Mortgage applications ground to a halt for the week ending Sept. 29, falling 6% from the week prior as mortgage rates jumped to a 23-year high of 7.53%, according to new weekly data from the Mortgage Bankers Association.

Mortgage application activity is now at its lowest level since 1996, the MBA reported.

Purchase mortgage application volume, in particular, slowed considerably for the week ending Sept. 29, down 22% from a year ago, according to unadjusted data. Meanwhile, refinance applications slumped 7% from the previous week and were 11% lower than the same time a year ago.

“The purchase market slowed to the lowest level of activity since 1995, as the
rapid rise in rates pushed an increasing number of potential homebuyers out of the market,” Joel Kan, MBA’s vice president and deputy chief economist, said in a news release.

Bucking the downward trend, the share of adjustable-rate mortgage (ARM) applications rose to 8% of all loan applications, the MBA found. Kan attributed the uptick in ARM demand to homebuyers looking for ways to lower their mortgage payments amid rate increases.

Still, mortgage rates for home loan products across the board, including ARMs, pushed higher for the week ending Sept. 29. The average contract interest rate for 5/1 ARMs hit 6.49%, up slightly from 6.47% a week prior, the MBA reported.

Meanwhile, the refinance share of mortgage activity decreased to 31.7% of total applications from 31.9% the previous week. 

The share of Federal Housing Administration (FHA) loan activity inched up to 14.5% from 14.1% for the week ending Sept. 29. Meanwhile, the share of Department of Veterans Affairs (VA) loan activity of total mortgage applications was 10.1%, down from 10.9% the week prior. The Department of Agriculture (USDA) loan share of activity remained unchanged at 0.5%.



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Mortgage rates and bond yields kept rising Tuesday as the job openings unexpectedly increased more than anticipated. But is that job openings data legit today? And will job openings continue higher, pushing mortgage rates even higher in the future? I believe today’s job openings data needs some context, but it didn’t matter to bond traders as bond yields shot up after the report.

The marketplace has been extremely wild since the Federal Reserve meeting when the Fed took a very hawkish tone in their forward outlook, sending the 10-year yield higher. As I write this article today, the 10-year yield is 4.79%, with mortgage rates at 7.72%. We can see the recent aggressive move before today’s action. 

I have been in the camp that the Fed won’t pivot until jobless claims data breaks over 323,000 on the four-week moving average. The headline jobless claims is 204,000, and the four-week moving average is 211,000. So, this key data line hasn’t gotten better. However, the Federal Reserve has always favored the job openings data, so we must look there to see what is happening.

Job openings data

From the BLS: The number of job openings increased to 9.6 million on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 5.9 million and 5.7 million, respectively.

Early in the COVID-19 recovery, I was the only person on planet Earth talking about job openings getting toward 10 million in this recovery.

Job openings data had such an impact on mortgage rates that you can see it in the 10-year yield after the data was released this morning. Some traders got a heads-up before the release and sent yields higher.

What about the report itself? First, the headline is misleading; we have a massive jump in job openings data, but it’s only from one sector. So, I wouldn’t say the labor data is accelerating, but the trend of job openings data getting softer is intact.

However, the key is that the labor market isn’t breaking as some on the Fed had hoped for in 2023. As shown below, job opening data should run with the long-term trend higher, and we are back to that level. Remember, population growth is slowing, and Baby Boomers leave the workforce each month.

QUITS Rate back to pre-COVID era

The real positive data line for the Fed is that the quit rate percentage is back to the COVID-19 era level; this data line is more key to the labor market than the headline job openings data. They want fewer people to quit their jobs for better paying jobs, so the fact that this data line is already back to the pre-COVID-19 level is probably one of the biggest reasons why the Fed is saying they might be done hiking rate, and could even cut next year.

The headline job openings data released today seems very strong, but reading the internals, it’s the same story. The labor market isn’t as tight as it used to be, but it isn’t cracking, meaning we aren’t on the verge of big job losses anytime soon. This will happen once the jobless claims data breaks over 323,000 on the four-week average.

However, as I’ve discussed in a recent HousingWire Daily podcast, the bond market has had itchy fingers since the Fed meeting when they gave a hawkish outlook. The dollar has gotten stronger, and the Bank of Japan needs to intervene again today. This is starting to look like this time last year when the world markets struggled with a stronger dollar.

Last year, London was going to lose its pension funds, the Bank of Japan intervened in their currency, and the IMF warned the Fed not to hike rates. We are getting the same vibe as last year, which means the bond market is oversold and we should see some mortgage rate relief soon. However, it’s job week, and we have three more labor reports coming out, so stay tuned.



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Los Angeles-based rental management software provider RentSpree has launched a reporting feature called Credit Builder, which will facilitate reporting online rent payments to the credit bureaus.

In June 2022, Freddie Mac authorized on-time rental payments to be included in its underwriting system. In doing so, the government-sponsored enterprise hoped to widen access to homeownership for people with no to little credit history.

Fannie Mae pioneered that trend by allowing on-time rental payments to factor into its underwriting calculations as early as August 2021.

“Building a credit history through rent payments can significantly impact loan approvals, especially for those with limited credit history,” Michael Lucarelli, CEO and co-founder of RentSpree said in a statement. “RentSpree aims to facilitate this process and empower renters to achieve their financial goals, whether it’s securing a loan, purchasing a vehicle, or buying their dream home.”

Since consumers for the most part are still unable to report directly their on-time rent payments, RentSpree’s Credit Builder provides a valuable service, the statement said.

“Research shows that when payments are reported to credit bureaus, seven out of 10 renters are more likely to pay on time,” Lucarelli added. “So this feature is going to benefit those who are already punctual while encouraging others to develop greater consistency. It’s a win-win.”

In October 2022, JPMorgan Chase launched ia platform that automates the invoicing and receipt of online rent payments, serving property owners, managers and tenants.

RentSpree was ranked #992 on Inc. 5000’s fastest-growing private companies in 2023. 



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The 2023 housing market may be the “toughest real estate market” we’ve ever experienced. But, after this episode, we bet your home offer will get accepted, even during a wild seller’s market, even if you’re not offering the highest bid, and EVEN if this is your first time buying a home. While you may THINK that sellers always choose the “highest and best” offer that comes their way, we have a few experts to prove that that’s rarely the case and how you can win even in an impossible housing market.

First-time home buyers and veteran investors alike are feeling the sting from this never-ending sellers market. There are still more buyers than sellers, and bidding wars have come back into fashion. Thankfully, a few quick tips from today’s expert agent, Lindsey Iskierka, and David Greene’s own mortgage broker, Christian Bachelder, can help you win the home you love or your next cash-flowing, equity-boosting investment property.

We’ll walk through the five steps ANYONE (yes, even you) can take to put yourself in the BEST position to make a bid on a property, how your lender can ensure you DON’T get squeezed into paying more, and the biggest mistake new home buyers make that are costing them their dream home. Stick around because once you put these tips into practice, you could have too many accepted offers on your hands.

David:
This is the BiggerPockets Podcast show, 826. Coming at you from Las Vegas.

Lindsey:
You have to call the listing agent and find out specifically what is the seller looking for? What is most important to the seller? We can’t make assumptions that we know that it’s highest price and best terms. There might be more to it. Do they need to rent-back? Do they want smooth financing? Do they want a longer escrow? Is there certain things that they’re looking for in an offer that we’ll only find out if I make that phone call? Build a rapport with the agents, flatter them a little bit, get them to tell me all the information about their listing, so that I can take that back to my buyer and say, “Okay, here’s the scoop.”

David:
What’s going on, everyone? It’s David Greene, your host of the BiggerPockets Real Estate Podcast, the biggest, the best, the baddest real estate podcast on the planet. Every week, we are bringing you stories, how-tos and the answers that you need in order to make smart real estate decisions now in this current market. So, we’re really glad to have you.
In today’s episode, we’re talking about how to get your offer accepted and get deal terms to work in one of the most challenging markets we’ve ever seen. I have brought in Lindsey Iskierka and Christian Bachelder, two of my partners in the real estate game, to explain what we do to help put clients under contract in an incredibly competitive market. And more importantly, how you can do the same. The game has changed. The old advice of write 100 offers and hope that something sticks is not working in a market where every seller is getting what feels like 100 offers. So, if you want to win in today’s environment, you have to be strategic and intentional. In today’s show, we are going to tell you exactly how you can do the same.
If you’ve been frustrated because your offers are not being accepted or things are going wrong, or things are changing in the middle of the process that you were not prepared for, today’s show will help you a ton in eliminating some of those obstacles and hurdles, and getting rid of the snags. And even if you’re not in acquisition mode right now, this information is timeless. And when you do decide that the time is right for you to buy, this is a blueprint for how your team should be communicating on your behalf and with each other. I think your mind is going to be blown by some of the practical information that we share to give you an advantage over your competition in this wealth-building journey.
Before we bring in Lindsey and Christian, today’s quick tip is if you’ve read my book, Long-Distance Real Estate Investing, you understand the concept of the core four. This is your agent, your lender, your contractor, and your property manager. My belief is that you need those four people all working with you to help you achieve your goals. And if you have them, you can invest anywhere. Well, BiggerPockets can help you put together this team of investors. You can use the forums to find other people that are vendors, like agents, loan officers, contractors or property managers, giving advice to different BP members, and decide who sounds the smartest and the one you like the most. You can also use the agent or the lender finder to find my team as well as other agents in different places that you can vet to decide if they would be a good addition to your core four, that would help you scale your portfolio. After listening to today’s show, you will know exactly what to ask them and what the process should look like to find out if you got a stud or a dud.
All right. Without any further ado, let’s bring in Lindsey and Christian. Christian and Lindsey, welcome to the BiggerPockets Podcast. I kind of got to bring my family with me to the show today. We’re going to get into why this is such an important podcast briefly, because the market has shifted a lot. And if you’re listening to this and you’re wondering why you’re having such a hard time finding deals and putting them into contract, after today’s show, you will not be wondering. But Christian, let’s start with you. Can you explain who you are, what you do, and how we work together?

Christian:
Yeah. I am the man, the myth, the legend, David Greene’s business partner in The One Brokerage, which is our lending branch of the David Greene world. We started the company back in 2021, I wanted to say, been going strong ever since. And yeah, I’m the money guy, the finance guy, right? So, doing everything that we can to make these deals work, communicating effectively with agents, making sure borrowers have the right advice moving forward. And ultimately, trying to close deals.

David:
Thank you. And Lindsey, how do we know each other?

Lindsey:
Hey David. So, I am Lindsey Iskierka, and I am your partner for the Southern California real estate team. So, I head up the real estate sales team here in SoCal, helping investors buy and sell real estate. And I think we started the team, I want to say in April, 2021 or so, and been going strong. Even just in 2023, so far we’ve closed 68 deals, just under 50 million in volume. So, it’s been an interesting, tricky market to navigate, but we’ve done a good job in helping clients get to their goal. And we partner with The One Brokerage on our deals and it all goes smoothly.

David:
Truer words have never been spoken. This is honestly the toughest market I’ve seen in my entire career. I’ve mentioned this before. There is no clear answer out of it and there’s no indication it’s going to change anytime soon. So, you either adapt or you lose. And so, today’s show is all about different ways that the three of us have brainstormed… What’s the word that Rob always says when people come together and they… Workshop. We’ve workshopped different solutions here for what can be done, and we’re going to be sharing that with the audience today. Basically, the problem is that the supply and demand equilibrium is way off. It is a seller’s market. It’s been a seller’s market for a long time, and it’s just becoming more and more of a seller’s market every month it seems like. Sellers are having more leverage even as rates are going up.
I mean, Christian, what was it you were saying to me the other day? How much does somebody have to make to be able to afford a $500,000 house right now with where rates are?

Christian:
I mean, it’s getting there. I mean, especially with other debts and liabilities people have. I mean, you’re getting to start to need multiple hundreds of thousands a year in income to be able to afford a $500,000 house, and we’re talking 200,000, 300,000 with down payment requirements and everything like that. So, we’re a little bit out of whack right now in the balance of sellers and buyers and everything, for sure.

David:
Yeah, Lindsey and I, we were just at Mega Camp in Austin, a Keller Williams event for real estate agents. And Jay Papasan, who we’ve had on the show before, was mentioning that if you take on $50,000 of debt on a vehicle, that could rob you of $200,000 of debt that you’d be able to afford for your house. As rates are starting to slowly climb into these higher tiers, taking on additional debt is becoming more expensive. I mean, it was always foolish to buy a more expensive car than you need and to run up your credit card debt, but the consequences of said foolishness were less when rates were 3%. Now, we’re getting into the 8s sometimes, you’re really feeling poor choices.
So, in this very tough market, every decision that we make is that much more important, and that’s what we’re going to be talking about today. What can your team do, your agent and your lender that are working for you, to help put people into contract easier? Because there’s a lot of buyers that want this inventory. The sellers still have the power and the consequences are higher if you make a bad decision because rates are so high. Lindsey, before we get into some specifics, can you just share what it was like when we were selling houses in 2021 compared to what it’s like now?

Lindsey:
Oh, my goodness. Well, in 2021, the consumers understood the market that we were in. Headlines were saying, “Hey, multiple offers, you got to waive contingencies, offer way over list price.” And homes were so affordable at that time that buyers felt a lot more comfortable writing whatever it takes to get an offer accepted. Now, a lot of agents in that market put their clients at very high risk by waiving inspection contingencies. That’s something we never really did. I never had to waive an inspection contingency to get a client’s offer accepted. So, I think agents just felt like they had nothing else to do, and they didn’t know how else to help their client, where we’re able to protect the client throughout.
The difference is right now in 2023, as we’re recording this, the market’s not behaving like we would anticipate it should, with affordability being much worse. And so as a consumer, if they’re reaching out to us and they want to buy a primary and stop renting or they want to buy a short-term rental or a house hack, they would anticipate that they have better negotiation power, that they have better leverage. But then, I have to be the one to tell them, “Hey, there’s already 11 offers, 27 offers, 14 offers. Here’s what we’re going to have to do.” So, the market’s not behaving in the way that the consumer would expect. So, a realtor and a lender both need to know exactly what’s going on, be immersed in the market, and know the psychology of both buyers and sellers right now, so they can put their client in the best position to get their offer accepted, without putting them at additional risk.

David:
All right, so Lindsey, that was the market before. It’s obviously more challenging now. Do you have a story of an offer gone wrong in a market like the one we’re in now?

Lindsey:
Yes, there’s many. However, I think pertinent into this episode, I want to talk about a time when lender and agent weren’t really communicating, and therefore, the client lost out on the deal. So, a client came to me, referral from a past client, they were already pre-approved. And the lender just didn’t find it beneficial to talk to me, didn’t really see the benefit in strategizing ahead of time before showing the client houses and writing offers. So, I get the client in the contract. And about five days into escrow, the lender calls me and says, “Oh, we can’t actually do this loan.” I said, “Well, why not? We’re way below the pre-approval price.” And he said, “Well, that pre-approval was sent contingent upon the client pays off their car.”
And I said, “Was the client aware of that?” And he said, “Yeah, they should have been.” Client had no idea. And had I been able to have a direct phone number to that lender, had they found it beneficial to talk to me and I can ask questions about the client’s preapproval, I could have dug that out of them, and prevented the client from wasting money on inspections and appraisals and wasting everyone’s time. So, that was a situation that unfortunately the client lost out, and they didn’t end up buying the home after that.

David:
And we’ve seen stories like that and more over the several years that we’ve all been working together. And in today’s episode with the help of Lindsey and Christian, we are going to get into what you as the investor can do at every stage of the buying process to put yourself in a better position, starting with the pre-approval, like Lindsey said. We’re going to explain what could have happened differently there that would’ve avoided that catastrophe. You’ll also learn what not to do as this ace team debunk some common misconceptions along the way.
All right, so let’s start. We’re going to talk about the five steps for getting an offer accepted in today’s very tough market with your lender and your agent on the same team. Christian, let’s start with the pre-approval process. What would you recommend that investors ask their agent and their lender to do together when they’re working on the pre-approval phase?

Christian:
Pre-approval number one, absolutely… Communication is going to be my cheat code answer of every step of the way because if mistakes are made, like Lindsey’s with the car example that she used, communication can fix almost any issue in a negotiation standpoint, whether that’s with the borrower, the realtor, and the loan officer, with each other. So, that’s number one. But other things that I’d recommend, number two, make sure you’re getting a pre-approval, not a prequalification. This is not general knowledge. The differences between those two things. A pre-approval actually underwrites you. Underwrite is just verifying a couple of things. A pre-qualification is you walking into the bank, they ask you how much you make, they ask you what your debts are and they tell you what you can qualify for. There’s not enough information in what you shared with them there for them to tell you that with any amount of confidence, right?
We need to pull bank statements, and pay stubs, and tax returns, and the real estate that you already own, and insurance policies. I can go on for 1,000 years on what I actually need to request from you to make sure that we dot all our Is and cross our Ts. Pre-approving is that process. Pre-qualifying is not. Pre-approving also requires a credit check, whether it be a hard pull or a soft pull. If you went to your lender and they didn’t look at your credit, you did not get pre-approved, your realtor’s not going to have a strong desire to work with you when you’ve been pre-qualified. And obviously, sharing the findings with the realtor, bringing this full circle, and making sure they know not only the purchase price. That’s not the most important thing on a pre-approval. I know that’s what everybody thinks it is.
It’s the terms. It’s how strong are we with the loan? How flexible are we if the appraisal comes back low? How flexible are we with the asset type? Can this person that qualified for a single family go buy a duplex, right? Can they buy a short-term rental? Those are all things that may not be in words on the pre-approval, but need to be in a conversation that the lender has with the realtor before they start going and Lindsey spends all this time going and finding the perfect beautiful house for our client, where it turns out, “Oh, I meant they’re approved for a single family, not a condo. My bad.” We don’t want to end up in that situation, and that’s where the communication makes all the difference.

David:
So, what about a couple examples of this? Can you explain some stories of where realtors don’t understand that a pre-approval on a single family is not the same as a duplex or a condo can be different than a house? Just explain what some of the things that the loan officer has to underwrite for that are different among those asset classes that agents might not know, or maybe the people getting pre-approved might not understand. To them, $400,000 is $400,000, why does it matter what I’m spending it on?

Christian:
Yeah. Yeah, 100%. I mean, I’ll give a standard example of the different in asset types. Let’s say a single family to a triplex, let’s say. There’s different loan limits. Let’s say I did Lindsey’s car lender example. If I just gave the pre-approval to the buyer, I stepped away, never called the agent, never cared. If she got a pre-approval for, let’s call it a million dollar triplex, that’s not a million dollar single family. There’s these things called loan limits that if you’re getting conventional loans, I don’t want to get too far into the weeds, but there’s only a certain amount of financing that we can go up to for a single family, for a duplex, for a triplex and for a quadplex. They’re all different. So, what Lindsey could do if she wasn’t communicating well is take that triplex pre-approval that’s at a million, and go right on a single family property where I would only be able to get her 700,000.
Unless the borrower has 300,000, it’s not happening, right? I mean it’s crazy. And that’s actually my example as well. I kid you not, we have had people do this and it’s happened multiple times where realtor won’t pick up his phone, won’t let us know when we’re writing offers. I can tell you guys, any realtors listening to this, if you can take one thing away from this episode, the strongest thing that you can do is when you go write an offer, call your lender. When you write an offer, call your lender and say, “I’m writing on an $800,000 duplex in this county. What do you think? I know what your preapproval says, but is there anything we need to look out for?” Maybe there’s an HOA, maybe there’s tax assessment. In SoCal, we have these things called Mello-Roos, which is extra payments that you have on your taxes.
Let me know about those things. And not only am I going to give the realtor the answer on that phone call, I’m also going to ask for the listing agent’s contact. Now I’m going to go call the listing agent that’s listing that property and say, “This borrower is a rockstar. We’re going to slam dunk this loan. Lindsey’s a rockstar. I’ve never had a deal fall out of escrow with her for anything in our control, right?” Obviously, if a house under-appraises or something… But we’ve already got an insurance policy selected and quoted. There’s not another choice here. When you guys were talking in the intro here about navigating difficult markets, that’s how we do it. That’s the answer.

David:
So, Lindsey, in your perspective, had you had this conversation with the loan officer before doing all the work of finding the house, negotiating the deal, the client spending money on the inspections and the appraisal, you spending money on gas and time looking into this, you would’ve realized you’re actually not pre-approved to buy a house. If it’s contingent on paying off your car, we need to make sure that there’s enough money in the bank for the down payment, the repairs, the upgrades, the closing costs, and the car note, correct?

Lindsey:
Yeah. So, going back to Christian’s cheat code answer, communication, right? Had that lender been willing to get on the phone with me and talk through this pre-approval… And I’ll add too, it is the agent’s responsibility to ensure that that lender did do a thorough job pre-approving the client.

David:
Oh, that’s good.

Lindsey:
And if they haven’t, they may not know what questions to ask and they need to know, “How deep did you go with the pre-approval? Did you verify assets? Did you verify income and employment? Are there any red flags I need to be aware of? And on top of that, what terms can I put in the offer to make this buyer the strongest buyer possible without putting them at additional risk? Can I shorten the loan contingency period? No? Okay. Can you let me know why? So, I can tell the agent I would love to do this, but I’m not going to, and here’s why.” In very specific situations with lender’s blessing for certain borrowers, we can waive loan contingency and that may result in the client actually saving money on the house because they appear to be more like a cash buyer because we can remove that financing contingency.
But a realtor cannot and should not do that without the blessing in a full conversation with a lender, ensuring that we’re working together on the same team. “If I get them into contract, can you close?” So, the realtor has to take responsibility for that as well and not just think that they need to stay in their lane. That’s not my job. Ultimately, we’re all on the same team trying to serve the client and if deal falls through, no one gets paid. So, let’s work together.

David:
Okay, so I’m looking to buy a house. I heard about Christian and his team got me pre-approved. I heard about Lindsey and I felt really good. You gave me a buyer presentation, you explained the process, and I just got an email that says, “Congratulations, you’re pre-approved. $600,000.” What’s the next thing I do? Should I get my loan officer and my agent on a group call? Should we be in a group email? What do you guys recommend that people do to get everybody on the same page, so that we know where the boundaries are, what’s okay, what’s not okay, what the plan is?

Christian:
Yeah, I mean I think both of those options are good, a group call and a group text. But more importantly, I want to correct one thing because just being pre-approved for 600,000 is not all the information we need from the pre-approval, right? So, that phone call is intended to get that information… I just want everybody to think… If there’s realtors listening to this or people who have bought houses, everything that Lindsey just said there, what asset type, what loan product do we have flexibility in the down payment? When’s the last time you had that conversation on the first day of preapproval with a lender?
So, David, to answer your question, this should be phone call immediately. And the questions that Lindsey just ran through are needing to be what’s asked, right? I mean, “It’s okay 600,000, but for what? Could we change loan products and get that higher? What if we find something for 650? Do you have wiggle room built into your pre-approvals, right? Can we buy down the interest rate if we get some seller credit?” That way, I’m now giving the realtor ammunition to go write this offer in a way that’s competitive, in a way that is going to lead to a win at the end of the day for the borrower. If we know we got to buy this interest rate down, we got to go get credit, or we got to go save some money on an insurance, or we know we can’t take on an HOA, so condos are out of the question.
All these things go into it and that conversation is the only way that information gets passed because I can’t put all this on a pre-approval page. Your pre-approval page has the county, the loan amount, and really, that’s it. It’s not really worth the paper it’s written on. That’s all the information’s there. It doesn’t say if it’s a single family. It doesn’t say if you can’t do an HOA. So, it’s got to be in that conversation. It’s the only way to properly share this information and move forward as a team throughout the negotiating process.

David:
Which is especially important when it’s an incredibly competitive market. When we were in a market, like 2010, where it was just throw spaghetti at the wall, write low offers, see what sticks, you didn’t need to have these conversations because sellers would do whatever it took to sell their house. It’s not like that anymore. It is now incredibly difficult to get your offer accepted. So, let’s sum up some of the things that we think should be talked about in that initial conversation, then we’ll move on to writing the offer.
We’ve mentioned that it should be a single family or a multifamily. What type of asset class? Is it a condo? And if it is, how does that change what the pre-approval amount is? Different asset classes have different lending requirements as well as different expenses that will affect the debt-to-income ratio of the client, and therefore, how much they can borrow. What is the down payment going to be? Are we talking about an FHA loan, a VA loan? Is this a second home? Although those have different criteria that are not wildly different but enough, especially if it’s really close and you want to go another 10 grand higher to get the deal, can you actually do that or would you have to bring the extra cash to close?
And the sustainability rule with the FHA loan. If you’re using an FHA loan specifically to buy multifamily properties, it often sounds, in theory, better than it is in practice. You have to make sure that the property you’re buying can sustain itself, which means that the rents have to be a certain portion of the income. Definitely something an agent wants to know before they go hunting down a triplex for their client to house hack because the lender never explained, “Hey, yeah, they’re using an FHA loan. Make sure that things look this way before you move on.”
Now, let’s get into what I think is maybe the most crucial part, which is writing the offer. So, we are pre-approved, we are ready to rock and roll. Everyone’s on the same page. We find a property that we like and we want to make an offer on, but a bunch of other buyers want that property as well. Not an uncommon scenario in real estate in today’s day and age. Lindsey, let’s start with you. What can our listeners do to make sure that their offer is the one that the seller chooses on a property that’s going to make them massive wealth in the next 30 years?

Lindsey:
Yeah. So, a really important piece of the puzzle that a lot of realtors don’t think about is that you have to call the listing agent. You need to call a listing agent and find out specifically what is a seller looking for? What is most important to the seller? We can’t make assumptions as agents or buyers that we know that it’s highest price and best terms. There might be more to it. Do they need a rent-back? Do they want smooth financing? Do they want a longer escrow? Is there certain things that they’re looking for in an offer that we’ll only find out if I make that phone call? Build a rapport with the agents, flatter them a little bit, get them to tell me all the information about their listing, so that I can take out back to my buyer and say, “Okay, here’s the scoop.”
You can’t just be the kind of realtor that calls them an hour before the offer deadline saying, “What do you got?” And think that the agent’s going to be divulging information to you. You got to build a rapport along the way. So, prior to even showing the house, I call the agent and I say, “Hey, my client is so excited about this house. Let me tell you a little bit about them, this and this,” and talk the buyer up. “We’re also pre-approved with my preferred lender, The One Brokerage. We’ve done dozens of deals together. They have never not closed a deal that they pre-approved a client on. We’re really going to make this smooth as possible for your sellers.”
So, that’s a really important piece of the puzzle that a lot of agents miss. And so, then when we’re writing the offer, it’s really important too that I look at the comparable sales, what our homes are on here selling for. We’re seeing more and more that listing agents are listing houses low, and it should sell for $100,000 over list price. The agent’s not some miracle worker. Market value is 100 grand more and I need to know that and prepare my client for it. And if it’s out of budget, we tell them that right away. If it is within budget still, I tell them, “This is going to generate a lot of activity. We need to come in strong,” and then we get the offer written.

David:
Perfect. So, you’re saying don’t just shotgun email an offer to the sellers and text and say, “Hey, emailed you an offer,” without even making an effort to build rapport, speaking with the listing agent, right?

Lindsey:
Right. So, many agents will send a PDF and say, “See attached. Confirm receipts.” So, we have a real detailed offer template that I use on every offer. It outlines at a glance, which realtors love, what are we offering? So, you don’t have to open up a 26-page document and figure it out what we’re offering. “Here’s what it is. Here’s the terms. Here’s what your seller is going to love.” And then, I highlight, “I got my preferred lender copied here on this email. They’re going to be reaching out to you,” and just making sure they know we’re a cohesive team and it makes the offer stand out and agents really appreciate it.

David:
Yeah, we have a certain list of phrases that are red flags in our world, like, “See attached. Confirm receipt.” Not a good sign.

Christian:
See attached is for sure, 100%.

Lindsey:
Drives me crazy. It drives me crazy.

David:
I would say a listing agent who just says, “Highest and best, highest and best, highest and best,” like a little parrot on the shoulder of a pirate-

Lindsey:
Fire that agent.

David:
… is a great sign you picked the wrong listing agent. Exactly. That they’re supposed to actually be negotiating manually, not automatically. They’re supposed to be making an intentional effort to find the best buyer and get the best price. And because there’s so many bad agents, having a good agent and lender on your team actually gives you an advantage. I mean, it’s not uncommon for us to tell the other agent, “Hey, this is why our offer is best,” and they were too naive to understand it on their own. So, what you’re getting at here, Lindsey, is these are the things you do to make your buyer stand out as the one that really, really, really wants that house.
They’re in the position of leverage. They have all the buyers that want their house. Now, after it goes into contract, that changes and we’ll talk about that. The buyer gets some leverage in most cases, depending on how an offer was written after it’s in contract. But before it goes in contract, the seller’s got all the power, and so you got to play their game. Christian, what are some things that you would recommend that lenders do or loan officers to work with the buyer’s agent, communicating with the listing agent so that the borrower/buyer that we are representing has the best chance of having their offer selected?

Christian:
Yeah, it’s funny. The biggest one that I think of right off the bat is we call it customizing your pre-approval. But in all reality, a lot of lenders across the country are hurting their partner realtor’s negotiation power, and they don’t even know it. And what I mean by that is let’s say I give Lindsey a $600,000 pre-approval. Let’s say during the search, the borrower and Lindsey determine they can find something for 500,000. Cool, perfect. It’s below your pre-approval letter. Realtor feels we’re good, borrower feels we’re good. I know I’m going to qualify because we’re $100,000 below what my pre-approval says. They find the house, they love it. They don’t call me, they write an offer. They write an offer for 500,000, but they submit the $600,000 pre-approval.
Without even knowing it, that’s hurting their negotiation because subconsciously the sellers now know you can go higher. They know you’re pre-approved for more. So, they’re going to take that $600,000 pre-approval and say, “Hey, listing agent, you think we can get 520 out of them? We already know they’re qualified. They can make up the difference because they had a down payment for a $600,000 house, so why don’t we try to get a little bit more out of them?” Versus if they came to me, I can match every single offer to exactly what you’re writing. And even more than that, I call the listing agent. I say, “Hey, I’m just letting you know, we got a little bit of wiggle room. I don’t want you feeling like we’re absolutely borrowing to their absolute cap, but I want you to know that I wrote this pre-approval specifically for your property. I work with this realtor all the time. She’s one of the best that I know in the business. This borrower, I’ve done multiple deals for. They’re very qualified. I can tell you, I’m guaranteeing we’re going to close this loan. This is the terms that we’re going to get ready to rock when you are.”
And just that, I mean I want all the listing agents listening to this to hear when’s the last time you had a phone call same day as the offer from the realtor, from the listing agent, clarifying the structure of the deal? This does happen, it’s just rare. And over a large period of time, these are the offers getting accepted, guys. We know this because we’re doing it. It’s not like we’re putting nobody in a contract. We know the tricks. That would be my guidance on the actual contract offer.

David:
Well, it works because the seller is sitting there saying not only, “How do I get the highest offer?” But, “How do I know who’s going to close?” And Lindsey, I’m curious to get your thoughts on when you’re a listing agent and a buyer’s agent is telling you, “Hey, what do we need to do to put it under contract?” It probably feels a lot like when you’re a single gal and every guy is out there saying, “I’m the guy for you.” They’re going to put their best foot forward in the beginning, but you don’t know what you’re actually going to get once you commit to that person. Are they going to back out? Do they have the resources to back up the claims that they’re making?
How often do we see buyers will say whatever it takes, they’ll go in contract. Then they drop out of contract now that that listing just lost all of its steam that it had, it’s hard to get multiple offers a second time. What are some ways that you use the loan officer as a team to get the listing agent to feel comfortable that our buyer and their borrower is the one that’s going to close?

Lindsey:
Really good question. Of course, I’m thinking of all the ways when we have listings, how we prevent all the things that you just said, right? We try to lock the buyer in as much as possible, and not give them any outs, really, as much as we can. But on the buy side, when we’re leveraging the loan officer and the realtor as a team, have to make sure that the listing agent knows that we have a daily phone call. Sometimes I’ll say, “I’m on the phone every single day with The One Brokerage going over all of our deals to ensure clear and concise communication, that you always know what’s going on. Even if I don’t have an update on the loan, you’re going to get an update every single day because that’s just how we work.”
And making sure that the lender also knows that, “Hey, this listing agent is really going to value communication. They’re going to want to make sure we hit our deadlines. Can you please be on top of it? Let me know what you need from me.” On top of that too, if the lender is having a hard time getting the loan pushed through because the borrower is dragging their feet and getting certain things, I want the lender to tell me, so I can put a little fire under the feet of the borrower saying, “Hey, we can’t help you until you get that stuff back to the lender.” So, that’s how we can really leverage our partnership to move it forward.

David:
What about when the listing agent doesn’t want to tell you how many offers are on the table or what the high price is, because agents don’t trust each other? There’s this weird ego game that gets played between agents a lot of the time. But the loan officer sort of appears like a neutral third party who can step in and get information. Is that a tactic that you’ve ever used to find out where the buyer really needs to be?

Lindsey:
It is, yeah. So, first off, and I’ll just say like, “Hey, you have a great listing. I’m sure you have offers over this price point,” almost like flatter them. “Are we even in the ballpark if I offer this price? Is there a number that your seller is looking for that we can match or exceed? And on top of that, what kind of terms do we need to write?” And if they won’t really tell me a whole lot, because like you said, agents don’t really trust each other or agents have a very blank stare towards other realtors, but if the lender calls, “Where does our borrower need to be to get this into contract? We have some wiggle room to play with. They’re solid. I have it ready to submit into underwriting.”
And sometimes the agent will tell the lender, because most lenders don’t even call the listing agent to begin with, so they’re already caught off guard. So then if the lender asks, “Where does my borrower need to be in order to get this under contract? And let’s help each other here,” the listing agent is caught off guard and they may be more likely to divulge more information to the lender versus another agent.

David:
And especially in a market where it’s incredibly difficult to get your offer accepted. These little extra efforts can be the difference between being the second or third out of 10 and the first out of 10, because like Ricky Bobby said, in the world of real estate, “If you ain’t first, you’re last.” You definitely want to be first.
Okay, so now we have met over the pre-approval. We have gotten the loan officer and the agent working together in tandem to get the offer accepted. We’ve got success. You were the best offer out of all 10. You’ve got the house and contract. Now, we are in the middle of the escrow process. So, now that the offer is accepted because you’re smart and use your team together, how can investors use their lenders to improve the terms of the deal?
Christian, I’ll ask you about this first because you and I have done this together, actually, when I was buying houses using out-of-state agents. You would even contact the listing agent and talk for me because our agent was not as good as we were, right? And we’d come up with a plan where you’d go get information from the other agent that our agent wasn’t able to get, and then we’d go back and tell our agent what should be done. And it was kind of like a puppet, but that’s what was needed to be done because the agent that we were using either didn’t know how or didn’t have the rapport to get the same information. So, what are some ways that lenders can get involved once there is an escrow to get better interest rates for their clients, closing costs covered, even information out of the listing agent that a Lindsey could use to negotiate better terms for the clients?

Christian:
First and foremost, my cheat code answer, communication. Daily updates, right? Daily updates to the buyer’s agent, the listing agent. That just builds good rapport. Maybe then when the time comes for us to ask for some credit for repairs, “Oh man, these guys have been so communicative throughout the process. They’ve been keeping us up to date well. Okay, well, hey, seller, this is a really good offer. These guys are going to close. They need $5,000 credited for repairs.” You’re more likely to get it done when their experience with you has been beneficial up until that point. So, you kind of build up some brownie points. It’s the equivalent of coming home with flowers to your girlfriend every day, and then you come home late one day, you had to stay at work, and she’s like, “Well, he brought me flowers six out of the seven days of the week. I’m going to be nice to him the day he comes home late.”
Same thing. You’re just building up those brownie points and you’re trying to get enough credit so that when you need to use it, you can convert those brownie points into seller credit. But in terms of what I’m specifically asking for, questions that I like to ask are, “Are you worried about the property appraising?” So, that means the seller’s starting to get a feel of where the house might be worth. You can kind of gauge that even pre-contract acceptance to maybe seeing where the offers are at. “Oh yeah, we’ve gotten a couple really high offers.” I can then go back to Lindsey and say, “Hey, they’re over-asking on this.”
Specifically, in contract though, let’s just stay on the trend of the appraiser. If the appraisal comes back high, sometimes it allows us, we’ve used this strategy before, we can up our offer by 5,000 or 10,000 because we know it’s supported by the appraisal, but get 5,000 or 10,000 back. It’s the same net out of pocket to the seller. It’s technically both because the buyer’s not paying any more closing costs. It’s getting credited, but they’re getting lower interest rate. So, that’s where I’m able to come, as the lender, explain, once again as a neutral third party. And explain, “Hey, there’s a way as the seller where your situation doesn’t change, but we can help benefit my buyer just a little bit here. Get them a little bit lower interest rate. It’s going to lead to this deal working just a little bit more smoothly. We won’t have to be up against the cap of our qualifying. Let’s get this done together. Here’s the number that we need. Are you guys willing to do that? I’ve already supported it by the appraisal.”
And we have a lot of success with that, and it saves the borrower 20,000, $30,000 in interest over the course of the loan. That’s the big one that I can think of.

David:
So, let’s talk about the rate stack. For people that don’t understand how interest rates work, a common newbie mistake is to go to a bunch of lenders and say, “What’s your rate? What’s your rate? What’s your rate?” Which just sets them up to be taken advantage of. Christian, if you could explain what the rate stack is and how it works briefly. And then Lindsey, I’ll let you explain how you can negotiate to get credits for the client that can be applied towards getting a better interest rate.

Christian:
Yeah, 100%. Just quick explanation of the rate stack. Everybody just do this in your head with me. If you got every rate from a 5% to a 9% and it’s separated in quarter points, so 5, 5.25, 5.5. And in your mind, just build a table of that going all the way down, like an Excel spreadsheet. On the right-hand side lined up with those rates, so 5% has a cost, let’s say that’s 0, right? So 5%, 0, 5.25 would be a lower cost. So, that would actually give you… When you hear of lender credits, that’s what it is. And what you can do is you can choose to slide up or down on this, what we call rate stack, by either spending more money at closing and getting a lower interest rate.
So, that’s, in our example, if you bought from 5 to 4.5, maybe that may cost $5,000, but your monthly payment’s going to be, I don’t know, $300 cheaper, whatever it is. We’re throwing out random numbers. Or you could take a higher interest rate, and this is something that a lot of loan officers don’t explain that could benefit people in short timeframes of owning property, you take a higher interest rate, but you get a credit and wipe out your closing costs. So, when somebody asks, “What’s your rate?” It depends, right?

David:
But what happens is lenders quote them the lowest rate on the rate stack. Don’t tell them that that rate that they quoted comes with a $35,000 rate buydown cost, and they don’t find that out until they get to the closing table. They don’t have 35 grand, so now their rate goes higher than what somebody else might’ve quoted. This is very common in the mortgage industry, which is why we’re talking about it. But when you understand the way that the inner workings of lending works, you can use them to your advantage. So, Lindsey, that’s a thing that you can explain to a client because you understand both lending and being an agent.
Your husband is a loan officer on The One Brokerage, so you have to hear this nerd talk all day long all the time. Where if the client’s really short on cash, they can get a lender credit and get a higher rate and keeps more money in their pocket that they can use to improve the property, or if they’re going to hold it for a long time, you can go use an inspection report to negotiate credits for the buyer, which can be applied to the interest rate. Again, do you know how to do that if you’re not talking to the loan officer to even know how much it would cost to buy the rate down to each point?

Lindsey:
There’s two opportunities, really, to get the buyer some closing costs credits to potentially use towards buying down their interest rate. The first one is when you first write the offer. If you’re first going to write the offer, not a lot of competition on the property, which we could see into quarter three and quarter four of 2023, we could see some seasonality in some of the demand and multiple, multiple offer situations start to ease up a bit. This might be a thing again. We did this all the time in quarter one and quarter two of 2023, is we got the two-one buydown or the rate buydown paid for by the seller upfront in the offer, but you’re mindful of the seller’s net profit because that’s what they care about the most. So, if it’s going to cost, easy math, $20,000 to buy the interest rate down to a point where the client is comfortable with that and the deal really makes sense for them, could we add in $15,000 to the purchase price?
Because then, the seller is only taking a $5,000 cut, and that might not be a bad offer. They might actually consider that. And you may see this more often where sellers are going to advertise that they will pay towards a rate buydown, but you have to be mindful of the net profit. So, upfront, when we’re writing the offer, we’ll do that. We’ll say, “Okay, $20,000 seller credit towards a rate buydown towards closing costs.” So, that’s when you first write the offer. Then, once we’re in contract, the inspection really is the most powerful tool that we have as leverage to get closing cost credits for clients. If there are certain situations where we find out there’s a foundation issue, right? Foundation is a big, oh no, kind of like the word of doom a lot of times in these deals, but we can use that to our advantage if it’s really not that big of a deal, honestly, if the foundation repair isn’t that massive, but it’s going to freak out a bunch of other buyers should this buyer walk away from the deal.
I’ll use that to my advantage and say, “Hey, Mr. Listing Agent, you are now obligated to disclose this to future buyers if my buyer walks out of the deal, which they very well could. We’re going to need $20,000 to make this repair.” And usually, we’ll have invoices or estimates to prove that and have more leverage in negotiating costs. And we can take things like that… I mean, foundation is an extreme example, but I’m just using it to make a point here. You can use things found in inspections that the seller will now be obligated to disclose to future buyers. If my buyer walks out of the deal and I’ll tell him, “That buyer could ask you for a higher closing cost credit or even a price reduction, why don’t we just do this, sign off on a $20,000 credit to my client, we’ll remove all contingencies, we’ll close next week?”
So, not trying to corner the seller, but really utilizing the fact that, “Now you’re aware of this, Mr. Seller, these issues in the inspection report, my client’s okay with it, but we do need some funds to make these repairs.” And we can allocate that towards closing costs, and usually the client can then decide, “Okay, do I want to use it to bite on the interest rate, make the monthly payment more comfortable, but then also keep some of the funds to make the repairs that we’re talking about?” But it’s all about the agent knowing how to utilize and leverage what’s found in inspection reports and throughout the transaction to negotiate better terms for the client. And clear communication throughout. And again, the certainty that, “If you agree to this, Mr. Seller, we’re going to move contingencies. We’ll close in seven days. Let’s not start this all over again. Let’s just get this closed.”
So, there’s two opportunities, really, that you can leverage getting the most amount of closing cost credits for a buyer to use to probably buy down their interest rate. That’s really what the biggest issue is for clients right now.

David:
Okay, great stuff. So, to recap, talk to your loan officer about what the whole rate stack looks like, and make sure they even understand what that is. And then, have a conversation with your agent about what potential possibilities you have to get the seller to give credits to buy down the rate. Ask about the two-one buy down because it’s basically free money. And have a conversation if contingencies need to be extended so that the loan officer can call the listing agent, and put them at ease if they’re worried that the loan is falling through, because oftentimes, agents lie. But if the lender calls and says, “No, no, no, it’s fine. We’re just waiting on underwriting for these things. I’m expecting it to be resolved within the next five to six days.” You can get that contingency extended much more likely than if the agent is just sort of sending a form to have signed and not explaining what’s going on, or the listing agent doesn’t trust the buyer’s agent.
Okay. Moving on to the fourth stage, which is going to be funding the deal. Is there a role the agent can play here that people might not know about? Lindsey, what is your experience when the deal’s in escrow, you are moving to the finish line, we are waiting on the lender to get clear to close? What can you as an agent do to ensure that that process goes smoothly?

Lindsey:
One of the biggest hiccups as we’re getting near the finish line of a deal is possession of the property. We have to be crystal clear as to when the buyer expects to get keys to the house and when the seller needs to be out of the house. This should be negotiated upfront. If there’s some situations where the seller needs more time as we’re getting closer to funding, you want to make sure two things. One is that the seller is actually preparing to move out. The worst thing is when you’re doing your final walkthrough, which you’re entitled to here in California, within five days of closing, you should be doing a final walkthrough, making sure the house was in the same condition as it was when you wrote the offer. That’s the point of it.
If you notice the seller hasn’t even started packing yet, or there’s an occupant there that’s supposed to be moving out or things like that, that’s a hiccup that needs to be addressed. And we need to communicate that to the lender to make sure they don’t fund the deal without these negotiations and without these hiccups being resolved. That’s one of the biggest hangups as we’re getting close to the finish line. So, the agent needs to be proactive in negotiating possession, not assuming everyone’s going to do what they’re supposed to, or that the listing agent understands that the buyer is entitled to possession day of closing. So, start to work out those details.

David:
We say that often don’t assume best case scenario, that is what amateurs do. They assume everything will go great, and when something goes wrong, they’re shocked. Assume worst-case scenario, plan for everything that could go wrong, and then if it all goes smoothly, you’re pleasantly surprised. But that’s what I look for in the professionals I want to work with. They’re constantly saying, “What are we going to do if something goes wrong?”
Christian, what about when you have a funding hiccup and you’re trying to work on getting clear to close or some condition an underwriter has, you resolve it with the borrower, but nobody tells the real estate agent? Have you seen situations like that, where nobody updates the agent what was done, that there’s actually another three to four days that need to be added onto the timeline, but they don’t get the right paperwork filled out and the borrower’s actually at risk of losing their deposit? What’s your recommendation for how loan officers can keep agents in the loop in those situations?

Christian:
I mean, I hate to just sound like a broken record over and over, but it’s-

David:
Communication.

Christian:
… communicate.

David:
I knew it.

Christian:
Yeah, I know over and over. But I mean literally something for something as simple as, “Hey, we’re clear to close. Hey, just letting you know we’ve cleared underwriting. I just want to let you guys know I’m going to reach out to the borrower. I’m going to be scheduling the notary. Lindsey, when is time of possession? Is there a seller rent-back in place? Is there a tenant that’s going to be vacating? Even though we’re ready to close early here, is the day that you want to keep closing on for peace of mind of the seller or whatever situation’s going on?” Because I can structure that. I can make sure our funding day is going to take place on the right day.
Where do they want to sign? It’s a question that not a lot of people ask. They just assume the seller’s going to figure it out, right? Like, “Hey, is there a place that your borrower would want to sign? Do you want to be there with them? Do you want attend closing with them? Do you have a showing assistant that wants to attend closing with them just to be there to answer questions? Do you care about that? I can structure all of those things. Let me know. I can send you where the date and time is of signing.” So I mean, there’s a million things that can come up, of course. I am not going to be able to hit every example, but communication is just the trump card that allows you to knock out anything that happens, just a phone call.

Lindsey:
Agents need to be aware that they’re not sitting on the sidelines during this time. Just because it’s between the escrow and title company and the lender, the agent needs to be proactive in making sure people are moving this thing forward. If we’re behind in closing, put a little fire under escrow and title to make these resolutions and keep communication open with the lender. Our job is to make sure people are moving things forward. We can’t take a backseat and say, “Well, not my problem. That’s not my job.” No, it is your job to make sure people are moving things forward. So, the agent really needs to make sure they’re taking a proactive role in facilitating the funding, recording, closing, possession. Can’t just assume it’s lender and title escrow’s job to get that done. The client is looking to you, the agent, really, to hold their hand through this process. So, we can’t be passive in that process.

Christian:
Yeah, I mean, even something as simple as like you’re on the funding date and the borrower’s going to go to Ashley Home Furniture and get a furniture credit card, or they’re going to go get a new… Whatever you’re furnishing your house with. They’re going to go open up a really large line of credit. In the event the lender hasn’t fully underwritten yet and they haven’t announced clear to close, that could mess you up. Our lender that we’re getting your mortgage with could see your new line of credit and could ask, “Hey, what are you doing? What’d you buy?” And if you just went and bought 20 grand to furniture, that could kill your loan. So, if I was making sure to get ahead of that and the agent was knowledgeable and letting them know, “Hey, close first, then furniture, because if the furniture presents the house, where are you going to put it?”

David:
But no one tells the clients about this. They don’t realize that they weren’t supposed to go buy a new car to put in their new garage or open a line of credit at a furnishing store.

Lindsey:
I was just going to say.

David:
Yeah, Lindsey’s seen this before.

Lindsey:
Don’t buy a Tesla for your new garage.

Christian:
We’ve literally had it happen. Oh, my gosh.

Lindsey:
Yes, we have.

David:
Yep. Or even a HELOC on an existing home that you didn’t have before is a new line of credit that affects your DTI.

Lindsey:
That’s something going back to even the pre-approval stage, right? Hey, if the buyer gets excited and goes and opens a line of credit with Living Spaces or Target and makes a big order, it’s going to kill the deal. So, we need to know how close the borrower is to potentially losing the deal. So, we can know that upfront and remind them throughout the transaction, “Don’t get excited. I know you want to buy the furniture, but just wait until closing to open any line of credits or have any hard inquiries on your report.”

David:
Now we know communication is important, yet it frequently doesn’t happen. So, Christian, can you just give a brief explanation of the system that we’ve created so that loan officers, processors, real estate agents, pretty much everybody working on the transaction can be in the same location, communicating with each other easily and quickly?

Christian:
So, internally speaking, we have apps that allow us to never have to make phone calls internally. That means the loan officer never has to wait for an email or a phone call back from their processor, right? They’re in voice channels all day. It’s actually up on my side monitor here as we record this podcast. In terms of our real estate team communicating with our loan officer team, if you guys are in California, you work with the David Greene team as your realtor, and The One Brokerage is your lender. We have a daily meeting every day of the month. 10:30, whatever it is, Lindsey, whatever the time is, at 10:30 every morning we are on a 15 to 30 minute call breaking down every contract that we have in escrow. Breaking down updates, where they are in underwriting, where they are in closing, where they’re on funding. All these five steps that we just went through, we talk about that without having to make a phone call every day.
On top of that, we’ve built a process of seven touchpoints throughout the process of escrow, where the loan officer is required to make a phone call to the realtor. This is even if you’re not on the DGT team. This is what we do with every single realtor that we work with. I can go through those seven real quick. Intro call, first point of contact, pre-approval call, in contract, underwriting conditions, appraisal back, funding and recording. Seven times where it is mandatory. No situation where we don’t make those calls when each of those seven milestones passes in the loan process. That’s mainly because that’s when the negotiation possibilities are there. For instance, when the appraisal comes back, that’s when the updates that, “Hey, you went and bought the wrong type of house,” happens. That’s in the event of a duplex instead of a multifamily that we talked about earlier. So, those have to be had, but that’s the systems we have as The One Brokerage.

David:
And remember, if your loan officer and your agent are not communicating this way, the onus is on you, as the buyer, to put everyone together and then just make better choices on the next deal with who you have representing you.
All right, moving into closing. People might not normally think about this last phase, the fifth one, but what about after closing? Lindsey, is there anything investors can lean on their agents and their lenders for help with once they’ve closed?

Lindsey:
Yeah, so once we’re closed, I mean our communication is not done with the client, right? It’s still continuing. I want to make sure if things gone smoothly with them moving in, if they’re doing renovations and value adds, I’m here to help them with references and vendors and resources. I love to see progress of the renovation. And also consult with the client, “Where are you going to get the best return? If you update this versus update this, where should your money be spent if you are going to improve the property?” So working with them through that, keeping them up to speed about what their property is worth after closing is really important as well.
In Southern California we have great appreciation, and so it really helps the client to feel at ease with what they bought the property at if they find out six months later that they’ve got 80 grand in equity, which is not uncommon here. So, there’s that. And then, also just making sure that they’re connecting with the lender if it makes sense for them to refinance. “Have you saved enough money? Now we can get you that short-term rental. How do you want to scale your portfolio? Who can I introduce you to?” They’re part of our family once we close and communication doesn’t end there.

David:
Christian, what about you? Post-closing what are some things that the loan officers should be communicating with the client about?

Christian:
Yeah, absolutely. I like to call it something kind of silly. I call it a save the date, but I call it a save the rate. So, on a buyer, I’ll usually put a rate in their file. The buyers don’t see it, but we do it in our CRM, where we’ll put a rate where it makes sense for them to refinance. Whether that’s saving 500 bucks a month, 1,000 a month, whatever the metric is that we’re analyzing based on their purchase, we’ll set a save the rate. And what we do is that we have a log of months and months and months, and years of clients that we’ve done loans for that we have saved the rates for.
We track the market, just because of what we do, when the market unavoidably hits whatever that rate is again, we’ll reach out and say, “Hey, we’ve already done the math for you. We can shave off 500 bucks in your mortgage. Would that help you cash a little bit more on this house hack? Would that help you be a little more successful in this short-term rental? Would it just help you save money on your primary?” Whatever they bought, obviously. But that’s a big one, just helping the borrowers stay up to date with the state of the industry without them having to be on mortgagenewsdaily.com tracking rates, because nobody does that. Like you said, David, it’s nerd stuff, right? Nobody does that in their day-to-day life.
And then, second of all, if they’re working on a BRRRR, a loan is two steps of the BRRRR process. It’s the buy and the refi, right? So, we need to follow up and make sure, “Hey, how did your renovation go? When are we good to order an appraisal on the new property that you’ve renovated? And ultimately, when do you want to get this refinance open?” Because typically, BRRRRs are done with hard money upfront. So, let’s get you out of that. So, just follow up. Once again, communication. But making sure that they have the services and education that they need even after they close is equally as important to before they close.

David:
Because it’s all about building a portfolio, not closing a deal.

Christian:
Correct.

David:
That’s the idea here, right? So, if you’re in this for the long haul, you want your agent to be reaching out and saying, “Hey, your house is worth X. What’s the cashflow like on that? What headaches are you having? Do you think you might want to redeploy that capital into something that could perform better for you, or might see more appreciation?” We talk a lot about the different ways people make money in real estate on our team. I’m working on a book about that right now. And two of the big ways are buying equity and forcing equity. Could you sell this property that may be tapped out and buy into a market that could be growing in the future at a really good price, and then add value to it somehow?
And as far as your loan officer, you should be staying in touch with them. Rates could be dropping, new programs could be coming out. I can’t tell you how many clients we’ve had that assumed they could not buy a house because they didn’t have 20% or 25% to put down, that assumed that their debt-to-income ratio wouldn’t work for buying a house. And then we found DSCR products that were 30-year fixed-rate terms where they could go buy real estate. They just didn’t know it because they had talked to the wrong lender. So, I think it’s very important you stay in touch with your lender and your agent, communicate your goals for the portfolio you want to build and make them work to figure out how to help you. That’s the most healthy relationship between the professionals that should be helping you build your portfolio and yourself. Works much better than when you go tell them, “Hey, this is what I think I need,” when you don’t know as much about the industry as they do, because they work in it every single day, at least they should be.
All right. Thank you guys for sharing such good information. As you’ve seen, you got to be better and better and work harder and harder to make deals work in this environment. But I think the wins are even bigger for the clients when you do. Getting a property closed, rented, in your portfolio and being paid off over time is more important than ever because it’s getting harder and harder to buy real estate, and that’s the dirty truth that nobody wants to talk about. Lindsey, are there any last thoughts that you want to share before we let you get out of here?

Lindsey:
Yeah, I think if I can give advice to listeners out there, make sure the agent that you choose understands what you’re trying to accomplish. I think that’s a big piece of the puzzle here. When they come to us and David Greene Team SoCal, I have house hacked, I have long-term rentals, I have short-term rentals. You get to benefit from the mistakes that I’ve made as an investor. And I look at this like a fellow investor, not just a realtor. So, you need to make sure whoever is helping you, that they get what you’re trying to accomplish and that they have your best interests at heart. They’re not chasing transactions and make sure that you feel like they really can guide you through this process, I think that’s a huge determinant of your success here.

David:
Wonderful. And for people that want to reach out to you specifically to see what you could do to help them, guide them through their process, wherever they may be, what’s the best way to get ahold of you?

Lindsey:
Yeah. So, they can reach me on Instagram. I’m @LindseyIskierkaRealtor, or they can email me at socal@davidgreene, with an E, 24.com.

David:
Perfect. And if you can’t find Lindsey’s Instagram because of her last name, DM me and I’ll get you connected. And you said the email was [email protected]?

Lindsey:
That’s correct.

David:
Beautiful. Christian, what about you? Any wrap up thoughts that you want to share for advice that our listeners can benefit from when they’re trying to scale their portfolio?

Christian:
Yeah, in the same way that Lindsey shared she’s experienced the hiccups that come from being an investor, right? You can learn from her experience as a house hacker, as a short-term renter, as a long-term rental investor. We do David Greene’s loans. And if I have not learned something from lending to you, I don’t know what to tell everybody. If I can close a loan for David Greene, nobody is a challenge.

David:
That’s funny. I’m the diva of loans. I hate how high maintenance I am. But Christian has frequently said, “If it wasn’t you, I would never take this on. I would never do this for anybody else.”

Christian:
100%.

David:
Yeah. But thank you for that. And something, Christian, that you say that I think should be shared quite often is that you want a lender who’s helping you achieve your goals, not just a one stop, “Hey, what’s your rate? What can you do?” You want someone who’s like, “Hey, I’ve got all of these products and all of these strategies and all of these resources that can help. You having a hard time finding cashflow? We have 160 other clients that have found properties that cashflow in different areas. I can put you in touch with somebody over there. Are you stuck getting something put in contract? We can help overcome that.” You definitely want to find people on your team that care about your goals, that only make money when you win. And if they can help you win, they can make a life for themselves.
So, thank you two both for being here. Appreciate you coming on and sharing things, especially in this really tough market. Oh, Christian, where can people find out more about you?

Christian:
First and foremost, on BiggerPockets Mortgage Mondays on the YouTube channel. Every Monday we got a little 15-minute episode where David and I talk nerd. So, go check that out if you like the mortgage segment of this. Otherwise, on social media, I’m @The_One_Broker, underscores in between. Or you can find us at theonebrokerage.com, which is our website where you could get in touch with us as well.

David:
Thanks both. Really glad we had you here. And if you like this type of content, a couple other BiggerPockets episodes for you to go check out. Look up BiggerPockets Podcast episode 805 for agents from two cash-flowing markets, or podcast 817 for two agents who really came through for their investor clients. We at BiggerPockets are here to help you grow in knowledge, build your portfolio and do it the right way. So, we really appreciate your views and your downloads. Thanks so much. If you don’t mind, give us a comment on YouTube, tell us what you thought about the show. And leave us a review wherever you listen to your podcasts. This is David Greene for Lindsey and Christian, I’ll see you on the next one.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



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Equity Prime Mortgage (EPM), which shifted to the TPO business after exiting its retail channel in the fall, has embarked on a new chapter. EPM wants to help grow the industry’s wholesale channel through its newly launched broker recruiting website.

BLVR – a marketing and promotional campaign launched by EPM on Monday – aims to reach as many retail loan officers to provide information about the wholesale channel.

When retail loan originators visit the website, LOs are asked to fill out their names, contact information and comments or questions about wholesale lending.

A third-party call center agent of BLVR will reach out to the loan officer for a follow-up and potentially connect the LO with another broker to explore business options in the wholesale channel.

“They can continue the conversation [with another broker] to the point where they make the decision to stay in retail or move over to the light side of the force,” Phil Mancuso, president and chief investment officer of EPM, said in an interview with HousingWire

“As folks come into the funnel, we just push it through a call center and out to the brokers (…) There are no strings attached. If EPM happens to get one of those loans down the line, great, even better. We believe that we will earn business if the pie is bigger.” Mancuso explained. 

The goal is to bring more than 4,000 loan officers to the wholesale channel over the next 12 months, EPM said. 

The BLVR website gives retail loan officers a glimpse of the opportunities in wholesale origination, Mancuso added. 

With mortgage rates having sharply risen since 2022, loan officers who have already made the jump to wholesale say they have an advantage in being able to shop around for lower rates. 

Not having to bake in overhead costs found in the retail channel is a key advantage, wholesale lenders say.

About 16.8% of first-lien mortgage originations last quarter came from the broker channel, correspondent lending took up 26.8% and retail consisted of 56.5% of total volume, according to data from Inside Mortgage Finance (IMF). 

That’s a jump in the broker (13.9%) and correspondent (24.1%) channels while a drop in retail origination(62%) in Q2 2022. 

“The broker portion of the industry is less than it was pre-financial crisis. Yet, brokers have never been more competitive. The offering had never been more compelling. We’re pretty adamant, as others are about the future of this segment of our business (wholesale lending),” Mancuso said. 



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Real estate investment trust Rithm Capital Corp has entered into a definitive agreement to acquire Computershare Mortgage Services Inc. for about $720 million, the companies announced Monday. The deal includes the purchase of Specialized Loan Servicing LLC.  

The deal represents the second major acquisition that New York-based Rithm, which operates NewRezCaliber and other businesses, has announced in the past three months. In July, the company struck a deal to acquire Sculptor Capital Management Inc. for $639 million, leading to a dispute among the shareholders at the asset management firm.  

Rithm’s deal with Computershare will add a mortgage servicing rights (MSR) portfolio of about $136 billion in unpaid principal balance (UPB) to the company. It includes $85 billion in third-party servicing and the Specialized Loan Servicing’s MSR portfolio.

“Our track record of acquisitions in the mortgage servicing space continues to deliver value not only for our shareholders but also for the millions of consumers we serve,” Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement. 

Rithm expects to conclude the acquisition in the first half of 2024. 

Following the deal’s closing, Specialized Loan Servicing portfolio and operations will be under Newrez, the 8th largest U.S. mortgage lender in the first six months of 2023, with a production of $17 billion in loans, per Inside Mortgage Finance data.  

Newrez was also the fifth largest company in owned mortgage servicing in the second quarter, with a $540 billion MSR portfolio. Computershare Loan Services was No. 36, with $53 billion in total, according to the IMF data. 

Rithm intends to use a mix of existing cash, available liquidity on the balance sheet and additional MSR financing to close the Computershare deal. 

Rithm had 1.8 billion of total cash and liquidity to support its acquisitions at the end of the second quarter. From April to June, Rithm delivered a $357.4 million GAAP net income — higher than the $68.9 million the prior quarter.  

So far this year, the company has also invested $145 million to purchase $1.4 billion of consumer loans from Goldman Sachs and purchased 371 newly built single-family rental properties from Lennar.    



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Mortgage companies raising debt in the current high mortgage rates landscape is a sign that market conditions are improving, although a recovery from the downturn may come later than expected, analysts told HousingWire

Executives have decided to improve liquidity to fund their businesses and investments, targeting mortgage servicing rights (MSRs) deals. And recent transactions show that there’s an appetite among investors for debt in the mortgage space.

With the equity market unattractive at this point, issuing debt is the ideal option to raise capital for public and private businesses. Companies are issuing mainly unsecured debt, which has no collateral, to elevate their share in the balance sheet.

Freedom Mortgage and PennyMac Mortgage Investment Trust have recently moved to raise money through debt offerings, but analysts said other mortgage companies may follow suit. 

“With rates going up last year, spreads increasing very dramatically and nonbank mortgage companies facing difficulties, the debt market shut down,” Warren Kornfeld, senior vice president of the financial institutions group at Moody’s Investors Service, said. 

However, things are different this year, Kornfeld said.

“With profitability starting to improve – and it looks like we have at least hit the bottom with respect to profitability – the markets opened up. The fears that investors had as to how much damage this downturn would have on companies have abated.”

Eric Hagen, managing director and mortgage analyst at BTIG, said that some companies are raising debt because they see an opportunity to grow ahead. However, it could be a defensive tactic to improve liquidity in other cases.

“Liquidity and generating cash are core components of the business. And so it makes sense to us that, even though interest rates are very high, there could be some demand for mortgage companies to raise capital in the debt markets,” Hagen said.   

Investors have an appetite 

In September, Freedom Mortgage raised $1.3 billion in about 24 hours. The volume was above the $1 billion expected in June when the company announced the offering, reflecting an oversubscribed deal. 

The company issued two tranches: the first tranche, of $800 million, is due in October 2028 with a 12% coupon, and the second tranche, of $500 million, is due in October 2030 with a 12.25% coupon. The use of funds is retiring about $1 billion of unsecured debt maturing between 2024 and 2025. The remainder will be used for market-growth opportunities. 

“Due to the overwhelming investor demand, the company accepted more capital than it had originally set out to raise. These proceeds will enable the company to extend its debt maturities and to continue to invest in opportunities to service more loans,” a spokesperson at Freedom wrote to HousingWire. 

Meanwhile, Pennymac Mortgage Investment Trust announced on Sept. 18 that it priced an underwritten public offering of $50 million of its 8.50% senior notes due 2028. The notes are fully and unconditionally guaranteed on a senior unsecured basis by Pennymac Corp., an indirect wholly-owned subsidiary of the company. 

The company intends to use the proceeds to fund its business and investments. It includes acquiring mortgage servicing rights (MSRs) and supporting its correspondent lending business, such as purchasing agency-eligible mortgages. The REIT also plans to repay other indebtedness, such as 5.50% exchangeable notes due in 2024.  

Pennymac declined to comment on this story. 

Piper Sandler & Co., Janney Montgomery Scott LLC and Ladenburg Thalmann & Co. Inc. served as joint book-running managers for the offering.  

Outlook for new offerings

The debt issued by mortgage companies during the COVID-19 pandemic years with a maturity of five or six years and low-interest rates may reach maturity soon. But that’s not a red flag so far.

Data compiled by BTIG shows that 10 lenders have $4 billion in unsecured debt with maturity in 2024 and 2025, only around 10% of the total is due next year, which is not alarming.

The data includes Mr. Cooper Group, Finance of America, Freedom Mortgage, Home Point Capital, loanDepot, Rithm Capital, Ocwen, Pennymac Financial Services, Rocket Companies and UWM Holdings Corp

“On the one hand, the Freedom case shows us that there’s demand [for mortgage companies debt], but maybe it’s limited. One of the things that we’re focused on is the debt maturity schedule of that $4 billion, which is spread out over the years. If a whole bunch of debt were rolling over next year, that would be more concerning,” Hagen said.   

Mortgage companies may face higher costs to issue debt due to the surging rates environment, pressuring their financials. However, the decision to issue unsecured debt now can improve their liquidity and provide financial flexibility. 

“The reason that we think some of that debt, which does have a lower coupon, is being retired or could be retired is just to manage the liquidity on the balance sheet,” Hagen said.

He continued: “The question we’ve been getting is: What do the returns look like in the business when you’re at that level of rates? Needless to say, it’s lower than it was before. But at the same time, when they were raising debt at 6%, that was just very low.”

Regarding the market outlook for these companies, Kornfeld said, “With the rise up in mortgage rates – the 1% increase we’ve seen over the last three or four months – instead of Q3 profitability being equal to Q2 and maybe being a little bit better, Q3 is likely going to be a little bit worse than Q2.” 

“We then thought that 2024 would be way better than 2023. But we still won’t get back to an average long-term profitability for these companies, which is about a 2.5% to 3% return on assets [basically net income to the balance sheet]. Maybe we’ll be back a little under that, about 1.5% to 2%. 2024 will still be better than 2023, but likely only modestly,” Kornfeld said.  



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Finding off-market real estate deals can be a great way to kick off your investing career, as it requires very little money to get started. The catch? You must be willing to get your hands dirty.

Welcome back to the Real Estate Rookie podcast! Today, we’re chatting with real estate wholesaler Nate Robbins. After a long and successful career in banking, Nate was beginning to feel burnt out and frustrated with life. As fate would have it, he ran into Tarl Yarber—one of the most successful real estate investors in the Pacific Northwest. Under Tarl’s mentorship, Nate learned the ropes of real estate investing. With his strong people skills, natural ability to communicate, and infectious personality, he was able to carve out a niche in acquisitions—where he has been able to close off-market deals at a massive profit.

If you need real estate to be your escape rope from the monotony of your nine-to-five, this episode is for you! Nate talks about shedding the W2 mentality and how to find the best investing strategy for you. He also shares his step-by-step process for finding highly profitable off-market deals. Whether you’re a bubbly extrovert or a cautious introvert, Nate will equip you with practical tips on how to engage a seller and get your foot in the door!

Ashley:
This is Real Estate Rookie Episode 326.

Nate:
As soon as I say cold calling, most people just kind of shut down. “I’m never going to do that, I can’t do that.” I promise you, you can. With your skill level, with your own unique personality, you absolutely can do this. But I think it’s a matter of managing your expectations, and I think that’s where a lot of people get gummed up. So I’ll tell you what I say and what I do, and then maybe we could dive a little bit deeper on this.

Ashley:
My name is Ashley Kehr, and I’m here with my co-host Tony J Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast, where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And rookies, do we have an episode for you guys today? If you have ever thought to yourself, “Where can I find really good deals? How can I do that with the least amount of money possible?” Nate Robbins, our guest for today, is going to answer that question for you. Now, Nate’s a friend of both Ashley and I, he’s one of the biggest characters I think I know in the world of real estate investing. He’s always got a smile on his face, always making people laugh. But don’t let his kind of boyish charm fool you, Nate is an absolute beast when it comes to finding good off market deals.

Ashley:
You know what? That’s so funny because that exactly describes [inaudible 00:01:14] his boyish charm. And yeah, so we bring Nate on today and we talk about how he actually got started in real estate, gives you a little background of that. And it was a very unique situation, and how he took advantage of this opportunity presented to him.
Then we’re going to go into how to source a deal, how to find a deal. And Nate will walk you through the two different paths as to how he finds addresses or gets the houses that he wants to go after. And we break down exactly what you should say on the phone, exactly what you should do when you’re at a seller appointment, step-by-step instructions. As you’re listening to this, I want you to write down notes of what Nate is going to say. And kind of develop your own plan to follow this along, and just try it out.
Pick up the phone, make a phone call, go door knocking, but Nate does a really great job of describing in detail a step-by-step list for you to go and do exactly what he’s doing.
Nate Robbins, welcome to the Real Estate Rookie Podcast.

Nate:
It’s the honor of my life, I love you guys. And your audience doesn’t know how lucky they are to have you in their lives.

Ashley:
Well, thank you, that was a very nice compliment. But today we are here to shower you with love and admiration on your real estate investing journey. So Nate, why don’t you start off telling everyone a little bit about yourself, and then how you got started in real estate.

Nate:
Yeah, so back in 2016, I was working for a bank. I’d been working at a bank for about five years, I was a private client banker. And I’ll be honest, I really should not be where I am today. There’s just no logical reason way that I am where I am today. And so I was working at the bank back in 2016, and I was actually hitting kind of a midlife crisis. I was very frustrated with my work, frustrated with life. And I got off a very frustrating phone call with a client and I hung up, and I just see this random guy standing in the lobby. And not wanting to make any more phone calls, I just get up out of my desk. I wasn’t necessarily supposed to pull the clients from the lobby. Walked over to this guy and I said, “Hey man, how can I help you?” And he goes, “Well, I need to open a business account.” And I was like, “No problem, I can help with that.”
And so I brought him over to my desk, [inaudible 00:03:47] chatting with this guy and I’m like, “Dude, you’re a really cool guy. What do you do?” And he goes, “Well, I’m in real estate.” I was like, “Oh, that’s cool, I’ve always been interested in real estate.” And I bought Carleton Sheets when I was 18, trying to… Your audience wouldn’t even know who Carleton Sheets is.

Ashley:
I don’t know who that is.

Tony:
You don’t know Carleton Sheets, Ashley?

Ashley:
No, no.

Tony:
So I don’t know, I was a really weird kid, I would stay up late during the summer months. And late at night when you don’t have really good cable packages, all you see is infomercials.

Ashley:
Mm-hmm.

Tony:
And every single night Carleton Sheets had an infomercial running for this at-home kind of package that taught you how to buy real estate with no money down.

Nate:
Yeah.

Tony:
Anyway, he was one of the big real estate info marketers back in the day.

Nate:
He’s the original guru kind of thing, he sold the program and then he’d get you in your loop and he’d sell you more programs and stuff. And so yeah, it’s kind of funny. Hey, actually Tony, if you want, I’ll send you the tapes, you could listen to him again if you want.

Tony:
My dad actually had a copy, I was in his garage a decade ago and found [inaudible 00:04:51] and Sheets’ tapes also.

Nate:
It actually has some pretty good stuff in it. It’s pretty basic, but it’s really good stuff. And I’m like, “Oh, okay, cool.” Yeah, it’s nice, but-

Ashley:
Okay Nate, you don’t need to give us your affiliate link now, back to you.

Nate:
So I’ve actually signed up, but-

Ashley:
Sign up under me.

Nate:
Yeah. I can promote my Amway business also? So anyway, that one conversation with that business account ended up being a conversation with who you guys know, Tarl Yarber. I don’t know if your audience would know who he is, but was one of the most successful real estate flippers up here in the Seattle Pacific Northwest market. And so he’s like, “Well, hey, let’s grab coffee and a lunch.” And so that turned into about a two or three month conversation. And then after about three months, he said, “Hey, I’m willing to offer you a 90-day contract to come work with me.” And so I had to make the choice of, do I stay at a safe job at the bank? Or do I take a chance on a 90-day contract to go and maybe succeed or fail at real estate? And so thankfully, the fear of not knowing what would happen was greater than the fear of being safe or the need for security. And so I took the chance and it’s been an absolute wild, wild ride ever since.

Ashley:
In that moment when you were looking at, okay, 90 days, what happens after 90 days? Are you the type of person that’s like, “Worst case scenario, this is what I can do.” Did you think you could go back to your other job? Maybe if somebody listening is given that same opportunity, what’s your advice on ways that they can take that chance and kind of shift their mindset to leaping into something that may only be 90 days and not continue on?

Nate:
Yeah. Well, I got to the point, and again, I was kind of in a existential crisis a little bit in my life. And so I got to a place… Because it was a big deal, I was on a fairly successful track with my job, I had a plan, a 10-year plan. And I got to the point of saying, or I had this image of saying, “Well, I’m on my deathbed.” It was kind of future casting. I’m on my deathbed, I’m always going to wonder what if? And the fear of… I had to see, I had to know what if? What if it did succeed? What if I did make it? What if this was my chance? And I had to know even if I failed. And so I kind of hedged my bets where I left gracefully, I left kind of on an extended timeline to help my manager out. So I knew that I could always come back if I failed, but I had to know.
And so I think sometimes it’s easy to play it safe, but on your deathbed when you’re dying and you’re about to take your last breath, are you going to be glad you took the chance? Or are you going to be glad you played it safe? And I think most people… And I’m sure you guys see a lot of these same motivational things. Most people on their deathbed when they interview these people on their last moments, it’s not taking the chance, it’s not taking the risk and taking the opportunity. And so for me, I had to see what happened down this path. And yeah, I would encourage other people too, it’s man, take the chance, see what happens.

Tony:
Nate, I just want to ask, you’re talking about taking this chance, but you worked in a bank, but were you in the mortgage department? Did you have any type of real estate experience prior taking this big bet on yourself I guess?

Nate:
No, none.

Ashley:
So why would Tarl want you? What were the things that you thought… What did he see? Besides how handsome you are, what are some other qualities that he looked for?

Nate:
Have you seen this hair?

Tony:
I was just about to say, man, and how perfectly quaffed that [inaudible 00:08:56].

Nate:
It’s almost as good as yours, Tony. It’s almost as good. Yeah, well, I think obviously, I have a real hard time talking to people. I don’t have any kind of personality and I stutter a lot. So those were some of the hindrances I had, but I think I owe a lot to Tarl for where I am at today. And I think what he saw… And he’s very good at this as well, when he sees potential in somebody, he’s really open to taking a chance on that person. And so I think it was probably pretty obvious that I was miserable, and I think from our conversations together he saw somebody that was really miserable, had a lot more potential and was stuck in a place that wasn’t that great for him.
And so Tarl saw that in me, and I think just doing what I do because my strong suit really is building relationships with people, it’s communicating, it’s getting to know somebody, it’s building rapport. And so my job within the bank was as a private client banker, so I was dealing with high net worth clients. I had no real estate background, I really didn’t have anything as far as real estate was concerned to bring to the table. But my personality, my ability to communicate and talk to people, that really I think is what kind of opened the door for me to work with Tarl.

Tony:
Nate, just I want to go back really quickly to something that you mentioned about the whole laying on your deathbed thing. And I think there’s a lot of value and you used a phrase future casting in that way. And there’s a book I’m reading right now, it’s called The Good Life, and it’s by two doctors, Robert Waldinger and Marc Schulz. But basically it was this longitudinal study where they followed hundreds of people over multiple decades. From the time they were 18 until they were in their 80s, and they passed away. And they even followed on with their kids and their grandchildren. So just crazy amount of data and it just goes into hey, what are the key factors of actually living a good life based on this really long comprehensive study? And a lot of it was kind of tied into what you said about taking some of those risks. And kind of surrounding yourself with people that you really get energy from. As opposed to being in an environment where you’ve got a bunch of energy vampires that are kind of pulling life out of you.
So I just wanted to plug that book, I’m 30% through it, I’ve already really enjoyed it. But The Good Life by Robert Waldinger and Marc Schulz, if you guys are looking for a good read on that.

Nate:
Yeah, I think you bring up a very interesting point that I’m still learning. And I think at least in my life, there’s a tipping point where I’ll be in a situation or I’ll be in a job, well, not a job anymore, but I’ll be in a situation where it no longer feels life-giving, it’s an energy drain on me. And I think it’s very challenging to want to pursue safety and security over having the integrity to say, “Hey, this is no longer really helping me, it’s killing me.” And trying to make active changes. Because the reality is we’re not trees, we can move, we can make changes, and we can make those things, right? So when you realize that those things are starting to happen to you, maybe it’s a relationship, maybe it’s a job, maybe it’s something, you have the ability to make changes to improve that situation and find that vein of, “Hey, this is giving me life, this is now exciting, this is good for me, this is getting me to where I need to go.”
So just being aware of that, and I’m still learning that as well, but okay, now I need a change, let’s start working that.

Tony:
One more plug, because I said the word book. And anytime we say the word book on this podcast, Ashley and I now have to plug the Real Estate Partnerships book with Ashley and I co-authored. If you head over to biggerpockets.com/partnerships, you guys can pick up a copy of that book. But now anytime the word book or partnership is mentioned on this podcast, we have to plug the Real Estate Partnerships book.

Nate:
Okay, well, we’re going to plug that a couple more times then.

Ashley:
Pretty soon anytime the word real estate is said, I’m plugging it. So tell me, Nate, what kind of investing do you like to do?

Nate:
Well, actually after that whole thing with Tarl, I don’t actually do real estate anymore.

Ashley:
Oh, real estate, so we have this [inaudible 00:13:14]. Let’s talk about when you made that transition. You’re leaving your bank job and you’re going to work for Tarl, what were some of the things that you were doing for this job? What was the actual position?

Nate:
So this is a little bit funny, and I’ll do the [inaudible 00:13:31]. Tarl, when he hired me he was looking to replicate himself. He wanted to kind of get a step away from the business, run the business and just replicate himself. And we could probably talk about this as well, but I left the bank with a very much of W2 mentality. And Tarl was looking for somebody with more of a independent, I’m going to go figure this out and get it done. So the first two weeks I’m just sitting in the car with him like, “All right man, tell me what to do. I have no idea anything about anything, just tell me what to do.” And after about a month of that, he was starting to get pretty frustrated. And so if you talk to him ever, you’ll find out I was on my way to getting fired actually. And then we went to a Jocko Conference down in San Diego and that reframed some of his thinking, and so anyway, I got a second chance.
But what was apparent is that my strong suit and my skillset wasn’t really around the detailed operations of managing a project. Now, I can do that, but I wasn’t the skill match for Tarl. And so what it became apparent is that I’m much more stronger suited or my skillset is really in building relationships and that type of thing. And so the role that I kind of fell into or I kind of got more focused on was acquisitions. So networking with wholesalers, going direct to seller and that kind of the wholesale aspect of the business. And so just again, kind of Tarl realizing, “Hey, you’re better suited over here, not what I originally planned. So let’s move you over here and get you kind of in a better role.” And so that was kind of how I kind of fell into this whole acquisitions, door knocking, cold calling, deal finding, all that kind of good stuff.

Ashley:
That is such a real thing, the W2 mentality. And it’s also part of who you are too as far as your DiSC profile and things like that as to how you perceive the world. But being you just want to be told how to do something and you can master it instead of having to figure it out. And then there’s other people that want to figure it out and can figure it out. But that was something I struggled with too with one of my business partners, he came from the W2 world. And everything was handed to him as to, “Here’s what you have to do.” And he would just go and do it. And then it was on to the next thing of [inaudible 00:15:57] what you had to do. And there was never really a lot of decision making or even scheduling yourself or any kind of task management because everything was just given right to you.
And I think making that transition is really hard. Honestly, I think it took him a year. Now he oversees all of the maintenance for my property management company. And it is boom, boom, boom, everything is just done, he just takes action on it. But if he was doing that a year and a half ago, I literally would’ve had to sit down with him, “Okay, here’s this work order, this is what you have to do. Now let’s schedule it for this day and this time. Now go ahead and text her, tell her you’re going to be here at this time this day.”

Nate:
Yeah.

Ashley:
But now he can just go and figure it out, but that is such a big thing. So what are some of the things that you did to kind of get out of that? Because I feel you obviously haven’t stayed stuck in that W2 mentality. I can seriously doubt Tarl is still telling you exactly what to do every day.

Nate:
Well, it’s actually funny because now I’d say about 8, 12 months ago, we’ve kind of stopped doing real estate up here in the Pacific Northwest. So we work together on other aspects of that, and so if I did have any W2 mentality a year ago, it’s definitely gone now because it’s now 100% dependent on me, right? And so I’m looking, I’m trying to think back to my mentality on this kind of stuff, and I think it’s when you really, really want it bad enough, you will figure it out. People want the easy road, they want the easy five steps to make a million dollars. And that information exists except for… What did I see? Hold on, I have to read this quote today. And I posted this, right? It was like, “Building a real estate business is simple, knowing what to do is simple. Executing on what to do is hard, being consistent is hard, delayed gratification is hard, being persistent is hard.”
And so I think it’s just one of these things that it’s not wrong to have a W2 mentality, but it can be hard to succeed. And so you have to have this mentality of, “I am going to succeed, I’m not going to quit. I want this and I’m not going to wait for somebody else to come kind of spoonfeed me. I have to go get it and I’m going to go get it.” And so I don’t know if that was clear, but that’s kind my thought process on that.

Tony:
You kind of said it yourself that no one’s going to spoonfeed you, you have to go get it, Nate. So once you and Tarl had that realization of the detailed operational management isn’t kind of speaking to your natural genius, it’s more so the relationship side. What did that onboarding experience look like? How did you figure out what you should be doing every day? Or what was the effective way to go out? And just even I guess just taking them one step back, if you can first just define kind of what your new goal was after you guys have kind of decided, “Okay, here’s the role for Nate.” What was the end result you were looking for? And then how did you go about teaching yourself how to do that?

Nate:
Yeah, so one of the advantage… Now, I have to be very clear, I had an extreme advantage working with someone like Tarl, because it gave me a lot of things. It gave me access to a lot of high level people that normally a lot of people starting out don’t get, so that was an advantage. He put me in the room with a lot of very successful guys that I could pick their brain and kind of learn from their systems and stuff like that. And so that was a huge advantage. I think with social media and things like that, people today, even if you’re starting out, you can still kind of get the help that you need, but it was really nice having that kind of thing.
Now, the thing that was a challenge was that there was no onboarding process. There was no “Hey, this is how you wholesale.” It was more like, “Hey, go talk to this person and figure it out.” And so even though I had these connections, I made a lot of stupid mistakes. Which we could talk about if you want, because I’m sure your audience would love to hear about dumb things that happened, but I know I do.

Ashley:
I would love to hear about what that process has turned into for you because that was part of a lot of value that you bring. And you’ve helped me a ton with this, is how to actually talk to people to sell their property, and what those kind of processes are. So do you want to start from the very beginning of how you’re even finding a house, how you’re then finding the seller and kind of go from there?

Nate:
Well, first off, Tony, did I answer your question? Did I get to that?

Tony:
Yeah.

Nate:
Okay.

Tony:
I think the only other thing I’d add is just the goal of what it is, right? Tarl brought you in because he had a business of flipping homes. And in order to profitably flip homes, you have to buy properties at a discount in comparison to what you’ll be able to sell them for. So if I’m hearing you correctly, Nate, the role that you were then slotted to fill was to help Tarl find those undervalued properties. Am I hearing that correctly?

Nate:
Correct. And that came through, it could be a number of different ways like networking with other wholesalers myself doing that, agents. It was just I just need to bring in, I think it was about two to three deals a month is what I needed to bring in to the business.

Ashley:
Okay, let’s start with that of how are you even finding the deals you’re bringing them in? I want to create a step-by-step process so everyone listening can go ahead and write this down, make their own little checklist and kind of do exactly what you do, because you are so great at it. So first thing, how to find houses, go ahead.

Nate:
Yeah, well, thank you for that kind word. I will say there’s two tracks, right? There’s the people… And we could go deep on this if you want because this is where I’m probably most passionate about. You have the people that don’t have a lot of disposable income, and they’re going to have to bootstrap it. And they’re just going to have to get after it until they can make some additional income. And so on that vein, so we have the, “I have to just get after it.” Because they don’t have a lot of capital invest. There’s a couple of things that I would say. Number one, is I would download the Driving For Dollars App. And if people aren’t familiar with Driving For Dollars, it’s basically where you drive around neighborhoods and you’re looking for dilapidated houses, tarps on the roof, boarded up windows, overgrown lawns, vacant houses, missing power meters, things like that.
And so if you don’t have a lot of money to invest, and there’s other apps that can do this, I just prefer… because I’m friends with Tucker Merrihew. I don’t get any kickbacks from this, although, Tucker you should sponsor me. But I would download the Driving For Dollars App, and then over a weekend I would drive around median priced houses in a neighborhood that you’re relatively familiar with or a town or a city you’re familiar with. And I would drive up and down every single street and I would create a list of at least a thousand houses over a weekend. And so if you live in a place like Portland, you could do that in a couple of hours.

Ashley:
So what are you looking for when you’re looking at these properties? What was some of your kind of criteria?

Nate:
So I kind of mentioned before, if the house is vacant, if you’ve got boards on the windows, if you’ve got tarps on the roof, if it’s overgrown and with a bunch of vacant nasty cars in the thing, any signs of distress really. With this one, sometimes you can be a little bit liberal on it, you just have no idea who’s willing to have a conversation, but any signs of distress. Pro-tip, actually drive down the alleys. I don’t know in most cities, but ours, we have kind of back alleys that drive between two streets of houses. Sometimes that gives you a different perspective where the house looks good on the front, and you go down the alley and all of a sudden there’s a, “Oh, this is absolutely really bad.” So you can mark the house down, but any signs of distress, just mark it down.
And so what the Driving For Dollars App will allow you to do is you can just drive with the map open or the app open. You can drop a pin on the house and you can just kind of track your progress on what streets you’re going up and down. And I would just continue to build that list. Ideally, you want to build that list of 5, 7, 10,000, depending on your market and depending on how hard you want to go.

Tony:
Just one clarifying question.

Nate:
Mm-hmm.

Tony:
So Nate, I want to give some context to the rookies that are listening because you just said you want to get this list to not 500, but 5 or 10,000. First, how much time do you think it would take for someone to get to a list of that size, Driving For Dollars? And just like cumulatively, how much time do they have to spend driving? And then why does the list need to be so big? Because I think some people have this misconception around the volume that you need to be able to source markets off deals. So how much time? And why that volume?

Nate:
So I would say a couple of things on that. Number one, you don’t have to have 5 to 10,000 to start. If you were a brand new person, if one of your listeners is a brand new person, sat in front of me. And they’re like, “I want to get my very first deal.” I would say, “Download this app, and then go create a list of 200. Start with 200, and tell me your top 20 worst houses that you found, that are vacant. For sure there’s nobody in there and they’re really, really bad.” And so I would start, you don’t have to have that number, but if you’re going to build a business and actually grow this to continually source off market stuff, basically you want a larger list. And the reason you want that is… And I’ve seen this a lot with a lot of newer people, is that they’ll find 100 houses, and they’ll market to that, but they won’t get any calls.
Well, your section of people, it’s too small. And you just need a larger group to actually try and generate consistent leads. And so if you have 5, 6, 10,000 houses that you’re marketing to, well, then the deals will start… you’re going to get more deals that way, essentially.

Tony:
And I think just one thing to call out is that sellers’ timelines don’t always match with when you’re marketing to them. And this is, I kid you guys not, when I first started investing in real estate back in, I think it was summer of 2019. I sent out a bunch of mailers to Shreveport, Louisiana, where I was investing at the time. I got a call last week from someone on one of those mailers and he said, “Hey, I wasn’t ready to sell when I got your mailer, but I’m ready to sell today.” That was almost four and a half, five years ago that I sent those mailers out and someone’s calling me today. So I think it just goes to show that you’ve got to start planting those seeds, and then over time they all start to kind of sprout up.

Ashley:
Tony, are we going to have another story about another house in Louisiana?

Tony:
No, I didn’t even call them back. I didn’t even call them back, I’m not going back there.

Nate:
Give me the lead, I’ll deal with it. I got you.

Ashley:
Yeah, yeah, give it to [inaudible 00:26:53]. So as far as, okay, you have your list, you have the property address, right?

Nate:
Yep.

Ashley:
Are you finding other information? What’s happening once you’ve started to build this list of addresses?

Nate:
Yeah, so what I would say, again, if you have no money and you’re bootstrapping it and you’re just starting out. What I’d say is once you get to 200, I’d start taking action. Now, the Driving For Dollars App, and I know there’s other apps that will… DealMachine I think is one other one, they’ll give you a little bit of the seller’s information. Seller data is probably one of the most challenging aspects of off-market stuff, because you’re not always getting the right stuff. Most skip tracing services are probably 70% accurate. And so I probably spend a little bit too much on this, but I have three other programs that I pay every month to have access to.
And so yeah, these would be the ones I use. And you don’t have to spend all this money on these, but if you’re going to do this longterm it might be worth it. I have Whitepages, and I think that’s 60 bucks a quarter, so 20 bucks a month, I think. REISkip, you pay per skip on that one, so you put in 50 bucks and then it’ll last you until you’re done.

Ashley:
Nate, what’s a skip?

Nate:
Oh.

Tony:
Yeah.

Ashley:
You pay per skip, what’s a skip?

Nate:
Oh, good question. So basically Whitepages… let me give you this and I’ll explain all that. So I’ve used Whitepages, REISkip and People Finder PRO, and then Driving For Dollars. And so what this does is this allows you to look up the homeowner’s information, and get a bunch of emails, phone numbers and potentially mailing addresses. And so between the Driving For Dollars App, Whitepages, REISkip and People Finder PRO, I generally can find a phone number for the seller. And so if you were again, sitting in front of me, I’d say, “Once you have a list of 200, you have your top 20 worst ones. I would not think about it too much, look up, even get a piece of paper out, write it down, your seller leads, write down all their phone numbers, and then just pick up the phone and you call.”

Tony:
So you mentioned a few pieces of software, but you didn’t mention PropStream. Which I feel is a super popular one for a lot of wholesalers that I know. Is there a reason why you’re not using that software?

Nate:
I use PropStream when I’m pulling lists and stuff like that.

Tony:
Mm-hmm.

Nate:
So I do use PropStream, there’s nothing against it, it’s just for the initial find on things… I have nothing against PropStream, I use them. This is just kind of how I kind of started, and I’ve just kind of got stuck in my ways. And so this is not the only way. This is not the only way.

Tony:
Yeah.

Ashley:
Okay, so now you’ve got your list. So you gave us the example of Driving For Dollars, and actually looking at the properties. But then you mentioned sometimes you do use PropStream to actually pull lists without doing the Driving For Dollars. So when you go into PropStream, they have the filters. So what are some of the filters that you are using to kind of find the properties for you?

Nate:
Okay, so I think if I were to break this down in my mind, and maybe for your listeners, I would say that if you have a little bit of money to invest in pulling a list and hiring a professional company, then I might use PropStream. And then there’s two thoughts within this. One, you can do just try and get the cream of the crop off the top of a market. And then you can really dive in deep and then try and stack your lists. And so what that means is if you find multiple pain points on a property, that’s going to give you a better chance of maybe having a conversation, maybe having them want to sell. So what do I mean by that? I mean that if you have a house that’s vacant, that’s out of state owned, they have a code violation and they’re tax delinquent, right? Let’s imagine those are all the problems. And you can filter for that on PropStream.
Basically that seems like a great motivation for somebody that doesn’t live there, it’s vacant, it’s got problems, it’s got taxes backing up. That seems like it’d be a great motivation, so you can spend the money to then pull these lists, stack them together, and then you can call them. But that’s going to cost you a little bit of money. Or if you want to do, I’m doing some general marketing, trying to see if I can pull some easy stuff off the top of a market. So I’m actually just starting this down in Arizona, is I just pulled a tired landlord list, right? So right now just with everything, I just pulled a list and that’s an actual subtitle on PropStream. And so you can just go down from the suggested list.
Yeah, it’s just tired landlords, and so I pulled the area that I wanted to be in. And I just pulled that list, it was about 5,000. And so then I sent it over to my skip tracing company, which I just got a new one. And then I sent it over to my marketing people and we’re now marketing to that, so we’ll see what happens. Did that make sense, kind of the two thoughts there? You can go just general kind of broad spectrum over a market, or you can go real deep on a market and by stacking lists and stacking pain points.

Tony:
And I also just want to shout out, right? So as an alternative to PropStream with some of the data that Nate’s called out here. BiggerPockets also has a partnership with Invelo, that’s I-N-V-E-L-O. And Invelo also allows you to pull a lot of that kind of owner data that you’ll get from some of these other sources.

Ashley:
As a pro member, you get a $50 credit. So if you are already a pro member, go and spend that $50. And if you’re not a pro member, you can sign up at biggerpockets.com/pro

Nate:
Sweet.

Ashley:
So Nate, okay, you have your list created, you went and you either were Driving For Dollars and got some addresses, or you were going on your software and looking up properties. So now that you have your list together of addresses and now you’ve used your tools like Whitepages, things like that to find the phone numbers of the people who may own this property. When you make the call, what do you say?

Nate:
Ooh. Now, again, I’m going to preface this with saying, I’m very comfortable doing this. When I was a kid, just to give you a backstory, it’s funny how things kind of come full circle. I mowed lawns to make a living, and to make money my junior high and high school days. And so I would literally door knock people and go do this. I’m like, “Here, I’m door knocking again, it’s like I can’t get away from it.”
So this is something that I’m very comfortable doing. And something that I think everybody can do, but I think it’s a matter of managing your expectations, and I think that’s where a lot of people get gummed up. So I’ll tell you what I say and what I do, and then maybe we could dive a little bit deeper on this because as soon as I say cold calling, most people just shut down, or door knocking, shut down. “Oh, I’m never going to do that, I can’t do that.” I promise you, you can. And with your skillset, with your skill level, with your own unique personality, you absolutely can do this.

Ashley:
Real quick, part of the reason we are doing this episode today is because Nate flew out to Buffalo to visit me. And we’re driving from getting chai tea, and he sees the house with papers in the window like it might be vacant, whatever.

Nate:
Signs.

Ashley:
Pulls it up, finds a relative of the person that died in that house, and they’re five minutes from my house. And he is like, “I’m going to drive over there and knock on their door, see if they want to sell it.” I was like, “Okay, you and Daryl go, I going to just stay here. I don’t want to go do that, that makes me scared and nervous.” So part of this episode that we’re having is for me to become better at cold calling, cold knocking-

Nate:
Yeah, cool.

Ashley:
… door knocking.

Nate:
Next time I come out you’ll come with, you’ll be fine.

Ashley:
I’ll have to do it, yeah. He’ll wait in the car and make me go.

Nate:
And she was the nicest lady. So I think honestly, and we could talk about some resources and books that’ll help people with this, but I keep it very, very simple. So when I’m cold calling and we could role play. Who wants to role play?

Ashley:
Go ahead, Tony.

Tony:
Yeah, I’ll be the landlord here.

Nate:
Okay, cool. So let me just preface this and say that the only objective that I have for this very first call is going to be, “Are you open to an offer?” That’s the only thing I need to figure out. One of the pitfalls that I see with people is that sometimes they’ll see a vacant house and they’ll begin to fantasize about how amazing this house is, all the money that I’m going to make when they… And then they find out that they’re not even wanting to sell, that you can’t find a good working number. And so you begin to get way down the road. All you need to do for this very first conversation is just figure out, “Are you open to an offer?” All right. So this is how the conversation would go, and then we can kind of break it down. So ring, ring.

Tony:
Hello.

Nate:
Hi, is Tony there?

Tony:
Yeah, who is this?

Nate:
Tony, hey, yeah, my name is Nate Robbins, I’m really sorry to call you out of the blue like this. The reason for the call is I’m in the process of trying to buy a house here in Tacoma, and I noticed your house over on Main Street. It is probably a long shot, but-

Tony:
Look, I get calls like this all day. How did you get my phone number?

Nate:
You know what, Tony? I totally get that. I’m sorry, it is kind of a random call like this. So basically I drove by your house over on Main Street, homeowner information is public record. I use a program called Whitepages, it was actually a book when I was a kid. And I just looked up your own information and thought I’d give you a call. [inaudible 00:36:15] old school like that, I’d rather talk to you face-to-face, versus just sending you a letter. And so I don’t know, I’m just curious if there’s any chance you might be open to considering an offer on the house.

Tony:
Well, I get calls like this all day, Nate, so what’s your number?

Nate:
You know what? That’s a great question. Well, Tony, I’ve only ever driven past the house one time and I’m assuming you’re probably like me. I’ve been on the receiving end of low ball offers, and low ball offers are very offensive to me, and I don’t want to do that to you. And so I don’t actually have enough information to really make you a fair offer. So it sounds like you might be open to actually looking at an offer if it was a fair price.

Tony:
Yeah, I think I’d be open to that.

Nate:
Okay. Yeah, great. Well, how I make sure… I’d like to ask you a couple of quick questions right now if I can have 30 seconds. And then what I’d really like to do is then find a time to actually walk the property. I’d love to actually meet you in person, so you know I’m a real person. But would it be possible to walk it maybe this Friday? Are you going to be around?

Tony:
Yeah. All right, that’s pretty good, Nate. I feel like I threw some curveballs at you, man, and you handled those pretty well.

Nate:
Yeah, [inaudible 00:37:24] I’ve done this before.

Tony:
Because I’ve done a very, very few cold calls before trying to source my own deals. And it’s always like, “Who are you? How’d you get my number? I don’t want a low ball offer, the property’s perfect.” But you’ve kind of got a way to handle all of those objections it sounds like.

Nate:
So I don’t know if there’s a best way to do this, I have a couple of things I could give your audience. Number one, I can give you my script, which is I’m happy to do. And then I also have a worksheet that has… really, there’s six objections you are going to encounter if you cold call or door knock. And one of those is, how’d you get my number? What’s your offer? There’s some basic ones you’re going to come in contact quite a bit.

Ashley:
Okay. Yeah, Nate, we can put those into the show notes, it’ll be at biggerpockets.com/blog/rookie-326. Or you can also send Nate a DM on Instagram, and I’m sure you give him your phone number and your address, so he can cold call you, he would definitely give you a script.

Nate:
Yeah. Well, before we go too far on this, I would say you might get a seller that’s like Tony. They’ll just immediately, “What are you doing?” Or you are going to get people that are getting a lot of calls or getting a lot of mail, you will do that. Most people, however, if you are normal on the phone, are very normal. And so there’s a couple key things. Number one, again, managing your expectations like, “I’m only there to see if you’re open to an offer, if not, no big deal.” And this goes back to our original point of saying, why do you have 5,000 houses on your list? Or even if you have 500, right? It doesn’t matter if you tell me, no. It doesn’t matter because I have 499 other people I got to call. So you have that kind of thing, but when you call though, you have seven seconds to get to this line. And Ashley’s heard me talk about this before and she’s posted about it, is the reason for the call, right? You have to get to that, because you’re calling these people out of the blue.
And once you get to that line, it kind of allows you to get past their wall, right? It gets you kind of behind their immediate rejection. “Hi Mr. Seller, my name’s Nate, sorry to call you out of the blue. The reason for the call is I’m trying to buy a house, I’m trying to buy a rental.” Whatever your motivation or your goal is for your investing. And then, “I’m just curious if you’re open to an offer.” Again, yes or no. And then you might have to handle a couple of objections, which is totally fine. And I play off the, “Well, how’d you get my information?” I play it off like it’s no big deal. It’s no big deal, this is not a big deal.
“Oh, I looked it up, homeowner information’s public record.” “Cool, cool.” And then I always make a joke about Whitepages used to be a book. I’m like, “Oh, back when I was a kid, it was a book. Now it’s online, I just looked you up.” And then I just give that reason, then I don’t know if you noticed what I did is I immediately went on to say, “Do you think you might be open to considering an offer?” It’s almost like you just went past it, I didn’t even care. You do care, but you’re just kind of scooting past it, right? If that makes sense.

Tony:
Mm-hmm.

Nate:
And then he might bring up another objection. “Well, let’s just talk about it.” And then, “Okay, so it sounds like you might be open to an offer.” So you’re just kind of pushing the conversation forward. And then basically if they say, “Yes, yeah, I’d be open to an offer.” “Hey Mr. Seller, my process is because I don’t want to offend you with a low ball offer. I don’t want to offend you.” Most people don’t want to be offended. “Let me walk the house so I can make sure I make a fair offer.” And then that allows you to then kind of go to the next step of actually creating a good offer. And then if you’re going to wholesale it, if you’re going to buy it yourself, it allows you to put accurate numbers together to make the deal happen. So if they say yes, then I’m shooting for the appointment, I want to see the house.

Ashley:
So are you trying to set the appointment right then and there on that phone call too?

Nate:
Absolutely, no and yes.

Ashley:
Okay.

Nate:
Yeah, if they said no, I might toy with them a little bit, but if they say yes, I’m going to say, “Hey, cool, great.” I’m going to ask them a couple of questions about the house to sound like I’m intelligent, like I know what I’m doing.

Ashley:
Well, can you give us a couple of those questions?

Nate:
I’ll give [inaudible 00:41:41]. Yeah, no, no, no, no. I’m gatekeeping that one. No, but it’s, “Hey, have you made any repairs on the property in the last five years?” “Great, okay.” “How much do you owe on the property?” “Cool.” If they say free and clear, that allows me to think of some, “Oh, maybe there’s a creative option.” “If the right offer came across the table, what would be your ideal timeline? Do you want to sell it?” Because some people are like, “I need to [inaudible 00:42:08] this in two weeks.” Some people are like, “Oh, I have six months.” “Okay, cool.” That allows you to kind of gauge what’s important to them. And I always throw this one in. Now, some people are not going to be very comfortable doing this, but I always try and do it. I’m going to say, “Hey, do you have an ideal price range? It sounds like you’ve had…”
So if Tony, we got past all the objections, and we’re having a conversation, I would say, “So Tony, it sounds like you’ve been approached quite a bit. Do you have an ideal price in mind for what you’d like to get for the property?” And I kind of throw it out super casual, just to see if I can get a number from them. Or if they’re like, “Oh no, I haven’t really thought about it.” And I was like, “okay, cool, but have you thought of maybe a range of where you need to be?” And I try and get a range, because if they’re like, “Oh, well, I need $500 million.” Well, I’m like, “Is that for real?” Because I can always make a joke about it, like, “Hey, listen, I totally would give that to you, but my money people, they don’t let me make that decision, I have to back up my offer.”
But if they’re adamant, like, “Give me $5 million or I’m never selling.” And the most that these houses are selling for are half a million dollars. Okay, “Hey, Mr. Seller, we’re probably not on the same page. I’d love to put a real offer together if you’re serious, but if you’re really stuck at $5 million, I’m not going to be the guy for you.” And sometimes you can break past that by just saying that, but sometimes it’s that’s their number, they’re so sick of people reaching out. “Okay, thank you for your time, have a good day.” And I move on.

Tony:
Nate, so once you kind of go through the conversation and say you find… I guess first let me just ask one clarifying question. How many conversations do you typically need to have to book one appointment? Do you have a ballpark that people-

Nate:
Yes, great question. And this is again, kind of even setting expectations in your mind. I’m not going to speak for anybody else, I’ll speak for myself. There’s been times where I’ve found a house, and I fall in love with this house. It’s so nasty, it’s so vacant, it’s so… hell, my heart-

Ashley:
Smelly.

Nate:
Smelly, you can smell it from the street. And you start thinking about how amazing this deal’s going to be. And then nothing comes of it, right? You can’t find the seller, or they’re not going to sell, whatever reason. In your mind, this is the statistic, based on your skill level, it could be better or worse. But what you need to have in your mind is for every 100 contacts you make, actual conversations, it could be a [inaudible 00:44:36], it could be via email, whatever. For every 100 contacts, you should get one deal. So it kind of translates a hundred contacts, maybe you get 10 appointments, one deal, something like that. That’s not an exact science, but that will help you kind of break down the daily activity that you should have to do to try and get a deal.
So again, if you were sitting in front of me and we were having a conversation, I would say, “You have a list of 200, okay? You’re going to call these people, you’re going to make 100 contacts, 10 appointments, one deal.” That means to break it down super simple, you have to make five contacts every single day, Monday through Friday. You don’t even have to work the weekends, right? Five contacts, Monday through Friday, that should equate to one deal. Now that’s going to depend some on your skill level and different things like that. But I would expect that you would have one deal in the pipeline, one deal under contract, one deal ready to go. Now, if you want two deals a month, well, maybe you need to make 200 contacts in a month. So on and so forth, right?

Tony:
Nate, how are you keeping track of this communication with these sellers? Are you using a CRM? Or are you just kind of keeping track of it in a Google spreadsheet? Or just are you [inaudible 00:45:51] and just it’s all in your mind? How are you keeping track of it there?

Nate:
No, if you know me at all, it’s not safe in here, I’ll forget. Let’s just say there’s been a number of times where I’ve written down something on a paper, and then I found that paper months later and I was like, “Oh, I forgot to put that in Podio, and then I missed that deal.” So for me to manage my deal flow, I’m using Podio for my CRM, so…

Ashley:
What are some other ones that people can use too?

Nate:
Okay, look, if you’re super cheap, just use Google Sheets, something, write it down. What do they say? A short pencil is better than a long memory. So the idea is to write it down and track it. And then the other thing that I have to do for me is because I am a visual person. And so what I’ll do is as soon as I’m done with a seller call, if I have an appointment or a follow-up, I put it in my calendar in my phone so that it comes up like, hey, make sure to follow up with Mr. Smith. Follow up with Tony, he can meet on Friday at 3 o’clock. And so I immediately put that in my calendar, then I’ll put my notes in Podio. And then also track it through there, but yeah, I know there’s a bunch of different ones out there, but Podio is just the one I kind of fell into early on and I’m stuck with it, so…

Ashley:
Okay, cool. And kind of to wrap all of this up, when you do go to the showing, what are some of the most important pieces of information you want at the showing?

Nate:
Yeah, so whether you’re going to wholesale the property or whether you’re going to do it for yourself. And this is something that Tarl… one of the major lessons that I learned. And so even if you’re flipping houses and you’re listening to this, when I show up to the property, my several objectives, one of them being is that I will take 80 to 120 photos of the property. So I will do wide angle photos, I’ll start from the street, and I’ll walk all the way around the property. Then I’ll start at the front door, walk left to right throughout the house. And I’m getting detailed photos of the entire thing. And then I’m taking pictures of the quality of the roof, the water heater, the electrical panel. If I can sneak in the foundation, I’ll take pictures under there. I’m not crawling under there, but I’ll at least take pictures underneath.
I’m paying attention to noting if there’s slants on certain parts of the house. I’ll get under the sinks and take pictures of the plumbing, any of these big ticket items. And so this allows you to do two things. One of the biggest frustrations, because I worked with a lot of wholesalers. One of the biggest frustrations I had as someone trying to buy properties from wholesalers is they would send me three pictures of the house and an address. I’m like, “Hey, do you want this house?” “I don’t know, maybe.” But if you were to, I’ll tell you this right now, you’ll be the rockstar wholesaler in your market if you send a hundred photos.

Ashley:
Not even for wholesaling though, Nate, even just for your own information to put together an accurate offer, to put together your scope of work. And estimate what your rehab is going to be.

Nate:
Yes.

Ashley:
[inaudible 00:49:11] you can go back and you look at the pictures, you can look at the video instead of having to remember like, “Wait, how many windows were on the house now? I think there was two in the front, two in the back.” I’m like, “Okay, well, I’m going to need 10 windows. Here’s what my cost will be.”

Nate:
Exactly, exactly. So two points, so I’ll say, so a typical wholesale package for me is a hundred photos. I’ll sketch a very basic floor plan, I’ll put in some comps and I’ll put in the stats of the property and I’ll send it out. I’m like, “Hey, here’s what I’m thinking. Here’s the major list of things you’re going to have to do.” I don’t necessarily price that out, I have an idea of how much that’ll cost, but everybody’s prices are different. And so I send a package together. And so if you do that for wholesaling a property, man, you’re going to be light years ahead, you’ll get you faster answers as well.
And then to your point, Ashley, is a lot of times I’d be walking these properties for us to buy them. And so it allowed us to do a better scope of work. Or if you’re new and you’re like, “Hey, I don’t even know what this is going to cost.” If you have 150 or 80 to 120 really good photos, you could go to a contractor and say, “Hey, I’ll give you a hundred bucks. Can you sit down with me and tell me how much this is going to cost to do all this stuff?” And it’s going to allow you then to kind of put your scope of work together. It’s very easy, especially if you’re doing a lot of appointments and you’re getting houses mixed up. “Was the electrical panel good on that one?” Or, “Where is…” Oh, man, it’s really easy to get mixed up. So taking that and that allows you then to be more effective if you’re going to buy it as well.
Because the last thing you want to do is, “Oh, hey Mr. Seller, can I meet you at the property again?” And sometimes they’re cool with it, sometimes not, but that allows you to do that a little bit more effectively.

Tony:
Well, Nate, such a wealth of information brother, and I always love when we can deep dive a topic like this because not only is it instructional for the rookie audience, but I feel like Ashley and I always learn a lot when we kind of go through these deep dives as well, man. So I appreciate you pouring into the rookie audience. Before we let you go, got to pick your brain just a tad bit more, and I want to take us to the rookie request line. So for all of our rookies that are listening, if you want to get your question featured on the podcast, head over to biggerpockets.com/reply and we just might use your question for the episode. So Nate, are you ready for today’s rookie reply?

Nate:
I’m so ready.

Tony:
All right, so today’s question comes from Steven Cobb. Steven says, “Hey, I’m in the Dallas, Texas area. I’ve been out Driving For Dollars, and I have a list of about 30 or 40 houses. I’ve already looked up owners and numbers on the county website. Question, when I call the owners, how will I know how much I should offer them? I don’t even know the bedroom square footage of the property or what needs to be repaired. How can I run comps to come up with an ARV so that I know what number to offer even though I don’t have all of this info?” So Nate, what would your advice be to Steven?

Nate:
Steven, great question. Two things. One, Drive For Dollars more, get a bigger list. Two, to answer your question, this is why I always set the appointment. So there’s some things you can do, you can look up the basic square footage, bed, bath count, garage, lot size of a property. And then you can run comps generally on that, you can get a general idea of a range of maybe what that property’s worth. But you’re not going to be effective, I would say, as effective without going and walking the property. So it sounds like you have the hesitation of like, “Well, what do I offer?” Well, do you have enough information? And so that’s why when I call, if they’re open to an offer, I want to then set the appointment. So then I can go and walk the property, take my a 100 photos or so, and then go back and run a proper analysis.
You can do a rough range based on the stats, but I would say set the appointment, walk the property, dial back your expectations. Be like, “Hey, Mr. Seller, I don’t have enough information to make you a fair offer, right? So how I avoid making a low ball offer and offending you is I want to walk the property. Let me walk it, let’s do that, meet you, say hi, and then give me 24 to 48 hours and I’ll get you an offer then.”

Ashley:
Nate, thank you so much for all of your information today and taking the time to come on the episode. I know you’re sick of me and Tony all the time, so I greatly appreciate you taking the time to do this.

Nate:
No, I’m coming to the BiggerPockets Conference just to hang out with you guys.

Ashley:
Well, Tony won’t be there, but-

Nate:
Tony.

Ashley:
He’s having his baby.

Tony:
I’m MIA this year.

Ashley:
Yeah, he’s having his baby.

Tony:
Yeah, the baby’s due I think the week before BP Con, so we will be phoning it in this year, and then we’ll have Baby Robinson at a BP Con 2024.

Nate:
Yes, let’s go. Let’s go.

Ashley:
So Nate, you’ll just have to fill in as Tony for the conference.

Nate:
Done, I will wear my-

Ashley:
Practice his signature, so you can sign some books.

Tony:
Yeah.

Nate:
I’m going to wear my-

Ashley:
Black shirts.

Nate:
… my black shirts and my black shorts, we’ll be good.

Ashley:
Well, Nate, where can everyone find out some more information about you and reach out to you?

Nate:
Yeah, probably Instagram is probably the thing that I’m trying to do the most. So it’s N, the number 8, Robbins, R-O-B-B-I-N-S. And then, like I said, I’ll send you the scripting and stuff. But if people want the script or if they want the objections, I need to see if I can scan that and upload that. If they want to send me a DM, I’m be happy to send that over to them as well.

Ashley:
Okay, awesome. Well, thank you so much Nate, and we will put those documents in the show notes, go on to biggerpockets.com/blog/rookie-326. Or you could just DM Nate on Instagram @n8robbins.

Nate:
Could you say that one more time please?

Tony:
Where do we need to go Ashley? [inaudible 00:55:04].

Ashley:
Everyone knows the dash is I meant horizontal [inaudible 00:55:06] dash, hyphen. Well, Nate, thank you so much for joining us today, I’m Ashley @wealthfromrentals, and he’s Tony at @tonyjrobinson. And we’ll be back on Wednesday with another guest.

 

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Even with demand buoyed by a sparse housing inventory, growing financial challenges for buyers are forcing home sellers to cut prices to close deals, a new Redfin research report found.

According to the brokerage, 6.5% of U.S. homes for sale posted a price cut during the four weeks ending September 24, up from 5.8% the month prior.

In some markets, more than 50% of active listings have experienced a price cut, according to Altos Research. The five metro areas with the highest percentage of listings with price cuts for the week ending Sept. 22 were Wenatchee-East Wenatchee, Washington (53%); Idaho Falls, Idaho (52%); Carson City, Nevada (52%); Austin-Round Rock-San Marcos, Texas (52%); and Waco, Texas (51%).

Due to a lack of supply, prices overall have been on the upswing. The median U.S. home sale price rose 3% year over year, reaching $420,846 in August, the largest annual increase since October 2022. And because mortgage rates have been above 7% for about two months consecutively, the cost of financing is extreme. The average principal and interest payment among borrowers purchasing a home using a 30-year fixed-rate loan hit its highest point ever in July at $2,306, according to Black Knight’s mortgage monitor report. With taxes and insurance, most buyers today are approaching $3,000 or more

Pricing accurately is paramount

“Pricing is the absolute number one, most important factor when somebody sells their home,” Robert Andert, a real estate agent on The Minnesota Real Estate Team, told HousingWire in an interview in July. ”So even in the market that we’re in now, with a high demand, if a home is overpriced, it’s not necessarily going to move right away.” 

On the one hand, there are very few homes on the market, with total inventory down 15% year over year, according to Redfin. But on the other hand, homebuyers are also growing more price-sensitive as monthly payments eclipse an all time high. 

“Buyers are picky and they don’t want to pay a dollar more than they need to,” the report said.

Available inventory of home for sale is ticking up

Hence, homebuyers are encouraged to negotiate with sellers, who seem willing to make concessions.  However, available inventory of homes for sale is on the rise in late September, a very unusual trend for the season, Altos Research’s Mike Simonsen noted in a HousingWire article this week. It is giving buyers a little more leeway and allow them to chose from a larger selection of homes.



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Even though mortgage origination volumes are down, we’re experiencing a highly competitive purchase market. That means a number of businesses, seeking to grow their revenue, will likely look to expand their reach to the default and REO space.

But for those who haven’t done their homework, this is not an easy step, nor is it easy money. More than a few firms learned this the hard way during the housing meltdown and Great Recession, when foreclosure volume soared and public scrutiny intensified.

Those who cannot remember the past are condemned to repeat it. It can also be said that those who have not stayed current with this changing environment will be in for some serious challenges as well.

A moment of reckoning may be imminent for the default and REO industry. Many in the industry are already rising to meet it. Yet, we’re going to soon find out who’s heeding the lessons taught by the last foreclosure wave.

A look at default activity past and present

The default industry was thrust into the public view during the Great Recession. From 2007 through mid-2013, approximately 5.5 million households lost their homes to foreclosure.

While there are many reasons this came to be, the public focus quickly turned to the consumer and how poorly, in their perception, lenders and servicers treated them during the process.

Within the industry, many providers struggled with the sheer volume of transactions. While the historic amount of foreclosure activity was unprecedented, the industry, as a whole, was not as prepared as it should have been.

At least, that was the general perception.

Now, reports from Black Knight and ATTOM are showing signs that, while we may not be looking at another foreclosure spike anything like what we experienced in the late 2000s, we are likely in for a definite increase in default activity.

Understandably, foreclosure has never been a popular topic. Nor should it be. It’s the antithesis of the American Dream.

The mortgage lending industry exists to make home loans, not to repossess them. But the default surge accompanying the Great Recession; the struggle to manage it effectively and the subsequent public backlash inspired a number of consequences that changed the way lenders, default-focused firms and REO businesses had to operate. 

What had already been  a lengthy and complex process, as a result, became even more complicated. A 2012 Gallup Poll asserted that 58% of Americans preferred that the federal government take additional action to prevent foreclosures.

There’s little to suggest that sentiment has changed, which means that, today, mortgage lenders need to focus not only on an additionally scrutinous enforcement but the impact of public sentiment as well.

The housing meltdown and Great Recession inspired a flurry of activity in the hopes of dampening any future such surges in foreclosure. Some unintended consequences, such as the rise of “zombie foreclosures” or increase in abandoned properties, were the result.

It would appear, now, that we’ll find out how effective the changes made will be. 

What’s really changed since 2013?

The obvious result of the surge of foreclosures in the early 2010s was a wave of legislative and regulatory action. Especially where service providers were unprepared for the sudden pivot in market conditions after the refinance boom of the early 2000s.

The result of that reaction has been a no-nonsense approach to default and foreclosure. While well intended, that reaction has only created an extended foreclosure process. 

Another lesson learned, the hard way, from the foreclosure spike of the late 2000s was that scalability is the key to a market that can change quickly.

More than a few of the consumer-focused stories featured in the mainstream media during the height of the foreclosure spike were likely the result of the quick pivot from refinancing boom to default that caught many businesses flat-footed.

Most of them are no longer in the industry. But the result remains the same.

The default industry has digitalized a lot more. Many of the largest servicers have made major investments in automating their production platforms and workflow management systems. But they have yet to be tested by heavy volume.

The next major change in the default landscape is the way those who hold the loans, the lenders, are reacting to default. Likely because of more aggressive regulatory scrutiny, loss mitigation has become more of a priority.

Loan modifications, deeds in lieu and short sales have now become the preferred path to addressing defaults, although none of them are 100% effective. In fact, one could argue that they can often delay the process or even exacerbate the challenge.

The bottom line? It’s harder, more expensive and more time-consuming to foreclose on a defaulted mortgage today than ever before.

How should the mortgage, servicing and default industries be preparing for the inevitable next spike?

The 2008 housing crisis happened 15 years ago. The world, and the default industry, are different now. 

Lenders, servicers, asset managers and all of the other firms working in the REO industry should be well aware that default volume will soon be increasing and that it’s well past time to prepare.

It starts with compliance (and a little bit of PR). Public perception, right or wrong, has led to fairly intense scrutiny of the default servicing industry.

As volume increases, servicers and lenders should be sure to have compliance resources in place. They should also be on top of other compliance considerations such as oversight, training, staffing recommendations and, above all, documenting everything. 

Lenders and servicers should also be mindful of the push toward “first look” programs as well. This is a direct reaction to the surge of single family home purchases by investors seeking to subsequently rent those properties.

Freddie Mac, for example, has put forth an initiative which, for the first 30 days of a new MLS listing, essentially blocks out investors in favor of owner-occupants or public entities that would drive owner-occupancy instead of rental.

As is so true in any industry, compliance begins on the front lines. If a lender or servicer has a solid set of policies and procedures, but its contractors or employees don’t adhere to them, the lender or servicer faces the same exposure they would if they had no plan in place at all.

Having the right boots on the ground is critical and that starts with thorough training (and continuous updating) and effective monitoring. This won’t just protect against legal or regulatory risk. It’s also a sound way to help improve or at least maintain the entire industry’s reputation in the eyes of the media (as well as the public and regulators).

Consumer experience needs to be a part of the overall strategy of every firm serving the default and REO space.

Technology is often mentioned as a panacea for just about anything, but the investment must come after careful consideration about what systems are needed and what will provide the best fit.

Now is the time for any business involved in the REO industry to strategically review its workflow and efficiencies, especially on the customer service and field management side of operations.

More importantly, technology is the ultimate fulcrum for “right-sizing” staffing levels. There are numerous options available for scalable solutions. And the businesses that leverage them will likely see the positive results in the coming year.

Final thoughts

This is an industry of partnerships. A successful home closing simply cannot happen without a multitude of firms — mortgage brokers, appraisers, title companies, real estate brokers and professionals — investing their efforts and collaborating. If your partner/service provider isn’t of a like mind, you’re not ready for the next REO spike.  

There are a number of other considerations for which we’ll all need to be prepared when default volume increases.

Vendor management should begin with holding third party service providers to the same standards as the company they’re serving and they should be held accountable if they fall short of those standards.

In many cases, the existing standard even needs to be raised. Be certain your vendors are staying updated and have effective policies that align with your own regarding legal eviction, rehabilitation, liens, code enforcement, vacant property registrations

A mortgage lender with the right approach will still be faulted for a botched or inhumane eviction process if the law firm or third party with which it partners doesn’t share the same principles and practices.

The good news is that any number of firms (real estate professionals, servicers and asset managers) have long since evolved from where the industry was in 2010.) The ability to oversee and monitor has also been dramatically improved with the arrival of better technology.

Stricter compliance standards demand better vetting. It’s built upon seamlessness. For instance, does their tech align with yours?

However, the service levels of the vendors you depend upon to manage your risk mitigation and default processes (servicers, real estate professionals, asset managers) can make all the difference. This is a nation that revolves around perception. Public relations can mean everything, although this is not a call for “spin.” 

There are community-focused default professionals and businesses out there. One of the easiest ways to mitigate the heightened risk that comes with conducting default-related transactions in high volume is to find programs and entities that are working to do things the right way.

The best default professionals aren’t looking to take people out of their homes. They’re looking to help them to find their path back to the American Dream. In so doing, they’re also supporting the entire REO and default industry.

Michael Krein serves as President of the National REO Brokers Association (NRBA) and Managing Partner for House Karma, a digital ecosystem created to facilitate affordable, sustainable homeownership and neighborhood stabilization.

To contact the author of this article:
Michael Krein at mkrein@nrba.com

To contact the editor responsible for this article:
Deborah Kearns at deborah@hwmedia.com



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