0:02

Interested in real estate . How about

0:04

wealth ? Well , they go hand

0:06

in hand , and here you'll learn

0:08

all about it . Welcome to

0:10

Be the Bank , a podcast where

0:13

we discuss and debate the topics centered

0:15

around real estate investing . Your host

0:17

, Justin Bogard , shares insights

0:19

into investing in real estate to create

0:21

real wealth and passive income for you

0:23

and your family . He'll share stories

0:26

of real estate investments done right , Walk

0:28

you through the process of owning a real estate

0:30

note and , most importantly , educate

0:33

you so you can be the bank

0:35

. This is Be the Bank brought

0:38

to you by American Note Buyers . Now

0:40

here's your host , Justin Bogard

0:43

.

0:46

Hey listener , this is Justin Bogard

0:48

here on the Be the Bank podcast

0:51

. This is season six , episode

0:53

number five . Today I

0:55

have a person that I don't

0:57

know very well , but I know who she

0:59

is and we've had conversations and we hung up

1:01

before with her and her husband , and

1:04

so she has a very strong background in banking and

1:06

has been on the note scene for a little bit now

1:08

and she's definitely somebody that brings

1:10

a lot to the table and she's going to have a lot of cool things

1:13

to talk about . We're kind of going to focus our conversations

1:15

today on kind of underwriting , as

1:18

it were . So some of you may not have that skill

1:20

set as

1:22

a strong skill set , and so this will be a fun

1:24

conversation today . So stay tuned and welcome

1:26

to the show . Vanessa

1:30

Gomez-Lagato . And

1:42

it's funny when you start talking in these podcasts

1:44

and all of a sudden you get something in your throat and you're just like

1:47

, wow , this is the wrong time to clear my throat

1:49

.

1:51

I hear you . I have a glass of water just in case

1:54

.

1:54

Yeah , yeah , I had to grab something a

1:56

little bit warm before we got on the show

1:58

today , just because today it's not

2:00

cool , but it's like I don't know

2:02

dreary , it's like dark and cloudy and

2:04

I just , I don't know you feel cold , even though it's

2:06

not cold outside . It's actually like 65 degrees outside

2:08

.

2:09

Oh wow . We're actually in Vegas at

2:12

the structured finance Vegas conference

2:14

, so it's a little chilly outside , surprisingly

2:16

.

2:17

Vegas baby . That's why I think every time someone

2:19

says Vegas , Vegas baby .

2:22

It's been good . It's been good .

2:24

Awesome . Well , thanks for being on the podcast today

2:26

. I know this is your first time being on our

2:28

show , but probably not on others . I'm

2:30

sure you've been on the podcast before . But

2:32

, vanessa , the audience

2:34

that we have here today , they

2:37

don't know you and they would like to know

2:39

you and just kind of , I wanted to set

2:41

the table a little bit and kind of let

2:43

us know kind of your background and how you kind of

2:45

gotten to sell our financing notes , and then

2:47

we're just going to carry on the conversation there .

2:50

Oh , no , sounds great . But first thank you for

2:52

having me on the podcast , justin . I'm excited to

2:54

be here today and just

2:57

share a little bit about my background

2:59

. So I started my career at Credit

3:01

Swiss , which is a bulge bracket shop , rising

3:05

up to director in the investment making

3:07

division and focusing on leverage finance

3:09

. What

3:12

I'd worked on were large

3:14

, complex leverage facilities

3:16

for financial sponsors and corporates

3:19

throughout the United States . I

3:21

did have a specialty in the energy space

3:23

. From there I went

3:25

to go work for an energy public company

3:27

, moving to

3:29

Texas from New York City and

3:32

from there it was a very active

3:34

company . We did a lot of complex M&A

3:37

transactions as well as tapping

3:40

the capital markets , and ultimately

3:42

I took over as CFO until

3:45

we sold the company a couple years

3:47

later . After becoming CFO . Then

3:52

I did a little stint in the turnaround or structuring

3:54

space and then I

3:57

joined another energy-related

3:59

company , sdfo , and I took them

4:01

and helped them emerge out of bankruptcy

4:04

. So

4:06

after go ahead , sorry .

4:08

Let's just say the question . You say energy

4:10

and I'm making assumptions here , but

4:12

specifically what you talked about in energy

4:14

is this like gas , electric , water

4:17

type energy , like what ?

4:19

Absolutely so . It's called an exploration

4:21

and production company . So what we did is we drilled

4:23

wells into the ground and

4:25

extracted

4:28

gas and oil . The

4:30

company I worked for specifically was more gas-weighted

4:33

than oil-weighted , and we had production

4:35

in Texas , some

4:37

in Colorado , Canada and

4:39

some up in Alaska .

4:41

Yeah , Texas definitely makes sense , Drilling

4:43

right .

4:45

There's a lot of drilling , especially around the DFW

4:47

.

4:49

Yeah , I've been to Dallas many times I

4:51

know you have too and you live close to there but

4:55

I never see any oil rigs

4:57

or wells until I get really far away

4:59

from the city , if I'm driving somewhere else

5:01

or going to a different location . But you actually

5:03

see them in the Dallas metro area

5:05

.

5:06

Oh yes . So if you drive actually from

5:09

Dallas to Fort Worth off of

5:11

30 , there's different wells that you can

5:13

see and what

5:15

you'll see ? You won't see the drilling

5:17

rig anymore , you'll just see the pad that

5:19

has all the production equipment that

5:22

is the result of the wells being

5:25

drilled . But there's production all over

5:27

the metro area

5:29

and what's interesting

5:32

is in the energy

5:34

space they've gotten more and more sophisticated

5:36

as the years have gone by . It's been several

5:38

years since I worked in an oil and gas company . But

5:42

what they do is they drill laterally , so they drill down

5:44

, and diagonally and they can go

5:46

from miles upon miles and

5:48

so you can actually reach quite

5:51

extensive under residential

5:53

homes or businesses , lakes

5:55

et cetera , and so it's actually

5:57

pretty . It's very sophisticated

6:00

and complex and I don't necessarily

6:02

think the media talks about the

6:04

technology behind it .

6:06

But it's pretty impressive . It

6:08

sounds amazing . It still fascinates

6:10

me that there's oil underground and

6:12

we haven't ran out of it yet . I'll keep

6:15

tapping into it with all these countries

6:17

that always are going after the oil . It's

6:19

just fascinating to me . I'm sorry I jumped

6:21

in and let you finish your history

6:23

here .

6:25

No . So after my stint and

6:28

a couple of public companies , I

6:30

decided I wanted a different kind of challenge , and

6:32

so we started an investment platform

6:35

which is all of CoVe Partners , and

6:38

it's an investment platform that invests in

6:40

opportunistically and

6:44

our real investment strategy is deploying

6:46

capital and downside protected assets

6:49

with equity , like returns or attractive

6:51

risk adjusted returns . So

6:54

that really started earnest about three and

6:57

a half years ago . Shortly after

6:59

kicking off the platform , mike

7:01

left his corporate world

7:04

and joined , and

7:06

now we've both been active in investing

7:08

in the single family space as

7:10

well as and in that space

7:12

we originate and

7:15

buy private money loans and

7:18

then , as well as , investing in the secondary residential

7:20

mortgage loan pools , which

7:23

has been , more recently , our big

7:25

focus .

7:27

So you mentioned downside

7:29

, downside , on the type

7:32

of investment that you go for . What

7:35

is the main downside that you're looking for

7:37

in investment ?

7:39

So what we look at for investment

7:41

and I'll use real estate because it's

7:44

a good example , right ? So right now there's 84

7:47

million mortgages in the US . Those

7:50

mortgages have

7:52

a debt

7:55

of $12 trillion

7:57

, and then if you look

7:59

at the value associated

8:01

with all of those , if you look at the average

8:04

home price in the US , what

8:06

you find is that the loan devalue

8:09

in single family residential is

8:11

almost 50% loan devalue

8:13

, and so when you take a step

8:15

back and you think about this asset

8:17

can lose 50% of its value

8:19

before the lenders start experiencing

8:23

pressure on getting

8:25

their capital back . There's

8:27

a lot of cushion there , and

8:29

then , in particular , on buying in the

8:31

secondary loan market . We don't

8:34

buy at par , we buy at a discount

8:36

to par . So our investment to

8:38

our , the

8:41

amount of capital that we've deployed based

8:44

on the value , is

8:46

even lower than the loan to value

8:48

, and so there's even further protection

8:51

from that , and that's very attractive for

8:53

us .

8:54

You said that very well and I don't know why more people

8:57

don't get into real estate just for that reason

8:59

, whether they don't get the note specifically

9:01

or not . But that's just . That's just a great way to put

9:03

it .

9:05

Absolutely it's . It's

9:07

when you talk to people and

9:09

you explain it to them , just as I just

9:11

did now , they're like , oh , that's

9:14

super interesting and

9:17

and I don't think people really put two and two

9:19

together Because

9:21

there's so much equity value in the residential

9:24

market space right now . We're also

9:26

seeing a lot of new products coming to market , which

9:28

is very interesting too .

9:30

I think what ? What rings the

9:32

bell in people's ears , the way that you said

9:34

it which I like , the way that you said it is

9:37

the 50% loan to value already

9:39

right there . So they're like , oh , so

9:41

this thing is worth 100,000 . The

9:44

borrower has 50,000 of equity , but

9:46

you're not paying $50,000 for the note , like

9:49

no . So overall , you know your , your

9:51

investment to value is very significantly

9:55

lower risk than what you think . When

9:57

you're investing in just a traditional property and

9:59

let's say you get the property for , you

10:01

know , 85 cents on the dollar . If you buy it straight

10:03

out from that person , you know , at a discount , our

10:06

discounts much different because we're levered off of

10:08

the off of the unpaid balance

10:10

as opposed to the actual property value . So it's

10:12

just really cool way you put it . I haven't heard somebody put

10:14

it that way , so I like it .

10:16

Oh , thank you , it's

10:18

, it's what makes us attract to the space .

10:20

So Absolutely it's fun . So

10:23

you and Mike are running

10:26

this investment company and

10:29

are you raising private capital as well .

10:32

So today we've done all our

10:34

investments based on principal capital . As

10:37

we continue to grow , buying larger

10:39

and more pools , we would look to

10:41

partner with other investment

10:44

platforms , family offices , etc . To be able

10:46

to kind of expand what we are

10:48

are just a number of pools that we

10:50

can buy . So right now , today , we've done

10:52

all principal capital and we are

10:54

we're

10:56

open to the conversation of partnering

10:58

with people to co invest on these

11:00

pools .

11:02

That's really where you make a big . A big

11:04

hit against against a taking

11:06

out a tape is when you can partner with people and take

11:08

down bigger , bigger loan amounts , as

11:11

opposed to , you know , when I've . Since

11:13

I've been started out , I I typically

11:15

am buying loans around the 30,000

11:18

to about 1,000 range and

11:20

since I started the fund last year , that's

11:22

really what I've been able to look at assets you

11:24

know higher than 100k in value and be like , oh

11:26

, I can , I can buy two or three of these now and and

11:28

not just you know focus on well , if I bought

11:31

that one , I'd be tapped . I bought

11:33

one loan , right . So it's a different

11:35

ballgame when you can buy in bulk and

11:37

also in higher and unpaid balance value .

11:40

Well , so , for example , we're looking at

11:42

a tape right now that has 18 loans kind

11:44

of UPB I'm just going to use around numbers about $4

11:47

million , looking at probably a purchase

11:49

price , you know , somewhere between , I'm just

11:51

gonna say , $3 million , and

11:53

it's 18 loans and the average

11:55

UPB on that is around $230,000

11:58

.

11:59

Yeah , this is not like a lot of loans .

12:03

There's some high dollar loans in the pool

12:05

, but that's also where I think

12:07

there's opportunity to be able to , you know , take

12:09

down a little bit bigger pools , because there's

12:11

a lot of people who play in the smaller balance space

12:14

and where you get above

12:16

that $150,000 UPB

12:19

you know , not

12:21

everybody can play in that space and it provides

12:23

an opportunity for us to be able to come

12:25

in and play .

12:27

You mentioned earlier about private

12:30

money loans . Did I hear you say hard

12:32

money loans ? Is that one of the types

12:34

of loans that you guys like to go after ?

12:37

So we originate private

12:39

money loans and we also will buy

12:42

private money loans if other people have

12:44

originated . So we will do the

12:47

primary and second

12:49

play , the secondary space

12:51

in that specific asset class

12:53

.

12:54

I'm gonna get in the weeds here . So are you . I'm

12:56

talking about like a fix and flip

12:58

type of loan to where they're borrowing money on

13:01

a short term basis with the intention

13:03

of either renegotiating

13:05

the terms with you for a full amiturization of

13:07

30 years or selling the property

13:10

and paying off the interest only debt . Is

13:12

that the type of loan that I'm hearing , the private money

13:14

that you're saying ?

13:15

So it's a little bit of a comment . So what ? When

13:18

I originate a private money loan , it's usually

13:20

for , let's just say , a fix and flip . I do new

13:22

construction and I do land development

13:24

as well , but let's

13:26

just take the fix and flip , because I think it's a perfect

13:28

example . Those are six . I do

13:30

six month deals right . So the

13:33

ten or six months . Generally

13:35

my rates are somewhere between my

13:37

10 and 12% on an annual basis

13:39

, and then origination fees between two and 4%

13:42

, and we

13:46

I mean the , the ICOM operators

13:48

or sponsors come in . We

13:51

fund the purchase price as well

13:53

as the rehab , because we

13:55

like to be 100% of the capital structure

13:57

. That allows us to kind of have a

13:59

good sense of where they are in the project

14:02

, how the rehab

14:04

is actually progressing , and

14:06

then , once

14:09

the rehab is done , then it hits the market and usually

14:11

our operators are very efficient . They have

14:13

very defined scopes of work

14:15

, very defined timelines , and

14:18

so when we go

14:20

into a deal we actually know what everything's

14:22

supposed to look like and everything

14:25

. You know . Nothing's ever perfect , Things go

14:27

wrong , but just given that there is goals

14:30

and objectives and and and

14:32

posts that we check in on , it

14:34

makes the process very efficient and our operators

14:37

are very good at executing what

14:40

I've had . Deals so cool , sorry , go ahead

14:42

.

14:42

No , that was a delay there , sorry , finish what you

14:44

were saying .

14:45

I was going to say we have operators that come in

14:47

and there are , you know

14:50

, extensive rehabs that take , you know , call

14:52

it , several months to get done , and then we

14:54

have some that are more cosmetic in nature

14:56

and we're they're in and out

14:58

in two weeks and put it back on the market . So we

15:00

kind of see everything you

15:02

know , from super fast rehab to getting

15:05

it back on the market , to a little bit more extensive types

15:07

of rehabs , and then it taking closer

15:09

to the full six months and , depending

15:11

on the situation , we might go a little bit longer

15:13

and we just

15:15

discuss that up front .

15:17

Okay , what type of skin in the game does

15:19

your borrower have with these specific

15:21

loans ?

15:22

Great question . So

15:25

it really depends on

15:27

the ARV and

15:30

where they are buying the loan

15:32

. We like to have a loan

15:34

to value of around mid

15:36

70s and below . What

15:40

I would also say , though , is that we

15:43

really a lot of our operators

15:46

don't have a lot of cash , and

15:48

so expecting there to be a huge check

15:51

of skin in the game and

15:53

have them pay , you know , monthly interest

15:55

, I think is unrealistic , and

15:58

so a lot of times , we really end

16:01

up partnering up with operators who

16:03

are able to buy the properties at very

16:05

attractive rates to

16:07

the ARV .

16:09

Gotcha . Okay , what experience

16:12

level do you require of these operators

16:14

or sponsors to do these

16:16

projects and to get loans with you ?

16:19

So we are not the lender for everybody

16:22

. We are not . We don't

16:24

, we don't go around , and you know I

16:26

don't do a ton of marketing . Really , people who come

16:28

to us are through word of mouth , and

16:32

and because it's

16:34

through word of mouth , people who

16:36

we have done business with know our

16:39

diligence approach as well as

16:41

what we look for in

16:43

projects , and so , as you know

16:45

, our names get out there and people meet

16:49

and are introduced to us . They

16:51

also kind of understand what they're getting into , and so we

16:54

look for operators to have some

16:58

experience in this space . We look for

17:00

them to have . What's most important is

17:02

that either they themselves are doing the work

17:04

or that they have teams that they've worked

17:06

with and done projects before . That's

17:08

a that's a really big one for us , because

17:11

finding good service providers the

17:13

trades out there that actually complete

17:16

the work and do a good job , is

17:20

harder than you would think and

17:22

somebody who can then get the job done in a timely fashion

17:24

. So that's everybody

17:28

. But so we look for people who have done a couple

17:31

of projects before , who

17:33

have the service

17:35

providers to be able to get the jobs done

17:37

, and at the end of the day , we

17:39

talk to everybody , whether it's on the phone

17:41

call Zoom , we prefer Zoom

17:43

or in person , and

17:46

we really , for

17:49

honest , are working people

17:51

.

18:04

Vanessa , are you still there ?

18:08

Yeah , sorry , it was coming in and out .

18:11

I'm in a hotel , yeah , that's okay . I'm here , I think

18:13

yeah , I figure your Wi-Fi is probably

18:15

spotty at times . I think that , if I

18:17

could paraphrase what you were saying , you're looking for people

18:20

that just just are honest and transparent

18:22

, they're hardworking and they , they

18:25

just you know that they're going to get the job done

18:27

. My follow up question to

18:29

that was going to be do you let

18:31

them do multiple projects with you or

18:33

with other lenders at the same time ? And

18:35

if , if yes , how many do you allow

18:37

them to do ? Because I'm sure at some

18:39

point they get strung out . As far as you

18:43

know , they're burning the

18:45

candle at both ends , so to speak , and

18:47

do you recognize that point ?

18:52

Absolutely . That's something we talk about in front

18:54

. So when we're talking to , no

18:57

, I can hear me .

18:58

Okay , yeah , yeah , can you hear me ?

19:01

Okay , Sorry about that . So

19:03

that is one of the questions . When we are

19:05

first being introduced to new sponsors

19:07

, we ask them like how many projects can you take on

19:10

at one time ? Where do you think you would be

19:12

at full capacity ? And then

19:14

also understanding the type of

19:16

projects that they are on . So

19:19

, for example , if they're doing all new

19:21

construction , that's a lot more intense

19:23

type of work and I know that they're not going to

19:25

be able to handle , call it , 10 projects

19:27

at one time . If they're rehabs , they're

19:29

across the street . Okay , you can do a lot more

19:31

than that of those . And so it's really situational

19:34

at the end of the day , and

19:36

a lot of times my borrowers I'm

19:39

doing a lot of their projects they

19:41

like our approach , they like our diligence , and what

19:43

I was trying to say a little bit earlier is that , yes

19:45

, we are the private money

19:47

lender , but we really

19:50

look at it as we are your financing

19:52

partner . I put on my

19:54

Chief Investment Officer hat on and

19:57

I walked through the projects with them . I show them how I've

19:59

calculated my numbers and what

20:01

their returns will look like on

20:03

their base case from an ARV

20:05

perspective . I run downside cases

20:07

and I run upside cases and I'm like this is what the numbers

20:09

look like . Is there enough for

20:12

you to feel engaged enough on

20:14

this project ? And so we have those discussions

20:16

and one of my

20:18

biggest things is we want to make sure that there's

20:20

enough juice

20:23

for them , at the end of the day , to stay focused

20:25

.

20:27

Yeah , I like the way that you approach the

20:29

private money , the slash hard money , the

20:32

way you originate the loans and , quite frankly

20:35

, I don't think a lot of lenders do

20:37

the extensive diligence that they need to

20:39

. You know , some

20:42

of these newer fix and flip folks

20:45

come into our space and they look at

20:47

lenders and they're like scratching

20:49

their head , going like why

20:51

are their rates so high ? Why are they

20:53

asking for such low LTVs ? And

20:55

for all the reasons that

20:57

you explain , your diligence with

21:00

underwriting these projects is exactly

21:02

the reason why . Because you have to protect

21:04

yourself , especially when you're

21:06

doing many of these loans at the same time , because

21:09

they can all start going bad , especially if they're

21:11

in the same concentrated area and the real estate

21:14

kind of flips upside down for a little bit . You definitely

21:16

want to give yourself some protection . So if

21:18

you guys are out there thinking about doing hard money loans

21:21

the way that Vanessa is describing it , the way that

21:23

she walks through it , is the way that's

21:25

your , that's like the baseline you

21:27

need to also find ways to make sure that to protect

21:30

yourself in other ways too , you

21:32

know , for your whole portfolio . So , yeah

21:35

, I really don't think a lot of lenders are as

21:37

diligent as you guys are .

21:39

Well , that's something we pride ourselves on and that's

21:42

what I say . We're not the lender for everybody , because

21:44

if our partners don't see the value in

21:46

our diligence approach and how

21:48

thorough we are , then ultimately

21:50

we know when something goes wrong . We're not

21:52

going to probably have a rational conversation at

21:55

the end of the day to try to find a solution

21:57

. And we've had

21:59

some interesting things happen over the years

22:01

and what we found is that

22:03

our borrowers

22:05

have been very rational and

22:08

, as a result , we have been rational

22:10

back right . It is not

22:12

all about us just being the lender and

22:15

saying you have to . You

22:18

have to only abide by the terms

22:20

on the paper . We're

22:22

going to come up with a solution that works for

22:24

everybody , because one of our biggest things

22:26

is we want repeat borrowers

22:28

, we want people that understand our

22:30

underwriting , we want people that

22:33

we trust , and so let's

22:36

do it again and again , and again . And

22:39

if our borrowers see

22:42

us as just transactional , we

22:45

want relationship-based borrowers and

22:48

that's really important to us .

22:50

Yeah , you said it before , I

22:52

said it out loud , but I was thinking the same thing you were . It's

22:54

a repeat customer . Once you set up a repeat

22:57

customer , that becomes a profitable customer because

22:59

it's far less time to interview

23:01

them in the beginning . You can skip a lot of that stuff

23:03

up front and go straight to the project and get

23:05

to the meat of the numbers and go okay , yes , this one works

23:08

, this one doesn't . And then you have

23:10

a track record with that person and be like yeah , I know they've

23:12

done a couple of deals . They did a couple of deals with me

23:14

. It's different than them just doing

23:16

a couple of deals , you know , in general with a couple

23:18

of people .

23:20

So I fully agree with the way you approach that

23:22

. It makes a difference . I just had a borrower

23:24

. We did a deal in early 2022

23:27

. The deal went well , everything

23:29

went good , hadn't heard from them in a while and

23:32

then , all of a sudden , I get a you know a phone call to

23:34

express the email I have a deal . Are you

23:36

still lending money ? Can you know ? Can , can you

23:38

act quickly ? I'm like , absolutely , you know

23:40

what I do . Let's , let's send me the information

23:42

and let's go to it . And within they

23:45

reached out to me Thursday

23:47

evening . By Friday morning I already had a commitment

23:49

letter out to them so

23:51

they were able to send to

23:53

their you know seller so that they

23:55

can , you know , agree to the terms and get the track

23:57

contract signed , so that

24:00

and that's a bit of that relationship right

24:02

, and that we

24:04

can move . We can move more quickly

24:06

than most and

24:08

and , as a result , you know , there

24:10

people find value in that .

24:13

Absolutely . I'm sure you guys

24:15

also originate just owner

24:18

occupied homes as well not

24:21

as much just because

24:23

we are the private lender there's .

24:25

We don't take , we don't take ownership of the homes

24:27

, but when things don't

24:29

go right and they do we

24:32

do . We have taken possession of homes and

24:34

we , once we take possession of the homes

24:37

, doing seller finances clearly one

24:39

strategy that we employ , and have

24:41

done so .

24:44

What do you typically like to see on a seller

24:46

finance deal where its owner occupied for

24:49

skin in the game ?

24:52

So at least 10%

24:54

. But what I would also

24:56

say is that we try to be creative as

24:58

well , right , one of the things that

25:00

we I

25:04

think the seller finance market rate is they're non-qualified

25:06

people , right , they can't go to the bank and go get

25:08

a loan , and so a lot of times those

25:11

are business owners

25:13

of trades and everything , and

25:15

for us we really we

25:17

like that borrower . Why ? Yeah , because

25:19

they're hard-working , they're honest people

25:22

, right . Those that goes back to , you

25:24

know , the same people we support on the origination

25:27

side , and so , from that perspective

25:29

, we like to see that

25:31

they have a consistency of jobs

25:33

. We like to see

25:35

who's living in the house

25:38

, you know

25:40

. And then we also like to see is there family

25:42

around ? Do they have family in the city

25:44

that they're in , telling us a little bit more

25:46

about who the borrower is ? And

25:49

then , from a you know , just a pure financial

25:51

perspective , we usually see financial

25:53

statements from , or bank account statements

25:56

from , their business and then personally

25:58

. And the other thing that

26:00

we find we don't necessarily because we don't

26:02

do a ton of these I don't have them are mellowed

26:04

, but we do have them serviced

26:07

and and I

26:09

think that's really critical from

26:12

a servicing perspective to have it professionally

26:14

serviced . I still reach out to

26:17

our borrower when they haven't paid , but

26:20

having the servicer there as is

26:22

really critical what

26:25

is the fastest ? oh , sorry , sorry

26:27

one one other thing I do want

26:29

to highlight . So a lot of times , because

26:31

these , these individuals

26:33

do not have consistency

26:36

, we go into it knowing that it's

26:38

not going to be a steady as

26:40

a normal you know , qualified mortgage

26:42

, yeah , and so what we look to do

26:44

is also see what other assets

26:47

can they pledge in support

26:49

of the loan . So , for example

26:51

, on one of our homes

26:54

they were gonna finish the rehab

26:56

on the house and they were going to live

26:58

in their RV that they were able to get

27:01

connected at the home . So we have title

27:03

to the RV as well

27:05

as a mortgage filed , and

27:08

so it's just and extra support

27:10

and because the person couldn't

27:12

put down as much as we wanted , we

27:14

took that . We had a we structured

27:17

as the first and second lean . The

27:19

RV supports both leans , but the

27:21

intent is that when they're done with

27:23

the home , on the renovation they've moved

27:25

in , is to sell the RV and those proceeds would

27:28

pay off .

27:28

The second link sense and then

27:30

we got extra assets right extra

27:33

assets all the time and

27:35

don't forget to get those , to get

27:38

those titles on those vehicles and RVs

27:41

oh yeah oh yeah , it needs

27:43

to be in your possession what

27:46

was gonna ask is I'm

27:48

curious to know what is the fastest

27:50

on your private money loans that you do for your fix

27:52

and flippers , what's the fastest that you've

27:54

ever had it funded and then and

27:57

then back to you completed

27:59

mature ?

28:02

actually I had one last

28:04

week . I set money out on Wednesday

28:06

, it got repaid on Friday so

28:08

that's almost like a transactional money

28:10

at that point right , that

28:13

was transaction . But I've also done stuff

28:15

, many , many , many deals with these borrowers

28:18

and they had

28:20

. They had somebody on the back end

28:22

to buy it and they just needed . It was effectively

28:24

a back-to-back , but the title

28:27

company required them to close

28:29

fully on the purchase and

28:31

then have a day and

28:34

then have the second closing a

28:36

day after , and so the title company was

28:38

really driving on why it wasn't actually saying

28:40

a same-day transaction . Outside

28:43

of that , I've had some land

28:45

that we , that we funded

28:47

and that closed call early

28:50

December and by end of December

28:52

I've been paid off .

28:54

That's pretty cool it's , it

28:56

can go quickly that

28:59

business in general is something

29:01

I kind of wanted to tinker with . Richard

29:03

and I had done a couple of deals like that before

29:06

and we was looking at ourselves like man . I wish

29:08

we could have like five or six these lined up

29:10

every month and just be in and

29:12

out in a couple of days .

29:14

That's , that's like a lenders dream right there it

29:17

is , but I would also say it's

29:20

not . It's not , it's

29:22

90 , it's caught . 5% of the portfolio

29:25

, right , like most of it is not that way

29:27

and I would . I would also say that these

29:32

are replete borrowers , right ? So some

29:34

of these are sizes that I normally don't

29:36

play in , right ? But they bought the house , they

29:39

it was essentially you're really buying the land

29:41

and to flip it , and

29:43

so those aren't the types

29:45

of transactions that we normally

29:48

lend on , but it's relationship based , and

29:50

our borrowers come in and say , hey , would you do this ? Of

29:52

course let's do it , and

29:56

actually we are quite supportive . You

29:58

know , a lot of times they come in and they say we have contract

30:00

. I've done this with one

30:02

of the borrowers where they

30:04

got a contract . We talked about what

30:06

it would take to do the rehab and

30:09

they said will you give us a month to

30:11

see if we can sell it ? Because we have too

30:13

many projects and we'd

30:15

like to see if we could just do a you know a

30:18

mode , what's called it like a

30:20

whole , hold it . And

30:25

so what we did is , again , we try to be creative from

30:27

a structuring perspective . So what we said is , for

30:30

the first month , try to sell it , and if you don't

30:32

sell it , then we'll kick in the rehab loan at

30:34

that point and then we'll go from there Still

30:38

keeping the six months right . So the rehab had to be

30:40

something done quickly

30:42

. Ultimately . They had thought

30:44

they had a buyer within the month . They

30:46

fell through right at the end of the month and then we flipped

30:48

into the rehab portion of the loan and

30:51

they're actually working on it right now and

30:53

I should be getting my last draw request on that

30:55

probably this week . And

30:58

so we try again . We try to be creative , and that's where that

31:00

relationship aspect is super important Listening

31:03

to what our borrowers need and

31:06

then thinking how can we be

31:08

responsive . That makes it a win-win for

31:10

everybody .

31:12

Vanessa , quickly , where

31:15

are you doing these rehabs

31:17

at ? Is it just basically at a DFW

31:20

, or ?

31:22

It's a great question . So we are

31:24

in the DFW area , that's where we live and

31:27

we like the DFW area , so

31:29

a lot of our operators are in the DFW

31:31

area , but we will do private money

31:34

loans throughout the state of Texas .

31:35

Okay , and then how

31:38

can we get a hold of ? How do you guys ?

31:41

So I can share my contact information

31:44

. But the best is to email

31:46

operations at all of dashcovecom

31:48

. That

31:50

reaches everybody on the team and just to make

31:53

sure that we get back to you guys .

31:55

So that's that was

31:57

operations at all of olive-covecom

32:00

.

32:03

That's exactly right .

32:04

All right , olaclecom . All right , Vanessa

32:06

, we are out of time today

32:08

. Thank you so much for being on the podcast

32:11

. This is episode number five , season six

32:13

, of the VDK be the bank broadcast

32:15

podcast . My gosh , my tongue is all tied today

32:17

. So yeah , thanks for being on . This

32:19

has been an awesome little conversation

32:21

today and I really enjoyed the private

32:24

money conversation that we had on the underwriting

32:26

. That was pretty fun .

32:27

Absolutely . Thank you for having me . It's been fun .

32:30

All right , you're welcome . We'll catch you guys on the next

32:32

episode , if I can get my mouth

32:34

to work correctly . Oh , there we go .

32:36

All right , see you guys Bye , thank

32:38

you .

32:42

Thanks for listening to Be the Bank . We

32:44

hope you learned something from today's show . If

32:47

you enjoyed this episode , please rate and review

32:49

us . Plus , check out our channel on YouTube

32:51

and follow us on Facebook and Twitter

32:53

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32:55

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32:57

Bank is sponsored by American

32:59

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33:02

.