The Closer: John Warren

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JohnWarren_bioJohn Warren was working toward a degree in politics at Washington and Lee University, considering careers in business or law, when 9/11 changed the trajectory of his life. Upon graduating in 2003, he joined the Marine Corps. “If there hadn’t been a war, I would not have gone into the Marine Corps,” he said.

He was commissioned an infantry officer and given command of 1st Platoon, Lima Company (call sign: Lima One), deploying to Iraq in 2006 for seven months. After a second deployment, he left the Marines as a captain in 2008.

As founder and CEO of Lima One Capital, Warren has found his military experience to be invaluable as his business grows, influencing everything from how he hires to his focus on evolving and innovating. The company, which provides capital in the form of first mortgage loans to residential real estate investors, has grown to 46 employees with plans to double that number over the next year. Lima One reported 175 percent year-over-year loan volume growth in 2015 and revenue grew by160 percent, and, for Warren, that’s just the beginning.

The company is currently looking to expand its office space, is considering rolling out a multifamily commercial loan and just became licensed in California, bringing Lima One into 39 states so far. The growth doesn’t surprise those who know Warren, who, at age 7, went door-to-door offering shoe shines around North Main, charging 50 cents each. Even then, “I had a huge business,” he said, laughing.

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What does it mean to you to be considered a “closer”?

 

It’s funny – my wife is known as the closer in the family. She closes a lot of deals, too. [Courtney Warren is risk consultant at Rosenfeld Einstein.] But to me, being a closer is being able to complete things. A lot of people start really well, but to close, you have to have the complete package – not as an individual but as a company. I think it’s being complete and being able to sell yourself and have the reputation to continue to close.


JohnWarren_4What niche does Lima One Capital fill?

We provide first mortgage loans to residential real estate investors, which helps them to either flip a home or to buy long-term rental properties. If you look at the overall investor market, 24 percent of all homes sold each year are sold to real estate investors. There are 14 million rental homes in the U.S., and it’s a $1.5 trillion market. We serve all of those real estate investors.

After the financial meltdown, with all of the new regulations, traditional lenders were regulated out of non-owner-occupied investor homes. I started lending in 2009, so I got really lucky on the timing. A lot of closing is probably luck, too.

Your first business venture didn’t go as planned. How did that inform the creation of Lima One?

 

I was co-founder of a social media platform geared toward college students. We probably made every bad decision you can make as a company. It really taught me what you need to do to be successful: how to raise capital, how to have sales channels, what you need from an operational perspective. We had an amazing product, but we didn’t understand the market and the barriers to entry to get into the market, and that was the No. 1 contributing factor to why that venture failed.

Do you look back on that as an experience that got you where you are today?

It was tough at the time. But not only did I learn a lot, I made a lot of contacts who are still advisors and mentors today, so that was a huge benefit. But I wouldn’t want to go through it again.

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How has your military experience informed how you run your business?

The military has had the biggest impact for us as a company. One of the biggest lessons that make us different is we do everything for a reason here. That sounds basic, but in Iraq, we had to adapt our tactics, because it’s the ultimate chess match when you’re fighting insurgents. It’s not a linear war or about taking ground. So you’re always changing tactics to outsmart the insurgents, and they counter. Your tactics always evolve. In business, especially the financial services sector, I see businesses do things because it’s industry standard. There is no innovation. We always try to do things for a reason and make sure it makes sense, and that’s why we’re efficient.

You’ve said you hire based on the individual and not on his or her experience. Why?

In the Marine Corps, you hire based on core values and then you train them. No one really has combat experience before going into the Marine Corps. They share core values with the Marine Corps, and the Marine Corps trains them on industry standards – in that case, combat, war.

In business, if you’ve been an underwriter at four banks, you’ll get hired because they aren’t going to have to train you much – though you might be a terrible underwriter. We look at people based on their core values and competencies, so an underwriter would need to be able to juggle a lot of things, be organized, have great phone skills and be aggressive. I don’t care if they’ve been an underwriter. If they share our core values of honesty, being extremely hardworking, then we want them. We’ll spend more time and money training them. That’s why we have such a high retention rate.

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How do you motivate employees?

If you have to motivate an employee, you made a bad hire.

JohnWarren_1What is your biggest concern about your industry?

The risk in lending is the race to the bottom. Right after the financial crisis, there was a reset, and common sense standards came back into play. People had to put money down, have decent credit – just basics. Starting now is a small deterioration of those common-sense lending standards in an effort to gain market share. I would be concerned that lending standards erode and we have somewhat of a repeat of 2008.

How have you celebrated your success?

I had a baby and bought a house. I also try to eat out downtown as much as possible.

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What are your thoughts on work-life balance?

I guess I’m lucky because I require less sleep, so I can fit a lot more into my day, both for family and business. I need about five hours of sleep. I think I have a good balance. My wife is driven as well, and we’re lucky. We work a lot of hours and are committed to our careers, but our careers offer us flexibility with scheduling, so that helps with family life.

Rumor has it you have political aspirations. True?

I come from a service-oriented family. I risked a lot joining the Marine Corps after 9/11. I love my country and I wanted to fight for it. I think we have a huge leadership problem politically. We have a failure of competence and a failure of values. You compound those two things, and that’s where we are now. A lot of people run who have never been successful in the real world. They go into politics because that’s a way for them to make money or get the most fame. But I think you need to be successful in business before you can run a $3.5 trillion P&L.

So I’m committed to Lima One Capital right now. I love being here. But I definitely continue to love my country and I would look for opportunities in the future to serve in elected office.

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