas. We brought someone in, um, in the state of Georgia. We brought another person in North Carolina and we've been, you know, adding pieces that can bring us volume in the key markets where we, we really wanna be a part of.

[00:11:53] Andres Saias: We want to, to put our, our name and be consistent in that, in those markets.

[00:11:59] Rocky Butani: Okay. And let's talk about the types of loans. Are you a hundred percent focused on RTL residential transition loans or do you do long-term rental loans as well?

[00:12:11] Andres Saias: We do. Uh, I would say there are, the vast majority of our loans are RTL.

[00:12:15] Andres Saias: We do have some, uh, an appetite for DSCR that has been growing. The only reason that we. Really launched the product initially, and that was late last year, was because, uh, a lot of our borrowers were asking for, for this product that they would finish a flip. They might, they might wanna turn into A-D-S-E-R.

[00:12:37] Andres Saias: So we, we started that way. Um, we have the capacity to, to do a lot of production there, but in reality. What we've been focused so much, uh, is, uh, is the RTO. I think that that's what most of the, our investors know us for, and that's where we expect the, the growth to continue to be. I.

[00:12:59] Rocky Butani: Okay. And for people out there who don't know the term RTL, it, it just includes anything that's a, a short term loan essentially.

[00:13:05] Rocky Butani: So you have a standard purchase or refinance bridge loan that doesn't include any renovation or construction. Then you have your fix and flip, or it could be a rehab to rent. Uh, and then you have your ground of construction. So, so with those different types of loans, could you break down the percentages of.

[00:13:24] Rocky Butani: You know, what percentage of, of your total loan volume is construction versus rehab versus just a short term bridge loan?

[00:13:31] Andres Saias: Definitely, um, right now out of a entire RTL uh, production, I. We have, uh, 60% is construction, ground up construction. Um, then we have another 30% that is fix and flip, and then we have a 10% that is a stabilized bridge.

[00:13:49] Rocky Butani: Okay. And what stabilized bridge, what types of scenarios are you, are you seeing that in, is it where people finish a project and then they, they need some cash out, or are they just looking to. For purchase money? What are some of the different scenarios?

[00:14:04] Andres Saias: The, the, the bridge loan is a very unique product because it has so many, so many uses.

[00:14:09] Andres Saias: We see a lot of, uh, a lot of, you know, finish up constructions. The loan is ma mature with another lender, and they need a little bit longer term to, to, to sell the property. So that's one use. Another use could be, uh, someone that bought a house. In pre-construction phase and they put all the down payment and now a lot of the sudden they need to bring the rest of the money to to, to the closing and for whatever reason, either therefore national.

[00:14:37] Andres Saias: So they didn't, they didn't plan accordingly to, to get the, to get the rest of the financing in order with time. They, they need, they need the rest of the, of the funds to, to, to close or otherwise they will pay, they, they will lose their deposit. So that's another very typical. Use of the, of our bridge loan program, especially here in South Florida.

[00:15:01] Andres Saias: There's a lot of use for that in the new, new condos that have been built over the last decade or so. So we're seeing a lot of activity there. A lot of our homes, they do that as well. They wanna close by a certain date. Either you close or you lose a deposit. Another one could be an investor that is cashing out the pro and use the proceeds to purchase another property.

[00:15:23] Andres Saias: Um. So it's a little bit of a combination of everything. I think that the bridge has always been a very unique product, but again, we, it's curious because we started the business and in reality, a hundred percent of our loans were bridge when we start, right? Believe that we met back, back in the day. Um, and we, we saw that it, it was, there were so many ways that these investors would use the bridge, but at the same time, we've been.

[00:15:52] Andres Saias: We've been shifting our, our, our, our, our focus to more projects that where it's a win-win situation for both ends. And in fact, when we get a bridge loan in today's world, we wanna make sure that there's a clear exit strategy, even if it's a, a purchase that we're closing in. And we are going to, um, just, they're gonna use our funds just for a few months.

[00:16:16] Andres Saias: We wanna make sure that they're gonna be able to, to refinance. Just our for a few months, whether it's A-D-S-E-R, whatever, we're gonna calculate that because, because we wanna make sure that it's a healthy transaction. Both ends now for us and for the borrower especially.

[00:16:30] Rocky Butani: But you don't wanna get stuck with the, the loan for longer than, let's say 12 months.

[00:16:34] Andres Saias: Exactly. I. Okay.

[00:16:36] Rocky Butani: And with, uh, the ground up construction, uh, I mean, that's remarkable that it's 60% of your total loan volume. Now, um, with these ground up construction projects, are they, are they typically just one single house? Are they multi developments? Tell us a little bit more about the types of projects there.

[00:16:56] Andres Saias: Yes. I think that it depends on the, on the location where we're seeing the production. I think that if we go, for example, to the west coast of Florida, it's, it's a more scattered lots. But when you go to other communities, uh, in other places, like for example, in, in, in Houston, Texas, we get a ton of, uh, loan requests where they're buying a large parcel of land.

[00:17:16] Andres Saias: They're subdividing it, rep plotting it, and they wanna do multiple, uh. Properties side by side. So it, it all depends on the location, especially right now in Miami. Another example could be that there, there's a lot of this, uh, du they, they call it duplexes, but they're doing their town homes. Uh, and they're by buying just one lot, they're gonna build two, one structure that will have two folios separately.

[00:17:40] Andres Saias: And we're seeing that a, a lot of activity actually in those type of, with those types of scenarios in, in my end. Again, it all depends on the, the location.

[00:17:49] Rocky Butani: And with those subdivision type, uh, properties, um, are you participating at all in the horizontal development or do you only come in when it's ready for vertical?

[00:17:59] Andres Saias: We can, we can assist with the, as a bridge for the land in some cases, depending if the, if the land is in a proper location. Um, but we don't finance any part of the, of the horizontal development.

[00:18:13] Rocky Butani: Okay. And with some of these projects, are you, uh, are you finding that builders are, are jumping from one project to the other where you might be cross collateralizing with other projects that they have?

[00:18:25] Andres Saias: Yeah. In some cases you're gonna see that if the investor is looking for a certain amount of capital to finish the project, um, or, or getting the project done, the financing, they might, uh, be willing to. To, you know, add another collateral to, to make the numbers work. So yeah, we've seen it, uh, we've seen it lately more than usual.

[00:18:45] Rocky Butani: Okay. And, uh, how about, uh, fix and flip. Are there, is there anything in particular you're seeing there? Are you doing, you know, a lot of it in, in South Florida, or, or tell us a little bit more about fix and flip, if there's anything significant to share.

[00:18:58] Andres Saias: Yeah, I think that our product is, is becoming very attractive for fix and flips.

[00:19:03] Andres Saias: I think that over the last year, uh, we had competitors that were be being a little bit more aggressive towards the fix and flip program, and I. We weren't getting, uh, I mean, we were getting a loan requests, but we were not, uh, getting to close them as much because we were not willing to go to the highest LTCs.

[00:19:26] Andres Saias: Uh, we've seen, you know, some local lenders that will do 95 LTC or 90 LTCA hundred rehab for maybe a, a very, uh. Limited experience borrower. So we've been the, the fix and flip product. Even though, uh, there's a lot of investors that rather go that route more than a construction loan. We'd rather do a construction loan in today's market than a fix and flip.

[00:19:52] Andres Saias: That's the way that we, that, the way that we see things. Uh, definitely construction requires much more work from an operational standpoint. But, but I think that the way that we structure deals, uh. We, we feel safer with the construction than with the fix and flip. So, so I think that, um, the, the fix and flip have been the, the ones that we've been seeing are still the ones that are, are penciling out because we haven't been going to the highest, uh, you know, highest leverages unless the borrower is extremely experienced.

[00:20:27] Rocky Butani: So what leverage point are you at? Are you at 85% purchase, a hundred percent rehab?

[00:20:33] Andres Saias: Yeah, we do, uh, the highest that we can go to, um, it's 90 LTC. Well, actually, we, we just released a new program that is very hard to apply for and obtain, which is, uh, 90 a hundred. And it's for borrowers with 10 plus of experience in the last 24 months and 700 plus FCO.

[00:20:56] Andres Saias: Um, but um, before that it was, uh, 90 LTC, uh, which is the, you know, it depends on the budget because you're gonna hold back a hundred percent of the rehab. But if the rehab is a lot, then an acquisition is more of a closer to 85 or something. So it, it all depends on the numbers. So that's what we would do, uh, in most cases.

[00:21:19] Andres Saias: And. Um, in fact, last year we had, um, our production for it was in order to obtain 90 LTC, it would have to be someone that has six properties of experience and 700 plus vi. So there's a lot of competitors that will do that with much less than that.

[00:21:39] Rocky Butani: Okay. So it, it may not be that the, the borrowers are looking for the highest leverage, they just don't qualify.

[00:21:46] Rocky Butani: Um, you know. Even if they're trying to get 9,100 or even 90 90, they just, they just need to have the experience to get that high.

[00:21:57] Andres Saias: Correct. Exactly. Right. Now, we, we dropped the, that leverage because we really want to increase, uh, for someone that has good experience. We dropped down the experience requirement for the 90 90, and then now it's for anyone that has three plus of experience.

[00:22:13] Andres Saias: And that's how, uh, that, that gave us a little bit more. Uh, deal flow in that sense over the last few months.

[00:22:20] Rocky Butani: Do you take investors that have less than three projects in the last 12 months or so? We,

[00:22:25] Andres Saias: we do, uh, the only thing is that we, of course, we're gonna do it at a lower, a lot lesser LTC and rv.

[00:22:31] Rocky Butani: Okay.

[00:22:31] Rocky Butani: Makes sense.

[00:22:32] Andres Saias: And we, and we also accept, um, foreign nationals, which is very. In Texas and Florida, there's a lot of foreign nationals that use us, uh, for our services, especially when they're want, they're starting to, to get themselves independent. Maybe they were GCs for somebody else. They start to become, they wanna do their first property, so we've been able to assist them, of course, at a reduction in leverage.

[00:22:57] Rocky Butani: Okay. And the, I found that there, there's a lot of lenders out there that just flat out reject foreign nationals. Um, uh, do you, what further requirements do you have, uh, if you do accept a foreign national borrower?

[00:23:12] Andres Saias: It's not that complicated to be honest with you. It is just a matter of, uh, understanding their current, uh, visa status if they have a visa.

[00:23:20] Andres Saias: Um, also there's, um. They must have a, a bank account in the US By the time they close the funds, they sh sh they, they, they shouldn't have their funds here, but they should have an oper, an open bank account here. That meaning that they have gone through the compliance department of that bank. Um, and in addition to that, they just have to have, um, of course an uh, a us and US entity.

[00:23:46] Andres Saias: And by the time they're gonna close, part of the package will include something that is called a service of process. That is someone that is going to be appointed at the closing, that it will be responsible if anything goes bad with that loan and we have to service someone and the borrower is out of the country.

[00:24:04] Andres Saias: And again, that person is not, um, liable for anything on the loan. It's just making sure that if you serve that, that. Service of con that, that contact, it's like serving the borrower. It's just a matter of to, to expedite the, the foreclosure process. So that's something that, um, it's important to have when you have, uh, when you treat with foreign nationals.

[00:24:26] Rocky Butani: So that's something the borrower would, would select. They would say, Hey, I have this person who's a US citizen and a permanent resident. They're willing to be my personal service. Exactly. Okay.

[00:24:36] Andres Saias: Typically, they use either their attorney or their accountant or their realtor. But yes, it must be someone that is, uh, that is a US citizen.

[00:24:45] Rocky Butani: Okay. And let's go back to ground up construction loans. Tell us about the, the leverage structure there and the requirements.

[00:24:52] Andres Saias: Yes, so we have a, a matrix. We recently updated that matrix as well. We have, uh, in general we go up to 85% loan to cost between land plus hard cost, or. 70% of the after repair value, uh, for, in order to apply for that, for those leverages, the borrower must have three properties of experience and 700 plus FICO in the last 36 months.

[00:25:18] Andres Saias: Um, however, we have a special program that we just launched that we can go up to 87.5% LTC, and 70% a RV if the borrower has six plus of experience. And in the last, and plus 700 plus FICO in the last 36 months. Now, the only caveat with that specific program is that we can only do up to 750 K in loan amount.

[00:25:44] Andres Saias: We don't want large transactions of $2 million at 87 and a half LDC. 'cause of course they represent more risk. And when I'm talking about. Transaction I'm talking about in reality of per property. So you can do a blanket mortgage of, let's say three properties of $500,000 each. That will be a total of 1.5 loan a month, and they can still qual if the borrower qualifies, you can still obtain the 87 and a half LTC and the rates are, uh, right now in the high nines, low tens, uh, in that range.

[00:26:18] Andres Saias: And we do 12, uh, 1218. 24 months a term.

[00:26:23] Rocky Butani: Okay. And if leverage is not the biggest concern for the borrower, can you go higher on the loan amount?

[00:26:31] Andres Saias: Yes, we can go up to. 5 million on a daily basis on loans. After 5 million, we're gonna probably gonna have a second look with our committee and anything, and, and I would say that up to 10 million is where we're as right now.

[00:26:47] Andres Saias: Anything above 10 million, it has to be a very unique deal for us to be something that we, we feel comfortable. Because we rather do steel diversification.

[00:26:57] Rocky Butani: Okay, but when you say 5 million or 10 million, are you talking about to one borrower with multiple properties?

[00:27:04] Andres Saias: No, I'm talking about per property.

[00:27:06] Rocky Butani: Okay.

[00:27:06] Andres Saias: Per property. We're, we're talking about a concentration of borrowers. We can go much higher than that. But again, it all depends If the borrower has the experience, like if you have an investor that has proven himself to be, uh, someone trustworthy, that has done. 40 projects, you can, we can have available to that, to that borrower.

[00:27:27] Andres Saias: Uh, 15 million, no problem. But if the same, if, if there's an investor that is just starting and they wanna do 40 houses at the same time, we're probably gonna, you know, tell him to slow down a little bit. Let's, let's do a little, uh, first phase, then a second phase, and then we can grow together.

[00:27:44] Rocky Butani: So if you were to do a $5 million loan.

[00:27:47] Rocky Butani: To an investor, is that typically in a case where they're building multiple homes or are you talking about one large luxury home?

[00:27:57] Andres Saias: Typically? Ideally, what we would like is that there's multiple homes, but we can do both.

[00:28:02] Rocky Butani: Okay. So you're okay with doing a larger luxury product?

[00:28:06] Andres Saias: Yes, of course. When you're talking about, uh, luxury property, you're gonna expect a reduction in the LTCs and ARVs.

[00:28:13] Andres Saias: Um, 'cause again, I think that I. And we can talk about this in a second if you want. Um, it's, it's, it's the way the capital is structured. At the end of the day. I think that anything above two to 3 million, the capital markets, they stay out of it. And we have this, the capacity to continue to fund these deals because we have our own fund.

[00:28:35] Andres Saias: But in order to keep it in our fund, we're gonna be a little bit more conservative than the capital markets.

[00:28:42] Rocky Butani: Okay. Alright. And then with the, with the luxury product, uh, are you seeing that mainly in South Florida or do you see some of those in Texas or other states in the southeast?

[00:28:53] Andres Saias: Yeah, I think that we, we see that in, um, major markets, metropolitan areas.

[00:28:58] Andres Saias: That's where we really wanna focus if those cases, uh, happen. But yes, uh, I would say South Florida, I would say any major, any of the major cities in Texas. We also some get some, some of those. Some of that exposure in, uh, state like New York, uh, and maybe in the northeast where ex where tickets are a little bit higher and whoa, we're also, we just started to do loans in California or, uh, last few months and we can expect that deals there are a little bit, uh, la larger in insights as well.

[00:29:31] Andres Saias: Mm-hmm.

[00:29:31] Rocky Butani: Absolutely. Uh, okay. And then speaking of different areas, um, what. Which areas in the country are you most aggressive with expanding into at this time?

[00:29:42] Andres Saias: Yeah. I think that, uh, right now we're ex extremely focused, uh, in the Sunbelt and Northeast. And at the same time we just started, uh, again, uh, starting doing loans in, uh, in California.

[00:29:57] Andres Saias: Um, so I would say that if we have to choose, besides Florida, of course. Our main focus right now would be, uh, Texas, California, and then,

[00:30:08] Rocky Butani: uh, the Northeast. And within the northeast are we talking New York Metro or New England, or

[00:30:14] Andres Saias: New England area.

[00:30:15] Rocky Butani: Okay. How about, uh, the DC area? Is that attractive or of any interest?

[00:30:21] Andres Saias: There is interest, but it also depends on the market. Uh, right now there's a lot of, um, for example, in Maryland, there's a. There's a slow down with the, with regards to the process for foreclosures. So we are a little bit more, we take a little bit of a more conservative approach. We still are doing loans there, but we might, you might expect a reduction in l TC of 5% or whatever.

[00:30:44] Andres Saias: So we, we, we continue to, to do that and we, we, it all depends on the market conditions in each. Particular market.

[00:30:52] Rocky Butani: Okay. And so New England is, is your, uh, kind of like the, the area that you're most excited about right now?

[00:30:58] Andres Saias: Yeah.

[00:30:59] Rocky Butani: Okay. Yes. Now, when we first met many years ago, I think it was 2018, we first met at a pit bull conference.

[00:31:05] Rocky Butani: Yeah. Uh, at the time, I think you told me that you would lend in Florida, Texas, and New York, and it was very specific with, with those three states. Uh, and then in New York, obviously it's, it's New York City. Is, is that still a market that you're interested in?

[00:31:20] Andres Saias: I think that it's curious 'cause New York has been, you know, the market.

[00:31:27] Andres Saias: New York at the end of the day is still New York, but I think that we've learned that the, the foreclosure process takes way too long there, although we haven't had any major issues there. Um. But I think that we, we, we've come to realize that there are other areas that we might focus on, that we can still get a higher returns and, and do production.

[00:31:47] Andres Saias: Like California is an extremely competitive market, but it's the, the, the, the market that drives the most volume. So I, I, if we really wanna make, uh, a big impact in the industry, we, we should pursue the, the areas where the, the mo, the most volume. That's the way that, that we foresee things.

[00:32:08] Rocky Butani: Sure. Makes sense.

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[00:33:12] Rocky Butani: Please mention that you heard about them from Lender Link and the Private Lending Insights podcast. Okay, and we're back. Uh, so Andreas, let's talk about, uh, RBI, the company and a little bit about capital. Uh, you know, we met in 2018, you know, tell me about the journey of RBI private lending since that time When we first met, it was called RBI mortgages.

[00:33:34] Rocky Butani: At some point you reed it to RBI private lending. So just tell us a little bit about that journey, uh, since that time.

[00:33:41] Andres Saias: Of course. Yeah. So RBI started, we're a family business. We started, uh, back in 2014 actually. We, we, we are family coming from Venezuela, our ba our family has been involved in the banking industry in Venezuela for the past four generations.

[00:33:59] Andres Saias: And of course, with everything that was happening there at that time, we decided to come here and do something in there. In the financial field. But, uh, of course creating a bank from scratch is practically impossible here, especially if you're an immigrant. So we, we started in fact doing nothing that had, was related with, uh, with real estate loans.

[00:34:18] Andres Saias: We started to do auto loans, um, based here in in in, in Florida. Uh, after a year or so, we quickly realized that. The market was great, but we wanted to also get into real estate lending. There was a time that here that the, the. The need for the bridge loss that we previously were talking about, uh, was, was immense and enormous.

[00:34:44] Andres Saias: And we, we saw that the opportunity to, to be able to attend to these, uh, investors that were buying properties in pre-construction. So we started by that and little by little we've been learning and adding and incorporating other projects, uh, products, sorry, like, uh, new construction, fix and flip, DSCR, and that's how we've been growing.

[00:35:05] Andres Saias: Um. When we started to do the, these lows, initially we were doing, uh, we were raising capital from friends and family. Um, after, after a while we decided that it was best for us to, um, uh. Uh, get our own fund and we create our own fund. While we started to engage in other opportunities such as selling loans in the secondary mark, um, as we started to see that some of our competitors were either only exclusively operating our fund or just.

[00:35:40] Andres Saias: By originating and selling loans without holding anything in balance sheet, we saw that we had to do both in order to, to maintain the balance. And I think that that's has been key for us and key to our success to, to be able to establish ourselves both in good and in bad times. I think that the fund is there and, and helps us to, to strive when, when things get tough.

[00:36:03] Andres Saias: Um, and at the same time, um, when, when, when the market is, is hot and you can be as aggressive as as you can, it, it's good to be able to have access to, to, to the capital markets and, and do as, uh, as many loans as you can with the, with the right process in place.

[00:36:22] Rocky Butani: Great. And so now that you've built up over that many years, now it's a little over 10 years in the business, tell us about your, uh, your company's current operation in terms of, let's say the locations, the, the number of people that you have and, uh, uh, anything related to, uh, to the company structure.

[00:36:43] Andres Saias: Of course, yeah. We have a sales team that is, uh, over 10, over 20 people, um, 20 account execs or branch managers. Uh, a total of a head count of, uh, 22. As of today, uh, we have uh, three underwriters. We have seven processors. We have a head on of, of operations. We have a, uh, four team, uh, legal team department, sorry.

[00:37:10] Andres Saias: Um. We have a three people, uh, what is it called? Draw department, sorry. And we also have an in-house, uh, three people that take care of our service for both when we do service in, in-house and service for third party, such as F-C-I-B-S-I or, or whoever we're doing the servicing for.

[00:37:35] Rocky Butani: Okay. And, uh, how about, uh, growth in the future?

[00:37:38] Rocky Butani: Are you still looking to expand and, and open up new branches or, or expand the, the sales team?

[00:37:45] Andres Saias: Yes. I think that the, the ultimate goal is to establish a physical presence in markets that are worth for. Um, we are, we're planning to open our, our office in Austin, uh, sometime this year. And. We are, we're also looking to, to candidates to maybe potentially bring some talent and, and get someone to operate our, our, our, our brand in, in Cal in the state of California.

[00:38:14] Andres Saias: And we're looking for someone that can be trustworthy, that can take the reins there for us. So yes, the idea is to to, to put some physical press in the mar, the market star for.

[00:38:27] Rocky Butani: Okay, so you're headquartered in Aventura, in, in Miami. Right. Do you have other offices besides the new Austin office?

[00:38:35] Andres Saias: We have, uh, we have two offices in Miami.

[00:38:39] Andres Saias: We have, um, we have a lot of people working remote and we have also, uh, some folks that are working, uh, offshore. But besides the two offices? Well, we have actually, actually, we have another office in Orlando. Those are, we have three offices, two in Miami and one in Orlando.

[00:38:56] Rocky Butani: Okay. And in the other markets, you, you have your salespeople there that are boots on the ground for Correct.

[00:39:02] Rocky Butani: For meeting clients and looking at properties there.

[00:39:05] Andres Saias: Exactly. And I think that's, that's key. That, that's what makes a difference. Uh, that when, when we look at a specific market, we're looking to hire talent that they're footing ground there. 'cause otherwise. You can just hire someone to do cold calling all day.

[00:39:21] Andres Saias: But in, in order to penetrate the market and understand them, you need to understand the market. And in order to understand the market, you need someone there that, that, that is breathing, that, that market every single day that is seeing the trends, everything that happens. 'cause when you're seeing it, when you're not there and you, and you see it, it's, it's already in the newspaper.

[00:39:41] Andres Saias: And that's something that is, that, that's already too late. Already the time passed, like for example, today is becoming a, um, over the last few, last few months is becoming common to, to hear about the West Coast in Florida. We've been here in, in, in playing in this field for the last three years. We've been sitting with borrowers on a daily basis pretty much.

[00:40:07] Andres Saias: Hearing about that they wanna build a house in the west coast of Florida, we know we knew that this was gonna happen. So in order to understand this, you need to be there. So that's that. I think that's critical that when you want to to to develop a specific market, you need to have someone that understands the market really well.

[00:40:27] Rocky Butani: Well, that's a good segue into, uh, the next section of this interview, which is to talk about Florida. Um, you know, because RBI private lending is, is one of the, the top, uh, lenders in Florida in terms of loan volume, uh, and has been for a while in the top five, I believe, at this time. Um, so, so let's talk a little bit about, about.

[00:40:50] Rocky Butani: The Florida market overall, uh, and what's happening there, and then we will, we'll break down into, into different regions. Um, but when people think about Florida, they, the first thing they think about, for the most part is insurance. So tell us a little bit about the insurance situation and, uh, what that means for, uh, private lending moving forward.

[00:41:09] Andres Saias: Yes. No, I think that it's, uh, again, um, the insurance has been. Something, a, a, a hot topic over the last year and a half or so. Um, it, it's becoming more and more complicated, especially when you, when you get into the hurricane season. Um, I think that us as lenders, what we've been taking is a very conservative approach, especially with larger luxury properties.

[00:41:32] Andres Saias: Uh, we, we demand higher than usual or higher. In some cases there are competitors for, uh, insurance coverages and in some cases the, the, that, that. Kills the deal. Um, but I think that it, it's, it's the moment that you have to put your foot on the ground and, and say that we, we, we wanna do this deal, but it has to be the right way.

[00:41:55] Andres Saias: Um, and, and I think that that's has been critical for us. I think that insurance is, is, is the main problem. And that's why also we, we like, as we mentioned earlier, I like we, we like more, uh, construction notes. 'cause you start to see. When you talk about builder's risk, it's easier and it's easier for a deal to pencil seal out with a new construction that rather than on a fix and flip.

[00:42:21] Andres Saias: So that's why you, you start to see that premium has a lower level of incidents when it's a construction than versus when it's a fix and flip. So, so that's a little bit of why we, the strategy that we've seen that. It's allowing us to grow the construction, uh, loans more than the fix and flips

[00:42:41] Rocky Butani: and what the new construction projects in Florida are.

[00:42:45] Rocky Butani: Have there been all these new construction standards that have developed in the last few years as a result of, of valda the natural disaster or weather events, um, that make it. Easier for a newer constructed home to get insurance at a, at a more reasonable premium than, than your older properties.

[00:43:06] Andres Saias: Exactly. Yeah. Like you see it, uh, going back to the West coast, you see that last year, uh, two horrible hurricanes hit the area and when you're gonna go and, and get a house there. To flip it, it doesn't make any sense to, to, to flip it is you, you might be better off doing, tear it down and build it right, uh, from the ground up.

[00:43:28] Andres Saias: Uh, because the codes are gonna, uh, have been updated and if you're gonna elevate the house to a certain standards, then the insurance is gonna be much, much more, uh, uh, uh, affordable for, for their customers. So exactly that, that's one of the clear examples that we've seen that construction makes more sense than fixing food.

[00:43:47] Rocky Butani: Okay. And do you think that the, the high insurance costs have, have driven people away from investing in Florida? Um, because the, you know, they just don't wanna deal with that higher cost. It doesn't, it doesn't make sense or, um, you know, are there other reasons why, why, you know, Florida might not be as attractive of as a market as it was a few years ago?

[00:44:10] Andres Saias: No, I think that in addition to the insurance, there is this sentiment that the rates. Are high, although they're, they're, they're higher than they were compared to last, uh, two years ago or three years ago. But they're not historically high. Right. Um, but we've been, we've been with a lower rate environment for so long up until, uh, mid 2022 when they started to rapidly go, uh, have gone up.

[00:44:41] Andres Saias: So I think that the investors started to do, uh. To get into this business in the early 2020s, they are, let's say, used to a very low rate environment. So when you put into their heads the idea of higher rates than they when they started in higher insurance costs, higher property taxes as well. Then you start to see that the, this, this effect that all of the sudden numbers don't make sense and we have to go elsewhere to, to, to look for, for, for the margins that we're looking for.

[00:45:16] Rocky Butani: Okay. And let's talk about inventory in Florida. 'cause there's been, uh, you know, I've seen some reports of, of high inventory in certain areas and, and value starting to come down. Uh, tell us a little bit more about that and, and if it, if it's only in certain areas,

[00:45:32] Andres Saias: I think that it's a little bit over and all over.

[00:45:35] Andres Saias: I think that on the West coast we've seen that, but we've seen our appraisals have been coming, uh, coming down over the last six or seven months or so already. Um, I still think that especially in the West coast, you're seeing a lot of, uh, a lot of activity for new construction rather than fix and flip.

[00:45:52] Andres Saias: So I still, uh, for the lower balance loans for 200,000 to $300,000, you, you should feel safe. 'cause brand new home, $200,000, uh, or $300,000, you're still, it, it makes sense. Uh, I will be more worried about, let's say the, the a million plus. A RV in Cape Coral. That's where you get where it gets a little bit tricky, but, but besides the west coast, you're, yeah, there's, there's a, there's, uh, inventory accumulating in South Florida as well.

[00:46:30] Andres Saias: Um, again, I, I think this, this was just something that, it was a matter of time because the market was red hot for, for, for two or three years in a row, so. I think that it's, it's healthy and it's natural that the effect that we're seeing before we, we see things to continue to to grow.

[00:46:51] Rocky Butani: As far as the inventory and, and maybe declining values, are you seeing that mainly in the west coast of Florida, like Tampa Bay and Fort Myers, or, or is it, uh, is it also in Orlando and South Florida as well?

[00:47:05] Andres Saias: I, we, we see quite a few, but the headlines are, are going for, for the West coast.

[00:47:10] Rocky Butani: Sure. And, and that seemed, that makes sense because it's the market that had the highest growth over the last several years.

[00:47:16] Andres Saias: Exactly. Yeah.

[00:47:17] Rocky Butani: Yeah. Okay. And, uh, any other concerns that you have about, uh, about, uh, you know, the state of the Florida market in general for the next year or so?

[00:47:27] Andres Saias: I would say that it, it will have to depend on, um, the tariffs, uh, discussion is, is a big one. If we start to see that as long as with a higher prolonged, um. A higher rate environment and the insurance that we, we don't know, we don't do anything about the insurance costs, then yeah, we're gonna start to see a little bit more demand driving away.

[00:47:49] Andres Saias: But especially for South Florida, you still get a lot of traction. Maybe you have some, some places, some specific areas that have grown a lot and not you, you're starting to seeing a slowdown. But at the end of the day, uh, south Florida, everyone wants to come down here. Um, now for one, not for one reason.

[00:48:09] Andres Saias: Pit Bull conference, or now today's world is N-P-M-P-L-A. Every, every year they wanna do the, the conference here. So I think that, that overall there's still, uh, um, uh, an, an interest in this region. I.

[00:48:26] Rocky Butani: And, uh, how about the, the condo market in south Florida? Is that overheated or is it, are there a lot of challenges there as, as well with insurance and, and Yes.

[00:48:36] Rocky Butani: Buildings getting upgraded as well.

[00:48:38] Andres Saias: Condo is a different story. I definitely, something that I, it will be more, uh, will be more concerned and more conservative about. Um, I think that condos, you starting to see that, um. The high cost of insurances have been translated to the HOAs. The HOAs translated to the investors and investors.

[00:48:58] Andres Saias: They don't wanna, they don't wanna pay such high HOAs. Um, although, especially again, in South Florida, you still have a demand for a. For foreign, foreign investors, not doesn't mean foreign nationals, but foreign investors, when they wanna buy maybe a second home or another property, they'd rather do some, some of these investors, they'd rather buy a condo versus another asset type because it's easier to manage for them.

[00:49:22] Andres Saias: It's easier to manage to just close the, the condo you go. It's, it's more manageable than just a single family. So. So at the same time, the high costs have driven demand down for, for this, uh, for the, for the, for this asset type. But I still think that there's gonna be demand, especially for, for South Florida.

[00:49:42] Rocky Butani: Okay. And final question before we wrap up. Which parts of Florida are you most excited about lending in, uh, at this time in 2025 and maybe for, for the next year as well?

[00:49:56] Andres Saias: That's a question. I think that, um. We are focused on, we we're trying to grow our, our brand in, uh, central Florida, uh, uh, around Orlando area.

[00:50:08] Andres Saias: I think that, um, suburban areas to Orlando, although they've been hit hard with the inventories, um, is the moment to maybe, uh, get a little bit more traction there. Uh, because at the end of the day, you wanna still find it. It has become very. Very expensive to live in, uh, Miami, Orlando, or Tampa. So if you can find ways to create housing for these individuals that have had to move out, um, it, I think it's, it's a good opportunity for, for them, for us

[00:50:43] Rocky Butani: as well.

[00:50:44] Rocky Butani: And between Orlando and Tampa, there's this market of Lakeland. Is that, uh, a desirable area for you?

[00:50:50] Andres Saias: Yes. Lakeland is included in that, that list for us. Okay. Of

[00:50:54] Rocky Butani: course. And, uh, how about Jacksonville? What are your thoughts on that market?

[00:50:57] Andres Saias: Jacksonville is a tough market. I mean, I think that there's a lot of, um, has been, has had a lot of slowdown.

[00:51:03] Andres Saias: I think that there was a lot of, uh, lot of wholesalers are sending deals from Jacksonville. There's a lot of old inventory and there's a uh, uh, uh. Quite nicer areas where they have been, uh, good developments. But there you, you just start to see the blossoming those new areas. So it's, uh, as a lender, as you know, it's, it's very tough to come and get a deal where the, the appraisal shows you comparables that are.

[00:51:30] Andres Saias: Um, either two years old or five miles out. So it's, you start, you still see that when you're doing, when you're dealing with a nice area in Jacksonville. But other than that, the smaller balance, uh, loans are still something to to think about. At the end of the day, it is more about the borrowers. If the borrowers, they, they know what they're doing and we see, we can verify.

[00:51:53] Andres Saias: The experience and their credit history. I think that we put the trust in them. They know the market and, and, and yes, we continue to monitor the situation as we go.

[00:52:04] Rocky Butani: And how about the northwest side of the state? Uh, like Tallahassee and the panhandle?

[00:52:09] Andres Saias: Yeah. We don't, we don't get too much at traction there, to be honest.

[00:52:13] Rocky Butani: Okay. Alright, so focus for the foreseeable future is Central Florida. Yeah. Is what you're looking for. Yep. Okay. Okay, great. With that, uh, thank you for all your time and, uh, appreciate you joining me.

[00:52:26] Andres Saias: Thank you, Rocky. Thank you for the invitation.

[00:52:28] Rocky Butani: You got it. And that's a wrap for this episode of Private Lending Insights RBI Private Lending is listed on private lender link.com.

[00:52:38] Rocky Butani: I put a link to their profile in the description. You could learn a lot more about their guidelines there, and you could reach out to them by calling, sending them an email form or a detailed loan request. Form RBI pays us a monthly fee to be listed on the platform, so there's no fee for you to reach out to them through us.

[00:52:55] Rocky Butani: Please be sure to tell 'em that you heard about 'em from Lender Link and Private Lending Insights. I hope you found this episode to be insightful. Thank you for tuning in and listening all the way to the end. We've got lots of great episodes lined up. We're trying to do. Four per month or one per week, depending on how the schedule plays out.

[00:53:13] Rocky Butani: So stay tuned to private Lending insights.