Five reasons I couldn’t stay away from real estate private credit

After more than twenty years building a career and business in real estate private credit, I sold a controlling interest in my firm in 2023 and moved from California to North Carolina with my family for personal reasons. For a time, I explored a range of business ideas—including even a start-up with one of my sons to commercialize my wife’s granola recipe. But ultimately, I came back to my love of real estate private lending and decided to build a new firm, again focused on making loans to residential real estate developers.

Here are five reasons why I couldn’t stay away.

First: Real estate is tangible and real.

Early in my career, I realized how different real estate felt from my work as a financial analyst. Spreadsheets and models are useful, but they’re abstractions. Real estate is physical—you can walk a site, see a neighborhood, and understand its character in a way numbers alone can’t capture. Every property is unique. Every site visit is a reminder that this business is grounded in the real world.

Second: Entrepreneurs drive the economy.

Our borrowers are developers who are quintessential small business owners—risk-takers who build housing, create jobs, and revitalize communities. According to the U.S. Bureau of Labor Statistics, small businesses have accounted for more than half of net job creation in the U.S. over the past decade and employ nearly half the workforce (source). Supporting them is both profitable and meaningful, especially in regions such as California where more housing supply is critically needed. When I meet borrowers with smart, creative projects, I often think: who deserves to succeed more than they do? And how fortunate are we to play a part in that success?

Third: The lender’s role is disciplined and focused.

Developers make thousands of decisions: what to build, when to build, how to build, even down to the bathroom tile. As lenders, we don’t need to do all that. Our job is narrower but no less critical: choose the right borrowers, structure conservatively, and build in downside protection. I’ve learned that I’m not a good developer, but I am good at lending and I enjoy playing a role in helping developers succeed.

Fourth: Real estate private credit offers stability through cycles.

Since 2000, we’ve seen the Dot-Com Bust, the Global Financial Crisis (during which the S&P lost more than half its value), the European debt crisis, the COVID-19 crash, the inflation and interest-rate shock of 2021–22, and the recent Tariff Wars. Each one reminded investors how quickly optimism can turn to fear. 

When I started focusing on lending, as a husband and parent of two young kids with a mortgage to pay, I appreciated the stability of real estate private lending as a way to insulate my life from the roller coaster ride of being a developer or other typical entrepreneur. Despite all of the market shocks, the lending funds I have overseen managed to deliver positive returns every quarter. This track record encompasses 15 years and more than 1,800 loans. As lenders, we forgo the excitement of huge returns, but we also avoid the gut-wrenching setbacks that accompany equity investing. Over the long run, I am proud to have delivered 7-10% returns every year.

Fifth: Private credit suits my temperament.

I’ve always been drawn to challenging, quantitative problems. In college, I studied physics because I wanted to understand how things really work. Real estate private credit is fascinating to me because I like quantitative problems and private credit lets me focus on a narrower range of parameters. The central question is one I’ll never tire of asking: what’s the safest way to deliver attractive returns consistently through full market cycles?