Intentional Entrepreneurism with Jeff Tennyson

Welcome back to another episode of the Business and BBQ Podcast with Tim Herriage. On this episode, Tim interviews his friend Jeff Tennyson about entrepreneurship, work-life balance, organizational culture, and intentional leadership.

Jeff has held basically every position in the book at organizations big and small, and the thing he has found that makes or breaks a company is its culture. Having a good culture where employees are respected, and the focus is on profit, growth, and fun is more impactful on the bottom line of the company than strategy every single time. Because of his diverse work experiences, Jeff has been able to observe great cultures as well as toxic ones, and he makes it his mission now, as the CEO of Lima One Capital to always foster an intentional and healthy culture. If you were to show up at their Greenville, SC, you might walk right into Bagel Mondays or Beer Cart Thursdays, which is not something that can be said of most companies.

Lima One Capital is a nationwide lender to real estate investors who can apply for funding for (1) fix and flips, (2) rental properties, or (3) multifamily properties. Lima One currently has 130 employees, provides about 400 loans per month in 43 states, and is on track to loan over $1 billion this year. One of the other interesting and innovative aspects of their culture is the Leadership Lab meetings that occur once per month for Directors and above, where the focus is “fighting for the highest good of those we serve.” Out of this, Jeff created the customer service vision for Lima One where employees are to own every moment and invest in every opportunity.

As he has gained more life experience, Jeff has been more intentional about adhering to a better work-life balance, prioritizing what is important to him during each season. He also talks about the pressure that many people feel to “have it all together”, but he brings up the point that no one knows what is going on in your back of stage even when your front of stage is picture perfect.

To young entrepreneurs, Jeff emphasizes the importance of knowing what you want to measure and considering your capital base and the way that each decision might affect your risk profile. Having a handle on these two aspects of business and properly implementing your plan will help reduce a lot of the stress you might be carrying, and don’t forget that mistakes are only bad if you don’t learn from them.

Links:

Audible trial promotional link: https://www.audibletrial.com/th

HubSpot promotional link: https://www.hubspot.com/th

“Measure What Matters” book: https://amzn.to/2LH9txn

Connect with Jeff:
https://limaone.com/
https://twitter.com/jgtennyson

Connect with Tim:

https://timherriage.com/
https://www.linkedin.com/in/herriage
https://twitter.com/timherriage
https://www.facebook.com/timherriage/
https://www.facebook.com/groups/timherriage/
https://www.instagram.com/timherriage/

With business questions: ask@timherriage.com

With BBQ questions: bbq@timherriage.com

FULL TRANSCRIPT

Announcer: [00:00] You are listening to the business and barbecue podcast hosted by Tim Herriage. Tim Harris is an active entrepreneur who built and sold six companies but the age of 40 and enjoys a sharing the ups and downs of business and entrepreneur life. As for the barbecue, that’s just something he has a passion for and likes to shares as Well, here’s your host, Tim Herriage.

Tim Herriage: [00:21] Alright. Alright. What’s cooking? Everybody? Welcome back to another episode of the business and Barbecue podcast. I am your host Tim Harris and today I am being joined by one of the most all around good guys you will ever meet. Jeff Tennyson is a CPA, Mba CEO, CFO, COO. The man has earned and used about every three letter designator you can find. Today we’re talking about being an entrepreneur, running large businesses, running small businesses, leading from a position of intention, avoiding some of the traps along the way, work life balance and deciding which is better. Carolina Barbecue, Texas Barbecue, or maybe even Memphis. Stick around. We’ll be right back. I can’t wait to introduce you to my good friend. Jeff Tennyson. Today’s show is brought to you by audible. Audible is offering our listeners a free audio book with a 30 day trial membership. Just go to audibletrial.com/th and browse the unmatched selection of audio programs. Download a free title and start listening. It’s that easy. Go to audibletrial.com/th to get started today day. I have my good friend Jeff Tennyson with me on the line. Jeff say hello. Hello

Jeff Tennyson: [01:31] Tim. Thanks for having me on your show,

Tim Herriage: [01:33] man. It’s good to have you here. And so Jeff is someone that I first met in my days with the Blackstone company. B Two r finance. He was someone that was larger than life in both the culture and in leadership and mentorship. For me personally, he really kind of taught me how to and not to be a corporate employee. Something I had no experience in and no longer have an interest in. I thought, who better to have on to talk about being an entrepreneur and being an intrepreneur? And Jeff, I know you’ve led companies that you had no ownership in and you’ve led companies that you had ownership in and you’ve led companies that you ended up earning ownership in. So I just thought it would be great to spend a little bit of time talking about theory and culture and staying grounded and why don’t you just take a couple of minutes to introduce yourself and tell people about you.

Jeff Tennyson: [02:20] Sure. I have scanned the whole gamut of companies and sizes and have different stages of companies life. I’ve started up businesses and fail miserably. I have run multibillion dollar public companies and seeing the, the pros and cons of the large companies and then things in between. What I have found though consistently is I really thrive as a leader when I’m in a healthy culture and I’ve learned over the years that culture trumps strategy every single time. And you can’t have a good enough strategy if your culture sucks. And I’ve found that to be so true in the various companies at whatever stage of life they are in to be and very true story or very true concept. So even a small company has a bad culture. It’s, and we’ve seen some of that together, but bad culture is so toxic to people and everybody begins to go at each other and not really pushing towards the real company goal.

Jeff Tennyson: [03:14] And it doesn’t matter the size of the company, it doesn’t matter the stage of the life cycle and it’s in. So I’ve really tried to champion organizations and companies that have a healthy good culture and how we define that or how I’ve been able to define that. It’s all about the respect for all employees. Everybody is an important, valuable part of the team are quite frankly, Tim, they shouldn’t be here. We should deal with the employment side of someone who shouldn’t be here. And so culture has been a big part of that and it’s been a fun part of growing and building as a leader. And that’s been an important part of my success. And sometimes failure.

Tim Herriage: [03:46] Give some examples of just some companies you’ve been a part of and how you exited whether it was successful or not. Right. Because I like to really highlight that even brilliant, successful people make mistakes and growing out of those mistakes can sometimes be the most valuable thing in our lives and our careers. So talk a little bit about some of the companies you’ve been a part of and why you exited or how you exited and kind of where you’re focused on now.

Jeff Tennyson: [04:09] I started out as an accountant. I was in accountant back at him and training. Went to work as a accounting staff person for Arthur Andersen in Tulsa, Oklahoma. That was just right out of school. You’re doing whatever you need to do to make a living and build a family and all that kind of stuff. Out of that, I really got introduced. They got asked to go join a public manufacturing company. It was go third largest US manufacturer of glass containers and Tampa, Florida, and I did that because I had two mentors of mine, the CEO and the CFO who were really personal business mentors and they convinced me to come work for them at the time because they needed my skillset. I was interested in doing that because I just really liked the individual. And so from that it was really my first exposure to a healthy culture and an environment where you really could focus on profit growth and fun as a big part of the company and how you operate.

Jeff Tennyson: [05:00] And that company interestingly ended up having to go through bankruptcy and we had to get it sold and there were some really challenging pieces to that company from an operational perspective. But at the end of the day, the culture and the environment and the ways that we operated really had a real impact on me as far as if I can focus on culture and build a healthy culture, the good and bad times of business managing operations can come through. I left there and went to start a mortgage company and that at the time it was a 40 person residential mortgage company in Charlotte, North Carolina for my undergraduate college friend of mine had started. The company wanted me to help them build it out because he was the only guy I knew that he knew that had run a big company. And so we started with 40 people and he had a real focus on caring for employees, creating a great environment for people with great place to work.

Jeff Tennyson: [05:47] That helped me learn and respect the concept of culture, how we do it. We grew that company from 40 employees and went through a couple of different owners of that. At the peak it had 1400 employees. Uh, we were doing 2 billion a month in mortgage originations and we’re really able to keep a healthy, fun, appreciated, respected culture even to this day. Now ultimately the outcome of that, it was a subprime originators and so in 2007, 2008, it was owned by Barclays, a large UK bank and they just decided they were going totally exit anything operational of particularly toxic subprime loans. And so I had to stand up in front of 800 people and explain to them that that all of us, we’re losing our jobs that day. It was horrific to stand in front of those people. Many of those you hire all of those, you lead many of those.

Jeff Tennyson: [06:35] You made promises and expectations to, and tell them everybody was going to lose your job that day. However, it really focused me on the fact that culture really does matter. The reality is you need culture the most when things are hard and times are tough. When things are good, everybody’s typically making money. They’re typically doing things that they all like to do or getting promoted quickly. All the different things that maybe culture doesn’t impact as much, but as soon as you have it down, sorry, as soon as you have an environment where you have to tell people they no longer have a job, then you really get your culture tested and you know to this day in Charlotte, North Carolina, I mean you and I worked together. There are a lot of the people that we would hire came from that company and all of them wanting to come back and work for me and the culture.

Tim Herriage: [07:16] I think that’s a powerful thing that many, I mean more than half of our first employees there had worked for you at another company. Most likely they were probably in the room with the 800 people that were told you don’t have a job anymore, but they thought enough of you and respected you enough that when you came to them with a new idea that wasn’t even proven out yet. You know, because what we did at B2R was just, it was cowboy world, right? I mean, nobody had ever done anything we were doing, but they trusted you and I jumped full fledged in, I’ll never forget when you decided to leave the company, we had to have a company wide conference call basically to talk people off the ledge. I was unfortunate enough to have to like get in one of your shoes. I wouldn’t say fill your shoes, but I had to stand in.

Tim Herriage: [08:00] One of them can take over all these sales people that had known you for two decades almost and they were livid. It was all I could do to beg them to stay. Not only is it a testament to you as a person, but I think it’s that philosophy of always treating people, ride, always being honest with them upfront. Frankly. It’s probably one of the reasons I had so much trouble running 2020 rei because I didn’t want to be there. I wanted to be at my son’s school. I wanted to be at my ranch. I wanted to be somewhere else and I think that that real lack of interest, I was quote unquote just doing it for the money, doing what it is we always do and growing for the sake of growing. I’m pretty sure that’s the reason that I ended up winding that down is because I didn’t enjoy it and by extension, no one there enjoyed it either. I mean I think,

Jeff Tennyson: [08:45] I think there’s a couple of words that I always think of where I think of real leadership and one of them is intentional in leadership. It’s so easy to be in your ivory tower office, let everything come to you. And it’s so easy to be the top guy in the company and just let every year, the one that gets to make the decisions and everything you say gets responded to and people jump when you say, I need this. And I’m always amused that things that I say end up getting implemented and, and it really did mean for them to get implemented. So one, you’ve gotta be intentional with what you do, but secondly, you’ve got to really care and you’ve got to care for everyone in your organization in a way that it, you’re equally as offended if the person in charge of the mail room is not respected in the appropriate way, as your top sales person. That caring and that intentionality makes a big difference. You know, I talked to our guys, we do a monthly leadership lab here at Lima One.

Tim Herriage: [09:36] Well before we get into that, let’s transition into the big mortgage originator. You did some things on some boards of some banks and then I know you were on a couple of other leadership positions you settled at. I’m going to skip all the way to Lima, one for time sake. And so now you’re at Lima. Want to tell people a little bit about Lima one, what you do and then give them that leadership.

Jeff Tennyson: [09:54] Perfect. You and I were together, B2R I left there to go help run a company called Clayton Holdings, which is a large mortgage due diligence public company. And then these things there and was in Florida thinking I’d just stay on the beach for awhile. And our Chairman and founder, John Warren, who is a former marine like you and built this company will get the kind of, one of the reasons I got every one was the culture they had here. And that was built on his company in the Marine Corps with the Lima Company. And uh, he was the, and the Lima one comes exactly from his and our COO, John Thompson, Platoon and marine when they did for three the duty and Romani Afghanistan. So, uh, I’m very appreciative of your service and appreciative of their service. And it really filters into what Lima one. So when John Warren called me, he wanted to run for governor of South Carolina.

Jeff Tennyson: [10:41] He had a real calling to be governor. I wasn’t pleased with what was going on in the state, had never been in politics before, but was very frustrated the Republican leadership and the leadership in general in South Carolina and instead of just complaining about it or sending a check on it and he said, I’m going to do something. And so he said, if I can find a new CEO to run my business, I’ll get to run for governor. So fortunately he and I connected and it was a nice fit because I’m just down the road from Charlotte and decided I’d come out of retirement and lead Lima one capital. We’re a nationwide lender. We lend money to real estate investors. So anyone who does a fix and flip project rental project, If they are going to either do a single house, single blown project or a portfolio of rental houses will make loans on those.

Jeff Tennyson: [11:22] And we’re also doing loans on small balance multifamily properties. And so we’ll do loans as small as $100,000 $75,000 and we’ll do loans as much as $20 million. And so we’ll do over $1 billion of mortgages, uh, this year. Uh, and the well on track to have a clearly another double where we were last year though it’s in a great time and we’re based in Greenville, South Carolina, where we have about 130 employees today. And you’ll be pleased to hear we’ve got a really fun, dynamic, great culture. In fact, we had Bagel Mondays this morning for people to come in and have breakfast and on Thursday we’ll pass around the beer cart and have a beer cart Thursday. So, so anyway, it’s a fun time to have our employees engage, wrote this fun and we’re building the kind of culture that you and I would both appreciate.

Tim Herriage: [12:07] So talk about the leadership lab you were trying to talk before I cut you off.

Jeff Tennyson: [12:10] So that’s one of the things we did was I got frustrated that I wasn’t seeing a leadership culture at Lima one and he hit me one day. It’s like Duh, no one’s trained them on how to lead, have that culture, how to learn. A lot of the things, so you know, leaders do is they go first and we said, all right, let’s build a leadership lab. And so once a month I pull my directors and above together and I just share for an hour with them leadership and what that means, what that looks like. And, and the first session was called, we do dirty work. And the whole concept is as leaders, we have to do things that other people don’t want to do. And it’s all about the intentionality. And then the second one was, because I’m the boss and it’s like I’ve got a lot of young leaders, it’s not you don’t lead anymore because you’re the boss.

Jeff Tennyson: [12:51] You lead because you do the things necessary to help people respect you as their boss. And so that’s where we can really create it. The concept of really leadership is fighting for the highest good of those we serve. And that’s kind of the concept we think about here at Lima. One capital is we’re fighting for people’s highest good. That’s leadership. And at times that means you need to let them go because they’re not doing what they should do because they’re high as good as not being here. Their best and highest yield is going somewhere else. That’s not being a bad leader, it’s being a bad leader if you let him stay here. And then all the other elements that go with it. And then that led into what we just launched was our customer experience of vision and we wanted to create a customer service vision that Lima one capital, and that’s where that came from. So we came up with the customer service vision that said own every moment and invest in every opportunity. That’s the way that people need to think about delivery though.

Tim Herriage: [13:41] You know, it’s funny, when I first met you in Charlotte and you were heading up all the operations and sales at B2R, it was always impressive. You know, here I am, I’m on the road and I’m staying in a hotel and eight, nine o’clock at night, you’d be in there with your jacket off and your sleeves rolled up, working on loan docs are reviewing an origination file or helping one of the new sales people with their problems. And you know, you said we do dirty work and it’s kind of funny. Episode two or three of my podcast was getting back in the saddle was kind of the theme because Adam recently left the company and went on to do some other stuff and I had to start taking over all these house buying activities that I hadn’t done in five, six, seven years.

Tim Herriage: [14:24] And you start finding all these problems that were probably making people’s job really difficult and really unsatisfying and you know, a lot of friction in the process. And so before we came on, I was telling you how we were buying more houses lately it’s because I was forced as the owner of the company and the leader to get in the dirt and I started finding all these things that were antiquated, that technologies that didn’t function well together, frankly just wasted time and energy and things that made simple processes complicated. And it’s kind of funny you say that now I am the boss. It’s like telling your kids because I said so, right? It’s like, yeah, that’s a really great way to garner respect and someone, you know, do what you want them to do intentionally. So you are an entrepreneur. I believe you have a some sort of interest in Lima, one not just as a CEO, you came out of retirement.

Tim Herriage: [15:16] I think your kids are grown, it’s you and Kathy and home. Why are you doing this now from small business to big business? I think too many people lose track of their whole Why in life and they, you know, they want to buy a Ferrari when like really and truly that’s just to impress people. If they would just keep the f two 50 they have, they’d probably be more happy. So walk through kind of the why behind why Jeff Tennyson’s working and advice for entrepreneurs that may want to go into retirement, come out of retirement shift careers. Just kind of what makes you tick and what have you found throughout your career in life that helps you?

Jeff Tennyson: [15:47] Well, it’s interesting, early after our B2R experience, I created a decision Matrix, what I want to do that and I’ve stuck really hard for this decision matrix over the last five years, six years of decisions of what I want to do next. And it really starts with what are I want to live and, and then what do I want to do every day? And then once you kind of get to those things, it’s like, okay, are these good people or bad people? And if they’re bad people and means bad culture, pep environment, something that does it fit with my value system doesn’t mean they’re bad. I’m right and they’re wrong or I’m good and they’re bad. It just means as a leader, I don’t fit with what they’re doing. You know, I’m 57 years old, I’m not going to change. I am who I am and I’ve got to find a place that I can fit into.

Jeff Tennyson: [16:32] And I was at a point retirement where if I couldn’t find anything that’s okay, I’m not going to force it. So for example, we pick about a handful of three to five cities that we would even be interested in doing something. And Greenville, South Carolina was not necessarily on that list, but it’s an hour and a half from Charlotte, which is where our daughter lives. And we have a network of friends and that. So effectively we’re building a house in Charlotte and I’m commuting back and forth to Greenville, to lead Lima one capital. But it’s all about what do we want to do at this stage of your life? It’s not about the money, it’s about activity. Because what we can’t do, in my opinion, that really, at least up until our late sixties maybe early seventies I don’t think you can just quit and do nothing and try to figure out every day. So I want to be engaged. I want to be with smart people. I want to be with people I know, like, and trust. And so at some point that’ll be meaning me coaching or consulting or doing something along that line. But when you can find an organization like we were one that you really can’t share your values. It does have the ability to utilize your skillsets and utilize what you’re really good at to make it better and surely fight for the highest good of those we serve. That’s when you say, I gotta do that.

Tim Herriage: [17:40] How many people work at Lima? One now?

Jeff Tennyson: [17:41] Yeah, 130 people. So

Tim Herriage: [17:43] when you’re running 130 person company or an 800 person company or a 20 person, I know you like golf. I know you’re involved in your church. I know you like to spend time with your wife. I know you like to see your kids. How have you found ways to maintain work life balance through all these stages of different companies? Because I feel like, I think that’s what makes people in corporate America so miserable is they don’t prioritize the things they want the most and they just kind of become a slave to that paycheck and that job. So how do you maintain work life balance?

Jeff Tennyson: [18:16] I’ve been successful at that. There’s times when I have not done a good job of balance in many ways. Part of that maturity thing, as we get more mature, we truly recognize what really matters and what we really value and we allow ourselves to intentionally be a part of the things that we really value. I think as we’re younger and our careers, we don’t really know what we value and we’re so afraid of losing what we don’t already have, that we will allow ourselves to be slaves to our calendars or slaves to the company and lose sight of the work life balance. I think there’s two things. One is, it’s back to the word I used earlier. You’ve got to be intentional and you have to be intentional about what really matters to you. And it may be at this stage of your life work and it may be building your career.

Jeff Tennyson: [18:58] Don’t apologize for that. Work through it with your family, work through it with people who are important to you and say, listen, for this segment of my life, I’ve got to really focus on this. And there’s been times in my life and it’s like, listen, I’ve sat down with Kathy and listen for the next six months I really need to be focused on work and you guys are going to be second or third in this process. It doesn’t mean your second or third in my life and it means for this period of life, for this season, it’s going to be that point. And I think that’s the other thing that I think we lose. It’s just like the weather has seasons, life has seasons and we’ve got to take advantage of the seasons of life we’re in. And when we’re in a season we can control that and work life balance, do it.

Jeff Tennyson: [19:35] But when you’re not in a season, my son’s starting a new job. He’s not in a season of life that he has a lot of control over what he does and he’s going to have to be in that season where he’s going to have to manage the company demands, but he can’t influence all the way. Ultimately today I can, if I want to leave half the day on Friday and go to Charlotte play, go off and do something like that, I can do that now. It doesn’t mean I’m not here doing stuff with eight o’clock tonight because I’ll make it up, but I have control over.

Tim Herriage: [20:02] So I was talking to my oldest son, Alex is he graduates high school this Saturday and he’s going to be attending Trinity University to play football and I’ve had a lot of talks with him about seasons of life and I think this next generation that is forming families a lot later than we used to. We’ll probably be a lot happier than previous generations because, and when I look at it obviously I’ll be 41 in a couple of weeks, Alex is 18 so through my twenties and thirties I’ve had this internal conflict of wanting to be with him or wanting to be building my legacy at work or my business or my career. And you know, a lot of times there’s those moments when he was young that I’ll never get back and I’ve been trying to tell him, it’s like use your twenties to go and just slay dragons, right? If you want to be in a serious relationship, make sure that person is either super competent on their own or they’re committed to growing their career as well. Because I think those of us that started families in our twenties or even teens, there’s that internal conflict all the time. So talked with him a lot about that. And I think it’s, you know, now I’m in this season where I’ve realized that that’s really what was more important to me and I’ve got a nine year old at home that I can just do it differently with. And so, I mean, that’s what I’m looking forward to and that’s why I’m kind of taking a lower profile selling companies and eating more barbecue these days.

Jeff Tennyson: [21:24] Well, I think the other thing Tim, that people forget is everyone else only sees your front of stage at home. People, the people that we interact with, we only see their front of state. Nobody sees our back of stage and if you have ever gone to a event, the stage looks amazing, but you go in the back is this organizing is out of control. It is not well presented and we all have the back of stage in our lives, but we don’t let people see those. And so I think we worry too much about our front of stage until our maturation comes through and we get old as I am. And uh, you don’t worry as much about your front of stage, but what your entire stage to be practical,

Tim Herriage: [22:00] right? Because I mean it’s that housekeeping and I see a lot of real estate investors and you know, that’s my primary business. And I look at the stage, we are in the market and I see so many people getting new offices, getting more staff and trying to grow to meet a need or too often if they’re not growing to meet demand, they’re growing to me, a desire. And we were having a little meat and eat at a barbecue restaurant in fort worth last week, and I was just cautioning people. I was like, look, I did that back in 06 and 07 and I paid for it dearly in 08 and 09 so you just be careful. So talk a little bit about that, right? I mean, I like the analogy front of stage and backstage, but talk about like growth for growth’s sake, right?

Tim Herriage: [22:42] I’ve seen some big companies get big offices that they never fill up. And I’ve seen some big companies get too little space and cram everyone on top of each other. But you know, there’s a lot of small entrepreneurs out there that have really probably been making a lot of hay because the sun has been shining for the last 10 years almost now obviously it’s not an economic forecast. I’m not asking you to step out on the ledge here, but if you were a young entrepreneur, seeing all the facets of business that you’ve seen, what’s some advice about overhead and growth and measured growth? How are you intentional about being an entrepreneur to create more time, more revenue without significantly increasing your risk?

Jeff Tennyson: [23:21] I think, you know, we do. We do that here. We really look at two things here to try to determine how we grow and what we grow. One is we have a clear cost to operate and we do it based on basis points or percentage. So we want 2% of our originations to be our cost. You need some metrics. If you looked at my desk, you’d see this book from John Dewar. Called, measure what matters. And so you have to have these metrics basically keep you grounded. And so use your metrics. Use your processes to make sure, okay, here’s what we’re going to accomplish this month. Dewar talks about, OKRs objectives and key results. And so what’s your objective for a long period of time, a short period of time and make sure you have key results to measure it. So that’s number one because I think a lot of times people don’t have a plan and they just go, then we’ll figure it out when we get there.

Jeff Tennyson: [24:10] Well No, you have a plan in place, have key measurements of metric. Get and make sure that work. The second thing is the question, these guys hate it cause I always ask it as we’re looking at new products and new ways to grow. My first question is will this change our risk profile? Will this change the risk profile or company? Meaning do we have the expertise to handle it? Will it causes some grow into something that we may not know if it’s going to grow, will it change the way? And so we have a risk profile. What is your risk profile? What is your risk tolerance? How does your capital that you have to support that decision work in that risk profile. So, for example, if you’re thinly capitalized, you should have a much narrower risk profile because if anything goes wrong, you’re in trouble as your capital grows you risk profile can widen.

Jeff Tennyson: [24:53] And I think that’s the piece. What is your measurement? What are you measuring? And then are you changing your risk profile as you get more houses? We see that all the time at Lima one the biggest challenge in the fix and flip business, particularly it’s people are way over leveraged. Now that’s awkward for me to say as a lender cause I’m lending that much. But that’s what happens is these people and they say, oh well if I just buy this house and I can sell it, I’ll just buy this house. I can sell it. Well they wake up one day and they’ve got 12 houses they can’t sell now they can’t buy another one to get the proceeds out. And that’s a trap, so they didn’t take their capital base into consideration on their risk profile and what they were measuring.

Tim Herriage: [25:29] The president of homevestors once said that the fix and flip business, it has been making millionaires out of multimillionaires for decades, right? Some other, we always say you can’t eat equity, right? I mean you can have a multimillion dollar balance sheet, but if you don’t have cash, you know you can’t buy groceries. And so we had to foreclose on my lending company this month on a borrower that was so thinly capitalized that, I mean he had the reserves for that loan, but then he had a very major car wreck and it was a very unfortunate situation and he didn’t get anything done for two months and he had these unexpected medical bills. And as an entrepreneur, right, so often there’s some co mingling of the money, right? I mean if you need to pay a medical bill, it’s easy to take some of that fix and flip repair money and pay the medical bill. And so it just ended up that six months went by and it’s like, hey man, we have to do something here. So the risk tolerance based off your capital and your reserves is something that they should just be a class for entrepreneurs because so many of us are not used to running our own budgets and balance sheets. We are used to executing on today’s task, right? Taking massive action.

Jeff Tennyson: [26:41] I think entrepreneurs forget that capital is not a feeling. It’s just not. It’s a very tangible asset that you have to understand and have to know where your risks, where your limits are. And I think a lot of times entrepreneurs, I’m done with before, the exact same thing. I bought a lending company years ago. I put all that I felt like I could put into a company into it and let’s just grow. And the more we grow, the more money we’ll make. And you know, I woke up one day and it’s like I don’t have enough money to pay payroll. I don’t have enough money to keep growing. We’re not hitting our numbers. And it was all of a sudden it was, and the stress that’s created for, that’s where you begin to impact. That’s the most negative impact quite frankly on my relationships, my wife, my family, my lifestyle is getting over my skis in my risk profile that my uh, bank account couldn’t cash.

Tim Herriage: [27:27] So very interesting. You’re a CPA, you’ve got a Harvard MBA and entrepreneurs get in trouble, they run out of cash and they get to where they can’t operate or can’t do the things that they dream of. And I don’t ask for help. Right. And they may not be educated. There may be a great salesperson but they have to do the books too. And they’re not educated in that. How does that happen? A smart guy like you can run out of money to make payroll because that’s a feeling. Any entrepreneur who’s been doing it long enough knows and that’s the thing that will keep you up the most at night. It will turn those great friends that work for you into very unhappy people. Talk a little bit about the couple mistakes you made in that realm that you’ve now learned and share some knowledge about that.

Jeff Tennyson: [28:09] Well, I don’t know. There is a limit to how smart you can be, but there is no limit to how dumb you can be. And I think that’s where effectively the way to avoid your dumbness, it’s to experience that. And I think in some regard, I think I really a classic, um, serial entrepreneur has to have some of these moments that they learn from. And the key I think is to have those as early in the cycle as you possibly can. So you feel it in a way that, you know, you will never do it. I’ll be honest, I wish I had the secret sauce, but I think you have to experience it in some form and what you try to do, and hopefully you don’t experience it in a way that it destroys you, but you do experience in a way that it changes you and the important thing.

Tim Herriage: [28:51] I think what you’re saying there is, if I really summed all this up, it’s, you have to be intentional. You have to get experience and there’s going to be times you’re not in control, but dad gummit learn from your mistakes. Right. Don’t keep repeating.

Jeff Tennyson: [29:02] Yeah. Don’t ignore mistakes, encourage mistakes, but only allow mistakes to happen that you can truly learn from. And if you have a mistake and say, I’m never gonna do that again, you made a bad mistake. If you have a mistake and say, Ooh, I’m not going to do that because of this, this, this, this is what I’ve learned from, that’s when it’s a good mistake. And you need a bunch of those as an entrepreneur because that’s how you learn. And that’s how you really create some great, things.

Tim Herriage: [29:24] That’s right, man. So we’re going to take a quick break and then we’re going to come back and I want to talk to you a little bit more about fix and flip lending and the things that Lima One does. But also, I know you’re from Arkansas and we’ve got to talk about some BBQ. Start collecting more leads in minutes. Not only do I use hubspot’s free CRM, but I also use their free marketing tools. Start visitors into leads today. Sign up for free at hubspot.com/th sign up for free today and it’s free forever. No contract or credit card required. It’s a risk free way to see what inbound marketing can do for you. Start turning visitors into leads today. Sign up for free at hubspot.com/th

Tim Herriage: [29:58] all right, we’re back here with Jeff Tennyson and Jeff. I’m going to talk about barbecue in a second because I know you live in the Carolinas, but first just talk a little bit about where Lima one is and where you guys are going and give some information about how people can do business.

Jeff Tennyson: [30:12] So as I mentioned earlier, Lima one and we’re a national lender, we have three primary product lines. We have a fix and flip product line that we loan to investors of all experienced people who have never done it before. If you see Chip and Joanna Gaines on television and say we ought to do this to someone who like yourself, Tim who does 10 to 15 houses a month. And so we provide various levels of ourinterest rates will go up as high as I ten’s a lot eleven’s for someone who has no experience and you know in the high eights, low eight of low 7’s for someone who with experience. And so that’s the benefit for experience in that fix and flips space is you have your much lower risk and we understand. And so as a result you have a much better chance that you have good opportunities to make more money with your leverage.

Jeff Tennyson: [30:54] We also have a rental product for people who want to own rental properties, all residential at Lima One capital. With the exception of our multifamily, I’ll talk about in a minute, all these fix and flip rent or all residential properties, we’ll do one loan, one house, or we’ll do one loan for a portfolio of homes. We’ve done loans as small as 75,000 and we’ve done rental the loans as much as 20 million. So we’re across the board of that with our capital sources and kind of how we fund our business. And then we have the multifamily and we found a lot of our clients who were not finding as many residential properties that were advantageous to buy in certain markets, but they were finding really good B and c multifamily, small 15 door, 20 door, five door, multifamily units. And they couldn’t finance those, rehab them, stabilize them, and get them refinanced by Fannie and Freddie small balance, which is the best pricing.

Jeff Tennyson: [31:43] So we’ll basically give you a bridge loan with your multifamily project, allow you to renovate it, to stabilize it. And then in a couple of years you can get a takeout from Fannie and Freddy, uh, at a much more favorable price. We do about 400 loans a month all over the country. We’re in 43 states and it’s been really fun to grow this business and really let the market see a lender that cares about them. So the other thing is we own the relationship from the originating that loan all the way the file type that we have our own servicers who service a lot of our lenders in our space. Soon as they originate the loan, they’d send it to somebody and you have to deal with really somebody else. But that’s the life of the loan. Not at Lima One. We’re going to own that relationship all the way back to our customer experience. We want to make sure our customers have a great experience from origination to last payment. And the only way we knew to do that.

Tim Herriage: [32:32] Man. That’s great. And so what’s the website?

Jeff Tennyson: [32:35] www.LimaOne.com and we’re all sorts of a REIA meetings around the country. Uh, we’re all sorts of trade shows. We’d be more than happy to help you anyway.

Tim Herriage: [32:43] Wow, that’s great man. So we’ll put links in the show notes, but I’ve got a question for you. You’re from Arkansas. I know you’ve had some good Texas barbecue, you eat that stuff in Carolina, which is better Texas or Carolina Barbecue?

Jeff Tennyson: [32:55] Memphis.

Jeff Tennyson: [32:58] I’m not a fan of Carolina Barbecue. They use vinegar sauce and it’s just, there’s no chance. Yes. And you and I had had some great barbecue in Texas and you go to, what is the uh, Cedar – Pecan Lodge. Yeah, the Pecan Lodge and then there’s another one right there on that expressway right off the 60 10- 50, Ten50. Thank you. Uh, so those are great barbecue, but I’m telling you my favorite barbecue is central. Where are we cue in Memphis, Tennessee and it is a terrific spot and my best barbecue experiences that have been at Rendezvous for ribs in Memphis. I Corkys, which is the original Corkeys in Memphis. And then my most recent favorite Central barbecue in downtown.

Tim Herriage: [33:36] Well, we’re going to have to go in a, just spend a couple of days hitting barbecue joints and working on real estate there. Jeff will like it. I know you’re a busy guy being the CEO of the company. I appreciate you taking the time and we’ll see you soon man.

Jeff Tennyson: [33:48] All right, my friend. Thanks a lot. It’s always a pleasure to hang out with you.

Tim Herriage: [33:51] That’s all the time we have today. Thank you again for taking your time to spend some time with us on the business and barbecue podcast. It would mean the world to me. If you could give us a review on iTunes, Google play, Spotify, or anywhere that you listened to the business and barbecue podcast. Until next time, keep cooking.

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