Welcome to my Newsletter! Thanks to all of the support I have received here on LinkedIn, I have decided to extend my long-form posts into this monthly Newsletter. Please look forward to my commentary on the market, reflections as a business owner, and updates on Graham Mortgage. I am calling it Small Business: Living it. Here I express ideas and insights from the inside of a small business environment that lives with intention and a sense of purpose.

Over the last year, I have reflected here and celebrated benchmarks. As we come through the Thanksgiving Holiday I am able to focus on my journey and how grateful I am for many things as I celebrate 10 years as a small business owner, I focus on my journey and gratitude. I purchased GMC from our founder, Joe Graham, in January 2013. Joe has shown incredible support and generosity in trusting me with his brand.

In January 2023, I will own GMC free and clear. I celebrate this accomplishment as a life-changing benchmark.

Joe is the perfect partner. We will continue to collaborate daily and exist in the spirit of partnership for as long as we are both able to calculate an NOI. Joe has established many norms in private lending and built our brand on reliability. Steadfast and innovative, he created the gold standard for providing capital where needed. Joe and I both grew up in institutional lending environments. We saw the advantages and disadvantages of that culture. We know how to evaluate a deal. We know how to find the balance between serving the needs of our investors and treating our borrowers with the respect they deserve as entrepreneurs and innovators themselves.

Here are some other reflections on lessons learned over the past 10 years.

1. Owning a business is a great honor: While I like the thrill of closing deals and making money, I also take seriously the impact I have on the lives and success of all those close to me: our staff, vendors, mortgage bankers, borrowers, and, of course, our investors. I love to see our staff thrive and achieve milestone moments in their lives. I greatly enjoy providing a safe environment with fair compensation. I invest in them as they invest in our brand and success. Right-sizing the staff is difficult for small businesses. In the service business, our overhead is mostly people. Having too few in the name of profitability is not sustainable. Having too many can impact profitability greatly. It took all these 10 years to find that sweet spot. We now know how many it takes, and we know what types of folks we need to fill those slots.

2. Have a plan: I characterize myself as highly transactional. That is code for I am not very process oriented. I have learned to place a high value on process and structure as a key element of our company architecture. Having clearly defined roles and policies is a feature of sustainability. This sets me up for succession planning and to successfully navigate any changes in key staff.

3.Know your Secret Weapon and Super Power: Every small business has a secret weapon and a superpower. Our secret weapon is our law firm. Specifically, David Drumm at Carrington, Coleman, Sloman, & Blumenthal. David has added speed and great efficiency to our closing process with fair documents and fair fees. David is a top-notch representation and has been our closing lawyer for over 40 years. Our superpower is 100-plus years of combined commercial real estate experience; most in Dallas, Texas. We know the players, locations, and market conditions. We know good real estate, what fits, and who can execute and exit. We focus on what’s liquid. We know which product is attractive to investors and other lenders.

4.Scary Times will come and go (Keep some cash around): We have been fortunate to operate our business in Dallas for these 10 years. Dallas has evolved into a world-class city over years here. We all know the many reasons why. Having lived through cycles across the last 40 years gives perspective on how relevant our business model is and how resilient commercial real estate is as an asset class. We play from the senior secured position, placing us in a very strong position. The fundamental characteristics that drive value in commercial real estate underpin our capital preservation and yield. There have been times when I thought we were goners. In those times, I feel the weight of the financial fate of our teams’ families. That is real fear and some PTSD from past downturns. When the pandemic hit, I wasn’t sure we would have a market at all. Thankfully, our markets responded. We got some help with a PPP loan and have recovered well with strong loan demand on good assets since late 2020. Now we have an interest rate scare. After a summer of uncertainty, we see markets beginning to normalize again and good loans with appropriately adjusted pricing come to us. I’ve had to remind myself many times to have faith in the market and our brand. So far, our underwriting has held up. And I am focused on building our reserves just in case.

So, takeaways are: have faith, have a plan, and hire good people.Learn how to take care of yourself as the rainmaker. Save your cash. Don’t borrow if you don’t have to. Listen and ask for help. Serve others where you can. Take stock of what you can be grateful for.


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