Chasing Financial Freedom
Chasing Financial Freedom
Building Bridges, Not Walls: Uniting the Real Estate Trinity
Navigating the world of real estate investment is no walk in the park. As your host, I'm here to share my journey into a new role as a loan originator with Nexa Mortgage. The goal? To build a stronger network of connections and facilitate our deals. Even as the economy challenges us all, I’m sharpening my telephone skills and mastering the art of balancing multiple business lines. We'll reveal how important it is to maintain a reliable network in the real estate industry and how personal conversations can make all the difference in this digital age.
As we delve deeper into the real estate development process, we're bridging the gap between loan officers, realtors, and investors. No more instant gratification—hard work and patience are the name of the game. We'll share an insider's view of our ongoing development project in Bayard Park, discussing our strategies to keep the business profitable amid current market challenges. So, buckle up and get ready to discover strategies, insights, and real-world experiences to help you navigate these challenging times in the real estate world.
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Hey guys, ryan Dement, hope you guys are having a great day. Today on the podcast, you guys have me. I've had a guest that we've had to reschedule and I did not want to let things continue to go, so I'm going to shoot a video solo today. I really want to talk about numerous things, but if you guys don't know one, this is a new platform I'm trying to record video and audio on. It's called Squadcast. It was recently purchased by Descript and now they're offering it as part of my Descript membership, monthly subscriber, whatever. So please let me know about the quality and what you guys think of the video and the audio.
Speaker 1:But the other piece that I wanted to talk about there's several and we'll continue to go through it is I'm in a new line of business. I became a loan originator with Nexa Mortgage and I'm going to use that ability to connect with other investors but also help fund our deals that we're doing in the real estate space, but also help us sell the new homes that we're doing in Evansville, indiana. In the last several weeks, I've been doing a lot of cold calling, emails, text messages and just talking to people, so I want to talk about that and then, lastly, just give it an update on where things are at Bayard Park, what we're doing, how we're doing it and then how that's all playing into everything I'm doing. But when I say but, it's more like and how I'm balancing my day out between multiple lines of business to make sure that I am on top of what I need to be doing. So to kind of start everything out the loan position, the loan officer position with Nexa, I'm licensed in the state of Kentucky and Indiana. You guys are probably saying you live in Arizona, why aren't you licensed? I'm getting it done. I just haven't had time. I wanted to make sure that I was focused in on the immediate need, and the immediate need was Kentucky and Arizona, because that's where we're doing our business. So that's the focus. So we'll see what happens.
Speaker 1:Nexa's been great. I've been drinking through a fire hose. They have accessed over 200 different lenders, so I've been in contact with several investors that I know that are looking for loans. So I'm going to be able to help them hopefully. But the market is crazy with interest rates and there's so many things you can do that I didn't have access to before, so I can really be like one of those new home builders that are out there, like Lenar or KB or Toll Brothers, to where I can offer a buy-down rate, because I'm buying the rate down upfront through seller concessions, which is helping in its drawing people out.
Speaker 1:But the thing that I wanted to share was, in this role I'm really to connect with people. We had the pandemic and all that other great stuff, but everything in between has kind of been virtual. And now I'm testing my telephone skills and my telephone skills, I could say, initially sucked, just for the simple fact I was all business. And at Nexa, when you onboard, they give you a coach and I've got a coach and we've talked about this and she said you know, ryan, you're trying to be business-like, why don't you be personal-like and learn who they are? And I forgot all about all that All those years ago when I was doing cold calls, I was doing doorknocks for payday loans and so forth. It's just out of mind, out of sight. So I had to bring it back and readjust my approach and through my calls I have learned a lot.
Speaker 1:That one, people don't pick up their phones. They don't pick up a telephone call, they pick up a text message or an email or a smokescreen, for all that matters, but there's a lot of people out there that are struggling in this market because it's not 2021 or even 2022, because it was still warm and still hot and people are struggling. And when I say struggle, it's like my pipeline isn't full. What am I going to do? Sorry about that, guys. I needed to plug in my computer, otherwise it would have died on us and we would have lost the recording. They haven't taken out their tools out of their toolbox that they haven't used in a long time. So let me say that another way, they need to get rid of their power tools, because power tools are not going to work in this environment, and they need to take out their hand tools, their screwdriver, their hammer, their saw and they need to get back to the basics.
Speaker 1:And one realtor that I spoke to that I'm building a relationship with, she really just came out and said Ryan, I've not been a realtor for very long, this is not what I came into and now I have to work to get listings. And she goes my listings are slow, my buyers are slow and I need to find a way to differentiate myself. And she says I'm going to go back to handwriting notes, getting in front of people, shaking hands and just talking to people and making it a human touch. And I'm like amen. I mean there's no way around.
Speaker 1:That is that if you got away from being able to connect with people and talk to them and have conversations, you're really missing out on getting your pipeline set up, because the market is just the market. Markets go up and down and at some point the market's going to go back up and things are going to change and you won't have a pipeline. You won't have a bunch of people that you can call on, email, text, whatever. You're not going to be top of mind and one of the best things you can be doing right now for yourself is building that pipeline. And when I speak to these individuals and not all these individuals are realtors there are other people in the real estate space. Real estate investors are struggling too, because now cheap money's gone and now they've got to really work on their numbers and really hash out their numbers to make sure that it works. If they can work deals in an environment that's 10 to 12% interest rates, can you imagine how good they could be when rates go down to 6 or 8% or even 5%, who knows.
Speaker 1:But this market is teaching us to sharpen our tools, to use our manual tools that we haven't taken out in many years, to figure out how we can actually build our business from the ground up with our bare hands and not with all this help. By all means I'm not saying don't use technology, don't use AI, that's not the case. But you've got to get out in front of people and have conversations. You've got to be able to pick up the phone and talk to somebody, and if you're not talking to people, how are you supposed to build a pipeline? And this one individual that I was speaking to was a realtor. He was telling me that they're buying ads, they're buying leads, they're doing this and they're not getting any return. And I'm like you want to know why those people really don't want to buy. They're just out shopping, looking, they're looky-loos, they've always been looky-loos.
Speaker 1:You have to build that personal relationship with your client. Whether you're a realtor, a loan officer, real estate investor, car salesman, whoever, you've got to build a relationship. And if you can't build a relationship, why is somebody going to buy from you? Maybe they might buy one time from you, but they're not going to buy two, three, four, five times.
Speaker 1:I read this article or I heard this stat that 80% of people that buy homes will not use sorry, of the people that buy homes, 80% of them will not use the same loan officer and the same realtor in more than one transaction. So the very first transaction they do, they'll use that loan officer and that realtor, but they won't use them again. That's pretty sad. We've lost connection with everything we're doing and we have the ability to get back out there and reconnect and people just don't want to get off the couch and do it. They really want the market to come to them and it's not going to happen. I feel bad that I've been making cold calls for almost four weeks now and I've only turned up three or four leads and I haven't even turned that into a credit poll yet. So I mean there's pressure on that. But I'm working on a couple of bigger deals that potentially could be awesome, but I don't know until it actually happens.
Speaker 1:But one of the biggest things that I want to share with you guys whether this is Chasing Happiness or Chasing Financial Freedom Podcast we're all after one thing is to be happy, to be content and live a life full of purpose and passion and we're not doing it in this market. Realtors and loan officers are quitting like there's no tomorrow. They're having a hard time finding a job, whether they got into the market, into this space, for the money or whatever the case is. They're leaving. But could they stay and work through the challenges and find niche spaces to be in to make this all work for them? My answer is yes. You just have to be persistent and consistent, but I can't tell you if these individuals will or will not. I can't tell you from my telephone calls and my emails and text messages that there's a large exodus, has been going on for a while and it's now just getting ramped up even more as interest rates start fluctuating up because there's gonna be another rate hike, guys, and the market is the market. You sell today's rates, that's it. That's all you can do.
Speaker 1:But we spend and I'm not just talking about real estate, I'm talking human being. Now, you and I, we spend more time worrying about what happened in the past and what the past was like than actually focusing on today and going forward in what that will look like. That's a struggle in itself, but also, at the same time, it's sad, because how are you supposed to get what you want out of life passion, purpose, direction if you focus on something that's in the past that you cannot change, you can change the next three to five seconds in front of you, or maybe one second, however you want to look at that, but you can't go back and change what happened. You can't go back and wish that the market was what it was in 2021, to where you walked outside and you had five listings thrown at you. It doesn't work that way, but we tend to live there.
Speaker 1:What I'm trying to do is bridge that gap with humans, and I'm saying this as a human-to-human level contact or connect excuse me, is that I'm not trying to sell them my services or product. I'm trying to connect with them on a personal level to let them know that loan officers and realtors and investors can all work together in the same sphere. You just have to be open to it and find a way that works for you. Some of these people don't want to do that. Some of these people do. I'll work with the people that want to. I'm all for that. The people that don't, god bless you. I mean go do your thing and be happy, but you can't keep on asking for something and not do the work to get it. That's the technology piece in all this. We've used technology for instant gratification by all means.
Speaker 1:I use social media like anybody else, but no one sees how hard I work my ass off on a daily basis to make sure things are running, holding it together, building houses, trying to get them sold on the front end in a challenging interest rate environment and then also attract investors and be able to continue to buy more land and build more houses. It's a crappy environment, but the crappy environment gets you to the other side of the good stuff. If you put the time and effort in to fight through, it Doesn't mean you're always going to win. I'm already losing in this battle. I've had almost four weeks of cold calls and I don't want to say I haven't found potential deals. I just haven't brought a deal to the table yet, and that's frustrating because it's like I'm doing all this work and I'm getting nothing in return. But I have to remember this is a long game and making phone calls and connecting with people on LinkedIn and talking to them and trying to build that relationship is key. But it seems like we don't want to do that today and I struggle with that and I think that's part of my journey on this side of the business is I need to figure out what works for me and just go after it, because trying to help people change that are not ready to change is just shooting myself in the foot and I have to be respectful of it. If someone's not willing to change and go after what they want in life, I have to respect that, but I feel bad for them too, and that's a struggle. So it is what it is.
Speaker 1:We move on, I digress and we're going to come back around and talk a little bit about what we're doing in Bayard Park. Bayard Park, our first house is almost ready. We'll be about six weeks from start to finish to get a house built, so that's pretty damn good. We are going to have flooring, painting and cabinets done here this week, so hopefully that'll be taken care of. The second house has already started. They already started putting the iJoyce in and here quickly we should be able to start the third house. So we'll have those running.
Speaker 1:And now I'm putting my real estate developer hat on, my true vest hat on, and I have to find ways to sell these houses, and the only way I know to sell houses is to offer some type of builder concessions and it could be in the form of down payment excuse me, closing costs and also buy down rates so we can actually give them concessions to buy down their rates so they can have a lower interest rate. By all means, that's not the best thing to talk about in the marketplace, because people do not like builders that go out there and buy blocks of money. When I say this, the larger big boys will go out and buy millions of dollars of lower interest rate mortgages and then go out and sell it. So that's how they're advertising. You know 4.99 or 5.25 interest rates, but they always have a caveat on there that you've got to do an FHA or conventional and you have to have this type of credit score and then it's only good for this period of time or until the money runs out. I don't have those deep pockets, so I'm willing to do concessions to where we can apply some dollars towards a buy down, which, on these houses, would be up to $6,000, which is close to 3%. So that's pretty damn good and we've got some people looking, so that's a positive thing.
Speaker 1:But as a developer, I'm concerned about the headwinds in the interest rates and also how do we continue to work in this environment? One, to be profitable and two, to be effective with what we're selling, and that is a big challenge. And going back to those real estate investors that I talked about earlier, if you can make your business profitable or you continue to be profitable in this environment, you will make a ton of money when rates go the other way, because the rates are not going to continue to stay this high forever. Not saying we're going back down to zero, guys. I think that's that ship has sailed. I think we'll be in the three to five range, maybe six on the high end, but I think 5% would probably be safe. That's a huge difference of 5% interest rate versus 7% interest rate. Two basis points on 100,000. You're talking anywhere between $150 and $300 difference in a payment on a monthly basis. That's a big deal.
Speaker 1:So as a real estate investor, I'm trying to figure out how do we contain costs, make sure that we're putting out a quality product for everybody to buy, be able to build a home in a reasonable amount of time Six weeks is pretty damn good, because most developers in Evansville are nowhere near that. And then how do we attract the buyers in to make sure that we sell these properties as they come up and they're ready to go, and that's a challenge I'm struggling with that. We have a realtor and I would probably say that listing agent is not quite on the same page as I am and I'm working through that. I have a different gear than he does when it comes to what needs to be done, so we'll work through that. We'll figure it out.
Speaker 1:But the struggle is keeping the people interested in what we're doing on a daily basis. So luckily I have Jesse, our general contractor. He shares a lot of pictures, so I'll get those pictures up and show people. Hey, look at, we're progressing along. Here's where we're at. This is what we're looking at.
Speaker 1:But people are nervous right now with this market and I get it. I totally get it. But at the same time, there's opportunities out there that you can still buy and it be more affordable than renting. People think I'm crazy, but some of the rents around our new builds are extremely high and these places aren't brand new and they're not nice. I would probably say they're B or C level. They're not a brand new home and people just don't believe the numbers, so you have to show them the numbers. So I'm doing some videos on the numbers going after that.
Speaker 1:But the struggle here, guys, for me is doing the balancing act of making sure TruVest is profitable by way of pricing the house properly, selling it with the right concessions to attract the right buyers in, and be able to rinse and repeat that 15 times. And that's a challenge, to say the least, because I don't have a crystal ball. I do not know what rates are going to be. They're not stable. Typically, rates adjust daily, sometimes twice a day, and by doing that they're up down, up down, up down. It's a lot. It's a roller coaster man, it's a ping pong ball going all over the place. And can I say that's a pain in the butt.
Speaker 1:Sure, as a loan officer, it's a royal pain in the butt, because somebody's going to come out and shop and they want to know what interest rates are today. You can give them a range, but until they actually physically lock your loan down, until you lock your loan, your interest rate is going to change. It can change 20 times by the time you decide that you're under contract and ready to lock. So worrying about your interest rate today is not what you need to be doing. You need to go out and find a house that you're qualified for and start going through the process to get yourself ready to buy it, and then let's go figure out what the mortgage payment would be. That's a big challenge when it comes to being a loan officer is directing people in the right place. It's almost identical, not even in the inverse, but it's pretty close to the inverse.
Speaker 1:On the developer side, I'm trying to get the highest price for the best margin, and you can only do that if you don't give concessions away or you're not giving price reductions. Whatever the case is, it's truly just a balancing act that I feel that if I can actually balance both sides of this business out with true vest and loan originations during this pretty crappy time no-transcript we can do pretty well. When this all turns back around, you know and I'm going to digress and then I'll come back around I'm not a guy that's going to tell you you need to go out and buy a house, nor am I going to tell you you should continue to rent. It has to make dollars and cents for you and your family and your financial situation. Don't let anybody tell you otherwise, know your numbers, know where you're at. It has to work for you.
Speaker 1:But on the other side, on the bigger picture, all these guys are out there saying the sky's falling. We are going to be in the worst recession in the world past 2008. We've been in one for a while. Guys and people don't want to talk about it, but we've been in a recession. With interest rates where they're at, we're still in a recession, even though the gross domestic product is growing. We still have other recessionary points that have come up for the last 12 to 14 months that say recession, recession, recession. No one can tell you how bad this is going to get or if we've weathered the whole storm.
Speaker 1:I don't know, but this will be the last piece. I back up and say this again you have to take care of you and your family and your needs. The thing that I'll tell you is make sure your living expenses. You have a minimum of six months set aside. That'll work great for buying a home, but also if crap hits the fan and things go sideways in the economy, god forbid you lose your job. You've got six months worth of cash in the bank that you can live off of until you find another job, the other pieces credit card debt is at an all-time high 18%, 19%, 20% interest rates.
Speaker 1:You don't need them. Get rid of them, pay them off, pay cash for everything. You don't need credit cards, even in good times. They're not that great, you just don't need them. And then if you've got a car note that's $6,000, $7,000, $800, dump it, try to sell it, get something that's affordable and move on, and then you can live below your means, because if you don't, if this goes sideways, it'll eat you up.
Speaker 1:I know that. I've lived there. I'm still paying off debt. I don't have all my debt paid off, but I'm bound to determine to get it paid off and that's what I'm going to do. But, guys, make decisions that are best for you and your family and your financial situation. Don't chase the Joneses. Do what's best for you. Always make sure your four walls are taken care of before anything else. Enough of that soapbox, guys. I hope you guys enjoyed this podcast this week. It was me straight from the heart. Come check out the podcast. Come check out Chasing Happiness. Also. See what I'm putting out on the real estate side when it comes to TrueVest and what we're doing there, also on the loan origination side. It's on my personal account. Follow me. Love to hear the feedback. I hope you guys do well. I'll see you guys next week. Have a good one.
