House Flipping: Stephanie Casper of Kiavi on the 5 Things You Need To Create A Successful Career Buying, Rehabbing, and Selling Properties

An Interview with Jason Hartman

Have realistic expectations: A lot of people get into this business thinking it’s going to be as easy as it looks on HGTV, not realizing that there’s a LOT you don’t see on those shows. When I work with investors, I like to have in-depth conversations with them about how much things will cost, how long it will take, and what problems could potentially arise. It’s hard work!

Shows like Flip or Flop have glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some newbies have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the ‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing Stephanie Casper.

Stephanie Casper is Chief Revenue Officer at Kiavi, a large, technology-enabled private lender to real estate investors with more than $13B in funded loans. Stephanie is a real estate investor herself with a small portfolio of rental properties, so she understands the challenges and opportunities facing other investors first-hand.

Thank you so much for doing this with us! Can you tell us about what brought you to the Real Estate industry?

I credit my initial interest in real estate to my grandfather, a first-generation American and child of the Great Depression. Over the course of his life, he was able to build up an impressive real estate portfolio, which he used to support himself and our family. While my path to the real estate industry was not linear by any means, having him as an example was critical to my eventual move into — and success in — the industry at large.

Can you share with our readers the most interesting or amusing story in your career so far? What lesson or take away do you have from that story?

One thing I’ve learned in my career in real estate is just how small this industry is and how much relationships matter. Prior to getting into the lending side of residential real estate investing, I worked for an advisory shop where we helped community and regional banks work through their troubled real estate portfolios coming out of the housing crisis. In that role, I worked with potential property buyers who would review the inventory, and through that, I became tight with this great group of guys in North Carolina. A few years later, I left that company to lead bridge lending for another firm, and during onboarding, I learned that one of the North Carolina guys was actually a bridge customer at my new firm! It worked out so well; this was someone I had such a great relationship with already, and he was thrilled that I was coming on to run the bridge lending business for them.

That was such a full-circle moment for me, and it made me realize how much relationships matter in this business. If you’re kind to people and easy to work with, that always pays off in the end. We had a Kiavi customer panel recently and this was a topic that came up a lot — the importance of building relationships and having a good reputation in the business. It’s huge for our customer base and, honestly, a good thing for people in every industry to keep in mind.

Do you have a favorite “life lesson” quotes? Can you share a story or example of how that was relevant to you in your life?

There is a very famous quote from Teddy Roosevelt that has always resonated with me:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

It might be a little overplayed now — I know Tom Brady has kind of co-opted it in ’80 for Brady’ and Brené Brown has referenced it a few times as well. But it’s popular for a reason — I love the message. People are so quick to judge from the sidelines without understanding what it’s like to be in the trenches, taking risks and doing the work. I find that very motivating.

Are you working on any exciting new projects now? How do you think that will help people?

As a technology-enabled private lender in the residential real estate investing space, I think one of the most exciting things Kiavi is working on right now is around leveraging our data and machine learning models to be better and faster than ever, which will enable more customers to efficiently access affordable capital in pursuit of growing their portfolio. Since Kiavi was founded in 2013, we have funded over $13 billion in loans for more than 50,000 investment properties across the country. Compared with the 75% industry average, 95% of Kiavi projects have successful exits thanks to our unique approach and data/technology platform.

At Kiavi, we take all of the customer data we’ve compiled over the years and feed it to our data scientists, who are brilliant at producing models that make us better and faster at decision-making. They’ve produced models that estimate property values once a renovation is completed, scope of work feasibility, and even how long a project or rehab might take. The sky’s the limit for what data can do to make Kiavi — and our real estate investor customers — successful!

What do you think makes your company stand out?

Kiavi’s technology is a huge differentiator! At a time when national demand for housing is at an all-time high, our technology platform, data and machine-learning models enables real estate investors of all stripes to reliably grow their businesses and create a steady supply of move-in-ready options for those in need of a new place to call home. We extend access to capital for more real estate entrepreneurs because our models prioritize the potential value of the properties themselves over the borrower’s credit.

For example, Kiavi’s After Repair Value (ARV) machine learning model is crucial in streamlining part of our internal valuation analysts’ jobs and makes a significant impact on our ability to close loans quickly. Our customers can get a loan in as fast as 10 days, which enables them to compete in a fast-paced market alongside cash buyers. Transparency and simplification are built into the Kiavi lending process, which is one of the reasons why so many of our customers come back to Kiavi time and time again.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

In my previous role, I worked with an incredible woman who served as the outside counsel at that company. She is an amazing attorney and she essentially taught me everything about the mortgage industry, the legal side of things, loan documentation, what that all means, and how it works. I basically got an honorary law degree from her! She was so patient and worked closely with me until I really understood everything I needed to. I was clueless when I walked through the door, and by the time I left, I could both walk the walk and talk the talk. I am so grateful for her support every day!

You are a successful business leader. Which three character traits do you think have been most instrumental to your success?

1. Expertise: I throw myself into every task — learning everything there is to know about any given topic and taking whatever time I need to really become an expert in that subject.
2. Authenticity: Being upfront and honest about who I am has been very helpful for me. Early in my career, I think I had to conform a lot, but as I’ve matured in my career, I’ve realized that people appreciate me a lot more — whether as their peer, manager, or representative — when I’m authentically me.
3. Curiosity: I genuinely like and am curious about people, and that has helped me tremendously in my career. Regardless of where I am or who I’m working with, I always make it a point to establish a rapport and learn as much as I can about people.

Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry?

1. I love that the real estate investing space is accessible to anybody. Unlike commercial real estate, which is only accessible to people with very deep pockets or institutional investors, with residential real estate investments, anyone with enough knowledge and perseverance can get into it. It’s the great equalizer and a great way to generate wealth.
2. There’s always a new opportunity. Five or ten years ago, the execution strategy for investors in our space was buying non-performing loans that they would take through foreclosure or REO properties. Then it moved to repositioning assets that were troubled, then into improving and selling aged homes. It’s continuing to evolve, and most recently, is transitioning into renovating and holding rental properties. I just love that, no matter what the market looks like, there’s always a new way to execute in this business.
3. The build-to-rent model is heating up. This has evolved over the last five years — right now people are creating purpose-built rental properties and communities. It’s a great way for a whole new group of people to participate in the single-family rental space, especially in this high interest rate environment.

Can you share 3 things that most concern you about the industry?

1. The regulatory environment is difficult in many places. Especially when it comes to the permitting for new housing stock, I think that is contributing to the shortage and the high cost of housing in this country.
2. Rising interest rates are also concerning. While the government is doing this to try and control inflation, it dampens home price appreciation. As interest rates rise, it feels like we are trying to solve the housing supply issue by killing demand.
3. Media reports about real estate investors. I don’t like that I’m seeing stories that institutional capital is killing the mom-and-pop investor or making it hard for the average person to buy a house. That’s a narrative that just doesn’t hold water. At Kiavi, our investors are thriving small businesses, not giant corporations, and I don’t think the public understands how truly accessible this industry is.

What advice would you give to other real estate leaders to help their teams thrive and to create a really fantastic work culture?

I think there is starting to be a big shift in the industry, which is something I am incredibly grateful for. In the past, you had to compartmentalize the various elements of your life — nothing could ever blend. And I think the idea that you can’t display any emotion or vulnerability in the workplace is so toxic, especially for women. Sometimes your family life has to take priority, and that shouldn’t mean you’re not committed to your work. That is now changing and while I still think there is a lot of progress to be made, my advice to real estate leaders is to be human and allow the people around you to be as well. That’s the kind of leadership I want to display and the kind of leadership I want to follow. Fear of failure feels a little less acute, perhaps, when you have a leader who is willing to say, “Hey, I make mistakes all the time, too.”

Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”?

1. Have realistic expectations: A lot of people get into this business thinking it’s going to be as easy as it looks on HGTV, not realizing that there’s a LOT you don’t see on those shows. When I work with investors, I like to have in-depth conversations with them about how much things will cost, how long it will take, and what problems could potentially arise. It’s hard work!
2. Keep emotion out of your investments: Housing is inherently emotional, but buying investment properties is different from buying the house you want your kids to grow up in. Of course, you are going to be emotional about buying your family’s dream home, but when it comes to purchasing properties for your investment portfolio, you need to think about the math over your feelings.
3. Find partners in the space: Your skills are your skills, but you can’t do everything yourself. Building a team of people who can all work together to plan, build, execute, and crunch the numbers will make all the difference.
4. Understand the market you’re in: “Location, location, location” is an old adage in real estate for a reason. Before you invest anywhere, make sure you do your homework. Understand the dynamics impacting the market where you want to invest. Go into the neighborhoods and meet people. Ask brokers, bankers, neighbors, friends, family — anyone with real experience about what it’s like to buy, sell and live in the area where you’re looking to invest.
5. Solve for the capital: Yes, it’s possible to be 100% financed and never use any of your own cash, but there is a real risk there of being over-leveraged. So, in my opinion, it’s important to make sure you have enough of your own cash to make things work in a pinch. I know that’s not what a lot of people in the industry are saying, but I personally think relying entirely on financing limits your options in the event you have a problem.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

I want to inspire people in the real estate industry to approach real estate investing with an abundance mindset. The success of others doesn’t hinder yours, there’s enough opportunity for everyone! The mindset I see sometimes when people push back against new projects or ideas for fear of encroaching onto their space has, I think, really contributed to some of the housing shortage issues we have in this country.

How can our readers further follow your work online?

We publish helpful insights, tips & tricks, Q&As, features of successful investors, and more on the Kiavi blog. You can also find me on LinkedIn.

Thank you for your time, and your excellent insights! We wish you continued success.

Thank you so much for having me! It was a pleasure to speak with you.