JD Stettin is one of the most solution-oriented and innovative people in the industry. He and Mordecai explore his path from selling Citrons as a boy to selling cleaning solutions, joining Greystone, and then branching out to form his own company, and the creative outlook required to found something that bridges the gap between lenders and the rest of the services a client might need.
2:02 - 12:17 Selling for Sukkot
12:17 - 21:44 A Foray in the Cleaning Industry
21:44 - 35:25 Sales, Management, and Sales Coaching
35:25 - 40:03 Site Visits
40:03 - 57:50 Founding Carnegie Capital
57:50 - 1:03:43 Current Trends
lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mordecai Rosenberg (00:15):
Hey, this is Mordecai. And welcome back to
the Origination podcast where weinterview the top originators
and salespeople in themultifamily and commercial real
estate industries to try tounderstand what separates the
top performers from the rest ofthe pack. On this episode, I'll
be speaking with JD Stettin,founder of Carnegie Capital. JD
(00:39):
actually worked for me atGreystone for a number of years.
Before he went off on his own tostart Carnegie capital, he
identified a void in theindustry, and saw that sometimes
there are limitations in beingstuck with just a few products
(00:59):
to provide. Going off on his ownand starting to broker debt, he
was able to offer the universeof solutions to his clients. JD
is one of the most creativepeople I know in the industry.
He really he can see a problemand look at it from so many
different angles. He marches tothe beat of his own drum. In
(01:23):
fact, for the first year ofCarnegie capital, JD was driving
around the country trying outdifferent cities until he
finally settled in Austin, wherehe now resides. I really enjoyed
this conversation with JD. I'mincredibly proud of the business
that he's built, having closednow over $10 billion of
(01:44):
transactions since its founding.
Without further ado, let's talkto JD. JD Stettin, welcome to
the origination podcast. It's adelight to have you here.
JD Stettin (01:57):
Thanks, Mordy. Good to be here. Good to see you.
Mordecai Rosenberg (02:02):
Yeah. We've had a long history together.
Yeah, we did a lot of worktogether at Greystone, a lot of
adventures in Chicago back inthe day. Yeah. So I'm going to
(02:23):
start with the question that Ialways pose to guests, which is,
you have to turn back the clockand go back to the earliest
sales experience that you canrecall. Maybe that's when you
were a kid or high schoolcollege. What comes to mind?
JD Stettin (02:42):
It's a fun question.
It feels like the business orsales equivalent almost, of of
Krista Tippett's on Being whereshe always asks about the
participants early religious orspiritual experiences. So I
think that's a lot of fun. I hada lot of different jobs, growing
up. Tutoring, worked for alandscaper, babysitting, all
(03:09):
sorts of things. But I thinksales wise, my first official
formal sales gig was probably at13 or 14 and selling Glovem and
Estrogem on Main Street leadingup to the Sukkot holiday. So to
help unpack that for those whoaren't familiar one of the
(03:32):
Jewish holidays in the Fallrequires that every adult male
purchase a sort of Biblicallyprescribed group of leaves and
fruit. Not unlike a Palm Sundayin fact, one of the leaves is a
(03:55):
palm frond. And in the city Igrew up in, the neighborhood was
heavily Orthodox, heavilyJewish, and for about a week a
year on Main Street there werejust all these tables set up
with a high school age orelementary school boys selling
selling these things and thatwas definitely where I got my my
(04:15):
sales start.
Mordecai Rosenberg (04:19):
Wow, so how did that go? What did that look
like? So you had your wares thatyou're selling right? And you
put them on the table and peoplewould would approach you?
JD Stettin (04:32):
Right and you know, this is a commodity. There were
20 other stands with verysimilar looking wares, with
similar looking young men makingvery similar pitches, and you
know, price points are all moreor less the same. I think for me
the groove I fell into and theway I found success and joy in
(04:55):
it was I really loved the thewares. I loved what we were
selling. I was deeply religiousat the time and the idea that
these fruits and plants weresomehow of spiritual cosmic
significance was really cool andexciting. And there are all
these laws and customs thatdescribe certain shapes and
(05:21):
attributes and characteristicsof this plant matter that makes
them more holy for this purpose.
It was really fun to do a deepdive into that and read up and
learn and study all these booksand get to look at the wares in
a completely different way. Tolook at this citron basically,
more or less lemon, but not tosee it as just like, oh, it's a
(05:44):
lemon, to see the shap, to seethe number of grooves, to see
how clean it was or it wasn'twith the palm fronds to track
the spine along the back all theway up. And make sure that the
the middle double leaf of thepalm fronds was perfectly sealed
tip to tip. It was a level ofcare and attention to detail
(06:04):
that I really enjoyed andhelping people, because even
within the rules and thecustoms, there's some ambiguity,
there's some personalpreference, there's some
individual custom. And I thinkit was that marriage of
knowledge and an understandingof the wares and the laws behind
them. And also meeting peoplewhere they were and making them
(06:28):
feel comfortable askingquestions and honoring their
preferences. And you know, whenyou'd be trying to nudge them in
a direction that felt moretruthful, or along the lines, of
what they wanted. I really lovedthat. I also loved the autonomy
as a 13 year old boy, to berunning your own mini business
with other 13 year olds was wasgreat. And we worked, 12 to 14
(06:51):
hour days with a quick pizzabreak in the middle. So there's
something about the intensity. Iwas once in a play in college,
it's sort of like that, thatwork during tech week, the week
leading up to the show whereit's just all hands on deck all
(07:12):
the time following rehearsals.
There's something that's great.
It was really fun, that energyand and autonomy. It was great.
I love people feeling satisfied,like they got their holy work
and their good deed done. It wasit was really rewarding. At the
end of the week when our bosswould call us in to pay us,
(07:35):
there weren't set salaries oranything, this is all a cash
business. None of us have ourworking papers, 13 year old
boys. And he'd call you in andjust say so, what do you think
you should get? Wow, these are13 year old. I don't actually
(07:56):
remember what it would haveworked out to per hour, probably
wasn't all that much. But stillwalking away with, I don't know,
$300 or $400 in my hand in 20s,I felt like, like Andrew
Carnegie or something. It'sreally exciting and rewarding
(08:17):
and satisfying.
Mordecai Rosenberg (08:21):
Yeah, that's a lot of money for a 13 year
old.
JD Stettin (08:26):
Big time.
Mordecai Rosenberg (08:29):
How did that feel, the question of how much
do you think you should get? Howdid you receive that?
JD Stettin (08:36):
It's interesting.
Our boss would pull this similartactic with the high end
Citron's. As you may know, someof them go well up into the end.
For people who aren't familiar.
I don't know what lemons costnow, maybe a couple of dollars
or the pound. But these Citron'swith holy purpose can cost
(08:57):
anywhere from $35 to like $200.
So the nicer ones that had allthe proper holy beauty marks, if
you will, were kept in the backroom. The high end customers
were sent to the owner and theboss to deal with, and he would
use a similar sales tactic withsomeone. If they found that
Citron that they really liked,he'd say, well, what do you
(09:18):
think it's worth, what would youpay for it? Which was really
strange initially, hearing thatas a kid. Not really
understanding. Prices werethings, they were facts of the
physical world the same way anyother physical fact was. This is
(09:39):
it's height, this is its weight,this is its price. Realizing at
that age, that oh, there'sactually a lot of malleability
and subjectivity to all of this.
So when it came time to gettingpaid having been exposed to
that, on the other end on thesales side, it wasn't a total
(09:59):
shock. It was a little strange,but it also felt like a good
time. I remember being proud andfeeling like I'd done a great
job and helped a lot of people,and been really successful, and
sold a lot of product. So I feltgood. I had tallied up my hours
and had a rough sense of howmuch I'd sold. So, for me, it
(10:22):
was actually a really goodquestion. Like, well, I did
this, I did that ,you're askingme what I think that's worth. I
throw out a number, and I don'trecall what my first exact
number per hour was, but it feltlike a good invitation to kind
of take inventory and takeresponsibility as a young
(10:43):
salesman for for myself and myexperience. That for me that
that really worked well.
Mordecai Rosenberg (10:50):
Yeah. It's interesting. You're certainly
one of the most circumspectpeople that I know. You're
always thinking about whatyou're doing and rethinking it.
You know, and if you think aboutit, its an interesting question
to ask yourself at the end of,of every day. Is, well, how much
(11:15):
do you think you should get?
What was your contributiontoday? Which can mean lots of
different things. Right? whatkind of value did you add to the
world? What kind of value didyou add to yourself today? It's
an interesting question.
JD Stettin (11:33):
Yeah. And I think hearing you frame it in that
way, reminds me that around thesame time, my peak in orthodoxy
religiosity, I did actually keepa daily written log of my
spiritual merits and demerits,we'll call them. Yeah, this
(11:54):
sense of, I think, maybe wouldhave been called in my community
at the time, a heshbon hanefesh,an accounting of one soul, was
for me a literal and dailypractice. So the idea of then,
accounting for my sales dollarsjust felt like yeah, of course.
I mean, if I'm counting sins,then surely I can count
(12:16):
greenbacks.
Mordecai Rosenberg (12:17):
Yeah, that's really interesting. So let's
fast forward a bit, not quite toGreystone, but to before it. So
that job, I believe, that youhad immediately prior to getting
into the industry was cleaningmaterials. Is that correct? Am I
(12:41):
recalling that correctly?
JD Stettin (12:43):
Yeah, it's actually funny. The friends who had
introduced me to Greystone,Nathan Shas. He had been in
waste management, and I had beencleaining. And it was sort of
accidents of history, the funnyplaces to be in before this. But
(13:04):
yeah, EqualLogic Solutions wasthe company, and we did sell
non-toxic and eco-friendly, safecleaning solutions into the
institutional market. So ourclients were, at the time,
Wholefoods Chipotle, someschools, some hospitals, food
production, that sort of thing.
Mordecai Rosenberg (13:25):
Yeah. How did sales go with that? Can you
tell me a sales story there?
What did sales look like? Yourfirst successful sales story
there, or another good one. I'mcurious how you approached that
big corporation.
JD Stettin (13:45):
Yeah, that was that was sort of an interesting role,
in that, our clients really ranthe gamut from tiny Mom and Pop
restaurants in in Brooklyn. Wewere headquartered in the Navy
Yard. The CEO would do thedeliveries out of his car once a
(14:07):
week to some of these nationalchains. And as the northeastern
Sales Director, Regional SalesDirector, whatever it was, they
were all ultimately under mypurview. So having to switch
gears between these small oneoffs and then making a
(14:28):
management level presentation atWhole Foods, corporate offices,
and what do they call it,Trillion Dollar Mile in
Englewood? What's that placewith all those corporate
headquarters?
Mordecai Rosenberg (14:39):
Yeah.
Sullivan or 9W?
JD Stettin (14:43):
Yeah. So it was interesting. So one that comes
to mind, and I don't rememberwhich property management
company this was, might havebeen Durst, but maybe not. But
whoever it is that cleans theEmpire State Building. We had a
(15:04):
interview with them, obviously,that's, it's a big job and it is
prestigious in its way. And Iliterally in order to, to try
and make the sale, how to cleana urinal in the basement of the
Empire State Building with thehead of their maintenance
facility, there. So it is avery, very hands on job. I lead
(15:29):
overnight installations withteams of mostly Spanish speaking
workers at Whole Foods, becausewe couldn't disrupt their daily
workflow. So we would show up, Ithink it was at 10 or 11 and we
have to be out by 4am. Also justreally hard working, really
(15:51):
project based, doing whatever weneed for the client. You know,
in a way not unlike my firstjob, it was sort of a mix of
mission driven. In the way thatthe Citron and plant matter felt
religious and spiritual, andthere was something behind it,
so too with this stuff. Iremember, dishwasher is at
(16:13):
Chipotle, showing me two, threeweeks later that they're rashes
were gone from switching fromthese really harsh toxic soaps
to these plant based ones.
Really tears of gratitude for usin our work. That was really
compelling on top of, of course,commission based compensation,
and just feeling good at what wewere doing. But yeah, it was a
(16:36):
small scrappy startup and as asales guy, you did whatever you
needed to do. To keep accountsto win accounts, I was on call
practically 24/7. I remember onweekends driving up to Blue Hill
stone barns, that beautiful farmto table, farm and restaurant in
(16:56):
Westchester somewhere upstate,because the soap dispenser at
their dishwasher wasn't working.
And I would be there on techsupport call with someone with
my hand in the machine, tryingto rewire something with no
training in plumbing orelectrical. But we wanted to see
(17:21):
this stuff happen and take offand succeed. And it was really,
really exciting when it.
Mordecai Rosenberg (17:30):
So in how did a first call look for that?
So you call up Chipotle or WholeFoods or Blue? How did you
approach that?
JD Stettin (17:42):
So we mostly sold through distribution. The way
that works in that industry isthere are these big distribution
houses that supply all the papergoods, Jan San for restaurants,
hospitals, hotels. Everythingfrom toilet paper, garbage bags,
hand soap. Carry out trays, togo cups, all that stuff goes
(18:07):
through these big distributors.
We had aligned ourselves with acouple of major distribution
houses, who, when they madetheir weekly daily, whatever
sales rounds, their clientswould try and pitch them on this
green stuff that ultimatelysaved money and is better for
their employee health andenvironment. So we kind of got
brought in, almost warmreferrals mostly. The
(18:28):
distributor sales guy will sayok, can you call, Mickey over at
the DC for Chipotle, they'reinterested in hearing about
this, and they'd set it up. Sothere wasn't a ton of cold
calling. But there was a littlebit that I did of my own
(18:48):
initiative. I remember when Ifirst started, I literally just
went door to door to therestaurants and bars in
Williamsburg where I was livingat that point with my little
sample kit. We just asked tospeak to a manager and to make
the pitch that hey, not sure ifyou're aware, but most of the
(19:09):
soaps and cleaners you use arepretty toxic, and that can be
problematic for you and yourstaff, and at the very least as
it goes downstream, tat's notgreat. We have alternatives that
are made right here in the NavyYard in Brooklyn that will
ultimately save you money.
They're just a heck of a lotbetter for you and your your
employees and your patrons. Andthat's something you can, in
(19:31):
turn, advertise to your customerbase, that you use non-toxic
products in an environment, anda city in New York where that
was certainly seen as a pro. Wethought that would be
attractive. But yeah, that wasreally the pitch and from there
(19:51):
people usually asked for sampleproducts, and we would offer
that, and we would do atraining. As with many things,
it's how you use it and greenproducts often do require a
little more elbow grease or alittle more studied application
than their toxic counterparts.
So it was a good test of mySpanish too, because a lot of
(20:15):
back of house restaurants in NewYork are Spanish speaking folks.
Working with them, and trying toget them to understand the
benefits of the products wealthfor their health, their safety.
And sometimes it's a hard pitch,because again, they're the ones
who have to work a little harderto use a green product, but
maybe it's better for them. Soit was really interesting to
interface with so manywonderful, hardworking people
(20:38):
behind the scenes at New York'shotels, restaurants, bars. The
Batali group was one of our longstanding clients. So getting to
go behind the scenes at allthose restaurants when they
opened the Eataly. If you everbeen down there, we did a big
conversion. And, again, fun,challenging, exciting, drive up
(21:00):
to Boston and Connecticut andthese 20 hour long sales events
sometimes. We had a truck thatwe ran on, it had been converted
to biodiesel, and we literallypicked up the frialator grease
from some of our clients, andran our delivery truck on that.
Of course, it wasn't a veryreliable truck or mechanism. So
(21:22):
driving down to Philly, pullingoff the highway because the
enging us smoking and smellslike french fries. It had it had
its moments, for sure. And itwas just zany. And you kind of
had to roll with whateverhappened.
Mordecai Rosenberg (21:44):
That's quite an experience. I want to talk
about sales, management andsales coaching a little bit. I
know you're someone who has madea science out of out of sales.
(22:06):
Both in terms of books thatyou've read and courses, right.
But then there's also coachingand and training. It is
interesting to me to hear youtalk about your first sales
experience with like, thelouavem and estrogem and how you
really studied what does make agood one or not a good one. So
(22:31):
we'll talk in a little bit aboutthe studying that one can do to
improve their sales capability.
But I want to start with whatgood coaching looks like. I
mean, you've worked for a numberof different people, now you run
your own company. But atGreystone, that was probably the
(22:53):
thrill of manager and coach,right? And you try to invest in
that. But I'm curious, like,just with Greystone or
otherwise, what did you find?
What makes for a good salescoach in our industry, or bad
sales coach?
JD Stettin (23:11):
Hmm, it's a fun question. Thinking back, I think
I gained immeasurably from doingsales calls and visits with you
and with Donnie. I think all thetraining, all the books, all the
(23:35):
written anything, those are allfine and good. But give me like
five sales trips with you and orDonnie, and that was all the the
coaching, training, managementthat I feel like I needed and
enabled me to thrive. There'ssomething about that. I think of
(23:59):
it more like a medievalapprentice guild type model. And
I think for me as a lifephilosophy, just aligning myself
with great people or findinggreat people and then just
hanging out with them for awhile. That's how I ended up
with the degree I have. I'veended up studying evolutionary
bio and linguistics and there isno thought behind it more than
(24:24):
just, one of my professors inevolutionary bio I thought was
wild and brilliant and amazing,and one in linguistics, and I
just took all the classes thateach of them offered. And it's
like, oh, that's a way to get adegree. I feel similarly with my
experience at Greystone and Ivividly recall some of our sales
trips and meetings more so thanthe phone calls, although some
(24:45):
of those too. I think justsitting in on meetings with you
and really the first few tripswe ever took, I probably didn't
do much more than nod and takenotes while you or Donny took
the meetings. Just watching,experiencing maybe, the pattern
(25:08):
of mind and questioning andcadence. The way that you and
your brother would roll a dealor clients or opportunity just
through this mental rubric ofsorts. That was, for me, a
(25:30):
string of aha moments. They'rereally feeling like, Oh, I get
it. I get it. I get it. It'sjust watching you guys ask
questions and watching thepatterns of mind and the
patterns questions. That was it,that was what I needed to be
able to then go off,and do it onmy own, and train the folks who
(25:51):
are under me. And thenultimately go off and start my
own firm. But really, those ridealongs with with you guys, that
was where it all happened forme.
Mordecai Rosenberg (26:02):
Yeah. Those were some good. Yeah, I was
thinking about, I forget if itwas Dallas or Houston, and we
were definitely doing a lot ofdriving in Texas. As far as aha
moments, anything stick as faras, when you talk about patterns
(26:27):
of mind or questions. Anythingjump out?
JD Stettin (26:39):
I'm trying to think maybe it'll come to me as I talk
about, it in terms of specificcare or finance related
questions or ways of approach.
But I think to me, the overallmodality was more one of this
blend. Obviously, slightlydifferent proportions between
you and Donnie, but this blendof just sort of curiosity. It
never felt like we were goingsomewhere to, quote unquote,
(27:04):
pitch someone. In a way that,and no disrespect meant towards
EqualLogic solutions, but thatvery much felt like the way I
was trained there, not that Igot very much training in a five
person company where everyonewas doing everything, but it was
very mission driven. We'regreen. We're going to go in
(27:25):
there and tell them they got touse our product because
everyone's got to use ourproduct. That's one approach.
But it never felt that way withthe with the road bros crew at
Greystone. It really felt likethis is all exploratory and
curious. And it felt like, youguys would approach a meeting
(27:48):
really just as an opportunity tounderstand who it was we were
meeting with and what it wasthey were doing. And somehow out
of that understanding wouldoften enough arise some
opportunity. One thing thatmaybe comes to mind now, and I
guess, this is my first HUDclosing, so it's hard to forget.
(28:11):
This was actually the trip, Idid a day in Dallas with Donnie
and then flew to Houston thatnight, and you came in that
morning and we did Houstontogether. But but the Dallas
meeting with Donnie we had lunchwith this one prospect . He's a
guy who I had, I guess my myfervor as a new sales guy, cold
(28:35):
called at his home on ChristmasEve and he had been a sales guy
himself. So he was actuallyreally funny about it and we
kind of joked and played it off.
And we ended up sitting therefor lunch, and the opportunity
that had brought us togetherturned out not to be an
(28:56):
opportunity. But he mentionedsomething offhandedly about
another property and Donnie justasked a few follow up questions,
and pulled a pen on a napkin andquick kind of NOI Cap rate
evaluation. He was like, holdon, if that's really the NOI
you're throwing off, we couldprobably pull out like $6
million or something of cash outand have a $24 million deal. The
(29:21):
client put down his knife andfork and said, you do that you
have a deal. Really just thatapproach going into it knowing
that the deal in question wasprobably not a fit, and it was
unclear, and this guy had juststarted his own entity. But
really approaching things withcuriosity, I think, and
(29:41):
humility. And really driven tounderstand, it took all the
pressure off of the salesmeeting. It no longer felt like
we're going in there to sell.
None this ABC, always beclosing, Glengarry Glen roster.
Maybe ABC always be curious, Iguess, I don't know. That's
(30:03):
another way of thinking aboutit. But that's something that
you and Donnie really, I think,brought to every meeting. That
curiosity, and turning a dealover, and a situation over, and
asking questions, and reallyfinding what made people or
their projects or theirproperties, tick. And doing so
in a CRE setting. So learningthe questions to ask about
(30:29):
operations dutch service, andplans, and download goals, and
questions. And, I don't know,have you tried this? It's just
such a beautiful, for me, verynatural, very natural feeling
approach.
Mordecai Rosenberg (30:50):
Yeah, it's interesting. For me, that was
the part that I really enjoyedabout sales was the connecting
with people, and the curiosity,and getting to know them, Then
looking for opportunities to addvalue. Like how could I help
(31:10):
them think about something alittle differently? I was in
origination for for 10-12 years.
The reason why I left it wasbecause the actual deal itself
was the least interesting partabout it. Right? So as soon as
it got to, alright, well, we canrefinance, we have this, this
(31:32):
loan product. That to me wasless. It didn't feel like I was
adding the same kind of value,and it was more structured and
wrote. So it almost became alittle boring for me. But the
part about actually getting toknow people and understanding
(31:57):
them, and then to give them,advice that part was great. So
that's actually why I think Ienjoyed doing the podcast so
much because the whole purposeis just about trying to
understand people and get wisdomfrom them and share wisdom. But
you're right, because those wereenjoyable, those meetings.
JD Stettin (32:20):
Yeah, they were needed. I mean, we definitely
met with a cast of characters.
Remember that fellow in Houstonwho greeted us in his toe socks
and had the under the deskrecumbent bike? And was making
the fastest pipe in the West forinternet access.
Mordecai Rosenberg (32:39):
Oh my gosh.
JD Stettin (32:43):
Right?
Mordecai Rosenberg (32:46):
Some of those properties we drive up to
you hope that this is the wrongaddress. This can't be where
we're actually going. I rememberDonnie and I once went to a
property in the south side ofChicago. And we didn't know
neighborhoods. But we weremeeting the client at this
(33:11):
building and there were metaldetectors out front. It did not
feel like a safe place. I wasshocked that our car was there
when we got back. But I rememberwe went up and we were looking
at this unit. And I asked, so isthere any crime? What do you
(33:32):
mean crimes? Well, anyshootings, or anyone killed?
He's like, well, no shootings.
It's like, well, what do youmean? He says, well, someone was
thrown off a balcony.
JD Stettin (33:48):
Oh wow.
Mordecai Rosenberg (33:51):
Yeah. I think we did not end up doing
that deal, though. But we tried.
We tried.
JD Stettin (34:00):
I think for me, some of those visits were also really
eye opening. And I mean, I,arguably, I would say come from
pretty humble originsfinancially, and grew up next to
some low income housing projectsin Queens. And yet, even so,
driving out and seeing someurban poverty and seeing real
(34:25):
class-c housing in Dallas andHouston in Memphis. I don't know
that was also moving sometimesin ways. And obviously we were
there to make a connection withthe owner and again, explore the
possibility of financing andrefinancing. But just seeing the
(34:47):
way experiencing, even for a fewmoments, the way that people who
are relegated to that sort ofaffordable housing, after live
workforce housing, whatever wewant to call it. I don't know
what to say other than it reallywas eye opening and a little
perspective changing, even evenfor me. And made me I guess,
(35:12):
appreciative all the more of myluck and my privilege, and then
my experiences. Doing some ofthose site site visits. For
sure.
Mordecai Rosenberg (35:25):
Yeah. Well talk about site visits a little
bit. Because I think that'ssomething that sales people
don't necessarily always feel ispart of the process. Right? You
meet someone in their office,and you have a good
conversation, but as far asfinancing a property, it's
(35:48):
almost like, well, just tell methe financials. I don't need to
see it. But I do think thatthere's value in actually going
to see a property, ideally, withthe client. But even if even not
with the client, if you can't.
What do you think about that? Interms of site visits, do you
think it's important or notimportant?
JD Stettin (36:08):
I think it's very important, as you start in the
industry, to actually walkthrough a certain critical mass
of buildings of different assettypes, qualities, locations,
etc, to really get thatembodied, kinesthetic sense of
(36:34):
place. What does a 60s nursinghome look like versus a freshly
built high end assisted livingwhere people pay $9,500 a month
to live. I think that gives youcertain embodied wisdom or
(36:54):
knowledge that you can'tpossibly get from looking at
numbers and building and readingpackages or appraisals. I always
think about that famous NewYorker cartoon with a New
Yorkers sense of America. Andit's basically like Times
Square, Broadway, 10th Avenue,Hudson. Then there's a sliver of
(37:18):
Jersey, flyover Texas and LA. Ithink there is a provincialism
to being from New York where wejust, don't I don't know, it's
its center of gravity. So Ithink especially for New
Yorkers, New York based financeguys, getting out hitting the
road doing site visits, isessential to understanding what
(37:43):
it means for a building to servea community, or be part of a
community, or understand whatemployer dynamics look like in
an area so that when you readreports, and look at numbers,
you can actually connect them. Ifeel especially lucky because in
addition to all the travel I didat Greystone, I took 11 months
(38:05):
and did a cross country roadtrip with my brother while I was
building Carnegie. Part of thatwas just fun. Part of that was
really pedal to the metal andrubber to the road of being in
all these parts of the countrythat we get to work with and
work in. Not to mention sittingdown and shaking hands with
hundreds and hundreds of lenderscoast to coast, but really
(38:27):
feeling and exploring thesecommunities and living in an air
b&b for weeks at a time in thesecommunities, and cities and just
getting a visceral sense of thedynamic. And to me, I think
those intangibles do speak tothe way we do business now, in
(38:48):
ways that are probablyineffable. I can't always put my
finger on, but feel like animportant part of the experience
and knowing the landscapes andthe people. That being said,
certainly the last couple ofyears with a pandemic, but even
before that, I'd say maybe thetwo years leading up to it, I
really haven't been traveling asmuch for work and doing as many
(39:10):
site visits. I don't think thework suffers for it. I do think
to me, and this is just myexperience and dependent
understanding of it, having beenon the road so much so early in
my career, and then foundingeven this company gave me at
(39:31):
least enough of a sense ofthings that when I now look at
an appraisal, or play on GoogleMaps to see where a property or
project is, I can fit that intothis map have lived and traveled
experiences that I've had inthese cities and states and
markets and facilities. Ipersonally no longer feel that
(39:53):
it's quite as important for meto walk every nursing home or
look at every construction sitein a way that 10 or 11 years
ago, absolutely was critical.
Mordecai Rosenberg (40:03):
Yeah, that makes a lot of sense. So when
you left Greystone you startedCarnegie capital, which now how
many years ago? Eight years ago?
JD Stettin (40:16):
Yeah, I think I left Greystone, a little over seven
and Carnegie shortly after. Soit's about seven years. Yeah.
Mordecai Rosenberg (40:24):
So Greystones was a direct lender,
doing FHA agency bridge loans.
And you went out and startedCarnegie, which was going to be
a broker, right? To arrange anadvisor but where you would be
not a direct lender. You had aname behind you, which gives
(40:46):
credibility to a phone call,right? And you went out and you
now were starting something outof out of thin air. And you've
built the business at a reallyimpressive rate, So
congratulations on on that. ButI guess there are certain things
that you think drove thedecision at the time. But
looking back, you can also thinkabout it differently. So what
(41:08):
do you think as far as the ideaof being a direct lender versus
unaffiliated? How did thatcompare? And what benefits do
you see to either?
JD Stettin (41:27):
It's a fun question, too, And hearing something you
said before about for you, theexcitement was in the initial
meeting with people and gettingto know them and understand them
and get a sense of what theirproblems, pain points were. And
then the actual execution wasmaybe less interesting. That
resonated for me hearing you saythat. Not that HUD loans aren't
(41:49):
easy, or wrote. It takes a lotof smarts and talent to get them
done. But for me it was also asense of a little bit of yeah,
maybe boredom or lack ofinterest in that part of the
process once we get them in toHUD. Granted, we all had a
(42:10):
somewhat hands on sales,approach and guided and managed
and help solve problems all theway through. But for me, there
was this sense of, kind of likethe chase. It was exciting to
get these deals, and then youfunnel them into underwriting
and just hope that they close.
There's something exciting forme about brokerage in so far as
we're not limited to anyproduct, to any lender, to any
(42:35):
back end. And the internalguiding principle for David and
for me is, if this is a dealthat makes sense to us, that
based on the merits of themarket, the underwriting the
sponsorship, we feel like thisshould be doable, we have the
freedom to go out and find theright person, sometimes it's
(42:59):
only there's only one to getthat done. So there's a lot more
creative control in that, a lotmore variability. We work with a
lot of different lenders andbanks and CUSOs and CDFIs,
across the country. Sometimesthat's part of the challenge,
(43:23):
because it isn't a boxed productthat rinse and repeat it. To a
large extent a lot of theseloans stand on their own because
of the lender in the process.
But there's something excitingintellectually about that, and
keeps the deal alive for me in away that I didn't feel quite as
(43:44):
much focusing more on FHA. Ithink there was also something
for me about going out there atGreystone and developing all
these relationships and going toconferences and doing countless
lunches and dinners and roadshows, and then having a limited
(44:04):
array of products to offer. Andthen you fit bridge or agency or
FHA, or we can't help you. AtCarnagie, if we like a borrower
and a project, again, they'rethe sky's the limit, in terms
of how we can get it financed,and what resources we can pull,
and who we can work with. I justthink I really like that model
(44:29):
where we get to be. I think alsoI like being the agent for our
clients. We represent them, wedon't represent anyone else. And
we are unlimited in ourpotential to help them without
trying to shoehorn them into anyparticular product or lender.
It's really whatever's best forthe client and the deal. And
(44:52):
that felt really exciting andsatisfying. Also a little bit
more, I wouldn't say instantratification because nothing in
our in our line of work isinstant, but in a way that I
think in the FHA world, you cannurture a relationship for years
before someone has a need, or anappropriate deal for FHA.
(45:13):
Whereas with what we do now, anyCRE need, although we mostly
focus on seniors, housing andhealth care, any CRE need can be
filled and met by us. It'sexciting to be able to work with
a client and seniors and thenthey tell us, actually, we have
a bit of a storage portfolio,can you do that? And, sure, we
(45:34):
know how to underwrite that, thelenders are often the same. And
it feels, for me, reallygratifying to be able to be so
closely aligned with a clientand get to help them with the
full range of whatever theybring to the table.
Mordecai Rosenberg (45:49):
You know, when you are a direct lender,
and you go to a conference, yougo to the NIC or the NMHC, or
any conference, you're there andyou are competing with every
other lender. I think that oneway that you were able to enter
(46:09):
into the market was by makingyour competition into clients.
And you also knew that there wasthis void that you evidenced.
That if someone wanted FHA loanthey oftentimes would need a
bridge because it took so long,and a lot of lenders were not
providing bridge. So being ableto make all these other lenders
(46:34):
into your clients and referralsources, I think that also
opened up a whole new frontier.
JD Stettin (46:46):
Yeah, thank you for saying that. I think so too. And
I think there's a way in whichmy experience, EqualLogic
selling through distribution,sort of colored my thinking
about this too, in a way. I cango out there, try directly to
talk to the clients, or thereare people like originators at
(47:08):
Greystone or Walker, Prue whoare funded by these big
institutions to go out and talkto clients, they're already
doing that. That's an existingchannel. Let's piggyback on that
channel, the tracks alreadyexist, let's ride it and add
value where we can. And I thinkthe other thing too was we just
(47:30):
built Carnegie to be the toolkitthat I wish I had, as an FHA
originator, so that we can bethere to fill in the gaps. We're
never competing with anyone'sbridge program. We're there to
fill in the gaps for bridgeprograms, things they can't do.
So many agency lending bridgeprograms don't do construction,
(47:53):
or have size limits, both on thelower end or the higher end, or
cash flow needs. Where theagency and FHA lenders have a
product or program that fitsfantastic, and where they don't,
land loan construction, cashout, non cash flowing, whatever
it is, we wanted to fill in thatgap. And, again, be the the help
(48:16):
we wish we had when we weredoing this. And it really
happened organically. Therewasn't some great master plan.
There was just getting a littlefrustrated, not being able to
provide much beyond FHA, seeingthe opportunity with brokerage,
being creatively excited aboutit, and then thinking, this is
(48:37):
great, we can just build thetools that we wanted when we
were doing this. It's beenreally natural, really organic.
We don't really do any outboundmarketing or advertising or
sales. It's really throughexisting channels through people
(48:58):
we know at these trustedindustry wide institutions who
send us deals and clients whenthey don't fit their their
buckets. We've just ridden thatwave for seven years and repeats
and referrals. Again, it feelslike in the spirit of the way
that you guys trained us to selltoo where there's there's not a
(49:19):
lot of sales happening. There'sjust question asking, curiosity,
and hopefully problem solving,or the recognition or admission
that yeah, this is a problem wecan't solve. And we probably
turned down 50 to 60% dependingon the year or the month of the
deals you received because wedon't see a way that we can
(49:42):
solve or add value or doanything different than what
someone's already doing. Andthat's really refreshing too.
People appreciate that. I'vehad so many clients or prospects
thanked me when I've told themthat yeah, the deal you're
getting from your local bank isactually the best thing we're
seeing on the market, so why paya broker when you're getting
(50:03):
that from your bank direct.
Sometimes that's the case andthat's wonderful. I think a
metaphor I really like that weuse for what we do at Carnegie
is, some guy comes out of a bar,and he sees his friend looking
for his his keys on the ground,and he notices that his friend
(50:23):
is looking for his keys underthe one working lamppost in the
parking lot. He comes over andhe says, Hey, John, did you lose
your keys said, yeah, he goes,Oh, did you lose them over here?
Is that why you're looking? Andthe guy says, no, no, don't use
them over here. And this friendsays, well, then if you didn't
lose your keys here, why are youlooking here under this
lamppost? And the guy says,Well, that's the only place
(50:43):
where there's light. And I thinkthat feels true to me of our
industry, in that so many peoplego back to the same lenders and
funding sources because that'sjust what they know. That's
where the light is. Those arethe guys who come to the
conferences and do splashy ads.
(51:04):
They're the people you readabout in all the publications
every week closing loans, andthey do good work. That's why
they're big and in thepublications. But there is an
entire parking lot worth ofplaces. That's what we wanted to
do when we built Carnegie, isnot necessarily focusing the
usual suspects, the obviousplace where there's already so
(51:25):
much light being shed. Whatabout the 5500 FDIC insured
banks, the 1000s, of creditunions, the CUSOs, the CDFI's
that I didn't even know existeduntil seven years ago, as you
know, entities leveling fundingsources. So it's been really fun
to kind of expand that horizonfor ourselves and for our
(51:50):
clients in terms of what's outthere.
Mordecai Rosenberg (51:53):
Yeah.
Another analogy that comes tomind let's say, you have a heart
problem, right? So you go to onepractice, and they say, yeah, we
just do this one procedure onthe left ventricle, this is like
our specialty, we can do that.
(52:15):
Like, well, do you want to go tothat doctor? Or, do you want to
go to one who can give yousomething like, well, actually,
you know, there's this otherprocedure, where, you know, you
can just, it's non invasive, andthere's something else where you
can experiment with diet. Butit's not a small thing. It's not
like getting a lease for yourcar. Which is still a big thing.
(52:38):
This could be a $50 milliondollar property. And the debt is
the, in some ways is large.
JD Stettin (52:51):
Yeah. And I think it's interesting, hearing you
put it in terms of medicine.
It's something I've actuallybeen talking a lot with my
friends lately about the needfor guides, in the medical
field. Not doctors, notspecialists, not surgeons, but
people who guide, navigator.
People who can help make youaware of the array of
(53:13):
interventions, and options, andtake a more holistic approach.
Because, absolutely right, yougo to the surgeon they want to
do a cut, you go to the internsthey want to give you meds. And
that's great, and representstheir training in their habit of
mind. But how wonderful to havea guide or a coach who maybe
(53:34):
isn't as deep in any one field,but can see the whole field.
Kind of thinking like a footballmetaphor, why the coaches are on
the headset of the quarterback,they see things from truly a
different bird's eye perspectivethat even the best quarterback
can't see, certainly when he'sin the game. So being able to
(53:57):
kind of, and I don't claim tohave access to every single
ending source in the country,but really working towards that
goal. We like to think we bringan aspect of that vision to our
clients when they make these bigdecisions about how to buy or
build or recapitalize theirproperty, with that global
(54:23):
sense. And without being aspecialist in one small product
type. So yeah, that also feelsuseful and feels intellectually
curious and satisfying too. Andjust how many banks can we talk
to, and work with, and learnfrom?
Mordecai Rosenberg (54:41):
Yeah.
Continuing with the medicalmetaphor, like in medicine,
there's incentive forspecialization, right? The more
highly specialized you are,oftentimes the better paid
you'll be, the more the moreprestige there is. But I feel
like in any industry where thereis such a premium put on high
specialization, the generalisthas unique value. Just like in
(55:05):
just like in medicine where youreally want, with all this
specialization, a guide who canjust give you the big picture
advice. Our industry is thesame. There's people who focus
on their lists. You you look atcommercial mortgage alert, and
(55:28):
they come up with these withthese lists, right? And there's
the top mezzanine lenders,right? And there's 200 mezzanine
lenders, right? And theirs topbridge lenders, and there's 500
Bridge lenders, right? Andthere's FHA lenders, right? So
it's become very, veryspecialized. So I think that's
where you guys add such value.
(55:51):
For anyone listening who is adirect lender and has a need for
your bridge, I know youspecialize in healthcare and
seniors housing but also domultifamily?
JD Stettin (56:04):
Yeah, we do a good amount of multifamily. We use
some storage, office retail,hospitality. I think the only
asset class we probably haven'ttouched as manufacturing
facilities. We're happy to be asupport in terms of finding
homes for your deals or yourclients where you can't. Also
(56:28):
alternatively, on the other sideof the same coin is bringing you
guys lenders deals when theycome in to us from clients where
where we think you guys are thebest fit for something.
Mordecai Rosenberg (56:42):
Yeah, that's awesome. So, JD, if people do
want to find you afterwardswhat's the best way to get in
touch with you?
JD Stettin (56:52):
Probably the best way is via email. And simplest
email for me isJD@carnegiecp.com. That's J like
John D, like Daniel at CarnegieC, like capital P like
partner.com. And for what it'sworth, just because bringing
we're it up, the Carnegie nameis a bit of an homage to where
(57:15):
my partner and I come from,which is having met working back
to back at Carnegie Hall towerwith you Mordy and your team at
Greystone. So both in some ways,an inspiring entrepreneur in his
own right. And, of course,there's a complicated legacy
there. Not all of it, is great,but aspects of the way he built
(57:37):
his firm were impressive to us.
And also it felt true and rightfor how we met and how we really
built our partnership, which wasin Carnegie Hall tower with you
guys.
Mordecai Rosenberg (57:50):
That's awesome. Those were good times.
I'll close with just one finalpoint. And I'll let you comment
as well. We didn't talk aboutDavid so much on this in this
discussion. But I do think thatone of these really well kept
secrets in the sales industry,is the importance of an
(58:13):
execution, of having an amazingexecution partner. I think that
what you would find, the salesguy is the front end. They're
oftentimes in the spotlight.
They're the ones who are in thepress releases, right. But I
have a feeling that if you lookat the top salespeople in the
industry, you'll find that theyhave excellent execution
(58:35):
partners who are the ones whoare actually getting the stuff
done, doing the work of thedeal. Any any comments on that?
JD Stettin (58:47):
Couldn't agree more.
Behind every great originator isa great analyst or underwriter.
And that's something on everylevel, every job I've had, every
company I've worked for. I was abartender at a restaurant, so
being forward facing with theclients. But ultimately, you're
(59:09):
only as good as the chef and histeam are. That seems like a
very clear example of what'scalled front of house back of
house split. It's the bartendersand the servers who interface
with the clients and get tipsand get rated, but who's in the
kitchenmaking anything. To me,that's always been so clear. And
(59:30):
part of what I actuallystruggled with at EqualLogic,
conversation for another time,in terms of the support and the
infrastructure backing up ourproduct and our sales. It felt
like we were growing too far,and outpacing our ability to
really execute and serve ourclients. My opinion of course. I
think that's one of the things Iam most, whenever we're doing
(59:52):
like gratitude exercises ormeditations, one of the easiest
things for me that comes to mindfirst and foremost is gratitude
for my partner David for histalent, for his tenacity, for
his creativity. And he is, whatdo they say and in the old
Hollywood world, a triplethreat, they can act dance and
(01:00:15):
sing. So David, is that on theunderwriting side. The guy can
underwrite, he's personable, hecan sell, he's creative. His
packages aren't justcomprehensive, but they're
they're visually striking. He'sjust a catch, he's the complete
package. I think he's probablyno small part of how our our
(01:00:43):
team, your team at Greystone wasable to do so much in such a
short period of time. He isabsolutely the reason that
Corning he is able to do what itdoes. We joke sometimes oncalls
and tell clients on the showhorse is the workhorse. Which,
you know, it's an exaggeration,of course, but it points to a
(01:01:06):
truth. Having someone who reallyunderstands deals so deeply. It
is amazing to me the way thatDavid uncovers value in deals
that oftentimes the owners andoperators themselves couldn't
see and didn't see, that theappraisers missed. And he also,
(01:01:28):
as you probably know, has thisway. He is such a gentle and
humble person. Sometimeswatching him build a case with
folks who don't have a tenth ofthe underwriting chops or Excel
fluency as him. His manner is soeasy, and gentle, and kind. I
(01:01:57):
think that resonates withunderwriters and appraisers
around the country. So David isdefinitely the secret sauce and
the black box of Carnegie behindthe scenes. I have a lot of
gratitude for him. Working withsomeone that closely for so many
(01:02:18):
years is also an amazing thing.
From our time at Greystone toCarnegie, it's been,I don't
know, 10 and a half, maybe 11years. There's this way, and I'm
sure, some time in the futurecognitive science will show us
how this is true, but it feelslike we share brain cells at
(01:02:44):
this point. Almost we each havekind of a dual personality,
business wise, that's part uspart, part the other partner.
And that's also been an amazingthing to work with. I think in
terms of the joy I take in whatI do, so much of that joy is
brainstorming about deal anddeal strategy with David. And we
(01:03:09):
have a very, very openrelationship. And there's no
pride of authorship of ideas.
It's really about finding thequote unquote truth for any
given deal or circumstance. Andwe shoot down our own ideas,
shoot down each other's ideas,and it's so not personal. It's
so about the deal and the ideaand what works and it's been an
(01:03:31):
incredibly rich and generativepartnership for me, and I think
I hope for David too.
Mordecai Rosenberg (01:03:43):
Awesome.
Yes. So that's definitely somegreat closing advice for any
salesperson. if you want to be agreat show horse, find your
workhorse. Hitch your wagon andhold on for dear life.
JD Stettin (01:04:00):
Hold on tight. Yeah, hold on tight. They make
everything sane. I will say as afinal thought on David, a lot of
people don't know, but he isactually a great artist and is
painting. And as a sort of thankyou gift for this large
transaction we closed this lastyear. It was a nine figure deal
(01:04:22):
for a big client with one of thebanks we really like, and
actually the client wanted toget something special for the
bank. Then it turned out thisbanker collects Air Jordans.
That's a thing people do. Itturns out that David collects
and paints hand paints AirJordans. David collaborated with
(01:04:44):
this client to do this custompair the bankers name is Jared,
of Air Jared's. Put in, I haveto think, over 100 hours of work
with a tiny brush and actualreal gold leaf paint to do it in
the clients colors, and with thebankers name. It's just this
(01:05:06):
beautiful, creative side that Ithink often goes unnoticed in
underwriters and analysts.
Certainly David is among manyother talents. A great artist. I
think it's nice for peopletovknow that and see it.
There's a tendency to think of,underwriters in Excel. There's a
sort of, maybe robotic,mathematical scientific side,
(01:05:30):
but with David, there's alsojust tremendous creativity, and
art. That's one of the joys ofof working with him and knowing
him.
Mordecai Rosenberg (01:05:41):
I love it. I love it. Well, JD it's always a
pleasure, my friend. So good tochat. And we'll be in touch,
we'll talk soon.
JD Stettin (01:05:50):
That sounds great.
Thanks for having me on. Thanksfor making origination
interesting.
Mordecai Rosenberg (01:05:56):
Okay. Talk to you later, man.
JD Stettin (01:05:58):
Bye. Take care Mordy. Thanks, bye.
Hey, this is Mordecai. And welcome back to
the Origination podcast where weinterview the top originators
and salespeople in themultifamily and commercial real
estate industries to try tounderstand what separates the
top performers from the rest ofthe pack. On this episode, I'll
be speaking with JD Stettin,founder of Carnegie Capital. JD
(00:39):
actually worked for me atGreystone for a number of years.
Before he went off on his own tostart Carnegie capital, he
identified a void in theindustry, and saw that sometimes
there are limitations in beingstuck with just a few products
(00:59):
to provide. Going off on his ownand starting to broker debt, he
was able to offer the universeof solutions to his clients. JD
is one of the most creativepeople I know in the industry.
He really he can see a problemand look at it from so many
different angles. He marches tothe beat of his own drum. In
(01:23):
fact, for the first year ofCarnegie capital, JD was driving
around the country trying outdifferent cities until he
finally settled in Austin, wherehe now resides. I really enjoyed
this conversation with JD. I'mincredibly proud of the business
that he's built, having closednow over $10 billion of
(01:44):
transactions since its founding.
Without further ado, let's talkto JD. JD Stettin, welcome to
the origination podcast. It's adelight to have you here.
JD Stettin (01:57):
Thanks, Mordy. Good to be here. Good to see you.
Mordecai Rosenberg (02:02):
Yeah. We've had a long history together.
Yeah, we did a lot of worktogether at Greystone, a lot of
adventures in Chicago back inthe day. Yeah. So I'm going to
(02:23):
start with the question that Ialways pose to guests, which is,
you have to turn back the clockand go back to the earliest
sales experience that you canrecall. Maybe that's when you
were a kid or high schoolcollege. What comes to mind?
JD Stettin (02:42):
It's a fun question.
It feels like the business orsales equivalent almost, of of
Krista Tippett's on Being whereshe always asks about the
participants early religious orspiritual experiences. So I
think that's a lot of fun. I hada lot of different jobs, growing
up. Tutoring, worked for alandscaper, babysitting, all
(03:09):
sorts of things. But I thinksales wise, my first official
formal sales gig was probably at13 or 14 and selling Glovem and
Estrogem on Main Street leadingup to the Sukkot holiday. So to
help unpack that for those whoaren't familiar one of the
(03:32):
Jewish holidays in the Fallrequires that every adult male
purchase a sort of Biblicallyprescribed group of leaves and
fruit. Not unlike a Palm Sundayin fact, one of the leaves is a
(03:55):
palm frond. And in the city Igrew up in, the neighborhood was
heavily Orthodox, heavilyJewish, and for about a week a
year on Main Street there werejust all these tables set up
with a high school age orelementary school boys selling
selling these things and thatwas definitely where I got my my
(04:15):
sales start.
Mordecai Rosenberg (04:19):
Wow, so how did that go? What did that look
like? So you had your wares thatyou're selling right? And you
put them on the table and peoplewould would approach you?
JD Stettin (04:32):
Right and you know, this is a commodity. There were
20 other stands with verysimilar looking wares, with
similar looking young men makingvery similar pitches, and you
know, price points are all moreor less the same. I think for me
the groove I fell into and theway I found success and joy in
(04:55):
it was I really loved the thewares. I loved what we were
selling. I was deeply religiousat the time and the idea that
these fruits and plants weresomehow of spiritual cosmic
significance was really cool andexciting. And there are all
these laws and customs thatdescribe certain shapes and
(05:21):
attributes and characteristicsof this plant matter that makes
them more holy for this purpose.
It was really fun to do a deepdive into that and read up and
learn and study all these booksand get to look at the wares in
a completely different way. Tolook at this citron basically,
more or less lemon, but not tosee it as just like, oh, it's a
(05:44):
lemon, to see the shap, to seethe number of grooves, to see
how clean it was or it wasn'twith the palm fronds to track
the spine along the back all theway up. And make sure that the
the middle double leaf of thepalm fronds was perfectly sealed
tip to tip. It was a level ofcare and attention to detail
(06:04):
that I really enjoyed andhelping people, because even
within the rules and thecustoms, there's some ambiguity,
there's some personalpreference, there's some
individual custom. And I thinkit was that marriage of
knowledge and an understandingof the wares and the laws behind
them. And also meeting peoplewhere they were and making them
(06:28):
feel comfortable askingquestions and honoring their
preferences. And you know, whenyou'd be trying to nudge them in
a direction that felt moretruthful, or along the lines, of
what they wanted. I really lovedthat. I also loved the autonomy
as a 13 year old boy, to berunning your own mini business
with other 13 year olds was wasgreat. And we worked, 12 to 14
(06:51):
hour days with a quick pizzabreak in the middle. So there's
something about the intensity. Iwas once in a play in college,
it's sort of like that, thatwork during tech week, the week
leading up to the show whereit's just all hands on deck all
(07:12):
the time following rehearsals.
There's something that's great.
It was really fun, that energyand and autonomy. It was great.
I love people feeling satisfied,like they got their holy work
and their good deed done. It wasit was really rewarding. At the
end of the week when our bosswould call us in to pay us,
(07:35):
there weren't set salaries oranything, this is all a cash
business. None of us have ourworking papers, 13 year old
boys. And he'd call you in andjust say so, what do you think
you should get? Wow, these are13 year old. I don't actually
(07:56):
remember what it would haveworked out to per hour, probably
wasn't all that much. But stillwalking away with, I don't know,
$300 or $400 in my hand in 20s,I felt like, like Andrew
Carnegie or something. It'sreally exciting and rewarding
(08:17):
and satisfying.
Mordecai Rosenberg (08:21):
Yeah, that's a lot of money for a 13 year
old.
JD Stettin (08:26):
Big time.
Mordecai Rosenberg (08:29):
How did that feel, the question of how much
do you think you should get? Howdid you receive that?
JD Stettin (08:36):
It's interesting.
Our boss would pull this similartactic with the high end
Citron's. As you may know, someof them go well up into the end.
For people who aren't familiar.
I don't know what lemons costnow, maybe a couple of dollars
or the pound. But these Citron'swith holy purpose can cost
(08:57):
anywhere from $35 to like $200.
So the nicer ones that had allthe proper holy beauty marks, if
you will, were kept in the backroom. The high end customers
were sent to the owner and theboss to deal with, and he would
use a similar sales tactic withsomeone. If they found that
Citron that they really liked,he'd say, well, what do you
(09:18):
think it's worth, what would youpay for it? Which was really
strange initially, hearing thatas a kid. Not really
understanding. Prices werethings, they were facts of the
physical world the same way anyother physical fact was. This is
(09:39):
it's height, this is its weight,this is its price. Realizing at
that age, that oh, there'sactually a lot of malleability
and subjectivity to all of this.
So when it came time to gettingpaid having been exposed to
that, on the other end on thesales side, it wasn't a total
(09:59):
shock. It was a little strange,but it also felt like a good
time. I remember being proud andfeeling like I'd done a great
job and helped a lot of people,and been really successful, and
sold a lot of product. So I feltgood. I had tallied up my hours
and had a rough sense of howmuch I'd sold. So, for me, it
(10:22):
was actually a really goodquestion. Like, well, I did
this, I did that ,you're askingme what I think that's worth. I
throw out a number, and I don'trecall what my first exact
number per hour was, but it feltlike a good invitation to kind
of take inventory and takeresponsibility as a young
(10:43):
salesman for for myself and myexperience. That for me that
that really worked well.
Mordecai Rosenberg (10:50):
Yeah. It's interesting. You're certainly
one of the most circumspectpeople that I know. You're
always thinking about whatyou're doing and rethinking it.
You know, and if you think aboutit, its an interesting question
to ask yourself at the end of,of every day. Is, well, how much
(11:15):
do you think you should get?
What was your contributiontoday? Which can mean lots of
different things. Right? whatkind of value did you add to the
world? What kind of value didyou add to yourself today? It's
an interesting question.
JD Stettin (11:33):
Yeah. And I think hearing you frame it in that
way, reminds me that around thesame time, my peak in orthodoxy
religiosity, I did actually keepa daily written log of my
spiritual merits and demerits,we'll call them. Yeah, this
(11:54):
sense of, I think, maybe wouldhave been called in my community
at the time, a heshbon hanefesh,an accounting of one soul, was
for me a literal and dailypractice. So the idea of then,
accounting for my sales dollarsjust felt like yeah, of course.
I mean, if I'm counting sins,then surely I can count
(12:16):
greenbacks.
Mordecai Rosenberg (12:17):
Yeah, that's really interesting. So let's
fast forward a bit, not quite toGreystone, but to before it. So
that job, I believe, that youhad immediately prior to getting
into the industry was cleaningmaterials. Is that correct? Am I
(12:41):
recalling that correctly?
JD Stettin (12:43):
Yeah, it's actually funny. The friends who had
introduced me to Greystone,Nathan Shas. He had been in
waste management, and I had beencleaining. And it was sort of
accidents of history, the funnyplaces to be in before this. But
(13:04):
yeah, EqualLogic Solutions wasthe company, and we did sell
non-toxic and eco-friendly, safecleaning solutions into the
institutional market. So ourclients were, at the time,
Wholefoods Chipotle, someschools, some hospitals, food
production, that sort of thing.
Mordecai Rosenberg (13:25):
Yeah. How did sales go with that? Can you
tell me a sales story there?
What did sales look like? Yourfirst successful sales story
there, or another good one. I'mcurious how you approached that
big corporation.
JD Stettin (13:45):
Yeah, that was that was sort of an interesting role,
in that, our clients really ranthe gamut from tiny Mom and Pop
restaurants in in Brooklyn. Wewere headquartered in the Navy
Yard. The CEO would do thedeliveries out of his car once a
(14:07):
week to some of these nationalchains. And as the northeastern
Sales Director, Regional SalesDirector, whatever it was, they
were all ultimately under mypurview. So having to switch
gears between these small oneoffs and then making a
(14:28):
management level presentation atWhole Foods, corporate offices,
and what do they call it,Trillion Dollar Mile in
Englewood? What's that placewith all those corporate
headquarters?
Mordecai Rosenberg (14:39):
Yeah.
Sullivan or 9W?
JD Stettin (14:43):
Yeah. So it was interesting. So one that comes
to mind, and I don't rememberwhich property management
company this was, might havebeen Durst, but maybe not. But
whoever it is that cleans theEmpire State Building. We had a
(15:04):
interview with them, obviously,that's, it's a big job and it is
prestigious in its way. And Iliterally in order to, to try
and make the sale, how to cleana urinal in the basement of the
Empire State Building with thehead of their maintenance
facility, there. So it is avery, very hands on job. I lead
(15:29):
overnight installations withteams of mostly Spanish speaking
workers at Whole Foods, becausewe couldn't disrupt their daily
workflow. So we would show up, Ithink it was at 10 or 11 and we
have to be out by 4am. Also justreally hard working, really
(15:51):
project based, doing whatever weneed for the client. You know,
in a way not unlike my firstjob, it was sort of a mix of
mission driven. In the way thatthe Citron and plant matter felt
religious and spiritual, andthere was something behind it,
so too with this stuff. Iremember, dishwasher is at
(16:13):
Chipotle, showing me two, threeweeks later that they're rashes
were gone from switching fromthese really harsh toxic soaps
to these plant based ones.
Really tears of gratitude for usin our work. That was really
compelling on top of, of course,commission based compensation,
and just feeling good at what wewere doing. But yeah, it was a
(16:36):
small scrappy startup and as asales guy, you did whatever you
needed to do. To keep accountsto win accounts, I was on call
practically 24/7. I remember onweekends driving up to Blue Hill
stone barns, that beautiful farmto table, farm and restaurant in
(16:56):
Westchester somewhere upstate,because the soap dispenser at
their dishwasher wasn't working.
And I would be there on techsupport call with someone with
my hand in the machine, tryingto rewire something with no
training in plumbing orelectrical. But we wanted to see
(17:21):
this stuff happen and take offand succeed. And it was really,
really exciting when it.
Mordecai Rosenberg (17:30):
So in how did a first call look for that?
So you call up Chipotle or WholeFoods or Blue? How did you
approach that?
JD Stettin (17:42):
So we mostly sold through distribution. The way
that works in that industry isthere are these big distribution
houses that supply all the papergoods, Jan San for restaurants,
hospitals, hotels. Everythingfrom toilet paper, garbage bags,
hand soap. Carry out trays, togo cups, all that stuff goes
(18:07):
through these big distributors.
We had aligned ourselves with acouple of major distribution
houses, who, when they madetheir weekly daily, whatever
sales rounds, their clientswould try and pitch them on this
green stuff that ultimatelysaved money and is better for
their employee health andenvironment. So we kind of got
brought in, almost warmreferrals mostly. The
(18:28):
distributor sales guy will sayok, can you call, Mickey over at
the DC for Chipotle, they'reinterested in hearing about
this, and they'd set it up. Sothere wasn't a ton of cold
calling. But there was a littlebit that I did of my own
(18:48):
initiative. I remember when Ifirst started, I literally just
went door to door to therestaurants and bars in
Williamsburg where I was livingat that point with my little
sample kit. We just asked tospeak to a manager and to make
the pitch that hey, not sure ifyou're aware, but most of the
(19:09):
soaps and cleaners you use arepretty toxic, and that can be
problematic for you and yourstaff, and at the very least as
it goes downstream, tat's notgreat. We have alternatives that
are made right here in the NavyYard in Brooklyn that will
ultimately save you money.
They're just a heck of a lotbetter for you and your your
employees and your patrons. Andthat's something you can, in
(19:31):
turn, advertise to your customerbase, that you use non-toxic
products in an environment, anda city in New York where that
was certainly seen as a pro. Wethought that would be
attractive. But yeah, that wasreally the pitch and from there
(19:51):
people usually asked for sampleproducts, and we would offer
that, and we would do atraining. As with many things,
it's how you use it and greenproducts often do require a
little more elbow grease or alittle more studied application
than their toxic counterparts.
So it was a good test of mySpanish too, because a lot of
(20:15):
back of house restaurants in NewYork are Spanish speaking folks.
Working with them, and trying toget them to understand the
benefits of the products wealthfor their health, their safety.
And sometimes it's a hard pitch,because again, they're the ones
who have to work a little harderto use a green product, but
maybe it's better for them. Soit was really interesting to
interface with so manywonderful, hardworking people
(20:38):
behind the scenes at New York'shotels, restaurants, bars. The
Batali group was one of our longstanding clients. So getting to
go behind the scenes at allthose restaurants when they
opened the Eataly. If you everbeen down there, we did a big
conversion. And, again, fun,challenging, exciting, drive up
(21:00):
to Boston and Connecticut andthese 20 hour long sales events
sometimes. We had a truck thatwe ran on, it had been converted
to biodiesel, and we literallypicked up the frialator grease
from some of our clients, andran our delivery truck on that.
Of course, it wasn't a veryreliable truck or mechanism. So
(21:22):
driving down to Philly, pullingoff the highway because the
enging us smoking and smellslike french fries. It had it had
its moments, for sure. And itwas just zany. And you kind of
had to roll with whateverhappened.
Mordecai Rosenberg (21:44):
That's quite an experience. I want to talk
about sales, management andsales coaching a little bit. I
know you're someone who has madea science out of out of sales.
(22:06):
Both in terms of books thatyou've read and courses, right.
But then there's also coachingand and training. It is
interesting to me to hear youtalk about your first sales
experience with like, thelouavem and estrogem and how you
really studied what does make agood one or not a good one. So
(22:31):
we'll talk in a little bit aboutthe studying that one can do to
improve their sales capability.
But I want to start with whatgood coaching looks like. I
mean, you've worked for a numberof different people, now you run
your own company. But atGreystone, that was probably the
(22:53):
thrill of manager and coach,right? And you try to invest in
that. But I'm curious, like,just with Greystone or
otherwise, what did you find?
What makes for a good salescoach in our industry, or bad
sales coach?
JD Stettin (23:11):
Hmm, it's a fun question. Thinking back, I think
I gained immeasurably from doingsales calls and visits with you
and with Donnie. I think all thetraining, all the books, all the
(23:35):
written anything, those are allfine and good. But give me like
five sales trips with you and orDonnie, and that was all the the
coaching, training, managementthat I feel like I needed and
enabled me to thrive. There'ssomething about that. I think of
(23:59):
it more like a medievalapprentice guild type model. And
I think for me as a lifephilosophy, just aligning myself
with great people or findinggreat people and then just
hanging out with them for awhile. That's how I ended up
with the degree I have. I'veended up studying evolutionary
bio and linguistics and there isno thought behind it more than
(24:24):
just, one of my professors inevolutionary bio I thought was
wild and brilliant and amazing,and one in linguistics, and I
just took all the classes thateach of them offered. And it's
like, oh, that's a way to get adegree. I feel similarly with my
experience at Greystone and Ivividly recall some of our sales
trips and meetings more so thanthe phone calls, although some
(24:45):
of those too. I think justsitting in on meetings with you
and really the first few tripswe ever took, I probably didn't
do much more than nod and takenotes while you or Donny took
the meetings. Just watching,experiencing maybe, the pattern
(25:08):
of mind and questioning andcadence. The way that you and
your brother would roll a dealor clients or opportunity just
through this mental rubric ofsorts. That was, for me, a
(25:30):
string of aha moments. They'rereally feeling like, Oh, I get
it. I get it. I get it. It'sjust watching you guys ask
questions and watching thepatterns of mind and the
patterns questions. That was it,that was what I needed to be
able to then go off,and do it onmy own, and train the folks who
(25:51):
are under me. And thenultimately go off and start my
own firm. But really, those ridealongs with with you guys, that
was where it all happened forme.
Mordecai Rosenberg (26:02):
Yeah. Those were some good. Yeah, I was
thinking about, I forget if itwas Dallas or Houston, and we
were definitely doing a lot ofdriving in Texas. As far as aha
moments, anything stick as faras, when you talk about patterns
(26:27):
of mind or questions. Anythingjump out?
JD Stettin (26:39):
I'm trying to think maybe it'll come to me as I talk
about, it in terms of specificcare or finance related
questions or ways of approach.
But I think to me, the overallmodality was more one of this
blend. Obviously, slightlydifferent proportions between
you and Donnie, but this blendof just sort of curiosity. It
never felt like we were goingsomewhere to, quote unquote,
(27:04):
pitch someone. In a way that,and no disrespect meant towards
EqualLogic solutions, but thatvery much felt like the way I
was trained there, not that Igot very much training in a five
person company where everyonewas doing everything, but it was
very mission driven. We'regreen. We're going to go in
(27:25):
there and tell them they got touse our product because
everyone's got to use ourproduct. That's one approach.
But it never felt that way withthe with the road bros crew at
Greystone. It really felt likethis is all exploratory and
curious. And it felt like, youguys would approach a meeting
(27:48):
really just as an opportunity tounderstand who it was we were
meeting with and what it wasthey were doing. And somehow out
of that understanding wouldoften enough arise some
opportunity. One thing thatmaybe comes to mind now, and I
guess, this is my first HUDclosing, so it's hard to forget.
(28:11):
This was actually the trip, Idid a day in Dallas with Donnie
and then flew to Houston thatnight, and you came in that
morning and we did Houstontogether. But but the Dallas
meeting with Donnie we had lunchwith this one prospect . He's a
guy who I had, I guess my myfervor as a new sales guy, cold
(28:35):
called at his home on ChristmasEve and he had been a sales guy
himself. So he was actuallyreally funny about it and we
kind of joked and played it off.
And we ended up sitting therefor lunch, and the opportunity
that had brought us togetherturned out not to be an
(28:56):
opportunity. But he mentionedsomething offhandedly about
another property and Donnie justasked a few follow up questions,
and pulled a pen on a napkin andquick kind of NOI Cap rate
evaluation. He was like, holdon, if that's really the NOI
you're throwing off, we couldprobably pull out like $6
million or something of cash outand have a $24 million deal. The
(29:21):
client put down his knife andfork and said, you do that you
have a deal. Really just thatapproach going into it knowing
that the deal in question wasprobably not a fit, and it was
unclear, and this guy had juststarted his own entity. But
really approaching things withcuriosity, I think, and
(29:41):
humility. And really driven tounderstand, it took all the
pressure off of the salesmeeting. It no longer felt like
we're going in there to sell.
None this ABC, always beclosing, Glengarry Glen roster.
Maybe ABC always be curious, Iguess, I don't know. That's
(30:03):
another way of thinking aboutit. But that's something that
you and Donnie really, I think,brought to every meeting. That
curiosity, and turning a dealover, and a situation over, and
asking questions, and reallyfinding what made people or
their projects or theirproperties, tick. And doing so
in a CRE setting. So learningthe questions to ask about
(30:29):
operations dutch service, andplans, and download goals, and
questions. And, I don't know,have you tried this? It's just
such a beautiful, for me, verynatural, very natural feeling
approach.
Mordecai Rosenberg (30:50):
Yeah, it's interesting. For me, that was
the part that I really enjoyedabout sales was the connecting
with people, and the curiosity,and getting to know them, Then
looking for opportunities to addvalue. Like how could I help
(31:10):
them think about something alittle differently? I was in
origination for for 10-12 years.
The reason why I left it wasbecause the actual deal itself
was the least interesting partabout it. Right? So as soon as
it got to, alright, well, we canrefinance, we have this, this
(31:32):
loan product. That to me wasless. It didn't feel like I was
adding the same kind of value,and it was more structured and
wrote. So it almost became alittle boring for me. But the
part about actually getting toknow people and understanding
(31:57):
them, and then to give them,advice that part was great. So
that's actually why I think Ienjoyed doing the podcast so
much because the whole purposeis just about trying to
understand people and get wisdomfrom them and share wisdom. But
you're right, because those wereenjoyable, those meetings.
JD Stettin (32:20):
Yeah, they were needed. I mean, we definitely
met with a cast of characters.
Remember that fellow in Houstonwho greeted us in his toe socks
and had the under the deskrecumbent bike? And was making
the fastest pipe in the West forinternet access.
Mordecai Rosenberg (32:39):
Oh my gosh.
JD Stettin (32:43):
Right?
Mordecai Rosenberg (32:46):
Some of those properties we drive up to
you hope that this is the wrongaddress. This can't be where
we're actually going. I rememberDonnie and I once went to a
property in the south side ofChicago. And we didn't know
neighborhoods. But we weremeeting the client at this
(33:11):
building and there were metaldetectors out front. It did not
feel like a safe place. I wasshocked that our car was there
when we got back. But I rememberwe went up and we were looking
at this unit. And I asked, so isthere any crime? What do you
(33:32):
mean crimes? Well, anyshootings, or anyone killed?
He's like, well, no shootings.
It's like, well, what do youmean? He says, well, someone was
thrown off a balcony.
JD Stettin (33:48):
Oh wow.
Mordecai Rosenberg (33:51):
Yeah. I think we did not end up doing
that deal, though. But we tried.
We tried.
JD Stettin (34:00):
I think for me, some of those visits were also really
eye opening. And I mean, I,arguably, I would say come from
pretty humble originsfinancially, and grew up next to
some low income housing projectsin Queens. And yet, even so,
driving out and seeing someurban poverty and seeing real
(34:25):
class-c housing in Dallas andHouston in Memphis. I don't know
that was also moving sometimesin ways. And obviously we were
there to make a connection withthe owner and again, explore the
possibility of financing andrefinancing. But just seeing the
(34:47):
way experiencing, even for a fewmoments, the way that people who
are relegated to that sort ofaffordable housing, after live
workforce housing, whatever wewant to call it. I don't know
what to say other than it reallywas eye opening and a little
perspective changing, even evenfor me. And made me I guess,
(35:12):
appreciative all the more of myluck and my privilege, and then
my experiences. Doing some ofthose site site visits. For
sure.
Mordecai Rosenberg (35:25):
Yeah. Well talk about site visits a little
bit. Because I think that'ssomething that sales people
don't necessarily always feel ispart of the process. Right? You
meet someone in their office,and you have a good
conversation, but as far asfinancing a property, it's
(35:48):
almost like, well, just tell methe financials. I don't need to
see it. But I do think thatthere's value in actually going
to see a property, ideally, withthe client. But even if even not
with the client, if you can't.
What do you think about that? Interms of site visits, do you
think it's important or notimportant?
JD Stettin (36:08):
I think it's very important, as you start in the
industry, to actually walkthrough a certain critical mass
of buildings of different assettypes, qualities, locations,
etc, to really get thatembodied, kinesthetic sense of
(36:34):
place. What does a 60s nursinghome look like versus a freshly
built high end assisted livingwhere people pay $9,500 a month
to live. I think that gives youcertain embodied wisdom or
(36:54):
knowledge that you can'tpossibly get from looking at
numbers and building and readingpackages or appraisals. I always
think about that famous NewYorker cartoon with a New
Yorkers sense of America. Andit's basically like Times
Square, Broadway, 10th Avenue,Hudson. Then there's a sliver of
(37:18):
Jersey, flyover Texas and LA. Ithink there is a provincialism
to being from New York where wejust, don't I don't know, it's
its center of gravity. So Ithink especially for New
Yorkers, New York based financeguys, getting out hitting the
road doing site visits, isessential to understanding what
(37:43):
it means for a building to servea community, or be part of a
community, or understand whatemployer dynamics look like in
an area so that when you readreports, and look at numbers,
you can actually connect them. Ifeel especially lucky because in
addition to all the travel I didat Greystone, I took 11 months
(38:05):
and did a cross country roadtrip with my brother while I was
building Carnegie. Part of thatwas just fun. Part of that was
really pedal to the metal andrubber to the road of being in
all these parts of the countrythat we get to work with and
work in. Not to mention sittingdown and shaking hands with
hundreds and hundreds of lenderscoast to coast, but really
(38:27):
feeling and exploring thesecommunities and living in an air
b&b for weeks at a time in thesecommunities, and cities and just
getting a visceral sense of thedynamic. And to me, I think
those intangibles do speak tothe way we do business now, in
(38:48):
ways that are probablyineffable. I can't always put my
finger on, but feel like animportant part of the experience
and knowing the landscapes andthe people. That being said,
certainly the last couple ofyears with a pandemic, but even
before that, I'd say maybe thetwo years leading up to it, I
really haven't been traveling asmuch for work and doing as many
(39:10):
site visits. I don't think thework suffers for it. I do think
to me, and this is just myexperience and dependent
understanding of it, having beenon the road so much so early in
my career, and then foundingeven this company gave me at
(39:31):
least enough of a sense ofthings that when I now look at
an appraisal, or play on GoogleMaps to see where a property or
project is, I can fit that intothis map have lived and traveled
experiences that I've had inthese cities and states and
markets and facilities. Ipersonally no longer feel that
(39:53):
it's quite as important for meto walk every nursing home or
look at every construction sitein a way that 10 or 11 years
ago, absolutely was critical.
Mordecai Rosenberg (40:03):
Yeah, that makes a lot of sense. So when
you left Greystone you startedCarnegie capital, which now how
many years ago? Eight years ago?
JD Stettin (40:16):
Yeah, I think I left Greystone, a little over seven
and Carnegie shortly after. Soit's about seven years. Yeah.
Mordecai Rosenberg (40:24):
So Greystones was a direct lender,
doing FHA agency bridge loans.
And you went out and startedCarnegie, which was going to be
a broker, right? To arrange anadvisor but where you would be
not a direct lender. You had aname behind you, which gives
(40:46):
credibility to a phone call,right? And you went out and you
now were starting something outof out of thin air. And you've
built the business at a reallyimpressive rate, So
congratulations on on that. ButI guess there are certain things
that you think drove thedecision at the time. But
looking back, you can also thinkabout it differently. So what
(41:08):
do you think as far as the ideaof being a direct lender versus
unaffiliated? How did thatcompare? And what benefits do
you see to either?
JD Stettin (41:27):
It's a fun question, too, And hearing something you
said before about for you, theexcitement was in the initial
meeting with people and gettingto know them and understand them
and get a sense of what theirproblems, pain points were. And
then the actual execution wasmaybe less interesting. That
resonated for me hearing you saythat. Not that HUD loans aren't
(41:49):
easy, or wrote. It takes a lotof smarts and talent to get them
done. But for me it was also asense of a little bit of yeah,
maybe boredom or lack ofinterest in that part of the
process once we get them in toHUD. Granted, we all had a
(42:10):
somewhat hands on sales,approach and guided and managed
and help solve problems all theway through. But for me, there
was this sense of, kind of likethe chase. It was exciting to
get these deals, and then youfunnel them into underwriting
and just hope that they close.
There's something exciting forme about brokerage in so far as
we're not limited to anyproduct, to any lender, to any
(42:35):
back end. And the internalguiding principle for David and
for me is, if this is a dealthat makes sense to us, that
based on the merits of themarket, the underwriting the
sponsorship, we feel like thisshould be doable, we have the
freedom to go out and find theright person, sometimes it's
(42:59):
only there's only one to getthat done. So there's a lot more
creative control in that, a lotmore variability. We work with a
lot of different lenders andbanks and CUSOs and CDFIs,
across the country. Sometimesthat's part of the challenge,
(43:23):
because it isn't a boxed productthat rinse and repeat it. To a
large extent a lot of theseloans stand on their own because
of the lender in the process.
But there's something excitingintellectually about that, and
keeps the deal alive for me in away that I didn't feel quite as
(43:44):
much focusing more on FHA. Ithink there was also something
for me about going out there atGreystone and developing all
these relationships and going toconferences and doing countless
lunches and dinners and roadshows, and then having a limited
(44:04):
array of products to offer. Andthen you fit bridge or agency or
FHA, or we can't help you. AtCarnagie, if we like a borrower
and a project, again, they'rethe sky's the limit, in terms
of how we can get it financed,and what resources we can pull,
and who we can work with. I justthink I really like that model
(44:29):
where we get to be. I think alsoI like being the agent for our
clients. We represent them, wedon't represent anyone else. And
we are unlimited in ourpotential to help them without
trying to shoehorn them into anyparticular product or lender.
It's really whatever's best forthe client and the deal. And
(44:52):
that felt really exciting andsatisfying. Also a little bit
more, I wouldn't say instantratification because nothing in
our in our line of work isinstant, but in a way that I
think in the FHA world, you cannurture a relationship for years
before someone has a need, or anappropriate deal for FHA.
(45:13):
Whereas with what we do now, anyCRE need, although we mostly
focus on seniors, housing andhealth care, any CRE need can be
filled and met by us. It'sexciting to be able to work with
a client and seniors and thenthey tell us, actually, we have
a bit of a storage portfolio,can you do that? And, sure, we
(45:34):
know how to underwrite that, thelenders are often the same. And
it feels, for me, reallygratifying to be able to be so
closely aligned with a clientand get to help them with the
full range of whatever theybring to the table.
Mordecai Rosenberg (45:49):
You know, when you are a direct lender,
and you go to a conference, yougo to the NIC or the NMHC, or
any conference, you're there andyou are competing with every
other lender. I think that oneway that you were able to enter
(46:09):
into the market was by makingyour competition into clients.
And you also knew that there wasthis void that you evidenced.
That if someone wanted FHA loanthey oftentimes would need a
bridge because it took so long,and a lot of lenders were not
providing bridge. So being ableto make all these other lenders
(46:34):
into your clients and referralsources, I think that also
opened up a whole new frontier.
JD Stettin (46:46):
Yeah, thank you for saying that. I think so too. And
I think there's a way in whichmy experience, EqualLogic
selling through distribution,sort of colored my thinking
about this too, in a way. I cango out there, try directly to
talk to the clients, or thereare people like originators at
(47:08):
Greystone or Walker, Prue whoare funded by these big
institutions to go out and talkto clients, they're already
doing that. That's an existingchannel. Let's piggyback on that
channel, the tracks alreadyexist, let's ride it and add
value where we can. And I thinkthe other thing too was we just
(47:30):
built Carnegie to be the toolkitthat I wish I had, as an FHA
originator, so that we can bethere to fill in the gaps. We're
never competing with anyone'sbridge program. We're there to
fill in the gaps for bridgeprograms, things they can't do.
So many agency lending bridgeprograms don't do construction,
(47:53):
or have size limits, both on thelower end or the higher end, or
cash flow needs. Where theagency and FHA lenders have a
product or program that fitsfantastic, and where they don't,
land loan construction, cashout, non cash flowing, whatever
it is, we wanted to fill in thatgap. And, again, be the the help
(48:16):
we wish we had when we weredoing this. And it really
happened organically. Therewasn't some great master plan.
There was just getting a littlefrustrated, not being able to
provide much beyond FHA, seeingthe opportunity with brokerage,
being creatively excited aboutit, and then thinking, this is
(48:37):
great, we can just build thetools that we wanted when we
were doing this. It's beenreally natural, really organic.
We don't really do any outboundmarketing or advertising or
sales. It's really throughexisting channels through people
(48:58):
we know at these trustedindustry wide institutions who
send us deals and clients whenthey don't fit their their
buckets. We've just ridden thatwave for seven years and repeats
and referrals. Again, it feelslike in the spirit of the way
that you guys trained us to selltoo where there's there's not a
(49:19):
lot of sales happening. There'sjust question asking, curiosity,
and hopefully problem solving,or the recognition or admission
that yeah, this is a problem wecan't solve. And we probably
turned down 50 to 60% dependingon the year or the month of the
deals you received because wedon't see a way that we can
(49:42):
solve or add value or doanything different than what
someone's already doing. Andthat's really refreshing too.
People appreciate that. I'vehad so many clients or prospects
thanked me when I've told themthat yeah, the deal you're
getting from your local bank isactually the best thing we're
seeing on the market, so why paya broker when you're getting
(50:03):
that from your bank direct.
Sometimes that's the case andthat's wonderful. I think a
metaphor I really like that weuse for what we do at Carnegie
is, some guy comes out of a bar,and he sees his friend looking
for his his keys on the ground,and he notices that his friend
(50:23):
is looking for his keys underthe one working lamppost in the
parking lot. He comes over andhe says, Hey, John, did you lose
your keys said, yeah, he goes,Oh, did you lose them over here?
Is that why you're looking? Andthe guy says, no, no, don't use
them over here. And this friendsays, well, then if you didn't
lose your keys here, why are youlooking here under this
lamppost? And the guy says,Well, that's the only place
(50:43):
where there's light. And I thinkthat feels true to me of our
industry, in that so many peoplego back to the same lenders and
funding sources because that'sjust what they know. That's
where the light is. Those arethe guys who come to the
conferences and do splashy ads.
(51:04):
They're the people you readabout in all the publications
every week closing loans, andthey do good work. That's why
they're big and in thepublications. But there is an
entire parking lot worth ofplaces. That's what we wanted to
do when we built Carnegie, isnot necessarily focusing the
usual suspects, the obviousplace where there's already so
(51:25):
much light being shed. Whatabout the 5500 FDIC insured
banks, the 1000s, of creditunions, the CUSOs, the CDFI's
that I didn't even know existeduntil seven years ago, as you
know, entities leveling fundingsources. So it's been really fun
to kind of expand that horizonfor ourselves and for our
(51:50):
clients in terms of what's outthere.
Mordecai Rosenberg (51:53):
Yeah.
Another analogy that comes tomind let's say, you have a heart
problem, right? So you go to onepractice, and they say, yeah, we
just do this one procedure onthe left ventricle, this is like
our specialty, we can do that.
(52:15):
Like, well, do you want to go tothat doctor? Or, do you want to
go to one who can give yousomething like, well, actually,
you know, there's this otherprocedure, where, you know, you
can just, it's non invasive, andthere's something else where you
can experiment with diet. Butit's not a small thing. It's not
like getting a lease for yourcar. Which is still a big thing.
(52:38):
This could be a $50 milliondollar property. And the debt is
the, in some ways is large.
JD Stettin (52:51):
Yeah. And I think it's interesting, hearing you
put it in terms of medicine.
It's something I've actuallybeen talking a lot with my
friends lately about the needfor guides, in the medical
field. Not doctors, notspecialists, not surgeons, but
people who guide, navigator.
People who can help make youaware of the array of
(53:13):
interventions, and options, andtake a more holistic approach.
Because, absolutely right, yougo to the surgeon they want to
do a cut, you go to the internsthey want to give you meds. And
that's great, and representstheir training in their habit of
mind. But how wonderful to havea guide or a coach who maybe
(53:34):
isn't as deep in any one field,but can see the whole field.
Kind of thinking like a footballmetaphor, why the coaches are on
the headset of the quarterback,they see things from truly a
different bird's eye perspectivethat even the best quarterback
can't see, certainly when he'sin the game. So being able to
(53:57):
kind of, and I don't claim tohave access to every single
ending source in the country,but really working towards that
goal. We like to think we bringan aspect of that vision to our
clients when they make these bigdecisions about how to buy or
build or recapitalize theirproperty, with that global
(54:23):
sense. And without being aspecialist in one small product
type. So yeah, that also feelsuseful and feels intellectually
curious and satisfying too. Andjust how many banks can we talk
to, and work with, and learnfrom?
Mordecai Rosenberg (54:41):
Yeah.
Continuing with the medicalmetaphor, like in medicine,
there's incentive forspecialization, right? The more
highly specialized you are,oftentimes the better paid
you'll be, the more the moreprestige there is. But I feel
like in any industry where thereis such a premium put on high
specialization, the generalisthas unique value. Just like in
(55:05):
just like in medicine where youreally want, with all this
specialization, a guide who canjust give you the big picture
advice. Our industry is thesame. There's people who focus
on their lists. You you look atcommercial mortgage alert, and
(55:28):
they come up with these withthese lists, right? And there's
the top mezzanine lenders,right? And there's 200 mezzanine
lenders, right? And theirs topbridge lenders, and there's 500
Bridge lenders, right? Andthere's FHA lenders, right? So
it's become very, veryspecialized. So I think that's
where you guys add such value.
(55:51):
For anyone listening who is adirect lender and has a need for
your bridge, I know youspecialize in healthcare and
seniors housing but also domultifamily?
JD Stettin (56:04):
Yeah, we do a good amount of multifamily. We use
some storage, office retail,hospitality. I think the only
asset class we probably haven'ttouched as manufacturing
facilities. We're happy to be asupport in terms of finding
homes for your deals or yourclients where you can't. Also
(56:28):
alternatively, on the other sideof the same coin is bringing you
guys lenders deals when theycome in to us from clients where
where we think you guys are thebest fit for something.
Mordecai Rosenberg (56:42):
Yeah, that's awesome. So, JD, if people do
want to find you afterwardswhat's the best way to get in
touch with you?
JD Stettin (56:52):
Probably the best way is via email. And simplest
email for me isJD@carnegiecp.com. That's J like
John D, like Daniel at CarnegieC, like capital P like
partner.com. And for what it'sworth, just because bringing
we're it up, the Carnegie nameis a bit of an homage to where
(57:15):
my partner and I come from,which is having met working back
to back at Carnegie Hall towerwith you Mordy and your team at
Greystone. So both in some ways,an inspiring entrepreneur in his
own right. And, of course,there's a complicated legacy
there. Not all of it, is great,but aspects of the way he built
(57:37):
his firm were impressive to us.
And also it felt true and rightfor how we met and how we really
built our partnership, which wasin Carnegie Hall tower with you
guys.
Mordecai Rosenberg (57:50):
That's awesome. Those were good times.
I'll close with just one finalpoint. And I'll let you comment
as well. We didn't talk aboutDavid so much on this in this
discussion. But I do think thatone of these really well kept
secrets in the sales industry,is the importance of an
(58:13):
execution, of having an amazingexecution partner. I think that
what you would find, the salesguy is the front end. They're
oftentimes in the spotlight.
They're the ones who are in thepress releases, right. But I
have a feeling that if you lookat the top salespeople in the
industry, you'll find that theyhave excellent execution
(58:35):
partners who are the ones whoare actually getting the stuff
done, doing the work of thedeal. Any any comments on that?
JD Stettin (58:47):
Couldn't agree more.
Behind every great originator isa great analyst or underwriter.
And that's something on everylevel, every job I've had, every
company I've worked for. I was abartender at a restaurant, so
being forward facing with theclients. But ultimately, you're
(59:09):
only as good as the chef and histeam are. That seems like a
very clear example of what'scalled front of house back of
house split. It's the bartendersand the servers who interface
with the clients and get tipsand get rated, but who's in the
kitchenmaking anything. To me,that's always been so clear. And
(59:30):
part of what I actuallystruggled with at EqualLogic,
conversation for another time,in terms of the support and the
infrastructure backing up ourproduct and our sales. It felt
like we were growing too far,and outpacing our ability to
really execute and serve ourclients. My opinion of course. I
think that's one of the things Iam most, whenever we're doing
(59:52):
like gratitude exercises ormeditations, one of the easiest
things for me that comes to mindfirst and foremost is gratitude
for my partner David for histalent, for his tenacity, for
his creativity. And he is, whatdo they say and in the old
Hollywood world, a triplethreat, they can act dance and
(01:00:15):
sing. So David, is that on theunderwriting side. The guy can
underwrite, he's personable, hecan sell, he's creative. His
packages aren't justcomprehensive, but they're
they're visually striking. He'sjust a catch, he's the complete
package. I think he's probablyno small part of how our our
(01:00:43):
team, your team at Greystone wasable to do so much in such a
short period of time. He isabsolutely the reason that
Corning he is able to do what itdoes. We joke sometimes oncalls
and tell clients on the showhorse is the workhorse. Which,
you know, it's an exaggeration,of course, but it points to a
(01:01:06):
truth. Having someone who reallyunderstands deals so deeply. It
is amazing to me the way thatDavid uncovers value in deals
that oftentimes the owners andoperators themselves couldn't
see and didn't see, that theappraisers missed. And he also,
(01:01:28):
as you probably know, has thisway. He is such a gentle and
humble person. Sometimeswatching him build a case with
folks who don't have a tenth ofthe underwriting chops or Excel
fluency as him. His manner is soeasy, and gentle, and kind. I
(01:01:57):
think that resonates withunderwriters and appraisers
around the country. So David isdefinitely the secret sauce and
the black box of Carnegie behindthe scenes. I have a lot of
gratitude for him. Working withsomeone that closely for so many
(01:02:18):
years is also an amazing thing.
From our time at Greystone toCarnegie, it's been,I don't
know, 10 and a half, maybe 11years. There's this way, and I'm
sure, some time in the futurecognitive science will show us
how this is true, but it feelslike we share brain cells at
(01:02:44):
this point. Almost we each havekind of a dual personality,
business wise, that's part uspart, part the other partner.
And that's also been an amazingthing to work with. I think in
terms of the joy I take in whatI do, so much of that joy is
brainstorming about deal anddeal strategy with David. And we
(01:03:09):
have a very, very openrelationship. And there's no
pride of authorship of ideas.
It's really about finding thequote unquote truth for any
given deal or circumstance. Andwe shoot down our own ideas,
shoot down each other's ideas,and it's so not personal. It's
so about the deal and the ideaand what works and it's been an
(01:03:31):
incredibly rich and generativepartnership for me, and I think
I hope for David too.
Mordecai Rosenberg (01:03:43):
Awesome.
Yes. So that's definitely somegreat closing advice for any
salesperson. if you want to be agreat show horse, find your
workhorse. Hitch your wagon andhold on for dear life.
JD Stettin (01:04:00):
Hold on tight. Yeah, hold on tight. They make
everything sane. I will say as afinal thought on David, a lot of
people don't know, but he isactually a great artist and is
painting. And as a sort of thankyou gift for this large
transaction we closed this lastyear. It was a nine figure deal
(01:04:22):
for a big client with one of thebanks we really like, and
actually the client wanted toget something special for the
bank. Then it turned out thisbanker collects Air Jordans.
That's a thing people do. Itturns out that David collects
and paints hand paints AirJordans. David collaborated with
(01:04:44):
this client to do this custompair the bankers name is Jared,
of Air Jared's. Put in, I haveto think, over 100 hours of work
with a tiny brush and actualreal gold leaf paint to do it in
the clients colors, and with thebankers name. It's just this
(01:05:06):
beautiful, creative side that Ithink often goes unnoticed in
underwriters and analysts.
Certainly David is among manyother talents. A great artist. I
think it's nice for peopletovknow that and see it.
There's a tendency to think of,underwriters in Excel. There's a
sort of, maybe robotic,mathematical scientific side,
(01:05:30):
but with David, there's alsojust tremendous creativity, and
art. That's one of the joys ofof working with him and knowing
him.
Mordecai Rosenberg (01:05:41):
I love it. I love it. Well, JD it's always a
pleasure, my friend. So good tochat. And we'll be in touch,
we'll talk soon.
JD Stettin (01:05:50):
That sounds great.
Thanks for having me on. Thanksfor making origination
interesting.
Mordecai Rosenberg (01:05:56):
Okay. Talk to you later, man.
JD Stettin (01:05:58):
Bye. Take care Mordy. Thanks, bye.
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