Episode Transcript
[00:00:00] Speaker A: All right. We are live and completely testing out if this is working on the LinkedIn world and this is the transition from war. Talk to Mike Dub, the mic dub show. So congratulations, Mike. I believe it's our close to our year anniversary here.
[00:00:19] Speaker B: Happy anniversary, then.
[00:00:21] Speaker A: Happy anniversary to you, too. I hear nothing but accolades for us being able to continue to do this and bring great guests on. But I think in the future, we want to take this show to another level, and we really believe it's about organization and guests, right?
[00:00:38] Speaker B: That's right.
[00:00:39] Speaker A: Better guests we're able to bring on, the better story we're able to tell, but we still need to be raw because you're seeing more and more of these pop up all throughout our industry. So we have to differentiate. What. What would you say makes us different?
[00:00:52] Speaker B: The fact that we are asking questions and getting transparent answers.
You know, I think a lot of times we get canned answers because, you know, whether it's at a show or being recorded on housing wire or national mortgage news or something, it's kind of like canned answer. We're asking some questions, actually, that, you know, because we don't have any affiliation or monetization, actually, with some of the things that we do. So we have no allegiance to advertising dollars at the moment. Although if anybody does want to advertise, we're okay with that. But part of the reason, though, because we don't have the allegiance, we also have the ability to be absolutely transparent. And we've been able to say the word raw only because the answers have been transparently truthful. And I think that's one of the things I really appreciate about all of our guests and even our show, we're able to just speak our mind. You know, I think earlier in season one, we talked about being the joker in the jester's court and the king is the mortgage industry. And the fact that we can be absolutely truthful in our opinion, and we don't have to really worry about any backlash, speaks to the truths that we're able to put out there.
[00:02:04] Speaker A: Yeah. And we don't really have an allegiance to the point where we have to monitor it. But a year in, I would say our takes have not. We haven't had anything controversial that has come back. It's just been in the moment. People more say, oh, I've never heard the guest speak like that, or, I never thought of that thought provoking. We are contemplating changing it, too. So here's the new format that we will have. Season three starts next week. This is our first practice of how to. Thankfully, we did that. Proper preparation prevents poor performance.
We're learning. So we were thinking, why not make it video? Because the audio LinkedIn is just almost fighting their own platform with us. So if we can get more viewers through video. But do we think the guests will be as telling as they were?
[00:02:58] Speaker B: I don't know. I mean, you know, some people get really weird about being on video, and I think it's just part of the deal right now. I saw that. I don't know. There was a radio host, Jim Rohm, who used to, he used to exclusively be on radio, and then he just announced that he's now doing video on X or Twitter or whatever you call it. So I think that video is the way to go. And I think if you're going to be a C suite executive or in sales, getting used to video is part of the deal. Like when I was a kid, I was watching the Jetsons or Buck Rogers or something like that, and you would always see video calls. And I just didn't think it was going to be possible in my, in my elementary school self. But now that we are at that point where we're in it, we just need to be prepared for it. It's a much more visual opportunity that we have to be able to not only see our customers, but also our audience in our future audience. Right. I think that if we are able to show ourselves in real life, then we're also able to show ourselves on video for recording as well.
[00:04:01] Speaker A: And I agree. Tom Brady was on last night speaking how he has formed such great relationships with people like Robert Kraft. And one of the points he makes is FaceTime didn't exist back then, so a boy from California didn't have the same ease of use to relate with the family and get used to the new surroundings. And the world has changed. I mean, FaceTime works almost everywhere now, right? You don't really have much service problems. It will work without Wifi.
It's nice. I think even our industry, there's so many faces now. People know because of all of these podcasts, really more than the webinars, you can get so much content without any paywall. And we hope to bring it to the industry with either thought provoking people or leaders of IMBs, banks, credit unions, leaders at the lenders, so that you can learn from people that are where you're trying to go. I think that'll be the main season three. The guests I'm looking at, you're going to see they're either thought provokers or they run mortgage companies. And if you are one of those two out there and you want to be on our show, we're going to have spinoff shows where we just tape a couple shows at a time and we release them throughout time. But our main stables every Thursday at.
[00:05:23] Speaker B: 02:00 p.m. eastern and of course at 11:00 a.m. pacific. And it's not so sunny in my living room, but I think we're going to have to change that and have a recording outside because it's still sunny San Diego. Nice and 75.
[00:05:36] Speaker A: Nice and 75 sunny San Diego. And so if you can make that you, then we'll do the live recording. We can do video, we can do audio, but our main purpose is to always get it out there on those podcast stations. So we've put in the groundwork to get it onto Apple. It's already on Spotify, it's on YouTube. And our team does a great job of getting the shorts. So you'll see Mike decrypted that. Mike and I are going to be bringing, it's a new spinoff, shorter version. We're going to be having social media channels. Here's the big takeaway. If you're a lender or you're a company out there, a marketing exposure that I think this show brings that others don't is you can play off that truth aspect. We've said it. If I was a loan officer and I was looking at a company and there was a mic dop show episode, it seems to me like that's the easiest way to get to know the leaders, like mortgage investors group. There wasn't much about Chrissy. I was on a call today with them, with one of my clients, and she's amazing. And if you heard that show, you would truly know the difference between what she is building as a culture and then what those recruiters have to do. Because I'm sure it's like any other sales. If you didn't know the name of the company and you hung up and somebody called again, it's probably very similar pitches, right?
[00:06:55] Speaker B: Yep. And I think that if you, if you're out here, I mean, we're out here in California, there's a lot of lenders out here in California and getting to know some of the independent mortgage bankers that are on the East coast, like in Tennessee or North or South Carolina, it's an opportunity to be able, maybe if we don't travel the across the nation to go to the conferences and the trade shows, then it's an opportunity to get to, if you wanted to actually get on and actually ask some questions. And we're advertising this, so you have the opportunity even to get on. We're supposed to be radio, and although it's hard, but we can send you an invitation if you'd like, to ask questions to some of the leaders that we put out there. I think that as we put out the schedule on the calendar and you'd like to ask questions to some of the leaders, then we can send you an email with how to get on to our live broadcasts. I think, Mike, maybe during the course of the remainder of the year and even into next, maybe we can have a Tuesday show at one of the conferences. Right. Whether in San Diego, Boston, Chicago, Seattle, wherever, you know, Nashville, wherever the trade show would be. Maybe we can go live on a Tuesday at one of the conferences, one of these days.
[00:08:07] Speaker A: That'd be impactful. I think people saw, I was at the New Jersey NBA. I was able to sit down with Rick and Greg, and we did tape. And it's fun in that environment. You're able to get a more humanizing interaction. Not that you can't on here, but when you're there. We were laughing, we were joking around. It was just a little bit different, but it's meaningful, and I think you can grab more people. I see us definitely doing that.
So little birdie from DC came and really dropped some knowledge.
[00:08:41] Speaker B: Okay.
[00:08:42] Speaker A: And so I have another nugget from you. Yeah. What I think is the ultimate predictor of the future. Right. And so it's. It's a battle to the buyer's side. And with that buyer's side, it's really controlled, in the birdies view, as the mortgage. So it's a game on for can you get to the buyer? Can you get them a mortgage? And then you need to be able to not just offer mortgage, but he actually said they need to get into commercial real estate and control the ecosystem, which is right up the alley of where you and I are starting to work. I think it's very relevant here. And I didn't say this, this is just almost billboarded to me, but relevant for where we're going. So now you can control the inventory, get involved in these, and you can explain it better. I haven't dug that deep on what he means by commercial real estate, but my guess is apartment building.
[00:09:42] Speaker B: Can you say. Yeah. Can you expand a little bit more? I'm trying to decipher what you're saying, and I think I get it. But when you say inventory, do you mean housing inventory?
[00:09:51] Speaker A: I would assume that's what it.
[00:09:53] Speaker B: Or do you mean securities and buying and selling of inventory of mortgage notes? Or what does it, what does inventory mean to you?
[00:09:59] Speaker A: My guess is I have the wrong answer. So first initial reaction would be because I have to go find out. I didn't get the talk in depth.
[00:10:06] Speaker B: Sure.
[00:10:07] Speaker A: I would guess if you're getting more upstream. Right. So if you are part of the 200 unit Avalon of renters, you for Emmett this we're about to embark on like game on for data. Before, for a while, people were afraid of data, having too much data, data breaches. Is it right to have data? Could the consumers own their own data? I think the message is the mortgage industry so far behind other industries on harvesting this data. Yes.
[00:10:40] Speaker B: Harvesting, yes, behind the. Yes, definitely behind the eight ball on harvesting the data, for sure.
[00:10:45] Speaker A: And they have the most data.
[00:10:46] Speaker B: Yes.
[00:10:47] Speaker A: They don't harvest it. They don't do anything with it, maybe out of fear of the regulators, but it's now gotten to the point where so far behind, I think I'll give you a quick just comment.
Rick Rock gave credit to movement for being so aggressive with msas at a time when courageous, really, at a time when people thought they were going to crack down on that. And that really helped movement. Significantly relevant today or not during the boom, it certainly helped them. And right after and into today, those that are courageous with data, I think, is the parallel I'm trying to say, that are not scared of, oh, that's not your data. It's not the consumer's data. They're just other industries out there that are harvesting this data and those that are courageous and careful or confident, or confident. But it doesn't stop at mortgage. It stops with this blueprint. So I'm just going to give it one more look here. And while you, while I listen to your thoughts to get it exactly worded.
[00:11:45] Speaker B: Correctly, I think that Casey has an extreme confidence in the type of advancements that he wants to provide, not only to the company and to his sales team, the mortgage originator. And when we talk about fear over gabbing data, whether it's fear over providing the correct HMDA information from originator or processor back to back to HUD or the powers that be and, or having fear, should we advertise this way, should we collaborate this way, or should we do this, or should we do that? And I think there's too much fear based mechanisms as a result of over regulation. Instead of just looking at the regulation and saying, look, this is what we, instead of looking at what we can't do, I think we're not asking ourselves too much what is it that we can do and just run with it as far as fast as we can with it in the most profitable way. And I think everybody wants to do that. And we're still trying to Rubik's cube the thing together. It's a big mess of colors and information and we still haven't put the puzzle together on how, how to do this profitably.
So if there's a, if there is a way to just say, okay, we're going to take a step back and unscramble everything, we're going to throw the Rubik's cube and throw it up against the wall, break it, and we got to put it together the right way. It's supposed to be that. And provide us the confidence in order to advertise, in order to market and then even get better, get more aggressive on product and pricing or sharper, potentially as a result of speaking to our secondary relationship partners. Theres, theres a lot still to be cut up and thrown out there or sewn out there, I should say.
[00:13:37] Speaker A: Yeah, theres a lot of opportunity and this would be for really large companies. So my thought is if youre not really large and you can follow the blueprint a little bit, better chance of acquisition down the road. Just thinking out loud. But you get to the buy side of the mortgage, right. So you get the buy side believes the buy sides, the mortgage. You can't buy it without the mortgage.
Fact, somebody at the New Jersey MBA said it's easier to be a part time realtor than a part time loan officer. So.
[00:14:11] Speaker B: And with HUD rules, you can't even do fha loans if you're not full time. So you can't be that. That's so interesting. Part time, part time realtors with side hacks, maybe they're ubering or DoorDash or something while they're closing their. I think the, at least here in San Diego county, the average realtor does four transactions a year. Like if you're doing eight plus Trent sides, you're a top producer.
[00:14:39] Speaker A: And I think the point was like four years of part time job or right, like that's technically. And Greg Shearer made a great point that when he looked at his pipeline and it was a wake up call and he didn't want to be the wet blanket in the room, but 50% of all of his volume comes from real estate agents that do as much as you just said or less ooh.
[00:15:05] Speaker B: That makes a lot of sense.
[00:15:06] Speaker A: So all of those buyer's agents, it was a funny exchange too, because he made that comment, and then Rick got confused and he's like, so you have one agent that gives, it just sounded funny and it took a while to explain it, but it's really simple. 50% come from buyer's agents, all of which it could be 100 of them or 200 or 1000, but all of them do one to three deals a year. And so his point was, if this new NAr ruling makes it difficult for them.
Difficult doesn't mean more work, though it probably will be more work. Could just mean asking money makes things weird. You have to actually ask for the money. Right. Maybe it's not worth a that for only doing two, three deals a year. And now you have to ask for checks up front. And especially if that was your family and friends that you just kind of had the license hanging, and now you gotta ask your friends and family for ten grand, and you don't feel comfortable doing that because you were a part time salesperson to begin with then, and you leave the deals go to the top producers. Right? Naturally.
[00:16:07] Speaker B: I don't understand.
[00:16:08] Speaker A: Wait a.
[00:16:08] Speaker B: Wait, wait, wait, wait. I don't understand. Okay. You, at least in California, right, you, you have to take classes, you have to take exams to pass those classes. You have to take an exam, and maybe you'll take a course to pass to get the licensing, right? So you've taken courses, you've taken licensing. You, if you're with a larger, you know, if you're with a keller or remax or some larger broker, you're probably on a reduced, you know, 40% to 60% of the, of the commissions. And you're not 100% scale because you're just starting. So you're getting some kind of training at a reduced level. So if you're getting training, you have a mentor, you go through classes, and the agent still doesn't even have the confidence to ask to get paid so they can get recompense for all the work they put into it and for their leadership of all that training to ask for the same type of compensation as a result of the time invested. I don't think there is enough education right now in teaching people how to have the amount of confidence to go and say, I am, I've gone through this. I'm not only getting reimbursed and paid for the education that I just had. It's not a college education, but every person does go through the school of hard knocks and then to not have the confidence to ask for by two and a half percent when the average person only does four transactions. So like if you're, if you're in San Diego, it's a million dollar transaction and you're earning 25,000 gross and you did four, which is 100 gross, which sounds great. But if you're that part time beginning agent and you only earn $40 to $50,000, that really doesn't food on the table. So you need to be able to ask for it.
[00:17:53] Speaker A: So I know where you're going with it and you're just to play devil's advocate because I do and I don't do it for, I mean I was, you saw me with Anthony Lamacchia. I don't saw that picture. He is the voice, right. Of reason that buyer's agents are needed. I told him how much I appreciate what he does. Appreciate him going on housing wire. He gave me a lot of tea on the side of what's going on there and I'm all for it. I just play the devil's advocate of consumer application of what I see. Cause that's how I'm able to create items like easy mortgage apps. It's how I'm able to reinvent myself here. It's just what I do doesn't mean I cheer for one side. I just like to play common sense, real world what, what could happen out. And I keep playing them out. And so this one plays out to, I think real estate agents are either really good at sales or really good at marketing.
And sorry, they either have to do sales or they have to do marketing. We're not talking about the really good ones anyways here. Right.
[00:18:58] Speaker B: Because they're good at both.
[00:18:59] Speaker A: Right. There's ones that are marketing, they go out to and let's just take the socializers, the ones that go out and sponsor the local little league, the ones that are involved, right. That hand out their business card and market themselves as available.
They don't sell themselves as knowing the conveyance plans of, or the plot plans or they have a connection to registry a deed so that your closings faster making up stuff, right. People that are at marketing still find the sales piece uncomfortable. And right now all they have to do is market and get chosen and it's built in commission. And nowadays that way that's all I mean. And so that those people are going to find it not harder to find people more uncomfortable to do what they do. And is two deals enough to get uncomfortable and ask for money from people? You know, and if they go away, it's just going to chip away at, at loan production of people that rely on those ones and twos. And it's probably going to make loan.
[00:20:06] Speaker B: Officers one of the most shameless sales opportunities for a person. You don't really. It. I used to teach this in my classes at UCSD extension. It's easy entrance and it's easy exit. Right. So it's easy entrance because you, you know, you can take the classes fairly easily, go get your license, as long as you can pass the exams. And then you're in the business. And then there are tons of brokerages. Oh, you got your license. Yeah. I'll hire you. Why? Well, because all it does is cost me time and I'm already training, whatever, five agents right now anyway, so you can just join in the next training session. So it's easy entrance. Easy exit. One of the things that they can do a better job potentially on is shameless plugging and doing things like this. I mean, this should be like the most obvious thing. Get on LinkedIn video or Facebook Live or Instagram live. Go do your thing and get live and get in front of people.
But then, oh, I'm scared to put my face out there. Whereas your face. Anyway, you're at the little league game, you're at the, you're at the restaurants, you're at the Home Depot, you're at the Costco or the whatever the Walmart brand is. So get out there and do the shameless plug because you're out there anyway.
[00:21:18] Speaker A: It just, everything to me screams the mortgage industry in the real estate industry need to be working closer together to prevent disruption.
[00:21:28] Speaker B: Yes.
[00:21:29] Speaker A: Instead, they go back to their own ways where the realtors feel like the lenders are selling them on something all the time. Can't have a conversation without selling them. Right. And, um. Or the teaming up is in some way selling. We can't shut that off for a minute. And, and also everybody's busy what they're doing. So I, again, I'm not blaming, taking sides. I'm just saying from an outsider, somebody that was at Beacon Hill on Monday and saw it, you know, I saw Anthony Lamacchia, who's on all the time with the head of NAr. I think they're even like working, you know, together. But he's always went up against catcher. Is that his name? Catch him? Catcher attorney. But he went up on housing wire. 4000 people watched. Right. Like he's actively doing it on screen. And then, like me, he's boots on the ground at Beacon Hill talking about transfer taxes, homebuyer programs, and speaking to our congress about, you know, what's going on here probably too.
[00:22:25] Speaker B: You know, I want to address that speaker three.
[00:22:26] Speaker A: Where's the lender? I guess that's also able to talk to him at that level versus him feel like they're approaching him like, oh, we should be working together on deals. And I think that is, maybe it's unfair, but it would certainly make it a lot harder to be disrupted than leave the door open and then somebody like Uwm who just disrupted title on the lap. Because Matt, I mean, he's awesome at what he does and he likes to shake things up and then he realizes they land well when he's well prepared for it. Right? What if he just offers to all brokers built in salary paid buyer's agents, you know, in every county in the country.
[00:23:08] Speaker B: That's exactly where I was going toward. I was reading the bio for Owen Lee. Congratulations. Shout out to him.
[00:23:14] Speaker A: Yeah, congratulations. Mike and I were talking last night, preparing the pathway he has to go on is amazing, too. It's like vice chair.
[00:23:22] Speaker B: Yes. Well, anyway, if you read his bio, not only, not only is he one of the principals for success mortgage partners, he's also a principal for a title company. So when you say something like that about how, how Matt Espia is going to be, has this opportunity to just go higher, zo, you know, if you're in, if you are a remax or a keller or some other brokerage, you got to be thinking to yourself, we either a, we learn how to do mortgages or b, the mortgage people, the guys with the money, they're going to learn how to go get agents. Which one is an easier path to go be a real estate company to get into mortgages or to be the mortgage company to get into real estate. When you hold all the gold and the money, I would think that that's.
[00:24:07] Speaker A: Kind of what I was saying, and I'm not saying the best, but when you look at like the, the 80% that do 20% of the business and one side might say, fine, take them, but it certainly will disrupt in the consumer's eyes what is going on, right. And there'll be winners and losers when that, that will be a shift.
[00:24:25] Speaker B: Right now the question is that if it's going to happen, I really believe the question is when is it going to happen? Especially with the shakedown with Nar. It's only a matter of when after everything is said and done. Oh, you know, the money people have to now change the way that things are done so they can get paid. Well, why don't we just go get paid and just bring the money to the seller? So we'll just create our own avenue of agency to represent buyers since we do have the money, I think it's just a matter of time when that does happen. And I think that the real estate community is potentially trying to figure out how to make that happen. But when, you know, it's like, you know, it's like, what is the saying that the tail wagging the dog.
[00:25:13] Speaker A: Yeah, I mean, I guess the tails, the head of the dog still up for grabs. Right. It's.
[00:25:20] Speaker B: Sure.
[00:25:21] Speaker A: Whereas you should just pat the whole dog. I don't know that. I think we're saying the same thing. And it goes back to, look, my birdie has told me before, Nara, you know, is at the table politically because they've had all this money. Right? They are, they're there in DC and their roots are there. And so when you see these new groups coming up because they feel like Nar spent the money wrong. On marketing. 20 million for a horrible Super bowl commercial, horrible advertisements in Connecticut, wherever. Where were they during this? They were too nice.
They were, they just assumed they were going to win down there and then that's really what happened. And then the attorney surprised everybody.
And so they're going to create these new realtor associations. I think what they're missing is that's great and flashy for real estate agents to feel like it's a better representation of marketing and this. But you're, you would give it all up in a second and overpay for marketing to have the type of political pull in DC right now that Nar has the people they know, you can't replicate that. And if you were going to start all over, you're going to be outside the table of the places that are making these big decisions of where this is going for multiple reasons. Data. Right, data. The decision here by the DOJ just shaking up in general is usually when pieces come in and don't sleep on, you know, the portal wars of homes.com owned by Costar. Right. Zillow leader. About 100% of people look at it before they buy a home. And then realtor.com, who just hired a new, you know, CEO to run that, and that person is brilliant. And I'll be making sure that I go out to the tree and get some, some stuff from the birdie on that for us. But I will say this, um, you also have ice, so, you know, mortgages they all have very powerful political players. They're all at these tables there and you don't want to, if you have somebody at the table, nah, you want to make sure you don't lose that piece of the table. And why I say that is going back to this roadmap here. You get on the buy side of things, which is the mortgage we talked about. It wasn't the buyer's agent agreement, right. It's the instrument, the mortgage, the gold and the data.
And you expand your product set into commercial real estate which allows you to have multiple audiences, networks, and then you have the rights to the data. So make sure that you have the rights to the data. And I think ultimately where he sees it going is mortgage company has the, whatever you want to call this company, origination company has the ability to sell that data back to the towns and cities and that's the end game. And this endgame could be 2040, 2045. There's a lot of political cycles that go through, right? Like things don't happen overnight in, in the DC world, but this is somebody that talks to nar ice, American Bankers association. There's a lot of money up for grabs and there's a lot of data up for grabs right now. And I think home ownership is one of the biggest data plays. And if they all don't work together, Amazon's coming in is what I'm told. And I've sold this on a couple shows. They already are hiring. If you look through the, the tea leaves out in the UK to build a mortgage system and Amazon run mortgage system, they are hiring engineers. You got to connect a lot of dots, but that's there. And 90% of all homeowners in America have Amazon prime upgrade on their phone. Like they have the app Amazon prime user. So that's, that's where we can say the puck's going. And I think that's a lot of theses for what you see me say here. And I hold this opinion, but I hold the right to change it. As soon as I told something else by the birdie that I, you know, I change it and I think I have three of them. But this particular one is just so powerful that, you know, some of this stuff has to be where it could go, not saying where it is going to go and it's not going to go this way for another five, four or five years.
[00:29:27] Speaker B: I just think of it like similar to the gold rush, right? And when, when goal was founded and who it wasn't, the people that was digging for golden that was making the money was people selling picks and shovels. And I think, and then, and then, if you think about that now, who, who right now goes out and digs for gold, nobody. It's just we have corporations, you know, mining for gold and selling copper, silver, gold, platinum, so on and so forth. And my point in that is, is that eventually everything went to the large corporation in the scale right now, everything scalable to the small time mom and pop broker still has the opportunity to create something through Nar. Even so, they can keep the integrity of the name realtor, the integrity of the business, and to maintain the integrity of the real estate professional, the real estate agent professional, I should say, with the realtor designation, there's a lot of things that they still have an opportunity to keep in order to maintain not only the professionalism, but the integrity. Because of their political clout, because of the, even though they've spent money out the door for this judgment and so on and so forth, they still have a lot of opportunity. Because if not just like, similar to the gold rush, it's very possible that we could see the money people coming in, those who have the pitch and shovels and, and taking over the business for the realtors, and they get it taken out from under them. Why? Because they kept fighting and dividing amongst themselves rather than trying to collaborate and work together. And I think it's something, I mean, it's so interesting to me as we get to historically watch this unfold in front of our eyes, but we yet still get the opportunity to watch them and see, are they going to collaborate with each other or are they going to fight with each other and see in the current changing of the guard of leadership, who has the willingness to say, we're all going to collaborate rather than fight with each other? And I think in lending right now, there is a special type of collaboration that is going on, especially as we get to talk to more people through our, through our mic'ed up show. The question is, how fast are we willing to ramp that up with the NBA so that we can collectively work faster, harder, smarter, and get a piece of that pie in the real estate game? Because we're fighting.
[00:31:46] Speaker A: That was so. Well said. I, that was perfect, Mike. I think. I hope everybody could hear that. And, um, if you're listening, give us a subscribe and a like we are podcast first. So hopefully you're listening to this on Spotify or you're listening to this on your run on YouTube or it's now Google. Like that.
[00:32:05] Speaker B: By the way, we are at the bottom of the hour. If you want to shout out.
[00:32:09] Speaker A: Shout out what companies we, we work with or.
[00:32:11] Speaker B: Yeah, any, any shout outs for the company at the bottom of the hour because we do do this show every Thursday at the 11:00 a.m. pacific and.
[00:32:18] Speaker A: 02:00 p.m. eastern time. I do want to do the shout out, but I want to finish a point here.
[00:32:23] Speaker B: Go ahead.
[00:32:24] Speaker A: Maybe we can insert it on the audio.
I'll get to it. It's almost, I'm almost going to go close to it here. Okay, so talking about all of this, and I also am very close with some of my clients that do Persona based bots decisioning where I see the future. I went to Beacon Hill and we advocated locally with our local politicians, state senators and state congressmen and women.
And so I was around a lot more loan officers, and I can't tell if I'm just boring around them. Do I speak at such a high level of, with no specific niche? Sometimes it seems, does it even a conversation. And the question that kept being, being asked of me, which was very interesting, is, Mike, I'm a loan officer. Will I be replaced? And it came up multiple times. And I believe I have a very good thumb on the pulse compared to most, and I'm sure you have, and everybody has a great opinion on it. So my answer, and so we probably should do shows on this because it seemed like it, people just kept asking me and my answer is which, going back to everything we just said, and it probably applies to real estate agents too. I unequivocally, in my opinion of this has actually changed as I've seen the tech get better. But knowing the industry now, more and more as I talk to more people, I said, no loan officers, you won't. I think, you know, the first one I see going is probably a loan officer assistant. That's just my opinion. It's maybe I see a lot of them going. So I do believe in Persona based bots. I guess at smaller companies you can't, it doesn't scale, so it's not going to happen for a long time. But these larger ones, these Persona based bots that I work with, they do 95% of the work the people do. And if you can get over the Harvard study is you can get over 66% of somebody's job, automated, the COO knows how to replace it. And there has been very little of that in the mortgage industry, so you haven't seen much of it. This company can do it. So I'm looking at them getting replaced, the loan officer, almost impossible to replace everything they do. And Rick Rock said it at the show, the reason they get such signing bonuses is the relationships that a loan officer has made over 510, 1520 years. You're actually getting them at a discount on the marketing spend it would take to get those relationships right. And I think leadership, too, is the other piece I've seen now. So people are having trouble getting into Massachusetts because certain great producers are already taken. They're very loyal to their brand and actually a lot of the national and local, but they've done a great job at making sure these people feel welcome, powerful, whatever it may be.
[00:35:08] Speaker B: One thing that.
[00:35:08] Speaker A: So there's other companies trying to get in. I guess what I'm saying is there's a vacuum of leadership, too, that you can build a team around. There's so few of those and there's such a thirst for that. And you're not going to find that through automation. You're only going to find that through personality. So again, loan officer underwriter were my two that you will, um. I just don't see it anymore. I don't see it happening in 1520 years even. Everything you just learned, like, listen to us about me, I wasn't saying the real estate agent or the loan officer are going away. I'm just saying that whole 80 20 rule, it's going to shake things up on the 80 side.
[00:35:42] Speaker B: I agree. I mean, the way I see it right now is that we still see Starbucks shops that are open, we still see coffee bean and we still see Pete's coffee. I think they're on the west coast up only. But anyway, my point is that if, that if you want to drink Starbucks coffee or Pete's or coffee, me, whatever, and, and there was a sample at, at your local big box, Costco or Walmart or something, you could go to one of those people that are working at the booth and go get your sample coffee for free. Right. And, or, and then buy your bag of coffee of Starbucks at the Costco and so on and so forth. But if you want the experience of going, you have your regular routine. I don't want to do it at home. I don't have time to make it. But I will take five minutes out of my day to drive to the Starbucks because I ordered it on the app. And do that instead of spending ten minutes doing it at home. You're willing to box, take five minutes out of your time, go to Starbucks, you ordered it on the app, pick it up, take five minutes back to whatever you're doing. The time was the same. It was a matter of the willingness to go for the experience. So instead of going through the experience of the free coffee at the Costco, you went and had the experience of buying the coffee at the Starbucks. And I think that when it comes to financial literacy, we can get it for free on the Internet or in a book on, off of Amazon or whatever. The type of financial literacy that they've savages through the mortgage coach, through MBS highway or whatever, or mortgage market guide or whatever the other services that are being offered out there and teaching about financial literacy, I think that needs to go one step further. And although leadership at the mortgage level definitely encourages it, it's not currently a part of the curriculum to be licensed and they don't need to make it. But if they were, then there would be a better quality of service and actually a more profitable level potentially, of mortgage and money product that was out there for those who were willing to borrow and understand what it means to, to truly have literacy about money, the simple facts of how money works about borrowing, being responsible with it and then how to invest it and so on and so forth. And I think that's the next level that the industry still has room to grow in.
[00:38:01] Speaker A: Yeah, I agree. I think segmenting your sales force would be great.
Find out what they're good at and empower them to be better. And the ones that really can't sell mortgages today maybe help them get into this financial literacy of selling mortgages tomorrow and working the relationships, because it's hard to have the person that can get busy and lose track of everything be your official financial literacy person. And if you're using the tools to get out there, maybe somebody long term can help people download it. And then on the other side, I just see you and I starting to work with these lenders, these imBs, and teach them some of the, some of the large Imbs that were guests on here. I've talked to you at your family office, which has opened up other family offices, and, you know, I'm circulating it now. People are wondering, but mortgage companies are capable of getting into the commercial space, the private money space, attract what he space, right. And you're losing opportunity if you're not doing it now because of where the yield curves are, because of where the equity is, whether. And so we can, we can dive into that now. But I think you could get loan officers that maybe are in a slump and this is how they can break it out and why I think some of these items are easier to advertise as we do these podcasts, people like to tune in and say, maybe I don't want to own a home, even though we think that's how they should build generational wealth. But I do want to leverage this $45,000 I just inherited, and I am handy, and I always wanted to own some product, like own flip. They might not be ready to buy today, but they're, that type of audience shows up to learn more. And so if you had that arrow in your quiver and you can bring that to them, I just think it aligns Mike with our marketing is today. If more companies worked like the IMBs we're now talking to, or you could teach them how to do it. You want to talk about that a little bit? We got some time.
[00:40:01] Speaker B: Well, I think it's been super interesting to talk about. A lot of people understand what the Internal Revenue Code has the 1031 exchange as an opportunity. In a nutshell, what's known as the Forward 1031 exchange is when an owner of an investment property will list a property for sale, and then they will name it as a part of a 1031 exchange, in which case they list the property for sale, and then they. And then once the property has closed escrow, then that money goes into a 1031 exchange account, in which case they now have 30 days to name at least three properties that they would like to close escrow on in the future. And a lot of people know, have. Know how to do that because it's commonly done, and they use it to. To push the tax, the tax burden of capital gains down the road.
[00:40:57] Speaker A: You say that like, up to three, meaning it gives you some options at that 90 day window.
[00:41:01] Speaker B: Yeah, in the 30. Yeah, you have 30 days to choose up to three properties, and then you have 90 days to close escrow on. On either one or three, depending basically.
[00:41:10] Speaker A: For the proceeds, it's use it or I lose it. But the lose it is the how much taxes you're going to get hit on, right?
[00:41:18] Speaker B: Well, it's not. And people assume that it's just about capital gains. Right. But it's not. So if you are, if, you know, if you did your taxes right, not then you have depreciation, you have write offs and so on and so forth. So you have, so, you know, it's not just your capital gains you're deferring. You know, you also have depreciation, recapture. So you think, oh, I have $100,000 gain, I got to pay $20,000, or it says here in California, I got to pay $24,000 to the federal government in the state of California. Oh, yeah. And by the way, you depreciated your property from $123,000 purchase down to zero. So you're going to have to pay all your depreciation recapture on top of your capital gains. And then people don't think about that. So the 1031 exchange as a tool in itself to defer capital gains, because if you die and, and then you, you know, and then your heirs get that property, actually the basis starts from zero. So there's no cap. All the capital gains that you had starts over at zero to your heirs. And that's with the forward regular 1031 exchange that people commonly know about. And you can get that information fairly easily on, on the Internet.
[00:42:29] Speaker A: What, it passes away.
[00:42:31] Speaker B: Yeah.
[00:42:32] Speaker A: And the house is worth a million.
[00:42:34] Speaker B: Sure. The basis starts over at a million.
[00:42:37] Speaker A: So you don't have to pay taxes on what you inherited.
[00:42:39] Speaker B: That's correct. Now, you may have it, you may have an estate tax depending on how big the estate is. But, you know, I'm not a tax advisor, so.
[00:42:48] Speaker A: No, I know. I was just saying.
[00:42:50] Speaker B: Well, that's just need to be disclosed. So I'm not a tax advisor. Contact your tax professional where we get tax advice and just disclose.
[00:42:57] Speaker A: Yeah, we're not financial advisors either, so if we slip some sort of purposes. Yes.
[00:43:03] Speaker B: Entertainment and education. So anyway, so, yeah, so if you, you know, if you die and then, you know, like a lot of boomers are passing on that to the, to the Gen Xers and younger. Right. Then the younger person who inherits that property, that the basis starts over again. So if the person bought their house in 1960 for $75,000 and then now it's worth a million dollars 40 years later, and. But they've, they've lived and owned that house for extended period of time. Now the person owns it instead of the perk, the newer, younger person who's inherited the property, their basis starts at zero or at that price, that a million dollar valuation. So now they have that opportunity. They don't have to. They, of course, your tax professional will tell you, so they don't necessarily have to pay that same tax. Now they can sell that property maybe for $100,000 gain if it's investment and maybe only pay $20,000 in taxes. So there is some opportunity for those who want to pass on.
[00:44:02] Speaker A: And you already own a home. Does that become an investment property if you don't do something on it quickly?
[00:44:07] Speaker B: Well, so in title, right. There's a death certificate when someone passes on. And so whenever you change, whether it's a quick claim or a grant deed or something, you have to fill out preliminary change of ownership form that goes along with the deed. Right. And so with that preliminary change of ownership form that you're going to show to the municipality, whatever county or city that you're in, that's going to dictate not only property taxes, but also you'll have some legal documentation to show the Internal Revenue Service in case they come after you for some kind of sale or whatever gain on sale that you might have. So you'll have some documentation for that purpose. You have the death certificate, you have the preliminary change of ownership form back to you or your trust or whoever, or whatever entity or person property. And then you have a legal form or you have a money trail or document trail to show the IR's. And that's, and that's all just for the forward 1031 exchange. And so there's a lot of things that are going on for that. That doesn't even go into what we specialize in for the reverse 1031 exchange, which is a completely different animal altogether.
[00:45:11] Speaker A: But the fact that you have an exclusive ability to offer paper lending on a vehicle, that really helps make real estate agents happy. Right. Because they can get more transactions out of it.
[00:45:24] Speaker B: Correct.
[00:45:24] Speaker A: And because.
Yeah. And so that allows. That's like cheese. Right. And so that's what was getting us the meetings of, well, what is this program? And then you're able to, being an underwriter in this field, figure out where lenders could get more yield, what they should be charging, help them in return for opportunities for, for deal flow. And I think what we're finding is it's two parts. One is your loan officers need to be confident in the referral and comfortable with who they're. Okay. Possibly getting a no. Right. I think that is that the difficult part. Like, there's no specific guidelines all the time, so you could refer it to somebody that does private money or family office money, and they might decide they don't want it for a risk that they don't have to take it. Right. And I think people are afraid. They give up for potential deals because they're afraid that one of their people is going to hear a no. But they have to understand that's part of the. That investor should know that. Right.
[00:46:24] Speaker B: I think when it comes to talking about specific tax rules or tax laws, there's a fear in saying, hey, you know what? I actually don't know what the tax rules are the tax laws with the IRC? Heck, there are tax professionals that are enrolled agents that probably know more than certain cpas and their cpas that know more than enrolled agents, of course, because they pass the CPA. But I think that if there are enrolled agents and cpas that don't even. Because they don't make it a regular part of their practice. How are loan officers supposed to get all of this? So it's okay to say, I don't know, but I'll find out. And I think the pride factor of a lot of originators and professionals that I don't know, they're afraid of saying, I don't know, but I'll find out. But even in their, but maybe in their circle of influence, they don't even have the right circle of influence. So they got to go outside of the circle. Not outside of the box, but go outside of that circle or have the willingness to go outside of that circle so they can get that education. And I think, you know, we, you know, you and I, we have the accessibility to provide that type of education or the willingness that even if we don't have the time, we have the willingness to refer them to the right people so they can get that right education to put more bullets into their gun of opportunities to earn more or more business. And even if they don't want to include this part of the business as a part of it, they now can become that right advisor to the realtor, financial advisor, or other ancillary partner of referral business so that they can get, they can get the information out to their consumer database.
[00:47:56] Speaker A: Yeah, it's a comfort level that maybe they're in the trenches and just having some advice from somebody like you, I've already noticed, works, works wonders. And that's why doubling down in that area, it. It's a play that almost hedges. And if you don't want to do seconds in the equity game, you want to get into the equity game. It's certainly a great way to practice and start and build a nice servicing portfolio on that side of the house. Or not even service. It's quick, right? So it's almost like funnel flow and the ability to almost back to the birdie. Just stay in tune with what's being developed in your market and it will make you stronger down channel.
[00:48:39] Speaker B: Yeah. We didn't even really get into what we do at our family office as far as potentially helping imbs on introducing this product to where they can earn yield spread on it. And I think the most important part that when, when we've had these meetings and opportunities is that there's no, um, there's no EPO. I mean, it hasn't been. I mean, the. And the Val. And because the values of the. The face values of these notes don't, uh, don't collide when even with. Even if rates were to come down, it's still because of the yields that are. These are at right now. It's just not as painful. So I think that if, if there's an IMB that would like to know more about how they can capitalize on the ability to get another product, that is. I don't know. It's not really non QM. I would call it more private credit. I don't want to say hard money, because that has such a terrible reputation, because now you're getting large institutional, independent mortgage bankers involved with, on their own warehouse line of credit, where it could be sold off to a private credit facility like a family office. And I think that it's not something that is widely known, but there's still $3 trillion of private credit liquidity that's available right now, and it's currently underutilized. And I've seen.
I've only seen one IMB at private or two imbs, I should say, at these private family office meetings, and they're still under the radar, really under the radar. And so it's still an exciting time for opportunity right now.
[00:50:20] Speaker A: Yeah. If you're an IMB leader and you have loan officers out there in the field, and they know people that used to call the accountant's friend and pay, you know, whatever it was, 16% interest and four points, plus two points to everybody that introduced to everybody along the way. Right. There's new software out there that allows people to go online and really apply for these quickly. And if you can be there and offer a better level of service, then not only are you, from what I see, not only will you start building a winning book and a winning portfolio, you have something that is almost like the watermark line, to know where you should be. Talk to Mike about being a little bit higher, a little bit lower to win that, but it's liquid. It's said you can get on warehouse line. Right now is the time to, don't treat it like hard money and you're pulling it out of a sofa. There's delivery models to make. You could do them one at a time. Like, I was listening to the second lean panel, and springy Q was talking, and they spoke about, you know, for our decrypted. So decrypted is really going to be just acronyms or words in the mortgage industry. So we had Rick Rock tell between delegated and non delegated in our video. And Michael Zao will tape one. I believe you can. I'm just telling you right now, you didn't already know this, but just like a whole loan bulk trading because the guy at spring EQ, like what's the difference? Was talking about how IMB's need to start doing these equity plans.
[00:51:51] Speaker B: Yeah.
[00:51:52] Speaker A: And they can one at a time sell them off the line, off their warehouse line after they close, or, but they naturally want to bulk them. And Spring EQ said themselves that they've been there at four points when they started and when they went to sell this bulk, they were at zero. Like there was no, but that they're predicting that won't happen right now. The liquidity is so strong in that second market that you don't have to worry about it. But it doesn't mean you shouldn't practice delivery before you get right into that bulk trading. And it's probably the same with you, right? Like before you become a private credit facility right here every Thursday in front of you is the team really led by Michael Zhao. But my enthusiasm that I've seen it work and I can get you some testimonials. You can get into it, you know, slowly and learn it.
[00:52:40] Speaker B: There's a birdie telling me that, yeah. Right now there is a large european bank. I can't say who they are right now. I could, but I just don't want to spill this, I don't want to spill the tea on them. That's my trade secret. But there's a large european bank right now that, that wants to fund trillion, I won't say trillions, but, you know, billions, meaning that, you know, if someone has a hundred million dollars of a year in business of this type of potential opportunity, there, Wall street, there are Wall street bankers that are going to start looking into it because some of the other banks, european banks that have the liquidity, understand this now and have been making these purchases on a smaller scale. My definition of scholar scale in the last year is about $600 million. So if that has already been in transacted existing business in that RTL space, then it's just a matter of time where other independent mortgage bankers can take advantage of what is available and then eventually it'll become a short term security.
[00:53:52] Speaker A: There you go. Paul Juno at my bank.
[00:53:56] Speaker B: Exactly.
[00:53:56] Speaker A: We will give you all the access to cash. Mercy.
[00:54:00] Speaker B: Yes.
[00:54:00] Speaker A: Go drunk. We can't tell you. I don't even know it. So that was just. No, you don't. Yeah, that's a european joke there.
That's right there. I mean, that's a sign that. And it seems to me that the NBA conferences, when people say, oh, was New Jersey good? Was this valuable? Was that valuable? The biggest takeaway from these conferences right now is certain panels are telling you where the liquidity is. Might be for the first time ever. Like, they're on panel saying it, because new products coming out, Mike, saying, right here, go where the liquidity is until something changes in those rates, and then you can go back to doing your. Your retail. But you might find that you like this, and you might find that this is the pathway to get more interaction and more data on your consumers. I'll give you one example. My biggest takeaway from that second lien is when you pull out a HELOC from figure or from spring EQ, because it's a line of credit. Every time they repull it, you know, take another 510 thousand out, the loan officer of the originator can be notified. They have those triggers.
[00:55:07] Speaker B: Oh, that's interesting.
[00:55:08] Speaker A: It's a way to stay in touch. So even though you only. You're paying for a trigger system, in my view. So if you close in a loan and you're only making. Yeah, it's like a CRM that works for you. So if you close alone ago, I only made $500 on that heloc. Well, guess what? You also got alerted every time they pulled out. Oh, we're actually fixing up because we're thinking of selling. So we're doing a new kitchen. Oh, I would like to refer you to a seller's agent and also do your help you with that mortgage. Right, right. I never thought, I never even heard anybody say that. Like, for that reason, that reason alone, you're gonna get paid a couple hundred dollars to get a CRM that's gonna work for you and almost alert you on everything that's important. Important enough to take out some extra money.
[00:55:48] Speaker B: Sure.
[00:55:49] Speaker A: Oh, my daughter's getting married.
[00:55:50] Speaker B: Oh.
[00:55:50] Speaker A: She's buying a home. Right. Oh, between the daughter getting married example and fixing up the kitchen, you're now up to about 140,000. Would you like to put them both in if the race drop another quarter and do back to a first? So Menta, we could talk about that. We'll get somebody on here from one of the second lien providers because that's where you are, where second lien is I'm trying to help make those conversations, because I think that's where lenders need to be. More contact is better, especially if you can deliver that contact and that data to a liquid, liquid market that's going to help you make product that's going to attract and work for both sides. You can undo that word salad. Um, you know, I think we can prosper, Mike.
[00:56:33] Speaker B: How do we go through an entire hour and not sell anything?
[00:56:36] Speaker A: I mean, we kind of did there. You sold it? I, um.
[00:56:40] Speaker B: We're informing. We're not selling. There's a difference. Education is not selling. Well, that's. I guess it kind of is, but.
[00:56:46] Speaker A: Yeah, I mean, we got an hour show, too. We gotta be entertaining for a full hour, so. And on the podcast, we'll get better at putting some advertisements in there. Pre recorded, pre sold. Next week, we have Eric and Bradley, who are clients of mine, Aster key. I've been introducing them to any branch mortgage company that wants to really get an exclusive area of the leads that come from this for a little while. There's no guarantee on the amount of time, but he is going to really launch it. He's a marketing expert. He created the mobile app just like I did a mortgage for real estate agents. He had, like, all 250,000 on them. All the big players used his mobile app. Keller is ended up being who he sold it to, but he had Kate. Okay, Keller is KW. Right? Who's the other one? I always. But exp. Like, yet they all were using his app, and he now has an app where you can apply for a mortgage on your phone so that your data is never. It stays on your phone, and it's encrypted, and it strips out all of the items that would identify you. And so when it finally gets into Los is, like, encompassed, it's just gonna be how far along there can you go without revealing who you are? So this new safe feel, and he's gonna help you pr it in your local newspaper. But it's just a story people want to hear, right? And it's a bit. It's a way to get some action going and in your pipeline while. Or a lot of action, depending on how big this launch ends up being. He's gonna tell us all about it next week, so we're gonna have him on and his brother who built it, and they could talk about their journey on the last app and why people should get involved, and just. He's a really cool entrepreneur, and we'll be the kickoff of season three, and then we have some great guests and we have a new website, mike upshow.com, where you'll be able to see it because this will be the mic dub show starting next week. So that's all from this side. Any if you want to take us home. Mike, thank you for joining me again here and I will see how it went on LinkedIn. I couldn't read any of the comments. I didn't know what to do there.
[00:58:50] Speaker B: I'm not on LinkedIn right now, so I can't read it anyway. Dog is nuts. My attention right now. I'll see you guys next week.
