Since 2007, Socotra Capital has funded over 2,000 loans, totaling $1 billion in private money loans across 22 states. Based in Sacramento, they are a premier private hard money lender and have built their reputation through consistent performance, reliable service, and fast delivery.
We caught up with Socotra Capital’s CEO, Adham Sbeih, to talk about how the company’s history and constant drive to improve have shaped what the company represents today.
According to the website, Socotra Capital is a private money lender specializing in hard money. Can you explain what “hard money” is?
Socotra Capital is a private money lender specializing in financing real estate investors on projects that may not be possible through traditional methods. As a premier lender, we are filling the space that many banks aren’t filling, whether it be a bridge loan, fix and flip loan, commercial refinance, construction projects, or other real estate projects.
The term “hard money loan” refers to a loan backed by a “hard” asset, such as real estate. If you’re a real estate investor or house flipper and need financing for a deal, a hard money loan might be a solid option to explore.
These types of loans aim to secure a property to renovate or develop and ultimately sell it for a profit. An investor might choose a hard money loan over a conventional loan because of the ease of access to the funds. Lending options from financial institutions often have complicated approval processes and weigh heavily on the borrower for approval. Hard money loans are asset-based and typically secured by a mortgage, so their approval process is much faster.
The company has been in business for 15 years and has become a successful regional loan provider. As a start-up, were there things you learned through the process?
I started Socotra in 2007, and John Ingoglia (my partner who passed away in July 2020) joined me in 2008 right before the Lehman Brothers collapse. Back then, I did everything:
- Sourced the loans.
- Found the lenders.
- Drafted up the loan documents.
- Collected the payments from the borrower.
In the 15 years since our inception, we’ve learned that there is always room for improvement. Problems happen when things get sloppy, so sticking with and trusting our processes is essential. We always ask ourselves: What can we be doing better? Where can we find additional opportunities? How can we improve?
What makes Socotra different than other lenders?
We have a relentless pursuit of improving the process and system. We work hard to give people opportunities to grow. We also take the time to celebrate the victories.
When it comes to real estate investment strategy, we don’t take a cookie-cutter approach. There are many opportunities to receive funding for a project. As a private lender, we can offer greater flexibility than most traditional banks. Socotra can also turn a loan quickly once all the paperwork is complete, often in a week. We can do this because our underwriting is primarily based on the current market value of the property as it sits.
Our team takes pride in providing value to our investors, good loans to our borrowers, and solid careers for our team.
What was the first deal you ever funded as a company?
The first deal was secured by an industrial building for $580,000. It took us four and a half months to raise the funds. It was a family affair, receiving investments from those closest to us. I still have the first check we ever received for $10k, a result of five months of work.
We operate four private placements and 3 REITS. Today, we have over $450 million in assets under management.
Last year Socotra Capital was voted one of the Best Places to Work by the Sacramento Business Journal. What are the key ingredients in hiring and retaining your team?
Socotra hired its first employee in 2008. We are now 31 people strong.
We know that for the team to win, we must also help the individual team members succeed. As a company, we work hard to ensure everyone on the team is respected. There is a relentless pursuit of improving the process and systems to give people opportunities.
We embrace the theory of aggregation of marginal gains, where everyone looks for 1% improvements. Everything we do is driven by and measured against our values. And now that things are starting to open up, we are excited about the opportunities that bring us back to the office. We enjoy the camaraderie and the engagement.
What is your favorite part of the job?
My favorite part is watching people grow and develop. I enjoy challenging our team and seeing them grow and respond. Along the way, we have hired college students as interns. Some have stayed with us after college and have become superstars. I am excited to continue to grow Socotra and provide value to our investors, good loans to our borrowers, and solid careers for our team.
Volunteerism is part of your company’s culture. What community organizations does Socotra support and why?
Since 2009, we have sponsored and organized a summer softball league for commercial realty brokers in Sacramento. The money raised during the season comes from the players who ask sponsors to pledge $20 for each strikeout, hit, or homerun. The league now has several sponsors, raising thousands of dollars each year. Socotra Capital matches the money raised by sponsors and players, and the funds are donated to Los Amigos/Sacramento Children’s Home.
Why the name Socotra? Is there a special meaning behind the name?
Socotra is named after an island off the coast of Yemen in the Arabian Sea. Many residents of mainland Yemen have sought safety from the war on Socotra Island. Socotra’s name stems from the firm’s ability to be an island of refuge for borrowers. The late John Ingoglia, the company’s founding partner, named it as such because he always said the best loans are those made in the ‘depths of uncertainty.’
Socotra’s logo is of a dragon tree, an endangered species that can only be found on the island.
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