Brian Mingham

Founder of CFSI Loan Management

CFSI is a service provider to financial institutions, not a lender. They help financial institutions to assess whether to make a construction loan or not. The financial institutions hire CFSI to look out for their best interests. It is a business to business (B2B) relationship.

Whether a construction loans should be undertaken by a bank or financial institution requires more than just credit underwriting, which banks are very good at and that looks at your income, assets, and liabilities and determining whether or not you can pay the loan back.

There is more that has to be considered with construction projects. The financial institution also needs to know whether a construction contractor is competent, whether the bid that the customer signed to build the project is adequate, or whether there is a process in place to handle the draw management to be sure certain steps in the construction have taken place before the funds will be released to the contractor.

For instance, if the concrete company is owed for pouring the foundation, but the contractor is bad and does not pay him, then the concrete guy could put a lien on the property, an action that will impact the borrower and the bank, as the noteholder.

CFSI manages the whole process for the bank as it relates to construction. We make sure the construction company is competent to take on the project. We go through the bid and look at the different line items and make sure it has what the project really requires and that everything is priced properly.

There is a lot of risk that is involved in a financial institution making loans on construction projects and CFSI helps them to assess the level of risk. We handle residential, commercial, and multifamily types of projects. We go out and do inspections and we make sure the project is being completed on schedule and by the maturity dates on the loans. There is a lot to a construction loan that is different than a regular mortgage.

Where did the idea for CFSI Loan Management come from?

I was working at JP Morgan Chase in their bulk servicing acquisitions group in 2009 when due to the recession they decided to close down that part of their business. Along with a partner, I decided to start a property preservation company that would help banks manage their default real estate portfolios. I thought this business would keep me busy during the recession until I could get back into the mortgage business, but the company did very well and grew very quickly. Subsequently we started an inspection company and that turned into starting a construction company, and then that turned into starting an asset management company, and all these companies were revolving around default residential real estate. I was managing four separate businesses and then decided to roll them all up to just have one entity once I could see the default business would not remain stable forever.

As the economy was now changing again, I decided to start CFSI Loan Management. I believed it would be a business that would do well as the economy picked up and building and construction came back and that is exactly what happened. The default business continued to slow down, and the construction business started to pick up. Then a little over two years ago, I completely closed down the default services business and concentrated all of my efforts into growing CFSI. Becoming self-employed taught me to strategically look ahead and see where things are going and act upon that.

What does your typical day look like and how do you make it productive?

A typical day has changed obviously since COVID. I work remotely. Our office is located in Denver, Colorado, and I live is Southern California. Mornings usually start at 6:00 with coffee. I’m a big reader so I’m up reading up all the newspapers and finding out what’s going on in the world, clearing out my inbox while it’s nice and quiet before everybody gets to the office.

I always go to the gym, a run, or a bike ride, anything to get the body moving and thinking. Then from there, it is literally just call after call, client calls, and a lot of Zoom meetings. It is more one on ones with your people, more Zoom meetings, trying to get face time.

Traditionally, I am on the road every week, but that hasn’t been the case for the last few months because of COVID.

How do you bring ideas to life?

The good thing about being a small company, ideas come along at the strangest time and place. We’re big enough to be able to finance those things, and we’re small enough and nimble enough to be able to do it tomorrow. We have a “Think Box” and employees are encouraged to find system enhancements that increase productivity, new changes, things like that, and we try them, and we bonus people. We have been getting some very good suggestions from employees to try to improve how we do business. They like being part of it. They are recognized. They get a plaque and a bonus. It goes through our senior leadership team. We evaluate it, and we pick it, and then we start the implementation process. If it doesn’t work, it’s no big deal. It’s not like we’re spending a million dollars on an idea, but we try things. We make system enhancements to change things. We have product enhancements. We’ve created new products. It’s a cool thing to try and see what the market likes.

What’s one trend that excites you?

For me the biggest exciting trend is the leaps and the bounds of technology and how we have determined that working at home can be pretty productive. Obviously, it’s not great for everyone, but the ability to have Zoom on everybody’s computer, have everything mobile, people getting used to the ability to have group chats and group texting, and all the things we never really had as an organization because people would be able to put their head over their cube to talk to the person next to them. Now they don’t get to do that, so now it’s really great utilizing technology to the fullest and finding out that maybe we can do a better job of having more flexibility with people instead of just saying it is a 9:00 to 5:00 job in an office with no flexibility. Technology allows us to be more flexible. It changes the dynamic of office space and office needs and where you can get your talent.

What is one habit of yours that makes you more productive as an entrepreneur?

Being self-employed, there is never a Saturday or a Sunday that goes by that you’re not working on something. You can go on vacation whenever you want without asking anybody, but even when you are sitting on the beach somewhere, you are still working. The habit that makes me more productive is outworking. You have to outwork everybody when you are self-employed, and that’s not for everybody. You learn quickly, that if you don’t kill it, you’re not eating.

What advice would you give your younger self?

I always tell people that I could have never started the companies and been successful had I not been in large Fortune 500 companies first and learned how they did business, going to the management training programs, and doing strategic planning. You don’t get that experience unless you do it. You’re either young and dumb and get lucky, or you have to spend a lot of years in a corporate position and have somebody spend a lot of money on you to develop you and train you. I’m sure I’ve made plenty of mistakes in business, but I feel like none of the decisions I’ve made have submarined anything. They were learning experiences. But if you don’t know anything about business, it’s tough to run a successful business.

Tell us something that’s true that almost nobody agrees with you on.

I think we should put America first, veterans, the homeless, healthcare, and infrastructure before foreign aid and immigration.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Proofread your email before you hit send. Or when you are writing and you hit “reply to all”, it is the biggest faux pas you can make, and it doesn’t take long before you get punched in the face on that one.

What is one strategy that has helped you grow your business?

You have to know the space that you’re in and put yourself in your customer’s shoes and understand the customers they serve as well. It is understanding the up and down stream of who you touch in your business. Those strategies allow you to further your business. The more familiar you are with the customers that your customers reach, it can help you to come up with new business ideas. It can lead to adding new verticals to your business.

What is one failure you had as an entrepreneur, and how did you overcome it?

The biggest failure is probably a people failure, either not recognizing talent that you have or discounting the comments or ideas that they have. That was a problem we had early on. People on the frontlines have great ideas and we missed some of that. Now we use the “Think Box” for new ideas from our people and it forces the managers to listen to their people and have them feel confident about bringing ideas.

What is one business idea that you’re willing to give away to our readers?

With all of the COVID closures, we are now seeing on the internet that in Venice the dolphins are coming back, you can see again in the canals of Venice, the coral reefs in Hawaii have made massive comeback, and some of the places all around the world recovering with less humans affecting things. We should create all electric outboard motors. They only make little motors. I think a big boat engine. We should do if we know we can save the reefs and the fish and all that stuff. That was my newest idea that I have been researching: To have good electric outboard motors in all of these places were people use crappy oil dripping gasoline venting into the water when we all start traveling again.

What is the best $100 you recently spent? What and why?

I recently bought a Roku. It helps me connect my Amazon and all that stuff in my mountain house, so I don’t have to have all the cable packages up there.

What is one piece of software or a web service that helps you be productive?

We just spend the last year custom building our own loan management software to run our business, and that has been launched with great success. It’s made things work faster. We no longer have to go between multiple systems. Before we had an inspection platform, a commercial platform, a residential platform, and people would have to work in three different systems. Now we work in one. We spent a lot of money to do it, but the return should be great.

An off-the-shelf solution we use is Ring Central. The phone system through Ring Central is pretty awesome. It allows great communication, seamless, to people’s cell phones at home. It does not show the cell phone numbers. When they call the office, it rings to their phone. They can dial out on it. It’s the office number. It allows chatting and video conferencing. From an off-the-shelf perspective, we just switched to that and it’s been a game changer.

What is the one book that you recommend our community should read and why?

Who Moved My Cheese? is a classic book. I also recommend The Art of War by Sun Tzu.

What is your favorite quote?

Alan Greenspan said, “I know you think you understand what you thought I said, but I’m not sure you realize that what you heard is not what I meant.”

Economists and weathermen are exactly the same. They always have an excuse for why something didn’t happen the way it did.

Key Learnings:

• Employees are the backbone to your business. It is great to encourage and reward employees for sharing ideas.
• Don’t be afraid to try and go for your goals.
• Know your business so you can grow it.
• If I did not have a great wife and family, I would not have accomplished what I have in my business.