The Guy Who Can Fund Anything: Chris Piro of Searchlight Lending | Coffeez for Closers with Joe Shalaby

0:00Most lenders grind. Chris Pirro, he grows greens, raises chickens, surfs at sunrise, and still funds billion-dollar deals before most people even hit snooze. From modular builds to hotel portfolios, church loans, cannabis, classic cars. Chris built a boutique powerhouse on the deals nobody else wanted. I don't want to make a fee off somebody just to kick their pain down the hall. I probably could have, but I like to sleep at night, right? A dad first, a lender with integrity, a renegade broker, rewriting what boutique lending really means. This isn't just about rates and points. It's about presence, passion, and doing business in a way you're proud to pass on.

0:46From street sweepers to sharks in Pismo, this is the Chris Pirro Playbook. Welcome to Coffees. Right on. Thanks for coming down to SoCal here. Hopefully the drive was nice and we can make the best of it. Now, Chris, I like to start the show off the way I start every single show, which is, Chris, what's your morning routine? Morning routine. That's actually on my list here to go over. I mean, I'm a routine guy, which we can get into that as well. Discipline is freedom, I always say. So I get up in the morning, do my big cup of cold lemon water, splash my face with cold water, just try to wake up first.

1:22I don't hit the computer, the phone. um you know everyone says no phone or computer for an hour or two i don't go that hardcore but um i start with that have my cup of tea in the morning i do like to get up early you probably see i don't know if you got my monthly mailers i do get up at 5 a.m i try to get my two hours in so i can get my day set up set up my team and that way i can make my kids breakfast and hang out with them before they go to school so i get my uh cup of tea i'm not a coffee guy i just can't work on coffee, get to jury. And then I sit down with my notepad, I write down my to do list.

1:56So whether it's three items, five items, 10 items, I try to go through what's important to accomplish. And then yeah, kids breakfast. Usually I'll make a workout after that. I've already gotten at this point, I said about two hours in of work. And then breakfast did a workout or surf or depends on how the tides are. And then yeah, just hit it from there. So routine, routine, routine. Love it. Love it. How close are you to the water in Santa Cruz? Well, I can see the ocean from my deck about 0.8 miles, about 12 minute walk from my house. Nice. You want to walk with the surfboard? Don't walk with the surfboard.

2:35I'm a longboarder, so you guys can have any opinions on that. I'm too old to be a shortboarder at this time of my life, but yeah, I like to go down. I have an e-bike or I got, you know, a van. We have a B-class van that we took out during COVID with the family. So I can throw boards in there and go down. And, you know, in this industry, I just put in my calendar, like, surf like it's a meeting. And, you know, I have big clients like, oh, from 10 or 11, you know, you call it a board meeting, right? I have a board meeting. I love that. I love that. You know, one thing I'm surprised at with Searchlight Lending is you've really built your business on like the difficult products.

3:16Now, you know, what is it that makes you say yes to the things that like nobody wants to say yes to? Like nobody wants to work with SBA loans in the motor space. Nobody wants to do commercial. No one's - No one? Well, good. You can send them all my way. And that's why, I mean, that's I think why we built a niche. I think they're, and I don't want to say too much, you know, there's a connotation that they're more difficult. There's a connotation that they're impossible or there's different lingo, but a rate's a rate, LTV's LTV, collateral's collateral, right? So as long as you know what you're, I always say, as long as you know what more than the borrower, you're an expert.

3:54So I guess to answer your question, why we say yes to it, I started by saying yes. So back in, you know, I started in retail, did my whole shtick at the big banks, and then started my wholesale shop. And someone says, hey, any SBA loan, any construction loan? I don't know what the heck I was doing. And I said, great, I'll get back to you in 24 hours. Hit the Google, hit my network. Called bankers and said, okay. I didn't even know what 504 versus 7A was at that point. And I get back to the borrower and I'm learning as I'm going. And then you learn during the loan process, right? I mean, the best way to learn is to do the process.

4:31And by just getting those loans in, you know, after two, three, four, five years, now I'm the expert. And we can go in more to like affiliate relationships and how I'm leveraging and monetizing that. but just by saying yes, then we could go into life. It's about saying yes in life, right? You know, you become the expert through experience, and now that's kind of what we're known for. Now, in our research that we were doing about you, I saw that, you know, you've done cannabis. You've done, you know, churches. Yeah, yeah, cannabis loans, churches, even airplanes and art. Like, that is so outside the box.

5:08Art, how do you get financing on art? How do you get financing on? Yeah, so the art actually does have to be held. A lot of the times these are high net worth individuals and they're non-recourse loans just based on their balance sheet. So we're not attaching anything to them. We're saying this person's worth$500 million net worth. We're giving them 50 million bucks. And, you know, same with the auto collection. We're not taking the pink slips. We're actually just going off their wherewithal and their net worth. We're assuming they're going to keep their net worth. So, you know, if something does hit the fan, you know, they have other assets that they'll liquidate.

5:42So you use art, you collateralize the art, you collateralize. I mean, we're not collateralizing, we're not putting it, we will insure it, but we're not like putting it into like my basement, you know, in a lockbox, right? It's still where it is. The same with cars and, you know, all that. I mean, the planes and stuff will have to have UCC filings, like business filings. But yeah, it's really going over the financial strength of and that worth of that of that individual or entity. Right on. So what's the most unconventional deal you think you've ever done? I've done some funny ones. I mean, it is street sweeper.

6:16You know, I did SBA for street sweeper. We did a barge for the SF Bay that like dredged the bay. I mean, I've done 2 ,000 acres in Florida for a pre-entitled development deal. You know, I could probably throw off, I was working on a hotel in Mexico with like Kenny Chesney and the Cabo Wabo tequila guy. So I like to work on, there's out of the box stuff that's kind of funny. I mean, I did the power exchange in San Francisco, if you know what that is. you probably look it up. So we had to do a walkthrough on that. Yeah, you could look that up. I don't need to say what it was, but it involves a gentleman's club kind of theme.

7:03But I really like putting the deals together where it's syndication plus equity, investors. They're not easy, but it's fun seeing a lot of dirt go vertical to permanent to sale or stabilization. and working with these people, they are professionals. They're developers and builders. This isn't fix and flip. And we do that, don't worry. They'll want to fix and flips. But these are people building large construction projects. We've done stuff in the billions of dollars and piece it together. Nice, nice. Now, being in the business 23 years, you've seen some funky stuff. What deal do you think still haunts you?

7:47I mean, the deals that haunt me are always the ones where the borrower client either is just shopping you the whole time is wasting your time. Right. And I just like I prefer when people are upfront and honest. I try to be the same way if, you know, if I'm talking to an attorney or a doctor, I'll say, yeah, I'm getting a second opinion. These people ring you through, put you through the ringer. And then at the end of it, they're like, oh, I'm going somewhere else. And then they just appear with no explanation. That's just shouts my hide. it just be upfront and honest. It's a small lending world.

8:17It's just, you know, I like to sleep at night. I like to have good ethics. Tell me you don't like how my face looks or the sound of my voice or my rate was terrible. Whatever. Yeah, just don't disappear. I mean, just be professional. I mean, we're professionals. We have families like to sleep at night. You know, we're all people. It's not like just because you're through the email or the phone that you're impermeable, you know, it's just, you know, be nice. And yeah, it's a small world. A lot of times they come back later and I'm like, oh, you know. Don't want to work with them again. Yeah. Yeah.

8:52Yeah. I've had that happen quite a few times in my career as well. You know, you came from big banks, right? Now, big banks teach you a certain way of doing business, you know, the retail banking model, let's say. And I think big banks are even different than traditional IMBs. Now, what did you have to unlearn to really lead Searchlight in the right way? I mean, the big reason I left was because I could not do the out of the box or the tertiary programs. I mean, they have a smaller box. If you're dealing with the big banks, we all know who they are. They want this kind of program, this kind of product, this kind of borrower.

9:32They want deposits. They want banking relationships. They want credit card. They make the money on relationships. So I hate turning deals down. I like to do the tricky ones. And really what switched for me was saying, I want to be able to do everything. I want to help this borrower out. And when I go to do talks at affiliate shops, whether it's an EXP or a side office, I say the reason why I work with a broker full service is if your buyer or seller, let's say they have a broker they're working with and they say, okay, I'm going to go to B of A and get a business loan. Well, that B of A person probably has a mortgage person that probably knows a realtor.

10:11You might just lost your real estate relationship, right? You might have lost your transaction. So when I go into these affiliate relationships with either other mortgage offices or with realtor offices, I say we can do everything under the sun. And that way, when they come back, we track them in our CRM, what was the lead source. Two years later, a partner comes back, or client and they say, I want to sell my home. I say, oh, this is from XYZ realtor. So I'm relationship, relationship, keep it in the family, keep it in the circle of trust. Um, and I think that's really got to us to where we are right now is just, you know, giving back, keeping people in, uh, you know, in the circle and relationship.

10:50Now you'd like to offer, you know, your, your no doc loans, DSCR loans, stuff that like brokers they don't like to touch right um what what take on that kind of fire or and what's your take on that kind of fire and how do you protect yourself from these funky deals i mean i am i do lose deals sometimes that there is a less ethical broker on the other side and i'm okay with it if the person truly cannot afford their payment and, or they're getting funky on their income or they're, you know, it's, I'd say, here's an attorney's phone number. Let's go sell your property. Here's a realtor's phone number, get a price.

11:32Like, I don't want to make a fee off somebody just to kick their pain down the hall. Like I'd rather, and I have people come back to me and they're like, oh, I got to loan somewhere else. And I'm like, almost like, I'm sorry, but you know, I probably could have, but I like to sleep at night. Right. I, I don't want to put people in a worse pain point. So I understand if there is a borrower that has bank statement income on a non-QM loan, and they really show income, but if they just can't qualify for the property, or if they're behind on their current payments, and I'm going to put them in a higher interest rate, how are they going to keep it for their payments just because I gave them six months of interest?

12:07So I don't like to make things worse for people. You try to stay ethical. It's easier. Maybe the people, they need that check to pay their Mercedes payment or their, their house payment that month. And, you know, you can't, you don't know what other people are going through, but I'd rather just, you know, not, not make money on other people's backs and their equity. Love it. Now, what's the most unconventional deal that you've ever funded? And what do you think it taught you? Ooh, might take a second when they come back around to that. But, um, you know, most of my stuff that comes my way because I did have the nine years in retail.

12:48I'm kind of known with my retail buddies at the big banks as the out of the source guys, or out of the box guys. So most of my stuff doesn't fit into that box. So maybe the permits aren't in place yet. I mean, I love doing construction right now. We've done manufactured modular home. We've done, I mean, I really like doing business loans because you're helping a business expand. So we're doing some stuff right now in the fire burn areas right now, putting together investors, athletes, people that want to invest in the rebuild. So you're doing business, true business loans, not DSCR, like actual business.

13:23Business loans. It's not collateralized. Well, these people are putting together a fund. Then they're going to try to buy the fire areas and rebuild. So they have this new stick build off site. They're going to come in and build for cheaper than they can build on site. and they're putting together local people to help fund the redevelopment and the rebuild in the fire burn areas. So we're putting together$100 million plus fund to work on that right now. So if anyone's interested, we're still having people come in, but there's athletes, musicians, and we're putting together local people. So the insurance companies don't come in or the vultures come in and just snake these lots away from the community.

14:03so that's i mean i'm working on some pretty decently sized big stuff and it doesn't always go through but it still teaches you stuff it still builds your network you're still talking to people with high net worth so even if it doesn't come together or they go somewhere else uh and not always especially on the bigger deals we know they kind of you know they don't always go through but you're still learning during the process and you're getting contacts and relationships so i just like piecing together big deals whether it's bringing investors together high net worth individuals um you know builders people they experience now i mean it's crazy because we were talking earlier you got 100 agents and half of your revenue comes from these non-conventional deals so you really have become this like niche lender you know because i don't know anybody in the entire industry that makes half their money on these on funky products where you just take basically the toughest deals and make a true, like a high income off of it.

15:04Yeah. I mean, especially in this lower volume market, it's worked out really well. It's worked out well for our recruiting. It's a good value add. When I say, you know, everyone, I don't want to say everyone has the same stuff, but there's so many wholesale lenders out there, so much technology out there, CRM AI, we can throw that around. But when I say you can come over here and you do multifamily, mixed use, commercial, assisted living, hospitality. So many times a loan officer comes over and says, I just lost a land deal. I didn't know where to take it. I just had a construction deal. I could have made X amount of dollars.

15:38So especially this lower volume market, it's a good sales point and recruiting tool to bring over his agents. And it's kind of like a flywheel effect. The more we get, the more we're known. I'm on realtor lists and offices at the box guy. And yes, we do the conventional stuff. And most of our agents are 90 % residential first. But that's the value add with myself and Searchlight is we can train them, whether we take it over as a referral, or we take it over, you know, and keep them on communication so they can learn, or tell them, you know, the summary needs list, what kind of applications. And that's kind of like I said, say it again, the value add is that we have specialized in that and now we're known as that.

16:23And I think it's, people can keep thinking it's harder than a conventional loan, but LECD, Trid, Cooloff, with all the new regulations, I mean, residential loans aren't that easy either these days. Yeah, that's true. Now, I just, I'm curious, like what's the biggest deal you've ever done in this unconventional space? I mean, I have a term sheet right now and a$1.4 billion deal. It's a bunch of flagged hotels, portfolio of 100 flagged hotels so we're working on that right now that's interesting because we are not actually we'll see if that comes to fruition not every deal does right but um that's too big to even put on a balance sheet so we're going to put that together in a bond and sell it right to new york so yeah a couple you know you know 3 000 unit ground up here and there you've done something like that 3 000 units yeah yeah but our biggest funded loan is probably in the 200 250 million range um wow yeah yeah you're talking truly unconventional stuff but like do you still make two points on a 250 million dollar deal i wish um or 1.2 billion dollar deal like no no no and i won't say exactly what we make but usually at that point you're making an eighth a quarter um because most of these people can get institutional money or they have relationships with high net worth borrowers.

17:43It's almost like being in the broker space. If they have 10 million bucks at JP Morgan or Merrill and they're in a paper borrower, they're going to get relationship discounts. We're probably not going to beat them on a super jumbo purchase loan. We can't win everything, right? So it's this kind of same thing with these high net worth individuals. A lot of times they're flying on private jets with these banks and maybe they have relationships with high up people. We're probably not going to win that, but it's still the tertiary products with people that maybe use up the credit at the bank or maybe have a blemish in their history or maybe aren't cash flowing so we have to stabilize.

18:19So there is still a niche market for broker services. And I always like to use, I hate to say sales line because it sounds salesy, but it's like using a contractor. You can get your own plumber, build a house, get a plumber, you can get a painter, you can get a tile person, right? Or you can go to a contractor, which is pretty much a broker and say, okay, well, this guy trusts this plumber. He trusts this you know, painter. So we get the home Depot discount. We know we're not dealing with the teller at the bank. We're dealing with the VP or president at the bank. Right. So we have different rules, different qualifications.

18:59Um, and we get preferred pricing dual relationships. So yeah, maybe you're paying us a fee for our services, but we're shopping around to hundreds, if not thousands of lenders, which most consumers have time for. And we're getting you the best deal. And it more than makes up for the fee that we charge for our services. A lot of people talk about solutions-based lending, right? You actually live it. So what's your brutal rule for turning chaos into closings? hmm i mean i like to one thing i teach my team is really um managing expectations so if the borrower wants to close a private money owner rock deal which is a trade loan in three days not going to happen it's a trade loan 12 days minimum right with cool out periods like day one i almost treat it like a relationship or a marriage if we're gonna walk down the aisle altogether, it's not going to be that easy, right?

20:00I'm going to need additional documents. I may need additional documents later. Don't yell at me. I'm here to help you, right? Because a lot of times you get in a deal with somebody and you haven't laid the groundwork for what the next steps are and what's going to happen. And yes, they may ask for additional XYZ. The appraisal may come in low. So here's what's going to happen, Mr. Mrs. Borrower client. You know, I've been, I've done enough of these, thousands of these, and then I get the buy-in, right? If you really want to work together, I want to work with you to the end. Because if you're working with somebody else, tell me, please, right?

20:34You know, if you're dating somebody else, tell me, please. It's like a relationship. And you want to get to the end with a bar to understand the process. Because if you say, yeah, I'll close in 24 hours and the rate's 5%, you know, it's not, you're never pissed off bar, right? And it's bad for your reputation, word gets out, especially in these smaller circles with high north individuals, builders, developers. So I'd rather break up day one or hour one than three weeks into the process and they don't like me anymore. That's a good strategy. That's a good strategy. A lot of people just kind of cling on and just get burned.

21:12Now, let's dive into some of your initial passions. You know, what's crazy, you're a chef at heart, broker by trade, right? now how does being in the kitchen sharpen your edge in the boardroom i mean i'll start off by being honest i was i rarely worked in a kitchen i did open a restaurant as far as the passion side on the uh business side of it um i guess to sell a story because all my chef friends are all them yelling at me that you know i wasn't in a in a crowded kitchen as much as um you know maybe my bio says here, but I did open a restaurant and it taught me a lot about delegation. It taught me a lot about people in different slices of society.

21:56Um, you know, just about business ownership, right? Cause you know, or we know mortgage, we grew it and lived it 20 plus years. We can do mortgage while we sleep. It's almost like, uh, we're in the zone and we do mortgage, right? But cooking for me is more of a passion. And I was going to go to culinary school and college. My parents, thank you, you know, put me through a nice UC. I ended up finishing college. I went back to culinary school to start after my four-year degree. And then my buddy actually brought me to a job fair, you know, right in the mortgage boom, 2002 and a half. And I was in a suit, college degree, and I got an offer from HSBC that was way more than I expected.

22:36And I said, do I want to flip burgers and work nights and weekends and holidays? and I kiboshed the working in a kitchen idea. And then the rest is history. I was, you know, platinum club at Wells, top 100 person. And I guess I was good at it. It paid the bills. It afforded me what I wanted to do in my life, travel and all those fun things. And then, you know, I did have the bug still in me, the passion. I opened a restaurant and I did make it through COVID. It was four years, but it's definitely the passion was gone. And that's a long conversation. Um, but I got it on my system and now I'd rather just cook for my friends and family and loved ones because that way I can pick what I want to cook.

23:18Um, I can relax at home. I can see the end product and the happiness and the nutrition and all that. I mean, I cook six days a week, probably. It's like I can work 12 hour days and the relaxing part of my days is put on some music, you know, maybe have a glass of wine and just cooking what I want for my family and loved ones. Nice. What's your favorite thing to cook? uh i mean anything on the grill a barbecue i got three different grills and smokers um family loves ribs i just made chicken wings last night they love tariki chicken wings we do sushi night i get sashimi grade sushi and do it up it's hard to get all you can eat sushi when you go out we eat a lot so especially my kids get older my kids eating like 40 bucks of salmon sashimi so i'll do lots of sushi um yeah and then we have a big garden like gardening is kind of my zen as well because i can be on a conference call with a client i have a big i mean i have so much kale and lettuce and tomatoes coming on my ears and come bring a bag by it so you pick garden um but yeah the kids will eat anything out of the garden they can get their hands on so but i like to see them you know healthy nutritious and that's awesome so you're teaching them the garden yeah eat off your own land yeah i say go pick whatever you want whatever is in the garden you go eat it's good it's like it's like the blue ocean thing right it's like community keep moving and then like have your own food source right so how much of your own food do you eat besides the garden do you have like chickens do you have a you do have chickens my wife's in charge of the chickens so we just got 10 we had five or six they had their their run they lost about three years while they're producing eggs and we just got 10 more chickens this easter so but that's my wife's department so we we share the do you have a full farm No.

25:04I mean, we have some land. It's enough. I mean, I do have a ranch, which is a different story. But that's a longer story. But we have enough. We're about three-quarter acre. So we have enough to feed our family of four. So usually I'm buying some meat and then having a big salad or kale. Or I did broccoli this year. So I do all the greens and everything. And then I'll add some protein on the side. That's awesome. You don't get that kind of land here in Orange County? No. No, no. I mean, we tried chickens for a while, but, uh, you need like a rooftop garden here to be perfect. That's a big thing in New York, right?

25:41Yeah. Um, now, uh, searchlight doesn't just like survive on niche lending and it's like, it's dominating in that space. Now what's right. One regulation or policy or, or trend you're actively pushing right now. I might've think about that. I mean, I'm not, I'm not currently active. I was doing, you know, MBA and all these different events. I'm, I'm, I am networking groups like Bama and stuff like that. So I'm really into, I think talked about this before the cast here is I'm really into working with other broker owners, like-minded people. I'm an open book. I like to talk about if my agents want to talk marketing, business planning, what books I'm reading, you know, et cetera.

26:25I'm an open book. Like I meet with other broker owners as almost advisors and I'm fine sharing information. What marketing is working? What marketing is not working? You know, here's my, you know, contract XYZ. So I'm fine sharing that because I think, especially in this broker world, anything helps. And to have a trusted community where people can, you know, have experiences, whether good or bad, it helps you guide the company, you know, share business back and forth. If I, you know, I can't do this property or that property. So I really like building a strong network of other like-minded broker owners and being able to share content and success and failures.

27:06I mean, sometimes it's a lonely industry we're in. A lot of people are behind phones or still working at home. And to have a voice or like I always say, my group, Searchlight is a team or a family. You know, when somebody dies, we know who they are. Somebody has a birthday, right? It's not just, you know, your NMLS, MLO number. these are people with families and you probably think the same thing sometimes you're like wow i have hundreds if not more people that rely on their whole you know livelihood on what i've built or what i support and it's you know when i started this search like you know 15 years ago i was probably the second youngest one in the company and sometimes i'm like there's these people's livelihood they're putting their kids through college on the platform model lenders um marketing that I put together, you know, it's almost like, uh, sometimes it's exciting.

28:01Sometimes it's daunting, right? It is. That's right. You know, it's a lot of pressure. Yeah. Now a couple last questions. Now, if you had to pitch searchlights model in one sentence to a burnt out loan officer, what would you say would make them quit their job right now? Uh, to keep it short, we have sources that will make you revenue for the loans you may be turning down right now. simple now a couple last questions now you've been fortunate enough to you know basically establish a pretty successful business on your own you're obviously a grinder and uh i asked this question to all my guests it's how are you instilling that same grit that same tenacity that you have in your children i prefer hustler or grinder but maybe grinder has the worst term these days.