How a Jewish businessman leant over $1 Billion in Loans

All right, we have a very special guest today on Jewish Business Secrets podcast. I have a good friend and I actually consider him a mentor, a personal mentor of mine, Jack Miller. He's done over a billion dollars of loans since 1989 at his company Guelt Financial and he's going to talk to us about how he started, how he built it, some obstacles he's encountered along the way. Jack, welcome to the show. be live with you and on camera with you. It's great. Absolutely. So, Jack, I mean, you know, the the I I I know a little bit of your story, but for people that don't, you know, how did you how did you get to a place where you could lend a billion dollars? I think you told me that you have over 10,000 active accounts or accounts you've dealt with in the past. How did you build that business? you know, uh, some luck, some hard work, but ultimately with the providence of, uh, Hashem, you know, uh, I was in a position where it was very unlikely that I would start a company and have success. And I got punched in the face a lot of times, bloodied nose, broken ribs. Same story as everyone, but I kept with it. Um, and I stuck it out and I was able to build a very successful company over the decades with a lot of help of other people, self-understood, a lot of great partners and other people along the way. But it all worked out. Um, it's not easy. I see a lot of people in business uh give up and because they're beaten up. I get it. And there's other easier paths, but for me, this was the only path for me and I just stayed on the path. You know, I look at you sometimes, Jack. We've had conversations where in your you're in your nice house in Miami and you're in your t-shirt and you're relaxing and it's like a Thursday afternoon and it's like 3:00 and you're chilling and I I'll I'll be honest with you. I've been jealous of you in those moments that it seems like it seems like you're on easy street almost a little bit. It seem it seems like you did a lot of Okay, I I I see that you have a comment on that. So, go ahead. No, no, no. Go on. Go on. Go on. Go. And you know, I've been jealous of of that. And it seems like you did a lot of things right in your life. So, you know, I'm 36 years old. I think my average listener is probably my age, give or take 10 years from 25 to probably 45. That's what I would guess. Um, you know, what what advice could you give to guys that are in the thick of it? Because it seems like it seems like you made it over that hump, you know? So I did do a lot right in my life. Uh but also a lot went wrong and I overcame what went wrong which I believe is the real story. We all get beaten up and look as a people were constantly in in in the battle but it's overcoming it. And look, you you see me now at 63, but when I started when I was 18, I used to work 247 or 246, you know, constantly. Constantly I was a madman. Um, even now, you may see me at, you know, 2 or 3 in the afternoon, but there's plenty of nights I'm up till I go to sleep at 9:00 cuz I'm exhausted. Some nights I'll wake up at 11:00 and I'll be up till 4:00 or 5 in the morning working uh because I still have that drive. So, uh behind what the success you see now was, believe me, a ton of sweat, blood, sweat, and tears. And tons of times my back was to the wall where I could have given up. I should have given up, but I didn't give up. And I just figured out how to overcome the obstacles. You know, in in my business particularly, it's very unusual to see companies in business for 36, 37 years. It almost doesn't exist. Just doesn't exist. We're such a rarity. Um, and the fact that we've been able to stay in business that long and thrive and keep thriving and keep reinventing myself when I've been knocked down to nothing or or feels like nothing is is is just through determination and and not giving up and having p having a belief in a greater a greater being. So for those of our my listeners that don't know exactly what you do on a very simple rudimentary level, what is the core of your business? We're non-bank commercial and investment real estate lenders. Uh real estate investors come to us and owners of businesses who don't want to go to a bank or don't have time to go to a bank and we'll provide them the financing either for a short term um or you know for a long term. It all depends on what they want. Is that what's referred to as like hard money loans? Is that you know, we do some hard money lending? Some people say you're a hard money lender. Okay, we are, but it's only a small percent of what we're doing. A perfect example, we have a deal closing Wednesday. It's on a Walgreens in one of the top cities in the country. Our loan to value is very low. Our borrower is a professional athlete who I saw has a bank account statement with $15 million in it and has a net worth over a hundred million. Without saying which athlete is it? I can't tell you which athlete. By the way, we just closed another uh deal in Charleston, South Carolina Friday for another athlete. We do a good amount of athletes. But anyway, this guy's coming to us for speed. He needs some money. He needs a million two. very quickly. His bank couldn't do it quickly. They'll do it. So, he's borrowing the money from us. He'll probably keep it out for 3 months, 6 months, nine months, and he'll pay us off. Is that a hard money loan? I don't know. But that that is one type of borrower who comes to us. Sure. You know, another type of borrower is someone in foreclosure or someone who can't go to a bank. Maybe their documentation is in order, maybe they have a credit problem or whatever it is, they're coming to us as well. So you've lent out a billion dollars since well over well over a billion. Well over a billion since 1989. I assume that all of that billion was not yours. That's where you get the money from to loan. Uh currently it's a very good question. Yeah. I don't have a billion dollars in my back pocket anywhere. Yeah. Yeah. Uh currently what we do is we we partner up with accredited investors, high netw worth investors and we partner with them on a loan. So let's say we do a loan for just a round number 100,000 or a million. What we'll do is we'll close the loan and after closing we'll have investors buy some of the loan or invest with us who we've dealt with for years, some of them decades. We've private individuals, private people. Yeah, they're private individuals. Uh some of them are family offices. Some of them are everything from doctors, lawyers, uh Indian chiefs, IT people who don't like the stock market and are looking to invest in uh real estate, don't want the hassles. So investing in lending is a fantastic way to do it. If you don't mind me asking, what's your average returns that you're giving to those people? Uh the investors are averaging about 10% on average return. So why why would somebody want to invest with you versus putting their money in the stock market that yields 10%? Also, you know, a couple reasons. One is a lot of our investors are big family offices. They have a lot of money. They don't want to put everything in the stock market. They're looking for diversification. So they'll take a certain percent, whether it be 5, 10, 25, 30% of what they have and invest in debt. Um, and some people are scared of the stock market and just don't like it. We have a few what I call real estate investors who have very large large large net worth. They just don't like the stock market. They're much more comfortable investing in real estate either ownership or the debt. What's the minimum amount of money you take from people for an investment? Typically, you know, we like our our investors to be at 250, but a lot of them start out at small, maybe 25. They'll do one deal for 25, wait six months, do another one, and they build up. So, we're pretty flexible. Okay. So, you understand real estate. I know that you do because we've had conversations. You have in your office an underwriter who sits and does deals all day, looks at deals all day. I assume that you're lending your money out at around the 12 11 or 12% mark. That's correct. Okay. So, your your your spread is two points. If you were the deal sponsor, you would be making you are the one actually buying the deal. You already have the investors. You would be making so much more money. So, why do you choose to be the debt men instead of the one actually running the deals? Well, you know, it we buy properties occasionally, too. And earlier in my career, I bought a lot of properties, and we still have most of them. And, you know, they've done fantastic for us. And I'm always looking to buy properties. The problem for me is a lot of the properties are trading at such high levels, they don't make sense to me to buy. So, uh, there's just too much capital chasing them and too many people who want to be real estate investors. Um, so for me, we're safer. And at this point, we're all about wealth preservation. So, I'm happy with our yield because, you know, when you're debt, you're paid ahead of the equity. So, it's a little safer than the equity. You know, you mentioned something that may have gone o over some of my listeners heads. You mentioned that you are in the wealth preservation phase. So for people that don't understand what that means, it means that there's inflation of let's call it an average of 3%. If you have money that's sitting in the bank, you had $100 this year. Next year it's worth 97. The year after that it's worth 90 94. The year after that it's worth $91. So in three years you lost 9% of your money. What he's talking about is when you invest your money, you're not only losing on the inflation, but you're hopefully making a little bit too. Um, I've had this conversation with you privately in the past. I've been told by people that, you know, you know that I have my own real estate aspirations outside of my business. I've been told that the real estate business as a regular, you know, uh, let's call it a deal sponsor, somebody who finds deals and finds money and puts the deals together. I've been told that that business is a wealth preservation business, not a not a not a not a wealth generating business. Is that true as the sponsor? Yeah. Yeah. No, I I would disagree with that. I would disagree with that. You can create a lot of value uh by being a sponsor. You're taking more risk being by being a sponsor. Absolutely. A lot of the deals that I did that I bought 15, 20 years ago allow me to to talk to you in a t-shirt at 3:00 in the afternoon relaxing. Uh yeah, absolutely. I I I really strongly did. Not all deals, but if you buy a value ad deal uh and really add value, I'm not talking paint and carpeting and raising the rents, but a real value ad deal, you can you can create wealth. Absolutely. So let me ask you another question is you know the average person we're not talking about family offices here we're talking about the average guy actually the above average guy he owns his own business at the end of the year after paying off his uh you know his school and his schools for his kids and his mortgages and his taxes and his insurance and his this and his food and and a trip and at the end of the year a guy's left with $50,000 at the end five years or three, four, whatever it is, three years, he's managed to put away 150 grand. And how few people have 150 grand liquid cash in the bank. What is that guy? Let's say he invested with you, okay? Or he invested in real estate and he's averaging 10%, 12%. 15%. On his 150 grand, he's only earning $15,000 a year. So when people say invest, invest, invest, what's a per what do you do? What's what do you do with the 15 grand a year? It's it's it's a it's a nebulous blip. First of all, it's compounding. Okay, if you're investing it, so 15 grand, then it's if he has 150, it's 165 and so on and so forth. But if he invests in real estate, um, and I believe everyone should, even in these crazy inflated markets, uh, you have debt repayment. Every month you make a mortgage payment, your debt goes down. It's forced savings. Every year you raise the rent, it it goes up. And the compounding effect is unbelievable. Even if you raise rent three or 5%, which is a normal rent raise, in 10 or 15 years, that's huge. And then when you in are in inflationary periods like we're in now where you're able to get higher than that in rent raises, it it has a tremendous effect on someone's net worth. So would you recommend a guy starting to buy his own little properties himself, maybe with a partner here and there? Again, we're talking about the businessman who has a few bucks left over or even the doctor or the lawyer or the dentist or the whatever. or would you suggest that that guy puts his money with somebody else and focuses on what he does best? Well, look, clearly uh I believe that one's business is one's best investment. So, if it's going to be a big distraction to this guy, he should focus on his business because he's going to be able to make a lot more in his business. see a couple extra patients, pick on a couple extra clients, figure out ways to save cost, increase revenues. You know, businesses is always your best investment. But the question is, what do you do when you have excess capital, right? That you, you know, and I'm a believer in the stock market. I'm very active in the market, but it's not for everything. I don't keep everything in the stock market. I'm a believer in real estate, but it's not for everything. And I'm a believer in debt. Most of my money is in debt, but it's so I believe in diversification and I think most people should be diversified because each one brings different things. You know, we're talking about this stuff. You know, the stock market's up today because of the tariff uh deal or whatever's going on in China. Three, four weeks ago, everyone was crying the blues, right? So, when you're just in one market, you're affected by that. So diversification is critical and you shouldn't be putting money at risk that you really can't lose whether it be in the stock market or somewhere else. Don't invest your last penny. You know, again, I just I go back to the the average person, you know, I'm just going to just for fun, we're going to ask chat GPT. Okay, chat GPT. I'm going to do real live chat GBT. What does the average American have? You know, very little in savings. I'm gonna do it even better. I'm gonna ask you what the average Jewish American has. Okay. Um, chat GPT because after all, this is called the Jewish Secrets Podcast. Okay, we're trying chat GPT. Here we go. What does the average Jewish American adult have in their bank account? Let's see. Look, my gut is it's very little and it's a little deceiving. It says that the average Jewish family makes $200,000 a year. Okay, it it it could be. I believe in a few. Again, I live my life a few ways. Live under your means. Underspend. Don't overspend. Most people overspend. Uh spend, live conservatively, and save money. whatever you're comfortable with, real estate, uh, equities, your own home, be a saver, be an investor, and grow your business. You know, I'm successful because I've been able to sustain a business and grow my business over the years through hardships. Is that where most of your wealth came from? Absolutely. Is your business? Yes. Yeah. Absolutely. No question about it. and it's been able to lead me to other areas. Tell me some of your hardships. What What was your biggest hardship? Well, look, there's been so many of them. You know, I'm not the guy I I I don't know if you see this, but do you ever see someone in your life, a guy who looks successful and seems to hit the nail on the head every time and just goes through life and coast through life and everything seems to go smooth for him. We've all seen those guys. I'm not that guy, Jack. for me. You're that guy. No, bro. Cuz you don't see me at night and my kishkas are eating out. I I need to be by the men's. Still, still. Yeah. Absolutely. Different things, but absolutely still. Absolutely. It never ends. As long as you're alive, it never ends. I I was speaking to a friend of mine. He's worth a quarter of a billion dollars cash, actually, Bitcoin. And I said to him like, and he's sitting in his office looking at all of his computer screens and this and that and stressing. I said, 'You have a quarter of a billion dollars. Go to the beach. And he's like, I can't. He's like, I I said, you still stress about money. He says, my friend, until the day you die. I'm saying the same exact thing. The stress is not is always. But look, in my business, every business is different. We're very cyclical. So when when something happens when there's a recession or interest rates go up, it kills the business. So there have been several times throughout my career where I've had to pivot. So I could say the company's 37 year old and that's true, but also every five or seven years we need to reinvent ourselves. We need to pivot. I'll give you a perfect example. You know, right now I think we have 118 maybe 119 active in partners who invest with us. But prior to 2011, we were financed by 19 separate banks. We used to borrow 5 million here, 20 million here, 8 million here. But what happened was when the great recession happened, all the banks wanted to be done with us. They all said goodbye, have a good life, you know, and they would get s every day a certified letter. You have seven days, 30 days to pay me 7 million, 8 million, 12 million. So I didn't want to deal with banks anymore. So I deal with individuals. It's much better for me at this stage. For other people it's not. So we've had to pivot so many times. But the number one thing that everyone's self-employed I think misses the boat. The number one rule is stay in business. And I think a lot of people don't follow that rule or they're not aware of that rule enough. their number one job is to stay in business because of me and earlier I didn't have any backup and I I happen to be dyslexic so I didn't have any choices I can't do anything else so I've had to my number one rule is stay in business whatever that is change change cut prices hire terminate whatever it is all the stuff along the way you have to constantly say what do I have to do to stay in business it seems pretty simple, but it's also very profound. I I think I actually keep all kinds I'm very big into tracking things. So, I I I rate things. I have all these emergency plans. If this happens, I'll do this. If this happens, I'll do this. And I've done that my whole life. I I track things and if different events happen, I sort of have a contingency plan to deal with it. But all revolves around being here for the next 30 years. You know, if you go to your friends who are self-employed and you and say to them, what do you have to do to ensure 100% that your business is going to be here for the next 30 years? Yeah. Get them thinking because most people are thinking the next payroll or the next whatever shortterm cycle is, right? But think what do you have to do to be here for 30 more years? It's very interesting. It's actually quite interesting. You know, you know, I I've been beaten up Earl so many times and a lot of them publicly. You know, I I made the genius move, and I say genius in quotes because it was the stupidest move of my life. We bought a bank in 2006. And right after we bought it, the whole economy collapsed, you know, and the the federal government went after me and closed a million banks, including mine. They were closing five, six banks a week, you know. So, a lot of my uh trials and tribulations have been very public. A lot of my friends who were investors lost a lot lost a lot of money in that. I lost a lot of money in that, you know. I'm still paying the price with the government, you know. But what's your choice? You can you can stay home and cry for a week, a day, a month, but sooner or later you got to stop crying and pick yourself up and reinvent yourself. I love it. I love it. There's something special about the Jewish people that we can do that. We take adversity. We don't ask for sympathy. We're not the victims. We say, "This is what happened to us. This is why. How can we flip it around? And what can we learn by it?" And this is one of the secrets to the Jewish people while we're successful because we've been beaten up so many times. We don't have a choice. We can't sit and cry in bed forever. You need to reinvent yourself and come back stronger and more powerful than before. You know, I've reinvented myself a few times already. Um, you know, I left my father's business and I started a video production business and then I went into the coaching business and then now I'm in my third iteration which is in the recruiting business. And I've had people that have I don't want to say made fun of me for reinventing myself, but who have cast a doubtful eye on reinventing myself. And uh it's it's it it has put a negative I I do feel that people have a negative perception of somebody who is constantly reinventing themselves. you you know uh look I've I've shared the same negative uh feedback. I I'll be kind feedback saying that. You know some people said a lot worse to me. Uh look the tr the truth is they haven't walked in my shoes. These people haven't walked in your shoes. They have no idea what it's like. You know I have someone who's pretty close to me who's had a fixed salary his whole life. You know doesn't know what it's like to meet a payroll. doesn't know what it's like when there's no sales coming in. Doesn't know what it's like to deal with all these things. And he's always been very critical of me, but he wakes up every day. He gets a salary. He gets a certain amount of sick time, you know. So, here's my best advice to you. Ignore them. They are nothing to you. They're nothing to me. They're nothing to The only people that matter is your wife and your kids. Look in your kids' eyes. Look in your wife's eyes. and you need to do what you have to do for them. So, you know what? Even at 63, I'm still reinventing myself and I'll continue I'll continue to I hope it go I don't know how long I'm going to live. I hope it goes on a long time because the markets never stay the same. You need you need to change. Even though you're in real estate, a stable, trusted long-term business, you feel like you still have to reinvent yourself. I still feel I'm in the fight every day of the week because there's 30 300 500 five million other guys who want what I have and every night I close my eyes. They're trying to feel find a way to take it. So I need to reinvent myself. Absolutely. Absolutely. And I'm I'm going through a reinvention of the company now. I I I felt myself getting softer in a certain area. I couldn't deal with a certain I wasn't as good as I used to be in dealing with a certain aspect of it. And I I I went out and I hired someone who I thought was good in this area and it's a reinvention of the company and I'm I I succeeded control of certain things to his name's Paul and I said, "Paul, you go do it. I'm not going to get in your way." So you mentioned that you're 63. From what I remember, you don't have kids in the business, right? No. Well, I have three kids who are in the business, but not exactly in the business. So, what's the future? You think you're going to sell? You think you're going to hold on? You're What? What's the future? selling I don't think is an option for me. Uh because I have no h this is my life. This is my I don't have any hobbies. I enjoy what I do. So I I I plan to go uh until my body or mind doesn't let me anymore. Could you sell your business if you wanted to? Yes, absolutely. I think it's very salailable. Jack Miller, thank you for joining today's podcast. If people want to uh get in touch with you to uh whether it's for advice or to potentially invest in your fund, how do they do that? Uh you can reach out to us at geltfinanicial.com or look me up uh on LinkedIn. It's Jack Miller. Guilt is spelled ge like Hanukkah gelt. Okay. Thank you, Jack. I appreciate your time. God bless. Thank you for joining the show. Thank you. Always a pleasure.