Debra Donahue, a regional account executive at Cardinal Financial in San Jose, California, not far from Shekhar’s office, says she has worked with him for several years over a few different companies.
“We all know he’s a large producer,” she added. “He has a very good business model and he runs his business very professionally. He’s got a great team of processors that support him. He’s very thorough and his loans are very well put together. He runs a great business.”
Regarding the recent seemingly overnight growth in Arcus’s plans, Donahue in unfazed. “Growing the model is just a natural progression in his business,” she shrugs.
Of course, Shekhar’s now trying to do all of this in a coronavirus economy – kind of like jumping out of a plane, confident you’ll live even without the safety of the aircraft and reveling in adrenaline-fueled challenge to win. But then, he’s faced odds like this before.
Learning In, And Leaning Into, A Recession
Clearly, Shekhar must love a challenge. In 2008, he was only two years out from leaving his native India. With less than $2,000 in savings and no contacts, he started as a mortgage broker, just as the U.S. residential real estate market was collapsing.
That first year he made only seven loans, but he persevered. Learning how better to connect with clients, how to market better. And each year, his production increased – often in seismic spikes. In 2019, practically single-handedly, he originated nearly $200 million of volume at Arcus Lending.
“It was crazy for sure to want to get into mortgages in 2008, but as Warren Buffett said, you buy when everyone is selling and sell when everyone is buying,” says Shekhar, who was 32 at the time.
“I saw an industry where 65% of the people left in those years, and I was coming in. But if you believe this is a long-term industry, from that perspective you feel good and that you will end up with a bigger market share. So, looking back, 2008 and part of 2009 were bad for me, but I wouldn’t do anything else different.”
That attitude helps explain his confidence in the midst of the coronavirus pandemic, as he stands by his plan to double the number of employees working for him. It’s an expansion that started halfway through 2019, but it got off to a quick start. In just a year, his company now numbers 50, including over 30 brokers and 15 in operations, just about all of them hired since last June. Arcus is currently licensed in 14 states, with a physical footprint in 10.
Always On The Fast Track
My first job after business school was with GE Consumer Finance in New Delhi, India. I was fast tracked to a manager position there within two years. I joined a small startup after that and was transferred to Mountain View, California, as director of product management reporting to the president. I barely worked there for two years before they shut down due to the financial crisis in 2008,” Shekhar recalled.
His first mortgage job was First Priority Financial, a broker turned banker in California. But he wanted the freedom to work the market the way he wanted. He took a leap of faith and launched Arcus in April 2008.
What he saw then, he sees again now. “When things get difficult, you have a lot of people who leave the industry because they are used to easy business. They’re not used to the unemployment and foreclosure rates rising to record levels and lending guidelines much stricter than they used to be. That leaves the betterquality professionals, which I think is the way it should be. For people like us, I see it as an opportunity to gain an even bigger market share. I’m very confident.”
In mid-2019, it was easy to be confident about the economy getting better. The conditions helped fuel the decision it was time to make Arcus Lending beyond a one-man band. While Arcus was doing fine based on his own performance, Shekhar wanted something more.
“When you produce on your own, you’re not really creating a legacy or anything that has any value because if you stop originating tomorrow, the company has no value,” says the married father of two daughters who lives in Saratoga, California.
“I wanted to create value for the company itself and not just me as an originator.”