They Played Their Cards Right

In 1998 in a spare bedroom in Pico Rivera, California, three real estate investment buddies with two computers and one dial-up modem came together to create Anchor Loans. Twenty years later, Anchor is the number one fix-and-flip lender in the nation, operating in 45 states plus the District of Columbia with over 5.3 billion in loans provided to our customers.

 

Prior to becoming successful real estate entrepreneurs, we were three professional poker players who became friends.

 

I first met Anchor co-founder Jeff Lipton at a poker game in California, and he later introduced me to his friend Dan Harrington, who would become Anchor’s first CEO. Dan was a successful poker player as well — in fact, he went on to win the 1995 World Series of Poker Championship and authored six books on poker strategy.

 

We learned that poker was an excellent training ground for real estate investing because consistently winning at either of them requires a strict reliance on numbers (never luck) and a keen ability to analyze all available data. In poker, the data are subtle cues from your opponents, their playing styles and body language, which you must accurately read before making an educated guess — often in less than a second.  In real estate investing, although you have a bit more time for decision making, critical data must also be analyzed, including market conditions, housing costs, cost of living, rehab expenses and borrower demographics.  With either endeavor, whether it’s cards or properties, you must know when to bet or fold, so the better the data analysis, the better the decisions and outcome.

 

Along with our success in poker, Jeff, Dan and I had all discovered a passion for real estate investing. My interest was in rental properties, and I used that experience to hone my data analysis and rehabbing skills.  As time went on, my poker winnings allowed me to invest in more properties, and it turns out Jeff and Dan were doing the same thing with their winnings.

 

Eventually, with several years of real estate experience under our belts, we agreed to go into business together providing quick bridge funding to real estate rehabbers.  The fancy name for it was trust deed investing, but back then most people just called it rehab lending.

 

Anchor Loans grew quickly, and within a few months we moved our young company into a commercial office space in Santa Monica, and even hired a few employees.  Our original clients in those formative years served non-profit organizations active in HUD-sponsored real estate rehabilitation.  By 2002 we had expanded to serve the for-profit fix-and-flip market.

 

Fortunately, the real estate market remained strong for a few years, but in late 2005, Jeff, Dan and I believed the data began pointing to a market correction.  We knew that to keep the business healthy we would need to do two things right away: 1) be more strategic about our loan originations, and 2) diversify our business model.  As we began scaling back our lending, we also added our own in-house construction capability to help borrowers that were struggling to complete property rehab and to manage some of our own in-house fix-and-flip projects. As a result of these decisions, Anchor Loans remained profitable during the downturn when many mortgage lenders suffered devastating losses.

 

By 2010 the market data pointed towards recovery, so we invested in developing our proprietary fintech (financial technology) platform.  Our new intuitive technology platform took our ability to access, analyze, and act on market data to a whole new level.  As it turns out, Anchor’s fintech was one of the engines that propelled Anchor to the top of our industry.  Today, Anchor Loans is the nation’s number one private direct lender to fix-and-flip investors and the first to fund more than $1 billion in loans in a single year — with over $1 billion funded in 2016, over $1 billion in 2017, and over $5.3 billion life-to-date fundings since 1998.

 

Most of the credit for Anchor Loans’ phenomenal success goes to our dedicated team of 125+ passionate, hard-working employees.  Their single-minded, everyday focus on delivering the products and services our customers demand is what makes us the company we are today. Over 85% of our current borrowers are repeat customers, and 70% of our new borrowers were referred to us by their business partners, friends, family and associates. That says everything about the quality of customer service our dedicated staff provides

 

After 20 successful years helping our borrowers transform properties, neighborhoods and communities, we sincerely thank you for sharing this anniversary with us and for being a customer of Anchor Loans.  We look forward to our next 20 years together.