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Greenville Business Magazine

Lima One Capital: Primed For Post-Pandemic Surge

By Rick Spruill

Lima One Capital CEO Jeff Tennyson is a Harvard product but it’s his southern drawl that grabs your attention.

“I grew up most of my life on a dirt road,” Tennyson said of Harrison, Arkansas, his hometown. “Harrison’s population was – and still is – 386.”

Tennyson’s road eventually took him to Harding University, about 2 ½ hours away in Searcy, Arkansas. From there, Harvard Business School.

“From Harrison to Harding to Harvard. I guess I’m a 3-H man,” he joked.

But Tennyson, who is also a CPA, is all business when it comes to Lima One Capital, the real estate investment lending company he’s leading through – and out of – a pandemic that pushed business off a cliff last year.

“The first quarter of 2020 was our biggest quarter, ever,” he said. “Then Covid came. We went from 1,100 originations worth over $300 million in Q1 to 6 originations worth $8 million in Q2.”

This from a company founded in 2011 that, by 2019, was named one of South Carolina’s 25 fastest growing.

Despite the slowdown, Tennyson said the company stood strong.

“We felt committed to our employees. We didn’t have layoffs. We received a federal PPE loan which gave us the confidence to keep our employees and not disrupt their families and lives,” he said.

Rather than wait on things to change in the markets, Tennyson said Lima One’s leadership poured into their greatest asset – their people.

“We used the pause to invest in training, online programs, job skills improvement, leadership development and knowledge for our employees,” he said. “We took a ‘starting over’ mentality and realigned our processes and procedures.”

Tennyson said Lima One’s competitive advantage is not in its portfolio or property financing products, whose value is set by an array of market forces.

Instead, it’s Lima One’s people.

“They are our most important asset. Our service motto is to own every moment. Invest in every opportunity.”

And that makes sense, given the company’s heritage.

“Lima One” was the call sign of Lima One’s cofounders, John Warren and John Thompson, a pair of Marines who served on the front lines against Al Qaeda in Iraq.

“The name Lima One means much more than just a business name … it’s the cultural foundation of our company,” Warren said in a video highlighting the company’s history.

Now, as the world slowly reopens, Lima One is again growing.

“Today, we’re at about 170 employees,162 who are in Greenville,” Tennyson said. “We expect to be up to 220 by the end of the year. We’re real optimistic about the future of our industry.”

And they should be.

Before the pandemic ground everything to a halt early in the second quarter of 2020, the company was on pace to shatter 2019’s loan origination total of $1.1 billion.

In 2021, the goal is anywhere from $1.4 to $1.5 billion.

“We’re on track to meet those numbers,” Tennyson said on Feb. 5.

He said the pandemic highlighted the resilience of the $100 billion-a-year residential transition loan (Fix-n-Flip) market characterized by borrowers in need of small, flexible and quick-turn real estate investment loans.

Tennyson, who joined the company in 2018, stresses that Lima One is a hard-money lender, not a bank.

He said borrowers range from individuals doing one or two single- and multi-family home renovations to contractors doing 10, 15, even 20 flips each month, all over the United States.

“We’ve taken the traditional, hard money lending model – which can come with a negative image – and developed standardized processes for investors to follow,” Tennyson said. “As a result, returns can be anywhere from 30 to 45% for flippers. Throw in the loan process that makes it easy and cost effective, and we’ve created a much more competitive, economically viable model. And an easier way to do business.”

In other words, Lima One has reimagined the lending model.

But that, alone, is not enough, Tennyson said.

“I remind our team every day that the loans we make are, in the end, commodities,” Tennyson said. “Once the loan is closed, it belongs to the market.”

So, the company looks beyond the model.

“We exist to create opportunities that ultimately stabilize neighborhoods,” he said. “It’s not people just making profits. It’s providing families a much better property and giving them access to it. It’s a noble purpose that our team internalizes.”

Tennyson said creating a corporate culture that fosters a vision beyond itself is something he learned in the 2007-2008 housing bubble crisis.

“You can’t create a good culture in a crisis. You have to do that before a crisis comes.”

He said Greenville is a large part of creating that culture.

“The quality of life here is terrific,” he said. “Greenville’s cost of living is great, which folds into the overall quality of life, which helps keep labor costs competitive.”

And a plethora of nearby colleges and universities ensures a strong labor pool.

“That’s what Greenville has done for us and we’re thankful, because we get the best and brightest that fit the profile.”

But the company is not looking for lending or mortgage experience, per se.

Tennyson said of 10 recent hires, one was a former Clemson football player and another, a former Furman University debate team member.

“And we love that diversity,” he said. “We get people who really enjoy being a part of a growing company and we train them.”

Tennyson said as housing inventories contract nationwide and small borrowers look for rapid

access to the capital needed to fuel their projects, he expects Lima One’s growth to continue.

“If the next five years are anything like the past five years, the sky’s the limit for Lima One in Greenville, South Carolina.”