I've had the pleasure to know Bill for over 10 years and I consider him a good friend as we manage NPL REO fund from 2013 to about 2017. Together. From that we created the value of 45 44% internal rate of return on the funds. Bill was written a best selling book in Amazon that I strongly recommend everybody should buy called Win Win revolution, which describes the loss mitigation strategies that that we use in that business model on the fund. Build his team are very active early on on this in this part of the cycle. And it's my sincere honor to introduce Bill and his team to the elite real estate network bill. Congratulations on your recent portfolio acquisition, and welcome.
Thank you so much, Joe. And it's great to see all these folks here today. All hard workers loving the real estate world. And so those of you that I can't see, I know you're there in spirit. I have two of my members with me here to my team. Both are our partners and asset managers in our portfolio. Carlos to Hey, Soos is who I've also known for over a decade he I was a client of his when he was one of the original executive asset managers for face servicing. And backplane when we always had a had a kind of hope that, you know, someday he would come we would come a call him. And a year ago, Carlos joined the team Carlos say hello,
guys. Like Bill said it's been it's been over a decade since I've known Bill, and as you said about a year ago, made the leap to come join Bill's team and it's been it's been fantastic ever since.
My other partner who's here, Eric Gonzalez, he is Eric and I have worked together for about 12 years now. We were the two senior asset managers for spurs capital. Eric was responsible for the northeast of the country and I was responsible for Florida for over a decade before we went out on our own. Eric is is joining us from Queens, New York. And I'm just happy that he's he's my partner and he's here today. Say Hello, Eric.
Hello, everyone. Thank you for your time.
You know, I don't know how you'd like to take this as if we wanted to start with a question and answer or you want me to start by maybe telling you a little bit about our existing fund and then you know where how I got started in the business. Does that does that work for you?
Yep. Tell us about your fun or what you guys are doing currently. It's a good good place to start.
Yeah, great. So um, you know, it was two years ago, three years ago when COVID hit I just got the new email and I got on Okay, great. Glad you're with us, Trisha. So, it was about two and a half years ago, right? Three, you know, maybe three years ago when this this virus hit. And we all thought that oh, great opera. We're gonna have a bunch of default scenarios, right. So I was at that time planning a move to California to sail off into the sunset. But the opportunity I saw on the horizon was too great. And needless to say, we've had a three year delay before the stress really has started to hit. You know, that happens when you write you know, you helicopter three to $6 trillion of new cash and keep interest rates at zero. So, you know, Joe made a comment many of you didn't hear when you might have not been signed on yet, which was I moved from Jupiter Florida to California in in early 2020. And I was subsequently selling off real estate before I left my home and Jupiter. I sold to someone who really literally knocked on my door and what I thought way overpaid me for it. So and that was at the end of 19 So when the virus hit I thought oh man I made it. I was the most brilliant guy in real estate. And legal is to say I left a few million bucks on the table, but you can't time this thing. Right. So we started firstly in capital we launched in March. Of 21. Our first acquisition from Carrington mortgages was a group of about two dogs in New York. NPL. You know, imagine what it was like remember what it was like in 2021 When all the courts were closed for over a year at this point, and with New York, they were the last ones to reopen. So we were able to purchase stuff that was had, you know, sale dates that were set and canceled just before COVID. And so they were late stage foreclosures kind of just sitting there, ready to go to sale but the uncertainty allowed us to buy these quality assets sub 50 cents which is better than what you would normally pay for, you know, along the lines of what you'd pay for an early stage foreclosure in New York. We've subsequently gone on to place just over $70 million of equity over the last two years. We own just over under 800 loans currently only 100 of which are non performing. And we're the non performing while we're in 35 states as a whole. The non performing portion is mostly concentrated in the Northeast in Florida. So it were mostly a little bit in the Midwest. We got you know, stragglers here and there. We had one in Oregon, one in California, etc. But we do expect to see more NPL purchases obviously coming on a more nationwide basis, which is why we are doing meetings like this to reconnect with our broker network across the country and fill in the holes in places in the country that maybe we haven't been working as much the last couple of years. We bought a lot of performing I mentioned in you know that was just because last year you could buy performing at the same discount that the non performing was selling at and so why not take the cash flow? You know, we've come through a period now where we I've never seen in my lifetime and I don't know that it's ever happened in history that we've seen fret, you know, interest rates rise over 5% and less than a year. And that's, I mean, that's just a surefire that, that the stress is coming. You know, that Silicon Valley Bank and the signature banks. I mean, these are just canaries in the coal mine. To think that the banks are out of trouble is a big mistake. And so that's it. We're excited. The you know, it's like Get your popcorn ready. We've got another 30 million in the pipe to close this in the next couple of weeks. So we hope to spend another 100 before the year is up, we've got the money in place to to buy big, I would. I'm kind of feeling like this as it's you know, feels kind of like the summer of 2008. I mean, it's not obviously the same situation. We're not. We're not we don't have a huge inventory of a residential on the market and stagnant market. It's a very different situation, compared to the GFC I think it's probably going to look more like for those of you of Joe's age in the room. Have to teach that to Joe. It's going to look more like the savings and loans debacle. We're gonna see a lot of banks and a lot of credit unions go out of business, a lot of mergers, a lot of acquisitions. Hopefully it doesn't get so bad that we have to have an RTC. But I'll tell you I'm in Chicago today flying home to Los Angeles. I love this city but downtown Chicago is 50 more than 50% vacant. We had dinner last night with one of our locals here who's very well connected. And he's being offered receivership on huge downtown office buildings in Chicago. And so I think that's really the that's the that's the that's where the bait the back of real estate will break first is in commercial major metros around the country. And you know, the question is, what's the effect going to be to residential real estate? Any questions? Do you want to do you have other dude who's really who's actually leading on your side? Joe? Is that you? You want to leave questions or do you want me to keep talking about
Kelly Do you have any you have any preference Kelly, what we want to do here?
Yeah, hey, Joe. Let me jump in real quick. This is Joe doorbell. Just two things I think supporting generally speaking for the for our group is number one. How can a good broker help you on the acquisition side and what are you looking at on that step? And then let's fast forward to the disposition. What can we do to help you and boots on the ground and what's important to you and to work with you
Sure, sure. Well, one other thing before I talk about our business, which is mostly residential. I would recommend I
did I can resend it if you need me to. Yeah, if you don't mind.
The the I would recommend that any of you that have any bit of commercial real estate experience or the ability to get a CCIE or get into the receivership business or property management. There's going to be high demand. There's going to be so much business on the default side and commercial that I would if I was in your shoes still wanting to make a living as an REO broker. I would I would go out and get that certification be ready to get that knowledge base and that's first of all on the revenue side let's talk about our business. That's a very good way you said Joe door was very good point we love we engage our broker network even during the bidding process. And I'll let Eric maybe speak a little bit to this because he does a lot of this with us. Just as an FYI as an example. One of the deals we have coming is we were one of the fortunate folks awarded the HUD out of the HUD trade last week or two weeks ago. So we're going to be buying 62 vacant HUD HECM loans, you know, deceased borrowers, you know, and that's, that's really an REO fix and flip trade. Yeah, it has an NPL element but you know, it's a lot of fish in the barrel stuff on the laws mid side, you know, tracking down areas dealing with probate, straight foreclosure, there's not a lot of loss made options the way we discuss in my book, but it's a fix and flip play. So it was so crucial that we had our brokers on the ground before that bid. Eric talk.
Sure. So I mean, you know, we live and die by the agents we have on the ground. A lot of that has to do with the upfront diligence, which is what we're speaking of today, which is not just on the valuation side, but also, you know, in changing markets, where they're seeing, you know, as far as which direction is moving, especially when you have you know, the rising rates going on right now, given us Intel as far as the maintenance on the property, you know, having an agent that has an eye for whether you're seeing deferred maintenance on a roof, whether you're seeing mail, pile up in the mailbox, where they are seeing overgrown lawn, that that gives us insight and Intel, when we do our pricing and our bidding to our counterparts. And if it's something that you know, we see that there's more upside to we'll be more aggressive. We'll take a hands on approach. And that all stems down to you know, us having to trust with our on the ground, boots on the ground agents to be able to provide us that kind of color. Same goes when a property is and does have a lot of different meanings that we can trust our agents on the ground to eyeball what they feel the approximate dollar amount to have that property brought to full market and that's very important because that never been off by 10% in our in our end of the world is a make or break on either a bid or make a break even once we own the asset. So that's that's the important stout we have and the relationship we have with our agents on the ground and how crucial it is.
And, you know, we're you know, we're fund managers now, but we all started as real estate brokers so we know where you all sit, right? We understand that there's, you know, nobody likes to do a bunch of free work and not get business out of it. So we try to be loyal, we try not to ask for anything that we can't, you know too much. But we do love to build these relationships long term because they have value. I mean, the HUD haccombe deal was the perfect example. We were able to get inside houses in Danbury, Connecticut in Tamarac Florida and you know and and really pin down exact valuation so that we were confident that we could pay what we needed to pay to get those deals and still make a nice return. So that's on the upfront side I think that you know we have a pretty good presence, obviously in the Northeast in Florida because that's where we are, you know, Joe's Florida and we've got other brokers in northern Florida etc. But we can always add to that population so you're not out of the there's not that it's not completely out of the water. And certainly elsewhere in the country. We're starting to see more opportunities to pick stuff up on a nationwide basis. So to that extent, maybe Carlos, I'll ask you to kind of talk about our relationship you deal Carlos deals a lot with the post acquisition, day to day asset management. So he's on the phone, looking over the shoulders of our servicer, and then coordinating with you as our agents on door knocks, you know, and valuations and a lot of the stuff that Eric said we'd look for originally during due diligence, but then obviously have to maintain on a once we on the asset or on the on the note Carlos.
Yeah. So as Bill mentioned, right. No one wants to do a lot of work for free and to get nothing in return. Right. So unfortunately, sometimes, and I've mentioned this to some of you in person in the past is a lot of my day to day involves overseeing what the mortgage servicers doing on these assets, right. And our goal is not necessarily to foreclose, our goal, oftentimes most of the time is actually to keep the borrower in the property. We benefit more than keeping the borrower in the property and performing on the loans. Frankly, foreclosure doesn't help anybody except for the reo agent, of course, right? But it doesn't help the community it doesn't help the market. So we really try to work for closure. However, unfortunately, there are circumstances where there is no other option. The borrower is either not cooperating with us or they simply just cannot afford the property in those cases where we have to foreclose because they won't work on a deal, or they don't want to sell the property as a short sale or as a full sale whatever the case may be. We have to foreclose. Now, oftentimes, I might reach out to an agent and there's a couple on here who I won't mention that I've reached out to in the past, and if you're on here, and you've you've worked with me in the past, hear me say it now. Thank you. It is appreciated. Don't think that you've been forgotten if I haven't given or assigned anything to you recently. It's just sometimes we don't have anything in your market area to assign to you. Or sometimes we might engage with you to start the process. But there's a lot of behind the scenes that goes on. There's one specific example that we're working on where there is an agent on this call who had an asset assigned to one we're currently waiting on the insurance company to pay out the insurance premium before we can proceed with the reo sale. Right so once we've received those proceeds from from the insurance claim we'll proceed listed as an REO so but there's a lot of behind the scenes that goes on, but we do appreciate reaching out. One very important thing Bill touched on is how we determine valuations on when we bid on these assets will be acquire them 99% Of what we acquire does not come over to us and the reo status, it comes over to us as an active account. So we rely heavily on the valuation you give us based on that market so that we can properly did the what we're going to pay for the asset when we acquire it taking into account the you know the current status it's in, if it's in foreclosure, what state it's in the foreclosure timeline, what stage of the foreclosure it's in. So your your feedback is is critical to us and one thing I would ask is transparency, which I think is is paramount. And here's why don't tell us what we want to hear. Tell us what we need to hear. Right. I think a lot of times agents think that well, I'll just agree with him just so that he can assign asked me in the future. It's not going to help us. We need if you think we're wrong, let us know we're wrong, and explain why I think that's that's extremely valuable.
That's That's good advice. You know, we're big boys. We can take it and that's all good. That's really good stuff. And you know, listen, when when a borrower if you go out and door knock a property that's an MPL for us and you come in contact with a borrower and you're, you know, that borrower hasn't been picking up the phone for the servicer, but you're able to make that contact now and put a happy face on like, we are we ask our agents to say listen, you know, we know the owner of the loan and the new service or that this loan transferred to and I'm telling you that they're not Bank of America, whoever you had before, these guys are worth talking to they want to work with you. And if that starts the cotton when that starts the conversation, it turns in to a loan modification we actually do have ways that we can we can incentivize Eric, are you round still? Do you want to talk to I forget what what what kind of what we offer agents on the loan mods.
Before before Eric even says something. One thing I want to add to what Bill said is the nice thing about working with us is that you don't have to go to the servicing. You can come to us directly, whatever the service or needs, we will let you know what we need. You don't have you know, in other words, we try we try to cut out as many middlemen as possible middlemen and women as possible, right. You don't have to go to the service sir and wait two weeks to get a response on the loss mitigation package. And then three weeks later, they tell you they got to stay or check stub and now you got to send them a check stub. The nice thing about working with us is that you get it directly from us. There is no middleman. You don't have to go to the servicer. We'll let you know exactly what we need.
Good. Eric,
back to Dr. Dos point. Yes, you know, again and even call us mentioned before, you know we really acknowledge that efforts that the agents will work with us. It does require their time it does require the use of you know, their resources, their use of even their own funding, whether that be gas money or having to even launching your own does it. So we do have part of our program when an agent gets a borrower engaged into a modification and are successfully able to get that bar to start paying. There is a compensation fee schedule. It does vary state by state, so I would have to show that to whoever we're working with. But there is an actual fee schedule that we have on a per state level of what we compensate the agents for for engaging and successfully having a borrower perform a modification.
Yeah. And you know, we're not asking you to perform any of those modification duties. It's just the being the happy face that connects us because we all know that modifications are a loan origination anyway, so we're going to have to put that there, we're going to have to have that process go through the servicer but you being the shepherd for us, like Eric said, it varies state to state. I mean, it might be 500 bucks or whatever. Or it might be you know, half a half 50 basis points or even a point you know, so it could end up being a valuable thing where you've made this connection. You've done a good job for us in cementing the relationship. You've helped someone save their home and you made a couple grand off of it. So there is that possibility as well. You know, the other thing I do you want to touch on and then we'll go to more questions or you can suggest another topic is vendors, your your local vendors. It is crucial that you know you each of you have a set of contractors, and you know, whether it's landscapers, GCS, cleaning people, you know, the utility connections to the knowledge of how to do the utilities and the ability to manage all that, you know, the old school REO broker stuff, and it's so much more I know, we haven't done a lot of rehabs. There hasn't been the need to do a lot of rehabs the last couple of years but I think, you know, that could shift. You know, one of the things that set us apart back in oh nine 2010 2011 When we refer to getting started was we were the only ones bringing deals to market. I mean, I kind of trained Condor on how to do this back in the day. Don't you know set everyone wanted to buy a foreclosure, but we were fixing them up. So we want to be able we don't we think a lot of our NpLS will go through a real full rehab on them at once they go reo. So having a local broker on the ground, who's willing to vouch and Shep and manage those, those those vendors and and provide that trustworthy knowledge and oversight. That's a crucial part of what we're looking for. Mid melt, you have a question? Yes, Dale,
thank you very much. I'm not currently a real estate broker any longer. I worked for LPS for years and part of the reason that I'm with this group still is because many of them worked for us. And I've known for a number of years. So one of the things that I understand his loyalty to the brokers to be able to get the kind of relationship and work that you'd like from them. It's important to have relationships. I maybe Joe described some of what we've done and who our brokers are with you. But we have actually we have two of our brokers from Connecticut on the phone right now. Very strong people with background that way we have five brokers in Florida. So some of the years where you have significant volume. And I don't know whether there's an opportunity to bring us in as a second opinion so that we can demonstrate or our agents can demonstrate for you who they are, what they can do and the networks that they have because that's exactly what they've done. And that's why they're part of this group is because they have those relationships. And that's what we need for the clients that that they work with across the country.
Yeah, no, that's good question. Good point melt. We do have you know, like you said, can we have heavy concentration in New York, Connecticut, Florida, and we have agents in a lot of those areas, but not all. And even in the areas that we have agents, maybe there's an opportunity for someone else to come in and prove themselves so we just got off a call just prior to this with a new agent from one of your competing broker networks, who was in Connecticut, and you know, so we're trying to find ways to to test each person and give a shot. You know, right now the like I said, the volumes not huge. So we're deer we're we have under 100 NPL and we're about to buy we're about to almost double that but you know, there may you know cert in terms of how to do it, I think. I don't know. I gotta leave it to I don't want to speak for Carlos and Eric because they're the ones making the decisions on who to work with and who to assign deals too. What's the best way to go about kind of getting in front of you, Carlos.
So right now, what we've done is this and I'd be very transparent with everyone. In many in many areas, especially the ones that we have heavy concentration in Eric can speak to this more. We've already got agents that we've built relationships with in the past, right. And milk you mentioned, right? We've just like just like, we are loyal to our agents just like they are loyal to us. Right? And so we don't have coverage in right in the entire state. Right. So in areas where we do need coverage, we will reach out to an agent and see if they're willing to assist us in the areas where we're lacking coverage. And if so, you know, we just have a basic conversation. And, you know, like they say, you know, we'll we'll send someone out there and see how they perform and if they deliver on their performance, and we continue to use them.
That answer your question. No. Yeah, thank you
very much. I mean, would it make sense to be able to just provide you with a list or Ross our current roster, so
absolutely. I thought that we already had, so maybe we gotta get,
though, if you look in chat, our roster is in there. Oh, perfect. yarn is the first document that website, then the roster, right. That will get you a copy as well.
You know, and as
Bill mentioned, right, we currently only have about 100 MPL, which we're looking to double in the very near future, which really is not a lot right 200 MPL it's really not a lot, right. So even if you don't hear from me in the next three to six months, that doesn't mean that you're taken off the list. You know, one day you might get blindsided by an email from me saying hey, I need to help so
stand by Yeah, it's a prime game that it's a fine line because like Milt, like you said, you know, you've got you got agents that are probably really good in Connecticut, and we've been in Connecticut so we have assembled we want to be loyal to the ones that we've been working with, but we also know that the volumes will increase and there may be holes so we'll do our best to try to give everyone a shot.
If I if I could, what Carlos just said about not having a lot of the volume today, none of these agents that are on this part of our group. Expect that there's going to be all kinds of things today and it's but it's if you take a look at the season faces that are on the phone. These are people that have been around for a long time like you like me, that have been around for a long time. Understand that this isn't something that comes about overnight. have the patience to be able to work through and wait for that to happen, but just variable able to introduce themselves to you and and have somebody that you could fall back on. If in case there's you know, things happen to people as well not just not performance
and you'll find so you know, we have no problem. You can share our email addresses with all of the group you have Joe to share with them. And you know, we'll get back to you and it'll probably be like something to the tune of what Carlos said, which is we're you know, we're we see you we're in receipt of your email, and we've got you on the list. And don't be afraid to check in with us once a quarter or once a month. You know, send us a newsletter, send us a you know, set tell us what's going on in your local market if you have a piece of information. The other thing by the way is I wouldn't discount your ability as brokers that are been around forever to get a phone call and get a deal. You know, on the acquisition side that maybe is you know, needs a fund right? I mean, I just got a call today from a broker and lo and behold it actually is a bond collapse a $75 million bond collabs that this guy just happened upon, and it's a real deal. Now. That doesn't mean send us every one of those deals you see on LinkedIn. That's not That's not what we're talking about. But there might be deals out there I would if I you know right now, I will tell you my experience with banks in the last year has been unlike anything I've ever experienced in my life. We've had banks coming to us for money. They want floaties coming to private equity, wanting them to do flow deals. We've we've had banks offering us commercial loans, you know, don't that not understanding why we'd want to pay a discount to par. You know, I mean, but the reality is, is that the banks are in troubles. There are seven foot 1500 community banks and credit unions in this country. I mean, that's more than any country in the world. And 70% of the commercial real estate is portfolio that those banks commercial is where the problem is. This mark to market issue with commercial real estate is what is going to cause all of the is going to continue to have put pressure on banks throughout the summer and the rest of this year. So there is an opportunity for those of you that are willing to do so to call up your local banks. You know, I'm dead. Most of them don't have sag departments. There's no one even to call but you never know. Talk to an executive talk to us about if you can find a special assets person at a local community bank. There may be an appetite to start moving stuff off their books in the in the coming months and we would participate with you pay you a commission and you know we have we're open to bidding on Unreal deals that are out there. And so that's another opportunity to get involved with us. I will just you know as an example on that special assets example I was on the phone with I'm not sorry. I was in at the the Ironman in a if it was at February the bank special assets down in Coral Gables and met a guy who is the sole special assets officer for five banks. You know it's a lot of these banks are related. So, you know, you have a $20 billion bank and then you have $4 billion smaller banks and they're all one they're all owned by the same bank. But they don't and they don't have any special assets or distressed division. They haven't had the need. So they've had one guy sitting at the top of these five banks, and he actually has to do a different job for each one of the banks. But you know, he's literally the only guy in town so he I know there's either they're going out and creating specialized groups or they're going to be looking for outside out. So there may be an opportunity in the near term to for you as brokers to get out there and, and start developing these relationships directly with banks. And, you know, just from a whether it's from a takeout position, whether it's from knowing about you know, maybe it's the, you know, a single asset here or there or an opportunity to bail a bank out, you know, liquidity provider, whatever. So, something to keep in mind though this
really, really, that was intriguing to me. So like say I see one officer to ops, can I come to you and you would be my funding partner on that deal and we would manage it on the street. Are you looking for pools of 20 3050?
We will do one offs if it's a if it's a good deal. If it's a really good deal, yes, we would consider something like that. Absolutely. Yeah, it's harder nowadays. It was easier when I was when I was managing 30 million to say that now that it's gonna be a billion it gets a little tougher to do the one off deals. But listen, we're doing a small deal here in Chicago. That's, you know, it's a less than it's a half a million dollar deal. So you know, there's there are opportunities when the price is right 100% Joe, you know, always shoot us a deal. We'll get a quick response back to you. Very solid and you had a question. Take yourself off mute. Wait, Harry, you're on mute you were on and then you're off. You're right. No Yes.
Okay. Thank you all three of you for being here. We all all of us really appreciate you guys taking your time. It's it's important for us to talk to people who are actually in the process of giving us and I'll say give us listings and such and business and such. We're willing to help you guys as much as we can into that. And have any of you heard of the software application called Blue hammer, as you were talking about repairs, and what and I'll just give a brief thing what blue hammer does is it's it's an app, and it's geared towards you put it you put the zip code of the property in and it gives labor cost of materials. And he puts it all together. And it breaks down room by room house by house, from the roof all the way down to the foundation.
Wow, that's awesome. I actually had never heard of it. So I'm downloading it right now.
I'll be happy to put you in touch with Bubba Mills who's was promoting it. That's where I got it hooked up with it. It's it's pretty amazing stuff. We use it on a retail stuff too. And it's it's usually within about, you know, four or $5,000 when you're talking about $100,000 thing that's not that's not about spread. So just something to keep in mind and believe it runs about 300 bucks a year. You get 25 or 30 properties. And I'll bet you with the volume you guys are doing. You could probably get that cut down even more. But I've used it and I and I really really liked it. It simplifies my life.
That's great advice, Harry. I appreciate that. I've got the app open right now and you actually if you can be wanting to get a referral out to me on it just to get my email and and shoot it over. Where are you located? Harry?
I'm in Orange County,
Florida. Okay. There's Orange County is I think in multiple states, but you're in Korea. Okay. Good, smallest county
with the largest population. So
thank you for that. Eric. Had you ever heard of that before? Or colors never heard of blue hammer.
I'm not gonna not right now. No, I haven't. We do. We do something that isn't useful for us which is a touring application goes on in Matterport Matterport gives us a 3d version of the property, all the rooms and that gives us a better idea of what kind of rehab we're going to do and but I have not heard of blue hammer.
I'm sure I'm I'm sure everyone's familiar with bat apart because you're using them. You know a lot of you probably are using them on the marketing side metaphor.
Take those two software's and come in somehow combine them looking at the Matterport but I can tell you I did it for a retail client. And we they had a $20,000 budget to get this house ready to market. And we were at 98 to get all this stuff down. I mean, that's mostly by us. And it also you can hand this to a contractor and now he's already got his bid done. And skip shaker will tell you that you can do this for an FHA to prepay. They'll take that they'll take that instead of the contractor going out. So it'll cut time and I'm not I'm not selling it. I don't get anything for it. I just it just when you were talking I just clicked
sounds like a great tool. Sounds like a great tool. Especially you could use it on our 203 K sale right now. That's good stuff. Thank you, Harry. Any anyone else have questions, comments or that you want to bring up? It's good to see you ready? Bunco How you doing, man?
Bill? Good to see you. Thanks for coming on. I appreciate your insight and your willingness to expand and I know I will. We will follow up meeting that's still pending this guy down so just let you know. I haven't forgotten about that.
No problem. Sounds good. Good to see. You. William Ramos. How you doing? Anybody else have Joe Do you have an idea of some other questions or topics that you think might be useful? Oh, yes. I want to get on your book. Not only here you go. The book is a really fun read. I mean I know if I had written it. I mean, realize, you know, I started like you all as a REO broker, who got that call from John Dario in the summer of oh eight a couple months before the fall of Lehman Brothers when they were buying that huge Port St. Lucie pool of all those construction to perms that were going back down back in. Oh, 708. And, you know, we wanted to create a paradigm I mean, if I was going to be a note buyer, I don't want to be a debt collector. I mean, you know, that's what you are when you bought buy notes, but who wants to actually be collecting debt for a little bit. So the whole book in the paradigm for how we operate the last linspace really was designed to look for solutions that met the borrowers where they wanted to be, you know, we will walk in and we'll ask the borrower who's in default will say, Well, how do you see this finishing? And they're surprised to have that question. Because, you know, I mean, there's the few that are like, Oh, I'm gonna get a free house. Well, you know, those, obviously are the cuckoo's. But you know, when you ask them and you listen, the best way to communicate is listening, talking and listening to what a borrower needs. I mean, that's just not how mortgage servicing is designed. It but it's how we've designed it, how we've designed it and how we've trained our servicers to operate.
Yeah, sometimes you're the only person that actually listening to them. So that gives you an edge when you're talking
to them. That's true. That's good point.
I can tell you guys, I can serve as safe. It's been about seven years. And 90% of the time when I make contact with a borrower who was in default, I'd let them speak. And I didn't have to say anything. And by the end of the conversation, they had talked so much that they figured out the solution on their own or they figured out that they have to do something without me having to push them. So like you said, William, right. It's a lot of times is just got to listen, some of these folks just want somebody to listen to their problems. I felt most of the time I felt like I was a therapist, just listen to some of these folks. But um, a lot of times folks just got problems and it didn't want to vent. But like I say, good, you know, bad things happen to good people.
Now, that's such a such a good point. You know, I mean, look, how many of us, that's was the inspiration for why I got in this this side of the business because how many of us either were directly or indirectly affected by the 2008 crash. I mean, my mother, who had a perfect credit her whole life ended up 200,000 upside down on a new construction condo with a negative m mortgage. You know, I mean, it's like, you know, she was paying it for years with no hope of ever getting any equity back and I I convinced her finally you know, that she needed to stop but you know, it you know, you just never know what people's situation is. And then like Carlos said, sometimes these folks just want to be heard. They're just tired of somebody calling up and saying you owe 40 grand when he paid us. Yeah. So you know, we do put that human, that human touch on it. And I think that's gonna it's gonna make the difference. You know, the next go around. Rich Well, next. Sorry, I didn't get to see you while I was in Chicago. Carlos. This is rich. And I'm sorry. You know, Rich.
met him at the conference.
Oh really good. How you doing? How you doing, guys?
I'm good, man.
It's cool, man. It was email.
Nice to hear that Chicago accent to my brother.
Good to see you guys.
Yeah. You to jump back. What's
your bill? Where do you see the market at six to 12 months from now?
I think that we're gonna we're already starting to see a little bit of this like, come to market because I have to stuff starting to happen. We've got residential commercial will be a bloodbath six to 12. Now, how that affects residential real estate will depend primarily, I think, on how many job losses we we ended up with it we're in that same weird situation we were in in oh seven, where cost of living was unaffordable. But at least back then there was an inventory. And that's what kind of so as that inventory built in, it slowed the market it caused a big dip down to nothing. You know that in values. I mean, I was already we're already starting to see there. We're already starting to see certain areas of the of the country that have cooled off. I would say west of the Rockies, a lot of you're seeing a lot of leveling off in certain obviously certain markets are still hot but But you think you hear about Boise, Idaho and Salt Lake City being overheated and slowing down a little bit. We have seen you know we've modeled for we're modeling to a negative 10 per year, just to be conservative just to watch our backs. I don't think any I don't think that the the bottom is going to drop out of Razzie like it did 15 years ago. That's not going to happen. There hasn't been enough building there's not enough supply. You know, residential real estate in America might might have a new normal to a certain extent. You know, when you travel outside this country, real estate's much more expensive. Still, so I mean, maybe not now that so now that our values are high, but but the you know, the major cities around this world, you know, a 1,000th of footer was not uncommon. Now, you know, we're we've seen that in LA now. We've seen that in, you know, New York, but we're not. We're still a relatively inexpensive culture for right now. I mean, in general, so, you know, maybe there's a new normal, maybe maybe you have to be passing your homes down to your children in order to, you know, I don't know. I do think there'll be more activity. There'll be more inventory and it's mostly going to come from two areas and resi there's two areas of distress and resi that are growing. One is the highly leveraged rent to rent rental, REO Rental Guys. Some of these guys like invitation homes are going to have to start dumping product and the reason for it is they all bought this stuff with 3%, three and a half percent rates
and they're highly leveraged.
So now those same rates are doubled right? On these these linear finance deals, these big securitizations. That they do or when they come to refinance a securitization or something like that. So there's a lot of there's a stress brewing there. And then the DSCR Yes, er market is is a problem. You know, if you want to say no, non QM is kind of the noni of today. The civics of the world went out and gave a lot of ridiculous debt service coverage ratio loans on rental properties with you know, Airbnb projections that just didn't make sense. I mean, I looked at one from civic a few months ago, and we remember that one was it Paramus, New Jersey or somewhere in South South Jersey, mid jersey, nothing in the in the neighborhood had sold for half million bucks. And these people had a million dollar loan because somehow they showed rental income to support debt service coverage on a million dollar loan. So there's a lot there's some stress there. And obviously, if anybody and then there's going to be stressed in the arms, you know there, believe it or not, with his lowest interest rates were a year and a half ago, people or two years ago or three years ago, people were still taking three and five year arms just to save a point. And I mean, we saw this Sterling bank deal that I was, I wish I had bought man. It was all high net worth borrowers who did three year option, three year option arms in with 2018 29 2017 originations. So these folks were like caught right at the wrong time. Their mortgages last year when doubled in price and even as high net worth individuals. They were having they're having struggles we had an opportunity to buy that stuff for a discount we should have sort of the the arm space so anything that's related to leverage, whether it's a you know, the private equity guys that are highly levered to the reo Rental Guys to these option arms and certainly the DSCR portfolios at places like Sydney occur, the disaster. Yeah.
That answer your question there.
I think we've only got about five more minutes. Right. Any other questions?
If we don't have any more questions, thank you so much.
I got one question. Oh, I got a question. Bill. You mentioned that we can walk into our local banks. What would what would, what would the pitch be? I mean, do you do you have like a resume brochure or something that we could use or?
Yeah, I could get Yeah, no, we can get you a write up that we did about a year and a half ago that got a lot of attention from from private equity and banks. And it was a list of like, the fact that we all the types of loans that we would buy that including doc deficiencies, bankruptcies, etc. So I'll put I'll put that together. And I'll get that to you and out to Joe and Joe and then they can distribute it to the rest. Really, it's about going in and you know, getting a sense for you know, is how is the bank doing? I know that you know, a lot of people are facing stress whether it's individual borrowers or lenders and you know, if there's an opportunity to provide liquidity, you know, we you have a source you have a source that you partner with private equity group, that is just in this business of, of buying debt, whether it's performing not performing, sub performing, scratching den doc deficiencies, you know, and we love the problem stuff because obviously you can get a bigger discount with that, you know, one of the the, one of the difficulties is educating the bankers bankers aren't used to selling things at a loss, right? That's that just doesn't, you know, that didn't compute to them, but they're going to learn Thank you. Bill. There you got.
That's excellent bill. And one other thing I think that's really important in Florida specifically, is there's gonna be a lot of people that just recently bought, their taxes are going to reset and then they're gonna get whacked with these insurance renewals that have doubled or tripled and cost them out where they can afford it. And I think there's gonna be a lot of homeowners under distress. How could we work together with the locksmith side what how is there anything we could help you if we have a distressed owner that you would work out? We'll come in on that. Do you have do you have a team that works on that or what do you suggest in that bill?
I mean, if the loan was if the loan on that property was owned by a private, not a non banking or non Fannie Mae, you know non non GSE loan right, then there is the slim chance that we could reverse inquiry. We know pretty much everyone in the business. That's only a small subset. So we're not in the business of advising borrowers on a third party basis, but we could be a we're always a quick takeout, you know, so the one thing we're good at is moving fast. So if somebody is in a stress situation, and, you know, they'd have to be comfortable with obviously, sharing some of the upside with us, but, you know, if something like that comes across, you're right, Joe. I mean, Florida's you know, I mean, Chicago's got a tax problem too. But, but Florida with the insurance is what scares me. And it's gonna, it's gonna cause it's gonna be a big cause of upset. You're right. I don't know if that answered your question.
Okay, thank you, Bill. Thank you, Carlos. We welcome. Thank you. Everyone that joined today. Thank you for the information. It was great to meet you.
Yeah, right. Oh, oh, thanks for sharing my podcast by the way. That's great. And, yeah, yeah, it's fun. It's got like real tidbits about, you know, terms in the industry interviews joba tag is, was one of my early guests in the podcast, can listen to him spiel. And in some of you actually are on my list to actually interview in the future. So love talking to us whenever we whenever we get a chance. So thank you for the opportunity. It was great to be with y'all.
Thank you, Eric, too. Yeah. So we'll look at that information you're gonna send out and we'll share it with the group. And we'll see what opportunities we can bring your way we look forward to potentially working with you guys.
That is telling you, guys,
thank you. Thank everybody.
Thank you.
Everyone leaves a bell. You're welcome to leave Eric. Take callers You're welcome. Before everyone leaves. I wanted to have rich and Tammy introduce themselves to the group because they're new to the group and I don't know that they have introduced themselves why doesn't rich go ahead first? Because
I was just on the phone with Darryl. He just called me I got to introduce myself. I'm Rich Warren. Then doing default business for a little over 30 years knows me very well. I'm just happy to be part of an organization you guys seem like you're like you know you're doing so I'm just happy to be here. If I could help anybody. I've done a lot of I've done a lot of redevelopments you know, auctions and you know, and I did carry between four and 500 properties a month at any given time back in the day. So I don't know how how to structure a business like that. Not that we don't have that today, but you know, I'm just happy to be here. Hello, everyone.
Thanks, Rich. And Tommy, Tommy, would you like to introduce yourself to the group so we can all know who you are and welcome you. Is she still here?
Did she already go?
I think she may have already jumped off the call. herself last week. Get
some Jasmine I think has not introduced herself to the group yet. And welcome Jasmine.
Jasmine. Are you still here?
Good morning. I'm still here. Thank you for having me. How are you feeling better? feeling much better. I have two little kids a one year old and a three year old and they just bring every bug home that you can possibly think of?
That's a speciality, isn't it? So Jasmine, you're partnering with Grace right?
Yes, I purchased oak shores Realty from Grace Pausini last year, and she and I are still working together quite a bit. She's not retiring. She's not going anywhere. And we make a great, great team.
Welcome Jasmine. Can you tell us a little bit about your background?
So I started working with Grace about five years ago now. Got my real estate license got my broker's license about two and a half years ago. Before I started working with grace, I worked for a agricultural company in which I was the executive assistant and helped him with property management there. And land acquisition. But I was not licensed at that point. It was just kind of me getting my boots on the ground and that sort of thing. So since working with grace, we specialize here on the central coast of California and just work with first time homebuyers investors. A little bit of everything.
Okay, well, welcome to the grid. We look forward to seeing more of you and before everybody jumps off, because we're going we're past one o'clock. Thank you for being here. I just want to remind everybody, we have one more mastermind coming up at five star in September. I hope that's usually a big one where a lot of us attend. Remember, we're a networking group and getting face to face with your members is really a you know, it's important for you guys. If you want members to refer you to clients or help you with clients, getting face to face with the members is a great opportunity. To get to know one another and build those really remember in the chat yet the roster is in the chat you can see who belongs to er N Who is where and how to reach them. If you have questions pick up the phone call your call the member if you've never spoken to them before pick up the phone and call them rather than email them and ask them to help you get to know them and, you know, build a relationship then, as I say one of the best ways to do that is through masterminds in September. We'll be sending out the information we'll have the same venue that we had last year. At the Lorenzo Hotel, which I found out by the way. Incidentally, a little bit of information here. I know you've all heard the sad news about Tina Turner passing away. But that's the hotel that she ran to when she was running away from Mike and that's where she ran to get help. So it's a historic hotel Lorenzo hotel in DFW. We'll be having the last year's mastermind in it. And if you look in the chat box, the roster is in there. Also the client target list I showed you how to get to it in the members portal on our website if you don't have the link to get into the members. Let me know and we will resend it to you. You did receive it when you first joined the group, but we can resend it to you. There's also a list of states where we don't have members right now. The leadership team are working hard to fill those spots. And if you go into the members portal you can see the guidelines for Arn and what the production requirements or if you have somebody that you think might fit the bill in a missing state, send them our way. And we can have them make an application. Other than that. Anytime you have any questions or anything or need any help with admin or you're not receiving text messages or emails from the group or you're not receiving WhatsApp or Facebook let us know you should be and if you're not you should be so we can fix that for you. But any questions guys Other than that, let me know Have a great week.
No question but I do want to give a shout out to Jove a tag for a couple of referrals that he's recently sent me and also for having bill on this call. That was very helpful. Informative call.
Thank you, of course. Thank you for all your viewership.
You know, I
wanted to make sure that and I wanted to ask William, if that's a buyer was that a new buyer that just wagged his tail into your office and gave me
triple room again.
Before you will go there was what that reminds me Eddie. That's a good point to say thank you to members. If somebody in the group has gotten your business at any point in time, put your hand up. Tell me how did you get that business and how did it happen? Because I think that's important information for other members to understand how we help one another how do we grow our business? I've gotten referrals from from members within this group that they could be client corporate referrals or just individuals. But Eddie, do you want to elaborate on how you the referrals you've got? From Joe and how it happened and what Joe Joe
is working some leads, investor light type leads, they doesn't cover quite down this far. And so there's some opportunities. Some of those people are either, you know, maybe maybe consider a traditional option, in which case he's referred some of that and also some opportunities for us to maybe partner together and buy some properties. I
still haven't had
a home run yet but but but it's really appreciated the opportunity. Is there. Another person that that was I know that
I was able to I know that there were some other referrals that recently happened. I don't know if you ever made that connection. Was it William William Ward, you're looking for somebody in Alabama that you get to connect with you can make that connection? Yes, yes. Hopefully the member to join us
because he was outside of network. He also somebody's brother. Understand
if I could say something I probably should have mentioned this earlier. Darryl Gibbs has been instrumental in helping me since I've joined you guys in a variety of different ways. Going back to an acquisition, I had been in North Augusta, South Carolina. More important than more recently, he sees his team to evolve and NPL that we're buying in South Carolina and then Michael Hadley's involved in another one that looks like we're gonna be buying and then PL in his neck of the woods. And so, and I mentioned this to Joe door early, because it Darrell, and the quality of the brokers that he recommended on some other due diligence files I was looking at, had I made had I gone with the values and not with the right boots on the ground values, I would have lost over $100,000 So sometimes you make money by what you don't do, as opposed to what you do. And Darrow was instrumental in helping us make those right, right determinations.
Thanks for sharing that Joe. And, like I say, if anybody else has that, had any referrals within the group ever reach out? Let me know how that happened. I want to talk about that on the meeting. So we all understand the opportunities that are within this, this really exclusive group where you know, we're exclusive and small but there's so much opportunity if you make it happen. All right, guys. Well, have a great week. It's gone. One o'clock, anyone have any questions or anything before we go? If not, have a great week. I'll see you all next month. Take care
