John C. Lettera is the founder and CEO of RealFi Financial LLC, a leading technology driven alternative investment management firm with expertise in real estate credit strategies. Through its subsidiaries, RealFi is an originator of qualified and non-qualified residential home mortgages and through the RealFi REIT, a leading real estate finance company, the firm is a direct lender focused on originating commercial real estate bridge loans in major markets throughout the United States.
John began investing in real estate in 1990, during one of the lowest points of the real estate market and capitalized on this opportunity. Once John realized how legal intensive this industry is, he decided to attend law school. Early in his career, he was recruited for a top Wall Street law firm; however, John quickly realized that a law firm, or any businesses where you bill by the hour, is one of the most inefficient business models out there. Your potential to earn more money is capped and limited, which is what encouraged John to quit his job, leading to something beyond what he had envisioned. Fast forward to present time, Realfi is recognized as one of the nation’s leading mortgage companies and employs hundreds of professionals and continues to grow exponentially.
John began investing in real estate early on and wanted to learn and absorb as much as he could. As he developed an appreciation for the financial structure of how a real estate deal works, he was intrigued to learn more.
“The more I learned about the relationship between equity and debt, the more I liked being involved on the debt side. I appreciate how every real estate deal is unique, and the factors that contribute to the potential risks and returns vary. The structure of the capital stack will therefore also vary from deal to deal. It’s a constant intellectual challenge,” John shares.
Furthermore, the more John learned about investing, the more he realized that a successful business is one that can be sold. This was the motivating factor behind institutionalizing his real estate investments into a real business that can be sold for a large multiple.
Despite the hurdles that go along with starting a business, John recognizes the importance of a leading with a positive mindset:
“We are not born afraid of failure, but we are taught to be embarrassed by it. An entrepreneurial mindset requires a way of thinking that enables you to uncover and see problems as opportunities, and then turning those opportunities into a business. If you believe somehow you’re set to a certain capability and level of accomplishment, then you’ll never achieve anything more. However, if you believe you can get better and do other things, that growth mindset will enable you to accomplish more,” shares John.
Throughout this year, John is set on continuing to grow RealFi through strategic acquisitions, as well as continuing to upgrade their technology to ensure they employ the latest financial technology. One of the things John has learned is that in order to thrive, it is important to listen to the people on the front lines and adopt an adaptable, engaging, and fluid management style. Furthermore, while the business has experienced significant growth, John understands that in order to stay relevant in a changing market, it is necessary to diversify continually.
“Our real estate debt business provides creative and comprehensive financing solutions across the capital structure and risk spectrum. We originate loans and invest in debt securities underpinned by high-quality real estate. We manage RealFi REIT, which originates loans collateralized by commercial real estate, and RealFi Home Funding, which originates qualified residential home mortgages,” John explains.
Hence, their objective is to fill the gap on assets with a lowered cost basis, allowing them to obtain excellent risk-adjusted returns up and down the capital stack.
“While many factors come into play when building a business, I believe that the most important ones have nothing to do with innovation, balance sheets, finance, or marketing. The most important variable to your success in business is you. You are the author of your own life, and it’s never too late to replace the stories you tell yourself,” John says.