High-net worth, high stress: Why even millionaires need creative financing

Florida has had a rough time of it lately. Hurricanes, floods, storms - a myriad of natural disasters have left the Sunshine State feeling more glum. Between 1980 and 2024, Florida was affected by 93 weather and climate disaster events, each causing losses exceeding $1 billion – with that number nearly doubling between 2004 and 2023, marking a staggering 93% increase, according to First Coast News.

For Philip Bennett, president of Bennett Capital Partners Mortgage Brokers, the story of Florida’s mortgage market is one of transformation, resilience, and adaptation. And, with over two decades of experience in both residential and commercial lending, Bennett has weathered cycles of boom and bust, pivoting when necessary and finding much needed opportunities in disruption.

“There’s been a lot of changes, specifically with COVID,” Bennett told MPA. “The pandemic reshaped the migration patterns of potential homeowners, with many fleeing densely populated states like New York and California. “These lockdown-driven relocations shifted his client base significantly – in fact, “50% of my business has been New Yorkers,” he said.

Research from James Madison University found that during the COVID-19 pandemic, Florida experienced a significant influx of new residents. Between April 2020 and April 2021, approximately 330,000 people relocated to the state, averaging about 903 new residents daily. And this trend has only continued – as of April 2024, Florida's population surpassed 23 million.

‘Commercial financing… is just really hard’

The influx of Californians however, initially robust during the pandemic, waned somewhat after pandemic restrictions eased.

“They pretty much stopped, but I still have some coming to South Florida,” Bennett said. “Pre-pandemic, the market was heavily reliant on international buyers from South America and Europe. However, COVID-induced travel bans stifled this once-thriving segment. They couldn’t come to the United States to travel, so that just really dried up tremendously.”

And it’s not just the personal mortgage market that’s been reshaped in Florida, commercial lending, a staple of Bennett’s early career, has faced a severe downturn too - one he compares starkly to the Great Recession.

“Commercial financing… is just really hard. A lot of banks won’t touch it,” he told MPA. The collapse of institutions like Silicon Valley Bank exacerbated the problem, leaving few willing to lend unless clients boast impeccable balance sheets or strong banking relationships.

‘I can make a career out of this’

Here, Bennett’s response was to lean heavily into residential lending, drawing on his deep industry knowledge developed since his start in 2000. As he told MPA, his own personal journey into the sector was fortuitous, recalling working in accounting at a large national firm post-college with a modest salary before discovering the lucrative world of mortgage brokering while in Graduate school getting his MBA.

“My first commission check was $20,000, and I thought, ‘I can make a career out of this’,” he added. “And I took it really seriously because, at the time I had Bear Stearns , Chase Bank, Wells Fargo and Countrywide Financial in our offices to give presentations on their products. I actually left a good career to switch to mortgage.”

Hard work having very much paid off, Bennett has built a niche catering to high-net-worth individuals, a demographic that presents its own set of unique challenges.

“Believe it or not, a lot of high-net-worth clients don’t have the highest credit scores,” he said. “They're busy traveling all over the world, or they're working 100 hours a week. And they don't necessarily pay their bills on time, all the time – so customers could have credit challenges.”

But bad credit isn’t always the only puzzle Bennett has to solve. Bennett recounts a recent case involving a client with a multimillion-dollar property held in trust – and the client needed liquidity for a new venture. 

“We closed a two-year bridge loan, pure asset-based, against the trust,” Bennett added. Other clients, such as commercial real estate investors with voluminous tax returns, benefit from tailored products like bank statement programs or profit-and-loss evaluations.

“We can take the deposits in the bank statements and draw an income off that,” he added.  “I’ve done loans for race car drivers, hockey players, baseball players. Everything I do is private. I take pride in that.”

Digital transformation has revolutionized the mortgage industry, a shift Bennett has embraced fully. “It’s 100% digital now,” he said, recounting how processes once dominated by paperwork and face-to-face meetings have transitioned to secure uploads and AI-driven underwriting.

He highlights a particularly unique case: a client completing a property deal from a cruise in the Mediterranean via a remote online notary. 

‘You have to be prepared for the ups and downs’

“Before COVID, this wasn’t even allowed,” Bennett noted. Tools like DocuSign, secure digital platforms, and AI have streamlined processes for both domestic and international clients, reflecting the industry’s move towards greater efficiency.

And yet, Bennett maintains a personal touch in his interactions.

“I’m available 24/7,” he said, noting that clients often text him directly. The combination of cutting-edge technology and hands-on service defines his approach. Reflecting on the volatile cycles of the mortgage market, Bennett draws on his experience during the early 2000s and the 2008 crash, highlighting the importance of adaptability and foresight in navigating such upheavals.

“You have to be prepared for the ups and downs,” he said. “This industry is always moving, and you have to move with it.”