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John Warren and lima One Capital Are Leading the Charge for Sensible Lending Options for Real Estate Investors

John Warren and lima One Capital Are Leading the Charge for Sensible Lending Options for Real Estate Investors

Lima One Capital—a South Carolina-based lender serving residential real estate investors—has become one of the industry’s fastest-growing providers of financing, approving more than $100 million in loans last year.

And CEO John Warren fully expects to triple that total in 2016.

Demand for Lima One Capital’s products has been keen. Since forming in 2010, it has quickly expanded to serve dozens of states. If everything proceeds according to plan, the lender should offer service in 49 states by the end of the second quarter.

Warren has some experience in managing swiftly moving situations: As an infantry officer in the U.S. Marine Corps, he fought insurgents in Iraq, leading more than 300 combat missions in Ramadi and other cities over the course of four years. His time in the military taught him the importance of constantly evaluating the facts on the ground and adjusting tactics to compensate.

He brings that approach to his work at Lima One Capital. (The name comes from Warren’s old call sign.) Unlike other lenders, who might be bound to “the way we’ve always done things,” Warren and his team are dedicated to delivering the best possible options for investors.

“We do it because it makes sense, and it helps the customers, ultimately,” Warren said.

For example, last year Lima One Capital introduced a new lending product, Rental30, a 30-year, fixed-rate loan that allows borrowers to purchase or refinance individual properties or entire portfolios. Rates start at 6.5 percent. The company’s 13-month FixNFlip loans offer rates as low as 10 percent for high-volume investors and can be rolled into a 30-year product for a discounted origination fee.

“We really work with any type of real estate investors,” he said.

A Change of Plans

Ironically, Warren didn’t plan to become a lender when he entered the industry. After leaving the military in 2008, he wanted to be a front-line investor in residential real estate.

Warren was able to quickly raise $1 million in capital, but when he went to buy rental homes in Atlanta, he found himself outmaneuvered by more experienced operators. “All of these investors were outbidding me,” he recalled.

Warren ended up talking to several of those investors, and he asked them where they were finding financing for their deals. Turns out, most of them were operating strictly on cash because, in the aftermath of the housing crisis, traditional lenders weren’t cooperating.

Investors’ other option was dealing with hard money lenders, many of whom weren’t transparent about their fees or weren’t properly capitalized.

It was crazy, Warren said, because the market presented huge opportunities for investors. About 20,000 foreclosure properties became available in a typical month in Atlanta. It was possible to buy high-quality homes for pennies on the dollar, but most investors didn’t have the ability to leverage their capital.

His original plan wasn’t working, but Warren spotted a different opportunity. He asked those other investors if they would be interested in dealing with a lender who refused to charge hidden costs or junk fees. “All of them said, ‘Absolutely, that company would do very well.’”

So Warren took that first $1 million and made nine loans to other investors, all of which paid off. That was the start of Lima One Capital.

Warren based his company in Atlanta, but the traffic eventually led him back to his hometown of Greenville, S.C. The company has six offices now, with plans for more to open this year as Lima One Capital expands to an almost national reach. (The one state where they won’t go: New York, which is very unfriendly for lenders, Warren said.)

Investing in People

Today, Lima One Capital employs about 40 full-time workers, plus another 150 contract employees across the country. Warren credits his team for giving Lima One the ability to expand so quickly.

One key is that Warren will hire people who might not have traditional experience in the industry, but do possess the right values and core competencies.

For example, his head of short-term financing came to Lima One Capital with an eclectic background, including experience in insurance and the food industry. But she’s superbly organized and driven, and she possesses a talent for fantastic customer service—all hallmarks of a great underwriter.

With that woman and other nontraditional but excellent hires, “we’ve found that training them on the industry experience is the easiest thing,” Warren said.

Lima One Capital has stayed true to its original commitment to transparency and fairness in pricing—a huge attraction for many lenders. Warren and his team have also secured institutional backing, providing them with essentially unlimited capital to lend, he said.

Other direct lenders are more like brokers, he said, because they don’t have the funding lined up and have to go hunting for money whenever loan demand increases—which unfortunately drives up costs for those lenders’ clients.

“We never have to go hunting,” Warren said.

While Lima One Capital has set big goals for 2016, this year is going to be busy on the home front, too. Warren and his wife, Courtney, are scheduled to have their first child soon.

The couple participates in their church and several Greenville civic organizations. Warren also is an active member of the Business Executives for National Security, a national, nonpartisan group of business leaders who share their expertise with the federal government on security issues.

Warren’s service as a Marine has had another influence on Lima One Capital. As in the Corps, everything in the company starts with and is driven by values. The Marines have three: honor, courage and commitment. Lima One Capital has nine, and they’re posted on the company’s website.

At the top of the list? Revolutionizing residential real estate investing and setting the new gold standard for hard money lenders. Warren said that he and his team have been driven to live up to that standard. “We believe we have the best products and the lowest rates out there.”