Keep everything simple and give real answers to real questions. I have a policy that we can’t use the term “policy.” We have real reasons behind whether we offer a loan or not. People understand reasons. Nobody understands the word “policy.”
Jeff Fullerton is the president of First Western Federal Savings Bank, one of the nation’s leading IRA non-recourse lenders specializing in customized lending on income-producing properties. Operating since 1979, FWFSB is committed to honest, no-nonsense customer communication.
At 21, Jeff became a stockbroker in the Denver market. He found he didn’t like investing other peoples’ money, so he moved to Gillette, Wyoming, and began managing a 1,400-acre subdivision and golf course. From there he bought into an auto parts store and a mobile home park in Alliance, Nebraska. He also began purchasing contracts for deeds at a discount. In 1984 at the age of 26, he became part owner and manager of FWFSB.
Jeff lives in Rapid City, South Dakota. In his free time, he plays golf, volunteers, and travels.
Where did the idea for FWFSB come from?
We are more of a business with FDIC insurance than a bank. Many of our ideas have come from the fact that owners have been in many businesses and understand the business world and the borrowers’ needs. We have always looked for niche markets. Anywhere there is a need for a loan or liquidity, we show up.
When we took over First Western Federal in 1984, it was losing more than $30,000 per month. Its loan portfolio had participation loans all over the United States. I think we averaged 20 cents on the dollar in returns. I found a loan portfolio of Federal Savings and Loan Insurance Corp. loans for sale from a failed savings and loan in town. We purchased it at discount. This was the start of our success. After that, I traveled the country buying failed bank loans at discount. We were soon a leader in the country for return on assets. Since then, we have remained a portfolio lender and have not sold a loan we have originated.
What does your typical day look like, and how do you make it productive?
I still do a good amount of lending. I am always looking for new niches and needs to fill. Management of the bank is not that difficult because we have a small menu of products.
Once I’m at work, I don’t worry about budgets or projections. I figure that if I make the best decisions on each issue, good things will happen.
When the day is over, I leave the office behind. If you leave the trees back at the office, you may find a new forest when you return. I am always looking at each news story, headline, or conversation to see if there is a niche to be filled.
How do you bring ideas to life?
Most banks have a product and force the customer’s needs to fit that product. We do things differently.
Once a customer’s need has been identified, we find a way to have the product fit that need. I have always asked the borrower, “Tell me what you need.” This works for us because we are small, which gives us the ability to look at each deal on its own merit. For example, I have seen credit scores in the 800s that I wouldn’t lend a dime on. A high credit score isn’t everything — you can have a great score but still have high credit card balances or poor use of credit. We’ve also seen many poor credit scores but had good reason to offer a loan to get people back on their feet.
Large banks simply cannot do this — they need to have policies, guides, and cookie-cutter offerings for loan officers to follow.
What’s one trend that really excites you?
The younger generation does not marry, have kids, or purchase houses. Thus, the rental market is getting tighter each day. This may not be viewed as good for the country, but it’s great for my customers, who are buying investment real estate to rent to the Millennial generation. This generation is driving up the demand for nice rental properties, and they’re willing to pay high rent in order to not be tied down to a property.
What is one habit of yours that makes you more productive as a business leader?
Keep everything simple and give real answers to real questions. I have a policy that we can’t use the term “policy.” We have real reasons behind whether we offer a loan or not. People understand reasons. Nobody understands the word “policy.” Once the customer hears our straight talk, we have gained their confidence. People like to hear why an answer is given.
What advice would you give your younger self?
To relax and take a little more risk to grow the bank. My business investing has been conservative. Successful, but conservative. In looking back, I could have been more aggressive. I don’t like to make mistakes, so I only took the gravy.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Never make the customer, employee, or service provider feel any less than you. A customer should never be intimidated to ask any or all questions. It’s their money, and they should know everything about the transaction. We never have a “banker” attitude toward a borrower. I never want a customer to feel they can’t ask any and all questions. It’s their money going into a deal, and they need to know everything possible about the financing.
What is one strategy that has helped you grow your business?
Always put yourself in the customer’s shoes. If you know what they need, you can service that need. Know where they are looking, and you will be found. Know what makes them feel good, and you can make them happy.
What is one business idea that you’re willing to give away to our readers?
Lonnie Scruggs’ “Deals on Wheels” — buying mobile homes and then selling them with financing — is a great idea for anyone looking to make money. For example, we bought mobile homes in a park that needed a fire sale. We paid cash, then sold at a much higher price with seller financing. I met Scruggs and went to his seminar. His teachings were better than my best finance classes in college.
What is the best $100 you recently spent, and why?
I gave $100 to an ex-Army man. He was a good man who broke his back in the Army and is now working as a bartender. He’s got a great attitude and smile. He never complains and is happy to see everyone.
What is one piece of software or web service that helps you be productive?
I rely on Google search for real estate addresses. You can find almost anything from your desk about a real estate property.
What is the one book that you recommend our community should read, and why?
“IRA Wealth” by Patrick Rice. He simplifies the self-directed IRA into usable knowledge. The book is not written as a textbook, but it does get the fundamentals across to the reader.
What is your favorite quote?
“Nobody worries about you more than you.” Many people offer advice. Realtors want to sell, advisors want to sell, but listen to yourself; at the end of the day you must rely on what is best for you.
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Mario Schulzke is the Founder of ideamensch, which he started a decade ago to learn from entrepreneurs and give them a platform for their ideas.