Brian Lauchner (00:10):
So we are back in the after party, and first thing I want to do is give a shout out to some of the people like Chris, who has been a long time listener, but a first time attender, he says, I love that. And I'm glad you guys are engaging with us and stuff like that. One of the things I wanted to start with was a question from glamour property, who asks about Larry. She wants to know for the buyers that came in, did you use an RMLO, a Residential Mortgage Lending Officer?
Larry Gill (00:38):
That's a great question. Yes, absolutely we did, because if we're going to make the loan Dodd-Frank compliant, we need to do that. So we did that great question.
Brian Lauchner (00:48):
Yeah.
Eddie Speed (00:50):
And not only that, I wanted to say that, you know, I've been buying seller financing for 40 years. Right? And what I've learned is that the real estate investors that used to just that their buyers themselves, now they have a discipline of using the Residential Mortgage Loan Originator. And they'll call it a little bit different things in different States, but that's generally what the acronym means. They vet the buyers better, a third party. Who's doing the underwriting process. It's underwriting the loan, Larry, to your specifications, making sure it's legal, but you still get the yes or no, whether I'm okay with the guy and all of a sudden, it's kind of a done for you business that makes your bank better.
Brian Lauchner (01:38):
Yeah, absolutely. And I think the other piece of that too, is almost the outsourcing, right? You don't want to get in the business of collecting W2's and pay stubs and bank statements and trying to make the decision yourself, let someone else handle that. Right? Alan asked, what do you pay an RMLO? And the reality is kind of two fold. It's typically a few hundred dollars in my case. But the bigger thing is in a lot of the cases, you're going to be asking your buyer to pay this as a part of this process. And this is something they're more than happy to do, simply because you're providing a service, the financing, and you're offering something that really no one else is willing to. And so these little fees that add up to you, the buyers, a lot of the time, as long as they can afford it are more than happy to do it.
Joe Varnadore (02:24):
Well, and Brian, you know, the other part of that is, again, you said that correctly, and that you're going to have the buyer that's part of the buyer, but they don't have all of these other crazy fees that you do when you go to the big banks, right? You don't have, you know, all these loan origination fees and all these different things. So it's a smoother process.
Brian Lauchner (02:44):
Yes. We have the process closing costs are going to be less. You don't see this run-up of points being paid to a lender that you can't figure out what you're paying the fee for kind of thing. And and again, to Glamour Properties comment, the vetted buyer pays the RMO if approved for the purchase, that's right. Our goal is to have them go ahead and do that. Well, let's see.
Larry Gill (03:12):
I want to add too basically my wife is used to be a mortgage loan officer. So we kind of do some prequalification beforehand, you know, because we don't want to promise anybody something in and then there's not a chance in heck that they could qualify. So we do that as well too, because you know, you just don't want to invade down that little rabbit hole.
Brian Lauchner (03:31):
Yeah, absolutely. And this is, I think how you kind of get the funnel, right? You start at 800 people. You're not going to call 800 people. And even out of the 50, you're not going to say, go talk to an RMLO. If you don't have a down payment, if you can't afford a thousand dollars a month or whatever the payment is, you're kind of using some common sense rule to set expectations, manage expectations, and then say, these are really the three qualified people that would be worth learning a little bit more about.
Eddie Speed (03:57):
You know, Larry, one thing I wanted to talk about because you're in your deep at NoteSchool, and we've discussed this behind the scenes, in our labs all the time. Right? But most people that are here aren't necessarily in these labs and they don't hear this conversation. The reason that we suggest you run the ad that you ran and you had more wording in there, then I might've put in the app, but it just, it worked, right? You can't argue with success, right? Is private financing says something different than seller financing. A lot of times to the consumer seller financing or owner financing means no qualifying. While you did private financing, you alluded there was a lender and a process, but you also said something that was said, just because you've been turned down for a traditional mortgage doesn't mean you're bad, private financing for deserving buyers. And you also did not specify the down payment, but you didn't allude it was you know, you didn't allude you were going to get into it for nothing, and you said private financing for deserving buyers with large down. Right. So there was, that two words tells a lot, about smart advertising It brings you the customer you're looking for.
Brian Lauchner (05:17):
Yeah, absolutely. And you know, Michael in Atlanta made a comment saying, is this is it really difficult to apply these concepts to the commercial space, to commercial property? And the reality is no, it's not more difficult. It's really the same exact same concept. In fact, I would say that it traditionally the commercial projects that when you look at small businesses and commercial seller financing is a much bigger player in that space for a long time. Just because of the price point, people don't qualify for say millions of dollars, right?
Eddie Speed (05:51):
Well, remember this, seller financing fills the gap conventional lending doesn't fill okay while there is a shortage of real estate. There also right now is a shortage of financing on residential property. The essentially 35% of the people that could get a mortgage last January can't get one this January. Now people say, well, that can't be true because their property is escalating in value. Yeah. When you have a shortage of inventory, the best buyers can still get a loan, but you still have this big pool of people over there that are really what we believe are good buyers that have now been eliminated from conventional financing. And Larry, what you know, Marishka was a loan originator you're very sophisticated, you know, in this space, what would happen if you were to sell this property? And he would have gotten, trying to go get a conventional mortgage for $32,000, what would he have found out?
Larry Gill (06:47):
Wouldn't have found anybody willing to do that? Yeah.
Eddie Speed (06:52):
Dodd-Frank requires that they limit the fees to the point that the mortgage originators doesn't meant for this $32,000 loans anymore. So you fill the gap in the market that nobody else could fill, which was good offer you, You created a home buyer, not a renter. Now let's talk about commercial. Okay. While residential is on fire and doing crazy good, right guys, what is not doing so good right now are segments of commercial real estate. So what do you think happens to lending Brian? When we start seeing a contraction in the market.
Brian Lauchner (07:29):
It goes down,
Eddie Speed (07:31):
We see a contraction in lending. So what, what happens is, is then seller financing fills the gap, not just on resi property, but commercial properties of all kinds. So great question, and let me just tell you that we will, we're going to be talking a lot about commercial as it relates to creative financing structures along the way, because the market's just going to demand it.
Brian Lauchner (07:54):
Absolutely. Well, as we're kind of wrap things up here, I wanted to mention Peggy's comment. She's basically asking about the boots on the ground. How how are you able to do this from this farther distance, right. And so talk to us a little bit about your boots on the ground, so to speak, which is really going to be, I'm guessing your note servicer, who's going to help facilitate a lot of this.
Larry Gill (08:18):
Actually after the, after we decided that this was not going to be going into, you know, getting things back in that we actually took over the servicing and cause it basically it's, they weren't making payments. So it's really actually pretty easy to find boots on the ground. You know, it's like you can either go onto well, in this particular instance, I believe we actually found somebody through the borrower that said, Hey, I've got, I can get some equipped with lockbox on there. And then we had a couple of contractors actually, excuse me. Cause we do other properties as well too. We actually had a lockbox there already because we've Had the property preservation company would go out and do that. So then it was just basically kind of a trust sort of thing, also was kind of cool because we found out that the police officer lived next door. So, you know, the house didn't have any problems with vandalism, So.
Eddie Speed (09:11):
Brian, let me just make a comment there in general for the audience. One of the things that we have found that is an educational gap is that people don't understand that they're all kind of services and vendors unlike there were 25 years ago, there's all kinds of services and vendors that can be our boots on the ground that don't have to physically be our boots. And so we bought assets and 35 States over the last many years and we've never physically been to those properties and people that are used to buying just in their backyard and think they always have to have the key in their physical hands to own a property or to own a rental or whatever, or sell a property.
Eddie Speed (09:55):
We just, I think we teach people different ways to do it. And so it doesn't shock us at all that Larry did sell this property way across the country. Larry, really just implemented an executable plan and of course he implement it to perfection, but he just implement it. There was nothing that came up in this process that I think was a shock to you right Larry. It was just the normal thing that you sort of knew was available.
Larry Gill (10:22):
Well, thank you for that Eddie, and you know, it's, it's some of it's through trial and error when we've been through this before and what works, what doesn't and so on. And so I guess I, again, I thank you for your compliment for that we implement it to perfection.
Brian Lauchner (10:41):
I love that. Well, that kind of wraps up our after party. Larry, thank you so much for joining us and sharing today. Eddie and Joe always, It's great to see you. All of those who joined us, I really appreciate you jumping on asking your questions, engaging with us. It means a lot. Hopefully you got a lot of value out of it. We'll plan on seeing you next week on NoteSchoolTV, we'll see you on the other side.
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