A serial entrepreneur, Victor Mitchell has successfully founded, acquired, and/or turned around numerous diverse business ventures over the past 30 years. His ventures include interests in finance, transportation, communications, technology, building supplies, real estate development, and brokerage services.
Victor Mitchell is the founder and CEO of Lead Funding, a specialty lending organization that provides innovative private financing solutions for homebuilders and developers, reducing their red tape and speeding up loan decisions.
How did you get started in this business? What inspired you to start this business?
Lead Funding was formed based off of another business that we owned called Essence Homes. We had developed this incredible proprietary valuation tool, and all types of real estate investors started coming to us and asking us if we would consider lending to them because we had such a great valuation tool. We ended up selling that business and started Lead Funding. Lead Funding just celebrated its 10-year anniversary on June 26th.
How do you make money?
We lend money to small real estate developers and investors, and we charge a higher rate than a traditional bank. We make money on interest and fees, but we help our customers in every facet of their project so that they can be successful. We provide our customers with many services including reviewing their project and architectural plans, getting them contractor referrals and contract forms. They’re potentially paying a slightly higher cost, but they’re getting various services, and we can also underwrite and fund the loan in two business days. It’s much easier to work with us than a traditional bank. If you look at everything, including the services we provide for free, even though there’s a slightly higher cost of capital compared to a bank, we’re so much faster and so much easier to work with. We have over 450 clients across six states currently.
How long did it take for you to become profitable?
The business was profitable the very first year. We’ve been consistently profitable every year for the ten years we have been in business. We grew more than 100 percent organically for five straight years. We’re one of the most successful private companies in the state of Colorado, and now we’re one of the largest private lenders in the United States as well.
When you were starting out, was there ever a time that you doubted it would work? If so, how did you handle it?
It was a business that I didn’t think of. It came about through another company I owned. Once we saw the demand, that there are so many real estate investors that need capital, and then we figured out how to underwrite very efficiently and provide a very high level of customer service, I had no doubt the business would be successful.
How did you get your first customer?
Through referrals. Through our other business, customers were coming to us asking if we would lend them money to acquire real estate assets because we were able to buy assets and seemed to have a lot of capital that other investors didn’t have. Eighty percent of our business today is from referrals and repeat customers.
What is one marketing strategy that you’re using that works well to generate new business?
We do a lot of networking at real estate events, and we do a lot of digital marketing as well.
What is the toughest decision that you’ve had to make in the last few months?
The toughest decision is to determine what additional risk if any we should take on as the market is maturing and also should we try to pass on some of the extra interest expense we’re incurring. Right now, the Federal Reserve has been consistently raising interest rates for the last two years and that has adversely affected our business. To date, we’ve never increased our rates or our pricing to our customers in ten years.
What do you think it is that makes you successful?
What has been your most satisfying moment in business?
Helping our customers achieve financial success by providing them capital that they otherwise wouldn’t have been able to get.
What does the future hold for your business? What are you most excited about?
We’re expanding into the Texas market, and we’re in the midst of a very large capital raise, and we hope to take the company public in the next couple of years.
What business books have inspired you?
I don’t usually read business books. I teach business and entrepreneurship courses at two major state universities, but I’m not a big business book reader, although one of my favorite books was Walter Isaacson’s book about Steve Jobs. I found that very inspirational.
What is a recent purchase that you have made that’s helped with your business?
We have a number of large credit facilities we have been to be able to secure this year from two major banks successfully.
Victor Mitchell around the web: