Episode Transcript
[00:00:00] Speaker A: Hello and welcome to season four of the Mic'd up show, where every mortgage has a story.
This is the ultimate hub where the hidden stories behind the mortgage industry come to life. My name is Michael Kelleher.
[00:00:14] Speaker B: Good morning. And I am Michael Zhao.
[00:00:17] Speaker A: And together in every episode, Mike and I dive deep into the entrepreneurial spirit, the strategic insights and the breakthrough innovations that build the world's greatest mortgage companies.
So whether you're advancing your career trying to scout for industry leaders like we have today, or exploring opportunities in fintech and prop tech, you're in the right spot.
So get ready to unlock the story behind every mortgage.
And today we are diving in with Joseph Scorsi.
And I hope I pronounced right.
[00:00:53] Speaker C: We were pretty close. It was good. Good enough.
[00:00:55] Speaker A: Thank you.
I know you are in the nationwide business development channel Growth. You specialize in direct private lending, which is a hot buzz here in mortgage lending. Everybody's trying to get in with their own products and everybody can learn from you because you have a really great understanding obviously of the biggest difficulty in this industry, I think, which is just telling that story on the street. And you have been able to do that with your expertise in dscr, fix and flip ground up construction to the tune of a hundred million and more of production. I think every loan officer is realizing this is a strategy we at adopt the brand and here are trying to say you need more than just know the product exists. You should have podcasts around it. Another piece you do. So so do you want to give just a quick introduction on who you are so our audience knows and then we'll dive into some questions on how you got here and where you're going.
[00:01:55] Speaker C: Thanks Mike and Michael. Joe Scarice, Nationwide Direct Private Lender Senior Account Executive at Park Place Finance.
Been in the lending space one shape or size for the since 2001. I've been a licensed real estate agent in the state of New Jersey and Pennsylvania since 1988 and I've taught CE instruction courses for real estate agents pretty much in about half the country on asset based lending for the past eight years on a CE course that I actually wrote myself and got approved on asset based lending. Understanding Lending Fundamentals.
I'm also a podcaster myself. I have my own podcast called the Creative Birth Strategies Podcast. I co founded that with my social media strategist Yardl Perkins and I'm also a real estate investor and we maintain a portfolio of my family and myself. We have 14 buildings on a multifamily side, anything like a five unit through 25 unit. Currently oh and happily married and you know, very happily married and my wife owns a wellness center school for massage therapy and a chair massage company.
[00:03:08] Speaker B: That's incredible, Joe. I mean, you know, nobody goes into lending on purpose that I know of yet.
Right. So can you give us a brief Description, go back 25 some odd years, almost 30 I guess and tell us how you got started in lending to begin with.
[00:03:27] Speaker C: Well, I have an accounting and I have economics degrees from Rutgers State University.
Graduated from Rutgers in 92, became a forensic accountant, was auditing banks and pharmaceutical companies but focusing more on the bank level. Always had my real estate licenses because of my family's ownership in real estate and interests and I was working different positions as a forensic auditor for a government group.
And coming around 2001 I was at 9 11, I was auditing bank of New York.
Got to see things I can't unsee, decided, just took a conscious decision. Once I got back safely home I just decided I didn't really want to play accountant anymore and just wanted to focus into a new industry and lending. I felt very compelled. So it propelled me to work for more regional style banks, more in that federally chartered environment than about, I'd say almost 10 years ago I was approached by a group that was buying Lending one, which was Blackstone and worked for Lending one for a bunch of years. And that kind of shape shifted into a different perspective and a lot of us left there went to Lenmark and that was owned by EthVue.
That kind of disintegrated this past October. I don't know where they're at but they shut down all their oper, a lot of their operations and then moved on to Park Place Finance which was recently acquired by Ellington. So working kind of in the relevant direct private lending space offering not just you know, direct to investor, but a referral program for licensed real estate professionals or real estate, you know, professionals in general and then obviously a white label and broker capital partner program for the brokers that are out there. So many more brokers and direct private lenders as we know.
[00:05:24] Speaker B: What was your transition like? If you go back to 2017 before you actually started entering into the asset based lending, what was transition from general agency? Fannie Freddie fully understanding that you know, you need, you know, two, two, two cups of, of sugar bread and, and, and a million pounds of beef to make everything happen versus now you're into asset based lending. You're like just make sure it makes sense and makes money for us.
What's the transition like of asking for a Million pieces of documentation to, we just need certain pieces of documentation.
Was it easy? Was it hard? Did you have to actually unlearn things in order to go from traditional agency business to DSCR funding?
[00:06:09] Speaker C: It was a major relief.
You know, when you're working on a personalized loan, it's personal, it gets very emotional. All the parties involved are ready to kill each other all the way to the closing table.
It's actually insanity, you know, and the way that, you know, the, the real estate professional acts toward one another in that environment is, is really not very healthy to be honest with you.
[00:06:34] Speaker B: And talking about realtors or everybody.
[00:06:37] Speaker C: Okay, everybody, I won't blame it all on the realtors, but you know, hey, because I'm a realtor too, but I, I, I find it very businesslike and very direct. In the business lending space, the non QM space, you give the answer the same way. Whether it's good or bad, doesn't matter what time of the day it is.
You do have to set, set, set your borders and your with people because people will take advantage of you. You know, they'll text you at nine o' clock at night thinking you're supposed to answer them just for their free advice. You set boundaries, you know, and that's how you do it. And I've set boundaries for myself whether it's during debt during the week or during the weekends.
So because you got to keep your sanity and that's the best part, you can refresh easier in the business lending space than I, than I feel like in the regulated lending space for FHA, VA, USD, all that. It's just very hard to unwind.
[00:07:31] Speaker A: Do you think you can be both like a local loan officer that is known for first time home buyers and then also has outlets for when they're out networking at events for these type of loans? Or do you think it's too much distraction and that's why there's, people have a tough time getting the numbers you get.
[00:07:56] Speaker C: I mean the regulated bankers I guess would offer some of this, these type of loans but they're brokered so they have a lot of layer in cost and rate. I feel you need to specialize in your lane. I stay in my lane. You know, somebody called me yesterday for industrial flex space. Joe, why don't you do that? Because I don't. Here's the programs I do over and one guy just keeps calling me for the same type of product that I never have done and I keep sending him the same sheet. Hey Michael, this is what I do.
Please review at least once.
You know, eventually I just going to staple it to his forehead, you know what I mean? Like, and then hopefully he'll remember what the staple.
But at the end of the day, you pick your lane, you focus on it, you do very well at it and you just keep burrowing that hole that then nobody. Then there's a lot less distractions.
Then the phone calls get very specific.
They get very direct to what you're trying to accomplish and you attract in a karma like atmosphere the right people.
[00:08:52] Speaker B: Mike's often talked about in past shows with other residential leaders to own your zip code. And that's for residential loan officers, however you've been able to fund and we talk offline, he's funding between 30 to 50 units a month.
And this is in the DSCR non QM space. And do you, do you think that the riches in your niche for DSCR allows you to go nationwide, which causes you to, to go into that unit space? Because you're not only doing loans on the east coast, you're nationwide? If I'm, if I'm correct here, correct,
[00:09:27] Speaker C: yeah, we're licensed in like 48 states.
[00:09:29] Speaker B: Sure. And so for that reason, what. Is it possible to stay in your lane, but only on the east coast and do that many units, or is it actually worth your effort and time to go nationwide because of, you know, because of the opportunity cost of time in itself?
[00:09:45] Speaker C: Well, my marketing is done nationwide because it's on all the social media buckets. If you do a quick Google search, I'm pretty much on any site that needs to be on.
I do have my own social media team that does my personalized marketing with the podcast myself, newsletters, things of the nature, they're always going out. Who's looking at them? Most likely a lot of people throughout the nation.
Physically, I can only be in one place at one time.
So physically I, my focus is in the Northeast, you know, primarily from Maine down to Maryland out to, you know, Pittsburgh, like a, like a, almost like a, like a triangle in a sense, but pretty broad market. Like next week I'll be up in Connecticut, I'll be in Massachusetts, I'll be in South Jersey. The following week I'm in Lehigh Valley. I'm in, you know, I'm going to be in New York State and Albany. I'll be in Rochester. I'll be different places. North Jersey, South Jersey, Delaware.
There's a. Listen. My goal in what I do on a daily basis, to meet, you know, 50 to 75 new people every day in person, hand Them a card here. This is what I do.
You know the phone calls in Texas are nice and we do that as well. That's done throughout the day. My postings of Education, Motivation, inspiration are push pushed out every single day.
But at the end of the day meeting people in person is huge. It's everything. You can only get across to somebody so much in an email or text.
[00:11:13] Speaker A: You clearly have a great social strategy. You have pieces going out every day. You have your, your podcast now that you've done it long enough. How many people when you go to hand on that business card, maybe they haven't seen a show, but they tell you they saw one of your shows but at least know your show exists or have seen something on, on social.
Is that something you have seen a huge lift in over the years?
[00:11:39] Speaker C: Oh yeah. Well, you know, I walk into an event, somebody comes up to me, hey, are you chose Greece? You know, I'm, I'm almost ready to get a punch in the face or something but you know, now that I'm, I'm ready, I'm ready to protect myself. You never know get a quick shot in but I'm like yeah, next to me and oh yeah, I heard your podcast or I saw you spoke eight years ago, five years ago, four years ago. I saw your article was really interesting. I love getting your articles on LinkedIn. You know a lot of related discussions.
Just ran into somebody at a phone at an event during the day.
He was walking out, I was walking in. Hey, aren't you Joe Sri with Clubhouse and the podcast and, and, and we're just talking. We just had a follow up call today. I wanted to set him up as a referral partner.
It was just walk by, you know, I was meeting another 30 or 40 people in the room.
[00:12:31] Speaker B: Let's, let's talk about your social media strategy if you don't mind Joe, because it's something I like to note that I'm not, I personally am not on TikTok at all and so I don't know if you're doing TikTok or Instagram. I, you know, we're not connected on Instagram. We just know each other because we know each other. So tell, tell me about your social media of the utilization. I don't know, do you use X or are you solely on clubhouse and LinkedIn? What is your social media strategy in entail and which platforms do you appreciate the most?
[00:13:06] Speaker C: I think Google business profile is the most important flat profile to have next to LinkedIn. Then Facebook, Instagram, YouTube, you know, X Is okay, you know, bus, you know, the.
There's a couple of. There's another blue sky. There's. I mean, there's so many different things. There's only so many events, so many sites you could be on consistently and provide insight.
My social media team is posting on TikTok, not X. They're posting on Instagram, Facebook, LinkedIn, you know, and just burrowing that hole with content, whether video, education, motivation, video updates, different things, just, you know, like a potpourri of things. And then in between, you know, my CRM is really strong. We get a. About a 42% open rate with our email blasting.
[00:14:02] Speaker A: Whoa.
[00:14:02] Speaker C: Which is way above the national average.
Probably got a hundred thousand plus people in there that's been scrubbed. We're constantly scrubbing our database to make sure we don't have any spam in there. Dead email. So we're very tightly run, you know, a lot. Maybe 100 emails personalized to clients per morning.
You know, personalized bombbomb video, updating them on the market, just touching a hundred different people.
[00:14:30] Speaker B: You say your open rate is 43%?
[00:14:32] Speaker A: 42.
[00:14:32] Speaker C: 40. Yeah, around there.
[00:14:35] Speaker B: Mike. I don't know what I mean. I've heard numbers, open rates on marketing, like under three.
So 43 to be 40% above what I thought was the norm. I mean, am I mistaken in thinking that the open rate's like under 3%, like.
[00:14:52] Speaker C: Or.
[00:14:53] Speaker A: Yeah, I mean, traditionally speaking, I think 3% is a good number. If Joe's giving more of a newsletter, personalized, intimate, you know, inbox delivery, then he's at the upper echelon of obviously providing value and more the long term nurturing.
Yeah, I think that the numbers are outstanding, but I think it tells a better story of the type of emails he's sending and his long game. I mean, a lot of this is long game. A lot of people fall off early because they can't keep it up. They come out of the gates too fast, like running a marathon, and after mile one, they're gone.
[00:15:36] Speaker B: And I.
[00:15:37] Speaker A: That's why I always say just anything I believe in, I try to outlast people in. Because it, it's, it's the right, it's the mentality that gets you over. Sometimes the vanity metrics aren't always 43% and you got to keep pushing through that.
[00:15:51] Speaker B: Joe, we met back in the days when, at the very beginning of the pandemic, when clubhouse was just beginning to get popular. And it got popular and then all of a sudden it didn't. But when did social Media for you become more prevailing? Was it just before the pandemic or is it during the pandemic or you know, how did that, how did that come about for you as far as social media marketing was concerned? When did you go from what was your volume like in 2017 versus what it was like in 2022 to, to over a hundred million this past year in, in dscr, non QM financing?
[00:16:26] Speaker C: I, I think I took the bull by the horns in social media probably about seven years ago, just at the
[00:16:34] Speaker B: beginning of the pandemic.
[00:16:34] Speaker C: Then right before, about a year or two, about a year before I was getting very involved and then I retained some experts in setting up the platform correctly, being very consistent.
So like I said, if you do the biggest way of finding out who you are online is just doing a Google search and if you can't really find yourself in a consistent manner with the right information, there's something not working.
So I always do an audit on my, on my, my five page backlook at to see where I'm at and where I can make changes. You know, quarterly, monthly. I'll look probably once a month and have my team look once a month, scrub my database once a month.
I'm always doing like audit checklists on a lot of stuff before things are going out. We're using a lot of flyer pushouts on events, leveraging eventbrite.
I'm probably sponsoring more live events than hosting live events.
I've shifted. Yeah, I think I'd rather just be attendee, let somebody else do all the hard work.
Let me go in there and ninja approach the room and introduce myself to the first 50, 60 people and then leave. I mean like there's nothing else to do. I mean I'll come, I'll stay for the educational subject but I mean listen, the reason why I'm going out to these events is to network and meet people. Here's my card. Let's follow up. Give me your card. You know I've had, I had what, 15, 20 follow ups this morning with people I met just last night. They got a, they got a, they get a video. Thank you for meeting me. Little detail.
If there's anything I can assist you with. And they get a nice video with me with a little personalized note with it as well. So I think people like that. The open rate's very strong on that as well.
I'm pulling data of investors buying loan, doing loans with other people and trying to see if they want to work with me and give it, give me a Shot at the belt.
So it's a combination of things. It's just all day. You're guerrilla marketing.
[00:18:32] Speaker A: I love guerrilla marketing.
[00:18:34] Speaker C: Can you talk a little bit about
[00:18:36] Speaker A: Eventbrite and what you. What you like about it? If I'll give you an example. We at the local or the state, Massachusetts Mortgage Bankers association are starting to have more events and I'm encouraging them to use Eventbrite because I think it's easiest for average.
[00:18:54] Speaker C: Way easier than meetup. I think. I think meetup has kind of fallen by the wayside.
I think it's, it's very wonky. Eventbrite's very clean. You could set up an event link rather quickly. They, they use AI revisions, you know, to, to for the betterment of your. Your subject matter. And I, I mean I literally could put together six events for the month or podcast for the month maybe in about 10 minutes.
Just because I'm just copying, pasting, using the Mi AI stuff. And when I create my flyers with my social media team, they push it out.
I mean, you know, like you said, Michael, in regards to, you know, the or Mike, it was the long game. Right? You know, most people give up on a podcast by 10, 10 podcasts are done. They're over. You know, I'm at 150, I'm at, I'm at 10,000 plus downloads. I'm two years into this.
We're looking to still figure things out.
Buying more equipment for the betterment of getting better interviews. I wasn't a fan of one on Ones because I don't like begging people to come to speak with me. I'm not in that. That mentality. So that's why I do the video podcast on the subject every Sunday morning. And then I do it live on Clubhouse and open it up to, you know, a national discussion with moderators and people of that nature. That's a lot of fun. And I'm, I'm now starting to do some one on ones. But I'm not compelled to beg anybody to come and speak with me.
We're not in grammar school or high school anymore. We're all full grown adults and nobody's on lists anymore and nobody has to plead with anybody. You want. You don't want to come and speak, fine, I'll do, I'll do a presentation with and talk to myself for an hour.
I can carry that conversation very easily. I might even get some answers back in my head. You know, I mean, so where I'm going with this, you know, that's what I love about podcasting. You got, you guys could just do, you guys could just talk amongst yourselves if you don't have a guest on a subject.
[00:20:48] Speaker B: And that's true. Joe, what in the previous you said you like to stay in your lane. Can you tell us what is your lane?
What is your, what is your product?
So that, that the loan officers who are listening and also their leaders and presidents and CEOs know what it is that your lane is. So they can say, well I mean
[00:21:07] Speaker C: our lane right now in asset based lending is DCR 1 to 4, 5 to 12 on the multifamily side. Under 5 million loan amount, loan size, 30 year money, 40 year money, 10 year interest only money with 30 year amortization, up to 85% on purchase in some scenes and then up to 80% on refinance in some scenarios depending on debt service, the experience of the borrower, the asset type, where it is classification.
Fix the rent and fix the flip is 1 through 4 and then just 5 plus units.
Usually most asset based lenders or non QL lenders are direct or probably up to 15 million without, you know, within their own balance sheet. New construction is primarily one through four. There might be some five plus unit opportunities but it's definitely going to be you know, five to 20, you know, maybe I don't think it's going to go much bigger than that.
And then, and again nationwide I think non QM is getting very AI friendly. Most of the appraisals in the Fix to rent, Fix to flip is, are now being conducted by AI.
So you're eliminating the aging appraisal industry. So if you're already doing a fixed to rent appraisal AI how far off we are with getting a DSCR AI appraisal?
We're already at the 50 yard line so you know, we're not far away. It's going to happen. It's just a matter of how fast they're going to eliminate the entire appraisal industry out of the equation.
[00:22:38] Speaker B: I just want to give you some interesting statistics of some of the leaders that I've spoken to in the residential space.
Some RESI leaders, they'll be funding like, like a hundred to $200 million a month in agency paper and then their year for the entire year. And some of the residential lenders, they'll maybe fund 50 million as a company, as an entire company.
But you're in, you're solely in your lane and the DSCR non QM space.
So how many units are you funding per month right now?
[00:23:11] Speaker C: Little quiet. The first Quarter a little bit here. There's a lot of competition out there.
We're probably looking at 35 to 50 loans a month.
Now once I rebuild up that broker business that I established at Lendmark as Well as lending one, that'll get up to another, add another 30 or 40 loans on average a month. I had a broker just present me five DSCR purchases and another broker presented me two retl purchases. So they take time to go back and forth, you know what I mean? But that could be seven or ten. That right there. Those seven or ten loans were probably, I don't know, four or five million in origination. That's. That alleviates a lot of pressure on me out there. Hunting for new game.
[00:23:56] Speaker A: Yeah, it does.
[00:23:56] Speaker C: It's about scale.
[00:23:59] Speaker A: Certainly want to ask you some questions about scale. Scale now is, you know, processes what you have in place and technology. So good segue to take a look at some of the technology partners we have that help companies scale. And on the other side I see Mike's ready to ask Joe a question on this topic and I'll ask you a couple on scaling.
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[00:25:32] Speaker A: All right, I'll, because I'll just jump in real quick here.
You've clearly have a system in place where you're able to scale your outreach, you're able to scale the units you take on.
At what point did you transition from Joe just you know, going out and hunting like you said to this new philosophy you have where it sounds it's very around systems and scaling in your marketing and obviously then therefore your referral partners.
[00:26:05] Speaker C: I decided to start spending some serious money on this probably over the last three years, four years, it made a lot more sense to, you know, if you're going to be a ronin, and that means a samurai without a master, you got to, you need a support system that nobody could see.
The people, they can't see. The people that are working for me right now, you can't see. And you'll never know them.
Right.
You'll just never know who's marketing on my behalf. Right. You, you just see these while you and I are talking, somebody's posting something on my behalf right now.
An article of information lending quotes, things of that nature. So when I'm off this call, I can facilitate the legitimatized inbound lead track.
[00:26:47] Speaker B: They also do.
What percentage of you is management and overseeing versus they just do the work. If you're the ronin, then what part of it of you is actually doing the work versus the management overseeing of staff?
[00:27:04] Speaker C: I, I probably, I probably involve myself an hour on average a day to set things up for the tracks to keep moving.
But like, like while we're talking, my, my social media team is talking with my social media administrator and they're working some things out on some new podcasts that are being loaded up and they're working it out. I'm just, I'm just looking at it and you know, if I, if I need this jump in, I'll jump in. But right now they're all grown adults. They can, they can do grown adult things.
[00:27:31] Speaker A: Instagram post on.
There's a person who has like a billion views and they post about a hundred to 150 times a day between all the platforms. So these experts that tell you too many posts get less posts. I mean it's, it's all in context. Obviously this person floods it and gets more views.
[00:27:55] Speaker C: I don't really pay. I just do what I can do.
I worry about what I can do. I don't, I don't really worry about anybody else.
I, I don't know whether I'm making impact or whether I'm not. Yeah. So the phone rings.
[00:28:04] Speaker A: That's all to actions. Do you find that you're purposeful about them? Do you have click links or do you just plant the seeds, water, and then wait for the, the harvest to come when it comes?
[00:28:16] Speaker C: I like that. Yeah, that analysis sounds like more like what I do keeps the day very filled, keeps you very sharp and concise in what you're doing. I have much healthier conversations with people now.
[00:28:26] Speaker B: Do you have a preferred referral source in direct to consumer whether it's other brokers or you know, the traditional financial advisor who's just trying to refer you because they don't do real estate. So they're like, hey, you know what, I want to keep my aum. So let's, let's figure out how we can utilize your financing better than people taking money out of their ira the retirement for real estate purposes.
[00:28:53] Speaker C: Yeah. So like a financial advisor is probably like the least and or worst referral partner ever to have in, in my space.
Wow.
[00:29:02] Speaker B: Surprising.
[00:29:02] Speaker C: Obviously. Obviously there's, there's investors and developers, there's fellow real estate professionals, and then there's real estate agents kind of batched all in the middle. I don't go to like a ton of real estate agent events because most agents are not busy. Maybe 10% of the 90 say there's a hundred people in a room. You got to find the 10 people that are actually doing a club a couple deals a year.
And that's very hard to identify because they all, they all talk like they're doing a hundred deals a year and they're not.
So then you got, then, then you're wasting a lot of time with people that are. Don't really have a cost benefit. So I'm not, I don't weigh heavy on real estate agent events. Like somebody's like, hey Joe, I'm going to this real estate agent event. There gonna be like a hundred people there. Great.
The odds of, of 10 people in that room doing anything more than two times this year related to real estate investing is, is, is right there. So like I'm going to go to an event with 50 real estate investors. That's all they do. They don't do anything else.
They're just trying to buy real estate investments, properties. That's 100% concentrate, not a lot of juice. And I can grab some of that pulp and that pulp. The results is hopefully a fixed or rent fixed or flip DSCR get it.
[00:30:16] Speaker B: You go to like a, like a Robert Kiyosaki event or something like that. Is that even worth it?
[00:30:22] Speaker C: Why nobody has any money. The only person that has money, there's Robert Kiyosaki. Everybody's giving their money to Robert Kiyosaki. He's a brilliant individual. So like everybody's dropping 10 grand to learn something from Robert Kiyosaki. But if I asked everybody person I went up there to put the ten grand down. None of them own any real estate, but they'll spend ten grand on Robert Kiyosaki. So that's not a likely event that I would attend.
Yeah.
No cost benefit.
[00:30:45] Speaker B: Interesting.
So then what is the, would you call them creative investing events like the CR or what is the actual networking group that you're looking for to go to in order to be highest and best use?
[00:31:04] Speaker C: Okay, we're all being nice and we're friends here. Right. So non Ponzi, non predatory investor group meetings.
[00:31:11] Speaker B: Interesting.
[00:31:13] Speaker C: Is that a good way of just taking a high level, 50 foot level of, of the human average human being.
[00:31:20] Speaker B: I've been to those Ponzi events where you have to pay to, I'm going to say it this way, pay to be a member, to go learn. And then
[00:31:33] Speaker C: I've never met so many people in one room at some of these like, I mean I'm talking like 4 or 500. I've spoken in front of not one phone call. Think about that. 500 people to run on the focus of attention on lending. Right. Not one closing. I go to an event with 80 people strictly real estate investors. I'm the only lender in the room. I already have a lunch appointment set up. I have four phone calls.
I'm scheduling a networking event, collaboration event with another real estate investor at his str somewhere in a beautiful area of Connecticut.
That was just on Monday. Michael.
I met 400 people in Brooklyn at an event all claimed to be real estate investors through a Ponzi like organization which I will not name on here.
And they all pay 10 to $30,000 to be in this club or whatever it is. Not one inquiry for a loan.
[00:32:28] Speaker B: Last week I was at the mortgage bankers at the MBA multifamily conference and then previous to that I was at two other events which was 90 times smaller than the NBA and out of the the smaller events.
This is not exaggerating for me in my private money space I think I've received maybe 20 or 30 referrals and at the MBA I got two.
So I resonate with that and I in you know, knowing the right, knowing your lane and the right place to pick is pretty integral. I haven't implemented the social media strategies that you have.
What role do you think it plays when it comes to in person speaking events?
What is the question or the answer?
One question, one answer. If you could answer that that you receive the most question on and what is the answer that you wish that would people ask more questions of so you can give that answer for the
[00:33:28] Speaker C: most ignorant people in the room and so they're always asking about rate because they're the most ignorant, they're the most ignorant for the real investor wants to know, how do you look at cash on cash return?
How do you look at DSCR and how that helps me make more money and scale my business.
That's the more intelligent individual.
If you're so wrapped up in rate, I'm probably not the right guy to have a conversation with. I would just go onto some kind of website where they'll give you 14 different quotes, let them run your credit 14 different ways and do whatever you got to do. That's. We're probably not a good match.
[00:34:02] Speaker A: Yeah, I mean you're, you're crushing it on here on this show, Joe, because I, there's a lot of loan officers out there. But whether they're in DSCR or just conventional, they need like now is the time to get your act together and come up with a strategy to just do what you do at night at the local, you know, networking event and how can you just make it a little bit wider and repeatable.
So kudos to that. I hope all the listeners you know are listening in that I have.
[00:34:31] Speaker C: Oh, there's some great, there's some great daytime events, Mike too. But I'm just not going to give you all my secret sauce and that's okay. There's some certain events that I go to during the day that, where there are real players at, not the posers that want to take pictures of themselves on Facebook. For all the Facebook legends listening, you know, I don't need to take model shots of myself. I don't need to take a picture with 30 people behind me.
That doesn't make, that makes me look too busy. Actually Mike, you don't want to look too busy for your clients to call you. So the more you take pictures at all these events that you're like hobnobbing and stuff, the more you look too busy to take a phone call.
[00:35:09] Speaker A: Interesting. Yeah, that's opposite of my strategy, but it obviously work works for you.
I was going to ask you about the like the, the landscape then because I'm kind of curious about this. So first I'll say is there ever a bad real estate market for what you do? You know, on the conventional side, some would argue supply is really low and so you can't originate more purchase loans without more listings. Is it?
[00:35:42] Speaker C: Yeah, I think that's all, that's all make believe listeners. So listen, your best out off market deals are out on the street and if you're not on the street, you're not going to find off market deals. So if you're not going out at least two, three times a week and you're a real estate professional, then you're not doing, you're not, you're already not, you're already getting up against the wall.
I, I, I think you know, just people have gotten lazier because they could work behind and just do texting and emails. That is not going to, that's all bull crap to be honest with you. You know, as soon as I'm done with this call, I'm going to pack up. I got to go head out to meet with two different real estate offices before I go to my own event.
So I'm on a timeline here.
[00:36:20] Speaker A: Well, we'll make sure that we help you.
[00:36:22] Speaker C: No, but I'm just saying that's just how you have to look at life. You know what I mean? Like so now I start my day very early. I go to the gym, I do, I do my exercises. I hit the ground running 7am in front of my laptop, get all my marketing in, get everything going, hit all my touches. So by 10, 11 o' clock I should be seeing some feedback, right? But then I'm on the road, I'm doing this, that or whatever, appointments or coffee meetings, setting up additional appointments in the future. Like you don't even want to look at my calendar book.
You'll have the same hairdo as me. So I mean you'll lose your mind. You know what I mean? So you just got to be very consistent. There's no bad or good market. There's just a market. You, if you want to say there's a bad market, knock yourself out. That's up that, that's you putting. You ever see those cartoons when people think things in their head and they put out in front of themselves.
If you put those negative clouds out in front of you, it's going to just be negative return.
[00:37:12] Speaker A: Yeah. Sandler Sales calls that head trash. You know, your head trash ends up. My other question is Mike Zhao always says it, you know, as I like to motivate and educate originators across the country. Can you talk about for you and then for others because you know it might be a little bit more insulated in your world, but just the power of these type of loans you do on the ability to create ancillary loans out of them whether they're flipping for new first time home buyers are going to refinance four more times in their life or just somebody that is going to start at this rate and eventually need another mortgage for lower rate.
What is everybody missing on?
They're not fertilizing their soil. They're just going and trying to find the apples at the end, at the end of apple picking season sometimes and, and not creating their own trees.
[00:38:04] Speaker C: I think most, most investors don't really understand their own expenses per asset and they have a reality check once they get a new loan, no matter what it is, because they didn't doc, they didn't really take into account taxes increasing or insurance rates increasing or expenditure, you know, property management higher or vacancy rates are now higher. You know, you're looking at four or five months average on vacancy rates in most markets throughout the country. You're not looking at the deferred maintenance where it used to be the average 3%. Now it's at 5 to 8% depending on what classification of tenant you have in. So I don't think a lot of these, these landlords that are scaling with non QM are evaluating that to pencil their deals down even more so to really know what they're making. I have one client, he owns like 25, 30 properties. He thinks he's broken and you know what? He probably is because he, he put too much into these in some of these deals and he's, he's, he's over leveraged on these properties. He's not going to see those values back for five to 10 years in that market where he's at. So I'm like, listen, the only thing you can do is either fire sale and reset or refinance and pray and hold on to the, you know, to the, to the steering wheel and hopefully don't press at 100 miles an hour on the gas pedal.
[00:39:23] Speaker B: I was at a loan signing last night, believe it or not, for a client, they happen to be to come into a seven figure windfall and they're like, so Michael, I want to start doing more of this and so on and so forth.
You know, what's the one advice that you would give and the advice I said, I said, you know what, you need to know what your number is.
Well, what does that mean? I said your number needs to either a be a dollar amount that you think you need to receive and that will in turn tell me what is the number that you think that the rate of return should be?
Whether it's 3%, 7%, 8%. That provides me A your expectations for return and B potentially your expectations for risk.
I don't know Joe, if you, if you go down that road with, especially if you're doing 30 to 50 units, how often do you have conversations like that individually with borrowers so that they might. So they, so that they. You can educate them or they can even educate you on things that you might not know.
When it comes to how they calculate their expectations for yield, I just try
[00:40:30] Speaker C: to have a longer. I don't want to make my clients feel rushed when I'm talking to them.
You know, I have my best conversations driving one place to another with a lot of people and I'm just having healthier discussions with people like what are they trying to accomplish? What are they, how old are they? What's their 10 year plan? Do they, what's their legacy? Do they have kids? Any of the kids have any interest in their real estate holdings? How many properties do you want to be at the. That would equate to, you know, to subtract out your job and you just do play, you know, land, you know, property owner. So I have deeper discussions with a lot of the clients and then when I'm doing presentations, I now already set up questions for the hosts to pose to make the discussions more interactive. Not just a presentation, me standing in front of people.
So I feel like the masterminding, the fast, the fireside chatting people are much more comfortable with these type of discussions. Like if you and I, all three of us were just sitting all near each other and there was 20 people, we would have this same conversation and then we would open it up to questions to the audience. Right. So we already have pre planned directive to the discussion.
[00:41:41] Speaker A: Yeah, that's.
I think I have a really question specific to what you just said and I was gonna ask it anyway, so this is perfect. I also want to say thank you for coming on the show. Don't forget to plug your own podcast and how to find you.
But why do you think no one has mastered yet like what you're doing at the local level, at the zip code level, where it might kind of advise me like financial planners can't really give you advice on how to take loans out of your house. So they can't really work around that. But a loan officer can.
Then you have estate planning, you have the new big beautiful bill coming out. And it just seems like real estate's more and more a tax play these days. Your CPA background, how come an ethos of of those three hasn't really been popping up around and people just get this advice in silos when it's relevant to what they're doing. Like when they go in for a mortgage, they call for a mortgage and then they figure out taxes at, you know, when tax season comes, it's always in arrears. Smart decisions.
[00:42:53] Speaker B: 1.
[00:42:53] Speaker C: I don't think financial advisors and financial planners have any idea what we're talking about here today. Not, not even a slight clue unless they fall on something and somebody takes the time to educate them.
I think real estate agents barely understand what we do.
And then you have so many people that come from other jobs that they failed at and, oh, I'll be a DSCR lender. Like every time I look up a mortgage broker that I meet at an event that I'm trying to sign up as a mortgage broker, I look up their LinkedIn profile and they were like, they worked at Best Buy or they worked at an auto sales place. Like, they don't have any longevity in the space. Like, I think the advantage is for the, any, any of the, the mortgage professionals are out there that have transactional experience. Like the scars of a couple economic cycles. Like, look, look what Michael looks like. He's got. He looks like he got hit with, you know, with like at least three mortgage cycles, at least 30 years of, of abuse. Right? You know, right. You got slugged around. I mean, like, you have to, if you haven't made a thousand mistakes and a thousand successes and admit to them or own up to things. This is the best part. The best part is when you have a transformation, you own up to something in our space.
You know, Like, I had a call with somebody today, he wanted to do something with a land trust. And I'm like, listen, I gave him the guidelines. And then he said, why can't you just do this? I said, listen, you're. One whole deal will not change my guidelines. Bring me 25 of them because I've only seen one in the last 10 years. And he kind of start laughing. He's like, okay, okay, like how many will make a difference? 20. Go, give me 20. Because I've only seen one in 10 years. So like, people, they try to push the lever with what we're doing in the non QM space and we have guidelines and, you know, I have a guideline book to go by. Like, I have a whole thing that I review.
You know, people don't take the time anymore. Everybody's very rushed. You gotta get put more time in a day to get better results. Like, my day starts at 7am, my evening ends at 9pm and if I can't get stuff done between that Monday through Friday and then put some extra time on Saturdays and Sundays when I'm not spending time with my wife, I got problems because I'm not I'm not staying abreast of what's going on. Am I staying ahead of it?
Okay. And I'm not staying in front of my clients in a consistent matter. So at the end of the day, what we do, there's consistency and continuity, there's transactional experience.
And thankfully, it seems like we're at the, we've got that 10 year. Like, Mike, you look at Lisa, you got 10 years in the business, right? Mike, how many years you got? 20.
[00:45:35] Speaker B: I'm coming up on 30 actually right now.
[00:45:37] Speaker C: Yeah, I'm 25 years in the business. So, you know, and my father was in three other economic cycles, so I got to work with somebody in the real estate space that I went, I went through a total of five economic cycles of experience. You know, not, not a lot of people get that exposure.
[00:45:52] Speaker B: Yeah,
[00:45:55] Speaker A: I'm, I'm 20 years for the listeners. I, you know, I was at the
[00:45:58] Speaker C: point making you look at a young man, Michael.
You look a young man. You got a young face.
Yeah, good. Good lotion. Good lotion.
[00:46:07] Speaker B: Yeah.
[00:46:08] Speaker A: The, the kids are starting to really, you know, the hairlines receding. The absolutely sleeping wrinkle. I gotta.
[00:46:15] Speaker C: Since 01, no bad hair day.
[00:46:18] Speaker B: I got. I have a comment before we come off the air here because, you know, I, I've. We've spoken to a lot of leaders in the mortgage industry on our show on in the four. In the four seasons we've been on here, and I've spoken to a lot of million dollar producers in the agency space, especially here in San Diego.
What is the, what is the one thing I always ask that, that there's some kind of commonality in the residential space.
Unfortunately, what I've seen for $100 million producers is that there is a lack of balance in their lives. And what's interesting about Joe, because I've known Joe now for a number of years, and when we talk, we actually don't talk mortgage really all that often. We've talked about, I would say more like spiritual condition and even more so health things. You know, what do we do for. To improve our, our physical health, our emotional health, our psychological health. And it's really just interesting that we have these types of conversations, deep, deeper conversations that we can advance our personal life. I think in this space there's not too many people that we can have deeper conversations with to create balance.
Otherwise, I, I think that for Joe, I don't know if you'd have more hair, but, but I, but one of the things I appreciate about you, my friend, is, is the type of depth that we can create together as, as, as professionals in the space.
And we don't, I don't really see as much of that in the, in the agency residential space.
So for, for the originators or even leaders out there that are wondering, for the non qm, dscr, private money lender, whatever you want to call it, in that space, there's something to be said for having life balance. And I think it's important because it creates the balance so that we can learn how to delegate, learn how to, to work smart and work hard at the same time.
So, Joe, as a friend, appreciate you, number one. Number two, thanks for coming up on our show.
Mike doesn't say in the middle of a show, you're crushing it right now too often. So when I heard that, I was like, oh man, that's, that's, that's a pretty good compliment.
[00:48:28] Speaker C: I appreciate the kind words and all I can say is, you know, just be consistent and continuous in your health and that'll obviously resonate into business over time, believing it will.
[00:48:39] Speaker A: Thank you again, Joe. This is like it should. Listen, I'm going to use it as a North Star for what I'm trying to just motivate certain loan officers on doing and getting out there and you can't do it overnight. And I hope our listeners appreciate this episode because you actually have actionable steps and actionable motivation of things that you can control.
Thank you for joining us on this journey into the heart of mortgage innovation.
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