Episode Transcript
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Speaker 1 (00:00):
For thirty five years, Cindy Stumpo has been a female
home builder with a passion for design, a mastery of detail,
and a commitment to her crack. With daughter Samantha Stumpo
by her side, I don't need my whole.
Speaker 2 (00:10):
Family on a date with me. That's a good note.
Speaker 3 (00:12):
It's goddemn weird.
Speaker 1 (00:13):
See. Stumpo Development is the only second generation female construction
company in the country.
Speaker 3 (00:18):
You're crazy, You're a wacko, You're insane. I mean, it
just doesn't end together.
Speaker 1 (00:24):
Cindy and Samantha welcome guests to explore the world of construction,
real estate, development, design, and more.
Speaker 3 (00:30):
Unpredictable. Every time I think I know what you want,
you switch it out. But that's what makes sure.
Speaker 1 (00:34):
Houses all your dy discuss anything that happens between the
roof and the foundation.
Speaker 3 (00:38):
Nothing is off limits. You truly do care about everybody.
Speaker 1 (00:41):
She can yell at, you can scream, but when you
get her alone, she's the best person on the planet.
Cindy Stumpo is tough as nails.
Speaker 2 (00:48):
Yea and welcome to Siddy stump with Tough's Nails on
WVZ News Radio ten thirty. I'm getting tired of that opening,
by the way, okay, and a student tonight we have
Nna Garrillell.
Speaker 4 (01:02):
John Kelly Wren, Tyler Winder.
Speaker 2 (01:03):
What do you too do? I'mna play like I don't
know you guys. What do you too do?
Speaker 4 (01:07):
Yeah?
Speaker 2 (01:08):
What do you do?
Speaker 4 (01:08):
I run a real estate credit fund in Boston, lends
to real estate developers.
Speaker 2 (01:12):
Want to talk to the mic, not me. I'm gonna
torch your daddy. Go ahead.
Speaker 4 (01:18):
So I'm a private lender. I lend to real estate
developers in the Boston area.
Speaker 2 (01:22):
Okay, And what's your raid's going for? Right now? As
a hard running guy, I know.
Speaker 4 (01:27):
Every deal is different twelve to thirteen so twelve to.
Speaker 2 (01:30):
Thirty percent, and these guys can afford to pay this
plus the land, plus the product, plus the labor and
still profit out.
Speaker 1 (01:38):
Huh.
Speaker 4 (01:39):
Yes.
Speaker 2 (01:40):
Anybody getting into trouble, any clients or anybody know. Of course,
of course there's trouble now.
Speaker 4 (01:44):
There's always, But there's always trouble. I would say historically,
I think one difference today, and I think we talked
about this before, is that the environment for development is
getting tougher today than it was several years ago.
Speaker 2 (01:57):
I'm so glad everybody sing of my tune today.
Speaker 4 (01:59):
Okay, so one of the the we have the rates.
But I think that's one thing. I think the other
thing is the development cycle is longer. And so what
we're seeing is developers are carrying projects for one thousand
and that that the cost may be slightly higher and
the sales price may be the same, But because the
project is stretched out for longer.
Speaker 2 (02:18):
We're not pulling their money out and we're not pulling
the money on the other end. And to get the
special permits and to get the it's just cuckoo crazy.
Oh but let's build them because we need them. But
while while they're saying that they got our hands tied
behind our backs, and that's what nobody understands.
Speaker 4 (02:34):
And so it's a tougher environment. And I think historically
what we've seen a while ago is we saw developers
make mistakes and things go wrong and the projects didn't
do well. I think what we're seeing today is some
developers are great developers, that they've been great developers, and
today they're running into problems because of cash flow, the
sales cycles slowed down, the development processes.
Speaker 2 (02:53):
Taking in one way, developer, it's a problem, guys thirty
eight years of experience, over leverage and undefunded the two
words that will bring you to your niece and you
will taste your own blood. I've said this all along,
said this my whole career. Over leveraged, underfunded period. Stop
trying to be the biggest guy in the block, right.
Speaker 4 (03:13):
Yep, take on. I mean we advise our clients. Hey,
you know you better have one or two projects well
capitalized than three or four thinly capitalized.
Speaker 2 (03:22):
Bingo. I agree. And what are you doing, handsome boy
over there?
Speaker 5 (03:27):
Hello, handsome boy in the corner, Tyler Winder. I have
a real estate brokerage and also real estate developer, one
of Sean's clients as well as we're developing single families
and condo conversions and then around Boston.
Speaker 2 (03:38):
All right, so let's be honest. How's it going for you?
Don't be passing any bologna like give it to us hogh.
Speaker 5 (03:44):
No one likes boloney. That's what we're all on here for, Okay,
I hit her out on the head. It's the sentiment
in the development world right now is it's extremely difficult
to get a product from acquisition all the way to
the end because the sale cycle is longer. There's a
lot of green tape, red tape, yellow tape that we
have to walk through every single step of.
Speaker 2 (04:01):
The parade tape.
Speaker 5 (04:02):
That's pretty much it is. Yeah, yeah, throw some parade
taper in hereally, but all of the outside noise that's
making a development project longer and longer and tougher to
get to a certain point.
Speaker 4 (04:14):
It's really putting it.
Speaker 2 (04:15):
Keep numbers simple, Let's keep numbers simple. We know what
I build in. What's your average average land price and
average development price? Like, give me your average.
Speaker 5 (04:25):
Average usually like let's call it a million dollars of
land acquisition, Okay, anywhere from.
Speaker 2 (04:31):
Great, you know, nine hundreds. Well, let's stay at the million.
Let's stay at the million. So let's say you borrow
a million from him. Right, here's your buddy. Yeah, how
much might does he have to put down because he's
your buddy.
Speaker 4 (04:42):
Like close twenty percent?
Speaker 2 (04:43):
So you're still asking for twenty percent down as a
hard money guy, right, because you want to be heavily protected.
Speaker 4 (04:48):
Right, And he has to be getting out of good value.
And I think one of the things that we got
to talk about.
Speaker 2 (04:52):
Hold on, let's throw all the sudden out he wants
to know that you're buying it actually the good value,
because if you don't, he's going to ask you for
thirty percent? Am I correct?
Speaker 4 (05:02):
Or just say we're not doing the deal because we
don't think it's good for you.
Speaker 2 (05:05):
So what makes you decide that, your Wizard of Oz?
Speaker 4 (05:09):
There you go, the Wizard of Oz. It's it's doing.
I mean, we've done three hundred and fifty loans out there,
we've left across over one hundred.
Speaker 2 (05:16):
Now, okay, but those three hundred loans that you've done,
or whatever you've done, if I'm not mistaken, you've done
it all in the good times, right the last twelve
years I.
Speaker 4 (05:25):
At this current firm, Yes, but I have also gone through.
Speaker 2 (05:28):
Eight And how you're too young? How old are?
Speaker 4 (05:30):
I'm not too young?
Speaker 2 (05:31):
I forgot? How old you?
Speaker 4 (05:33):
Forty five?
Speaker 2 (05:35):
Forty five? A wait? Brings you back to when.
Speaker 4 (05:39):
I was in way. I was at Lehman Brothers, okay,
in London, and I was working on financings. Brother Yeah,
we did. I started six and ended in O eight.
So I know, if you a bit about crisises and
financial crisises and what happens when things go south with
the financial you know system. So I've been around before.
Speaker 2 (06:01):
So you guys decide, okay, we're going to write his
loan a twenty percent. I might come in, you might
say I want forty percent on this deal. Thirty five right,
as long as you're just safe and secure, worth good.
Speaker 4 (06:14):
Yeah, And we're underwriting it both on what it's worth
today and then what it's worth that exit. And we're
writing it on exit assuming you know, we'll underwrite and say,
we've worked with Tyler enough that we know he knows
how to run his projects, and he knows his budgets, right,
we verified those budgets as well. We send it a
cost consultant to go through the budget. But we'll know.
You know, somebody comes in and it's they're building for
a one hundred and fifty bucks a square foot. You're going,
(06:35):
all right, that's.
Speaker 2 (06:35):
Not but you also know where the money is being
heavy loaded when you look at the We do espressa right,
we do, and every guy analog, every guy heavy loads
on site work.
Speaker 4 (06:46):
Yeah, maybe and maybe right because every single budget line.
You know, this happened to us recently. Somebody brought us
a budget and said, hey, we want this construction budget.
This is our budget and we looked at the framing budget.
We said that's a bit high. And my team going,
why is a framing budget so high? And I go, guys,
you know what the framing budget is, right that that
framing budget is their own crew. That's the dollars that
(07:08):
they can take to bring back in for the cash
for them to pay for the rest of the project.
And that's why it's early on in the project. But
we know that's the whole thing is that we don't
we don't allow that. We don't allow you.
Speaker 2 (07:19):
Actually think think about this, when you actually think what
a construction loan money is. We have to pay it
before you guys give it back to us. Right, it's
the most crazy thing you've ever seen. We have to
do the work, pay the guys. So you have to
have some money to self fund that development. Right. So
when I say to people, well, before you start a
(07:41):
custom home, whatever you're doing, do you have two one
thousand dollars to dump in, because before you get your
first K, you're going to go through one hundred easily
depending on what you're building. Right. So that's the funny
part about a construction loan or any loan that you
take hard money loan is that you guys don't pay
the developers or builders till the work is done. Yeah,
and you are not going to get a good deal
(08:02):
in a sub if you can't pay weekly like this.
Speaker 4 (08:06):
And the deposits upfront bing go. And so that's you mean,
I think people a lot of you know, especially if
you're doing larger projects. I think if people are doing
smaller projects where there's less renovation, it's more of a
down payment and you're really doing you know, kind of
a small fix and flip where you're just you know,
you'd say, putting lipstick on a pig. That's one thing, right,
And we don't finance a lot of those. Those aren't ours.
We're dealing more with the professionals. And we say our
(08:28):
clients are bankable clients with non bankable situations.
Speaker 2 (08:32):
Okay, well let me stop you there. If they're bankable clients,
why are they going to a bank and paying nine
percent for construction loan or eight and a half?
Speaker 4 (08:41):
I mean, by the time, if you look it out,
it's over a twelve month period with the profit margins
in there, one two things, nine and twelve. Isn't that
much of a difference? Especially when you're only paying on
drawing funds.
Speaker 2 (08:52):
Okay, well, let's stop with that. He buys something from
million dollars, he puts twenty percent down, he's putting two
hundred though thousand dollars down. He's financing eight hundred thousand.
That eight hundred thousand's costing him? How much a month?
Right now?
Speaker 4 (09:06):
One percent?
Speaker 2 (09:07):
Was it? Eight eight thousand dollars a month? Right? We
got a hold that thought that God, it comes in
my face so fast, I hold on. You listen to
Cidey Stumble Toughest Nails on WBZ He's Radio ten thirty.
Oh you get up on the screen. Love it? Okay, good,
We'll be right back.
Speaker 3 (09:23):
Sponsored by Floor and Decor, National Lumber and Village Band.
Speaker 2 (09:40):
And welcome to Sidney Stump o w Bzeen News Radio
ten thirty Toughest Nails and we are back in the
studio with Lena Grillou.
Speaker 4 (09:47):
Okay, Sean Kelly Wren Advisers and Tyler Winder.
Speaker 2 (09:52):
Okay, let's run through the numbers. So hypothetically, you got
eight hundred thousand on the land acquisition, right you're paying
eight thousand of the month. That's double to what you
were paying two years ago. Right, Oh yeah, okay, how
fast is that eight thousand? Well around as fast as
when I was young girl and I had that twenty
eight day cycle. Right, it comes back, roof comes really fast, right, boom,
(10:14):
twenty eight days. So eight thousand a month, Now, time's
that by twelve let's just say, twelve months before you
actually get the excavator to the ground. That's how much
money ninety six that you're never getting back, right, that
we're never getting back. But because that's never had to happen,
it's what I'm saying, he's.
Speaker 4 (10:33):
Not getting he's coming into these almost These are not
you know, projects where you're taking and we're just not
going to fund something where it's twelve months before you
get an excavator in the ground. Right, if you're not
ready to go and you can't go, go go.
Speaker 2 (10:47):
But what if we can't go, go go.
Speaker 4 (10:49):
Then don't borrow. This isn't this isn't the project for you, right,
this isn't the loan for you.
Speaker 2 (10:54):
But how do you know he's not going to get
held up in engineering for three months? Because because a
new engineer says, okay, so now engineering department works right now,
the building pot works as long as they buy the
twenty nine day send you well, we want you to
change that drainage, it stops all over again. You realize that, right,
(11:14):
they can do that by the state of Massachusetts and
many other states. So you have to the twenty nine
day to tell you go back, and then they have
to get in touch us civil engineer. You can't control that, and.
Speaker 5 (11:26):
There's always going to be those kind of hiccups are
going to come along.
Speaker 4 (11:29):
So everything out.
Speaker 2 (11:30):
They weren't every one of my plans every civil.
Speaker 5 (11:32):
Two years ago, three years ago, and money was extremely cheap.
We're able to move things quicker. We're underwriting these as
twelve month carry times. Now we're looking at it, it's
like you automatically have to bump a by right, single
family build from twelve months to eighteen months because the
permitting process, the engineering process to get started is so
much more difficult. So to Shaun's point, where he's going
to say, is like how much you're actually carrying. He's
(11:55):
not going to look at something that needs a special
permit that might take a year to get approvals.
Speaker 2 (12:00):
Okay, so if we take let's say, let's not even
play in my game because we can't play in my
game because that's.
Speaker 4 (12:10):
But I think part part of it is, and this
is underwriting it right. This is going out and saying, well,
what is the advantage of somebody using a private lender
versus a bank? And I always tell people go to
a bank. If you can get financed by a bank
and you can get the cheap rates, go to the bank.
That's not my this is and my clients are borrowing
from banks, just not.
Speaker 2 (12:29):
On that at first. Hard money guys to me, we're
guys that need to get to closing fast. You could
get them to closing fast, then they could refinance within
three four months.
Speaker 4 (12:39):
We have no prepayment penal, so you can refinance. And
we have guys we we finance something and somebody's already
telling us they're going to refinance us. They've already got
a bank. The bank just couldn't close in the timeline, correct.
So we have those projects. What we find often enough
is once people do a loan, they go, oh, you
know what, we're going to refinance with the bank. But
instead of doing it in thirty days, we're going to
add some value to the so we can bump up
(13:01):
the value or we can season it and maybe we
only need to get six months to seven seasoning, So
we'll hold the loan for six months because we're going
to see the value on the back end. And then
if you're looking at let's say it's a six percent
versus a twelve percent, well that's only half a year,
so that's three percent versus what you're paying six percent
for half a year. So it's only three percent differential
(13:22):
on the rate. And then at the end somebody's going
to refinance into another loan, but is getting the value
added by the bank. So there's a bit of a
strategy there from the borrowers.
Speaker 2 (13:31):
So let's just take you were in lending and you
got stuck in COVID and your your developers couldn't get this,
couldn't get that. Delays, delays, delays. Prior to COVID, it
would take c Stumble Development eight to nine months to
build a nine ten thousand script for house. We'd blow
up a thirty five hundred squrift for house in four months.
(13:52):
It was like, phof I can't do it has nothing
to do with my age. It has to do that.
The guys don't want to work as hard anymore. They
don't want to go was fast and furious anymore. COVID
was a game changer. And I think a lot of
my subs are aging out. A lot of my direct
guys are aging out. They're getting tired. I'm not getting
tired out there. I'm still like crazy Cindy out there.
(14:13):
But you got to get back to a time frame
that these guys are not going to let interest eat
them up and spit them out for breakfast like you
just can't when you're working to pay interest and you're
working to pay overhead, and when you see your bottom
line number and then you step in and then the taxes,
especially in a state, the mass tax, is this that everything?
(14:35):
What am I going to work for? And then I
got to get forty eight percent of the government, I
might as well retire. It gets to a point where
it doesn't make sense, right. So the question is to
make when back in the day, when guys went to
hard money guys, they moved that project along really fast.
They were banging them out. But you can't bang them
out anymore. So when you write alone, what's the average
(14:55):
time twelve months, fifteen months, eighteen months.
Speaker 4 (14:58):
I mean we talked about so we typically long term
for us is twelve months with a six month extension,
and the six month extension is there to say.
Speaker 2 (15:05):
Okay, but then you charge that six month extension of course, right,
so let the listeners know that you do pay. So
the first twelve months you pay a cent amount of points.
If they need to execute the next six months, it's
this amount of points again.
Speaker 4 (15:20):
Yep, it's you pay another point and an additional three
percent on the rate.
Speaker 2 (15:24):
Now with hard money, guys, you have points fluctuating with
what the market's doing too, or you locking them in
for that year.
Speaker 4 (15:31):
So we lock in for the year.
Speaker 2 (15:33):
You lock in for the year.
Speaker 4 (15:34):
Yeah, we don't. We don't fluctuate the rate at all.
It's just paying. And it's a twelve month long right.
If you can't get the rate right within those you know,
twelve months, you know, don't write the loan right if
you're so.
Speaker 2 (15:44):
It's actually funny one of my good friends, and I
won't mention a name, because very well known guy in
Boston said, what the hell am I doing?
Speaker 5 (15:51):
So?
Speaker 2 (15:51):
Then I just might as well open up a bank
like guy's worth over a billion? So he's what am
I messing around with here? Anymore? I could do so,
but a bank and lend money right period and not
to the stress of the aggravation of all the buildouts
of the commercial and this and that. But that's he
could say that, but I know who he is, and
(16:12):
that's his high It's like what gets me out of
bed every morning. I should be retired, right, That's that's
the truth. Let's call it what it is. I'm going
to do myself.
Speaker 4 (16:20):
Yeah, get boring.
Speaker 2 (16:21):
Right, So begins the banking industry. But I've saw how
that went too in nineteen ninety ninety one, ninety two,
nine three. That wasn't pretty sight, by the way, And
I think and I think that stayed with me, by
the way.
Speaker 4 (16:31):
And I think a lot of people think of the
hard money lending.
Speaker 1 (16:33):
Right.
Speaker 4 (16:34):
It's easier to do one loan, and people talk about, oh,
I'm going to do a private loan. I'm going to
do a loan in this and it's give one loan
and you collect the interest on one loan. Okay, Well,
let's do one hundred loans. You've got to And then,
by the way, you have to have one hundred loans
almost at all, you know, somewhere between seventy and one
hundred loans for fund at all times. Right, you have
to have diversification. You've got to collect payments in all those.
(16:54):
You've got to give issue construction draws and all of those.
You've got to review the paperwork. You've got to do payoffs,
you have to do modifications. So it's not you know, yes,
the loan, the lending. Everybody's like, oh, it seems like
it's passed well, the single loan. You're in and running
a business.
Speaker 2 (17:09):
Yeah you are, but you're pushing paper, you're moving, You're
you're you're sitting in an office. You can do this
from Florida. You can do this from Alaska. I got
to be out there on job sites. Yeah, which one
you want to do? At my age? Sit with you're
sitting or suit we're up sitting.
Speaker 4 (17:22):
I don't know. You know, I might want to get
back out on the job site. We'll see, I say,
bring me up in a few you know.
Speaker 2 (17:28):
The truth is I like being out there on the
job sites. That's what gets me up in the morning.
If I had to go to sit in an office
and do what you do.
Speaker 4 (17:33):
To be fair, I'm not really the one at the
office all day. I'm running around. I'm running around, not
necessarily on the job site every day, but and I've
had projects as well, so we have our own projects
that you know, I personally that's how we got into
the lending business as we were first owners, less developers
in that sense, more owners for the rental properties. And
so then we have a bunch of rental properties, but
we've probably renovated, you know, well over fifty maybe one
(17:56):
hundred years.
Speaker 2 (17:57):
Somebody in Texas wants to borrow from a hard money guy.
Do you guys all communicate with each other across state lines?
So you don't not, I mean prefer a business to each.
Speaker 4 (18:05):
Other sometimes there I mean, I know groups in Texas,
I know groups that are pan Us. There's groups that
I know. I even speak to groups in London or Ireland.
In Europe. You know, I know the the largest guys
in the private lending side in Europe. So I personally
have those conversations. I don't know if that's usual for
the industry, but but.
Speaker 2 (18:25):
Doesn't that set you upot from the boys to l
the men when you think about it?
Speaker 4 (18:28):
I think so, I think so, I mean.
Speaker 2 (18:30):
Because that becomes you become more national at that point,
meaning okay, I'm gonna call Joe Schmoe in Texas. I'm
gonna take an FMI off the deal, right and Joe
schmol is going to write the deal for the person Texas,
or Joe schmoll is gonna write the deal in Florida
or Arizona. See, that's the goal i'd go after right now.
Speaker 4 (18:49):
Yeah, And for me it's not. I mean, we we
do what we do, and we're lenders in Boston still here.
We're really good at what we do here. But you know,
when occasionally we'll lend in another state the client, you know,
if you want to go do something in Florida, we'd
look at it, right, But you know, would we do
something all over nationally? No, Occasionally we'll take a look
(19:10):
at something else.
Speaker 2 (19:11):
To me, that is is networking. So if somebody calls
you from another state, Yep, I got a guy to call,
here's his name, here's his number, and then you two
work out a deal for the referral fee, yep.
Speaker 4 (19:22):
Or we wouldn't. I mean, typically we're not taking.
Speaker 2 (19:24):
I'm putting a thought in your brain right now. I
don't know if it's a business, I'm.
Speaker 4 (19:27):
Gonna retire and just take referrals from the rest of
my life. I'm done. This is it.
Speaker 2 (19:31):
It's a good referral, by the way, all right, I right,
I'm going to break. This is city Stumping. You listen
to Tough his Nails on w b Z and He's
Radio tempt there and be right.
Speaker 3 (19:38):
Back, sponsored by Pellow Windows of Boston. Next Day Molding
and Kennedy Carr.
Speaker 2 (20:00):
And welcome back to City Stumble to his Nails on
WZ News Radio ten thirty and I'm here with Lena
Grillo and Tyler Winder you forget your name and Sean
Kelly Rant. Okay, there we go, we all back together again.
What was the question we had? Benay said the other question,
can you keep up with this?
Speaker 6 (20:20):
What are the current trends you were seeing in the
real estate market? And how should a new agent position
themselves to take advantage of these trends?
Speaker 5 (20:28):
So going agency side obviously a little bit different than
the lending and developer side of everything, but there's anything
in the real estate agency world. You're going to be
looking at this massive lawsuit that just passed that now
sellers don't have the option of necessarily paying a buyer's agent,
and a buyer's agent is going to have to get
signatures from their client in order to even show a house.
(20:49):
So a lot of the let's call it the rookie agents,
who may do one deal a year, just have the
active license. I think we're going to start seeing them
drift out of the industry just because there is this change.
I think the opportunity does come with change, with all
these new agents that can come in and take advantage
of a little bit of a turmoil in the agency side.
But strictly selling wise, that's the biggest thing that we're
(21:11):
seeing right now.
Speaker 2 (21:12):
I'm sorry, did he answer your question? Because I swear
I don't even know what the question was. I got
a little brain did here? Yeah?
Speaker 6 (21:17):
The question was what are the current trends you are
seeing in the real estate market and how should a
new agent position themselves to take advantage of these trends?
Speaker 2 (21:24):
Did you actually inner? Okay? Is the person happy with that?
It's okay? Thank you? Is there another question?
Speaker 6 (21:31):
Which industries do you think will benefit the most from.
Speaker 2 (21:33):
When you talk to somebody, you talk into the mic
and then look at him. We're teaching her how to
call position. Here, I'll turn your body thinking I'm tall.
Speaker 6 (21:41):
This thing is too short for me, I don't know
how to do well.
Speaker 2 (21:43):
We can't help it. You're five to eleven.
Speaker 6 (21:45):
Literally, Which industries do you think will benefit the most
from the expected rate cut, particularly when it comes to
securing financing?
Speaker 4 (21:56):
Which industries in general? I mean, I think anything that's
a heavy borrow.
Speaker 2 (22:00):
Or Mady, do you understand the question?
Speaker 4 (22:02):
But I think I think we have a tough discussion
about Let's let's have a different discussion about interest rates.
So let's go ask the question of why are we
dropping interest rates? Right? Is it because of inflation? Well,
we haven't hit our inflation target, So if infrastrates start
coming down substantially, it's not because of inflation. It's because
people are having fundamental worries about the economy. Right, So
(22:22):
I think that the view if interest rates are following
very hard, it's because the economy is not doing very
well at all. And I think we're seeing this right now.
If you go look, auto delinquencies are spiking, FHA, housing
delinquencies are spiking.
Speaker 2 (22:36):
Credit card Because John's going to debate that we is
bing bong bing yet being on here, okay, perfect being,
did you hear what he just said?
Speaker 7 (22:53):
Lena was going in and out.
Speaker 2 (22:55):
Oh God, damn, Lena, she's screwing up my whole little
vibe going here the phone delinquencies I heard about ahead.
Speaker 4 (23:06):
Yeah. The fundamental point I'm making is is people are
looking and saying, hey, when interest rates fall, that's going
to be good for real estate and a lot of
other industries that borrow a lot, including the auto industry
and everyone else. My fundamental view on this is, if
interest rates come down hard, it's because the Fed is saying, hey,
(23:27):
we see real turbulence in the economy, and we see
some really bad things on the horizon, and the economy
isn't doing as well. So it's not because inflation is
coming down. Interest rates are dropping because the economy and
jobs aren't doing as well, right, and the average consumer
isn't doing well.
Speaker 2 (23:43):
But what did you say about it?
Speaker 4 (23:44):
Agree?
Speaker 7 (23:45):
I agree with that one India and and last week
and the last I think it's last week of the
week before last segment that we uh, you and I
were discussing. I said, bad news is good news in
the real estate industry and the world the mortgage industry,
because we don't want to see three percent race. If
we see three percent race again, we're in trouble. That
means that we had to let me a bad news.
Speaker 2 (24:06):
Correct. I hear what you're saying. But you said something
about what do you call loans? Takes me up.
Speaker 4 (24:12):
The delinquencies on the loans that are on the margins,
so FHA delinquencies were up or v H A FHA
some of the the higher lower down payment loans, the
delinquencies seem to be up.
Speaker 2 (24:26):
Hey, John, you said the opposite last night on on chat.
I just want you to know that. Did you hear
what he just said?
Speaker 4 (24:31):
No?
Speaker 7 (24:32):
What I what I said was there're they're performing. And
I also said that the VA loans was required zero down.
Speaker 2 (24:39):
No, we weren't talking. We talked about VA loans. Put
that aside. But that's a that's a small percentage of
people that get VA loans. Okay, we were talking about
exactly what he just said, and you said they were
the best programs ever and they're doing really well.
Speaker 7 (24:54):
No, Actually know what what I said, Cindy was you
can't lock people for putting down law law now putting
that a lot of money, I said, because you know
it was because of the FAHA loan itself, that conventional mortgages,
because Traditionally you had to put twenty percent down. It
wasn't until the FAHA came into the market in the
nineteen thirties that people started putting less money down and
(25:17):
conventional mortgages.
Speaker 2 (25:18):
Had to actually Okay, all right, I'll hold you there.
What did he just delivered to you about that? Though?
Speaker 3 (25:27):
Wait?
Speaker 2 (25:27):
I think grand Cardon called you out on that last
night when he said those are loans that are going
to go bad the fastest, and he just said it
to you just now. Did you hear what he said?
Speaker 4 (25:38):
Yeah? I heard him.
Speaker 7 (25:39):
I said, I heard what he said. Once again, I
have to go look at that data. But right now,
and this is a tough economy, things have been getting
tougher for people. I'm not and I can't dispute that.
I can't disagree. I agree with that and this moment.
But once again, just because someone put a lot of
money down doesn't that they're a bad bet. That's all
(26:02):
I'm trying to say.
Speaker 2 (26:02):
You can't just okay and that and that's fine. I
hear you, And no one's a bad person. Okay, what
are the loans the lower end? When you're putting the
lower end of money down, how are those loans doing
right now.
Speaker 4 (26:16):
So the delinquencies are increasing. I don't quote me on
the exact figure. And I think you know, to this point,
ninety percent of borrowers are still ninety plus percent of
borrowers are still paying on time. That's my last recollection.
Speaker 2 (26:29):
Okay.
Speaker 4 (26:30):
I think what you're seeing is you're seeing a worrying trend.
And so what we're talking about is less the actual numbers,
because if you look at mortgage delinquencies overall, on average,
they're very low, historically very low, right because people right
now have you know two and three person, I mean,
you can't pay that mortgage. You know, it's a bigger issue.
The worrying trend is if you look across sector segments
(26:52):
of where people are borrowing, and this is even student loans, right,
so they just came off of their loan forbearance, right spikes.
Delinquencies on student loans have just spiked again. And so
when you look at the consumer and all their loans
and their borrowings on the margins, the delinquencies are starting
to grow up quite substantially.
Speaker 2 (27:11):
About credit card debt.
Speaker 4 (27:13):
Credit card debt is up, delinquen.
Speaker 2 (27:16):
We have any factual information of how much. No, not me.
Does anybody on on Chadow have any of that? Because
you guys are really good fast on Google. I can
I can locate that, can you please? I just want
to know so in your opinion as a hard money lender, right,
you get a lot. You're putting your money on the streets. Now,
(27:39):
what is it? What's the money? One point one four?
Speaker 4 (27:43):
What the total delinquencies or the total credit card debt?
Speaker 2 (27:46):
Total credit card debt?
Speaker 4 (27:47):
But that's up. But how much of the delinquencies the
delinquency rate is should be. It's not huge, but it's
it's right a trend.
Speaker 2 (27:58):
I'm going somewhere with us.
Speaker 4 (28:00):
And autodelinquencies are up. SMP just put out a report
on it.
Speaker 2 (28:04):
Okay, so there's more delinquencies now than there was four
years ago? Can we say that?
Speaker 4 (28:09):
Clearly?
Speaker 2 (28:10):
Clearly? Clearly Okay, more than fifty over the last year,
thank you so much.
Speaker 4 (28:18):
Increased increased by more than fifty percent. Yep, yep.
Speaker 2 (28:21):
So we'll indeed go alhead for the delinquency rate.
Speaker 7 (28:26):
For delinquency rate. Right now, we're at three point two
five percent of Americans are delinquent. That's up from three
point one and and I'm getting this from lending three
dot com. The most recent and thirty eight DELINQUISCY thirty eight.
Speaker 4 (28:43):
But that so what what happens is when you look
at that data and you start looking at the averages.
It's when you disaggregate those averages when it gets really
interesting is because what you'll see is, and this is
what I'm expecting to see but not having the data
in front of me, is you'll see that those borrowers
that are the lower interest rate twenty percent down, high
income borrowers are probably doing better, and their delinquency rate
(29:03):
hasn't barely moved. And then when you go and you
start breaking it down, you say, okay, well, FHA mortgages
are what percentage of the market, but their delinquency rates
now are not at three percent. Those are the ones
that are going from whatever it was maybe before a
three percent to now a much higher rate, and so
that must be up much higher. So it's really disaggregating
that data and looking on the margins and seeing that
(29:25):
certain segments are much higher.
Speaker 2 (29:28):
Okay, So here again, you've got the money out in
the streets. You're the guy that's worring. Are you worrying?
Are you nervous. Tell me where you stand on a
scale of one to ten. We were cocky three years ago.
Go where you fell three years ago.
Speaker 4 (29:41):
Go back three years and I'll go back.
Speaker 2 (29:43):
Where do you feel? What do you feel?
Speaker 4 (29:44):
So go back to you know when I came out
of school and I started working.
Speaker 2 (29:48):
He's making me hold that thought, Hold that thought. Oh ah, yeah,
he's stick out. What we see him walk in the room.
You want to throw him out and gone, all right,
hold that thought. Welcome to Cindney Stumpo and we'll be
right back. Went Toughest Nails on WZ News Radio attempt
and you can see him game really.
Speaker 3 (30:01):
Tied sponsored by Newbrook Realty Group, Boston, would Smaller Insurance
World Auto Body and Tasca Drive Auto Body.
Speaker 2 (30:20):
And Welcome back to city Stoppo Tough his Nails on
WBZ News Radio ten thirty. And I'm here with Lena.
Speaker 4 (30:25):
Grillo and Tyler Winder, Sean Kelly Rand.
Speaker 2 (30:29):
And we got a live group from Chadas Social Audio
and we have Jonathan Bing with us on here. We're
discussing go ahead.
Speaker 4 (30:36):
Finish Delinquency is the economy yeprtgages.
Speaker 2 (30:40):
I asked the question to you where we were three
years ago, right, Yep, you were in a more comfortable
position lending money. Are you more comfortable three four years
ago than you are right now?
Speaker 4 (30:50):
I would say we're about the same, and that's that's
a personal statement, not we're in a statement on the economy.
And I think when we set it up, let's talk
about why we got into the lending business. Okay, So
we're in the lending business. Before we're in the lending business,
we're owners and operators, and we went into the lending
business in twenty seventeen.
Speaker 2 (31:05):
I get a hold in there for one minute. You
got banks tightening up out there, and you're telling me
you don't feel the same way as a hard minded guy.
Speaker 4 (31:14):
We feel pretty comfortable with our lending today.
Speaker 2 (31:17):
Exactly how you felt two three.
Speaker 4 (31:19):
Is not exactly exactly. I don't you know, we're are you?
Speaker 3 (31:22):
Okay?
Speaker 4 (31:23):
Well, let me talk about what we do and why
we do it.
Speaker 5 (31:25):
Right.
Speaker 4 (31:26):
So, my job is protect my investor's capital and my
own capital, and that's why we started this business. And
so we were on the equity side in twenty seventeen,
we switched into a private lending structure. Why because we
were worried back in twenty seventeen looking back ten years
ago to two thousand and seven, saying hey, we're on
ten year cycles. We don't know when the next cycle
is going to hit, but we got to get ready now, right,
(31:47):
So twenty seventeen nineteen it was coming. Twenty seventeen, we said,
button down that patch.
Speaker 2 (31:53):
Yeah.
Speaker 4 (31:53):
In twenty nineteen, right before the pandemic, right in nineteen,
we felt the market slowed down absolute and so actually
from our investors standpoint, that was one of our worst
years was the twenty nineteen and kind of twenty twenty
for returns. Why because we piled up on cash when
cash was zero and we said hair investors going, why
aren't you putting the cash out?
Speaker 2 (32:14):
Why aren't was going to repeat it cycles.
Speaker 4 (32:17):
Right, and we were looking at it. We saw it
slowed down and we were getting ahead of it. We
didn't know that billions are going to be trillions are
gonna be pumped into the market.
Speaker 2 (32:25):
Would have been right if COVID didn't happen.
Speaker 4 (32:28):
And so coming out of it, so how have we
played right? So we always played defensive. We're lended and
so what are we seeing is you're talking about some
of the things are getting tough run development. One of
the things we're shifting into is we see it right.
So early on, we did a lot of condo plays, right,
so we were lending to developers that were, you know,
converting residential to condos. Well, right now we say, hey,
(32:49):
if rates are going up, who borrows a lot of money? Well,
it's first time home buyers. What are first time home
buyers buying? Well, they're buying condos. So let's shift away
from the condo in first time home buyer market and
let's focus on the markets that are the markets where
they're putting down more. I mean, are your buyers, Cindy,
worried about whether they can borrow money from the bank
and at what rate? Or are they coming in all cash.
(33:09):
It's just not the same concern.
Speaker 2 (33:11):
It's a different I come on, I'm playing in a
whole different league, folks. You can't even come So that's
that's I am not okay. So what we do is
not even half a percent of the population, not even
a point, not a half quarter percent of the population,
right quarter to a half of the population in a
country can afford to see stumble home. Right, So we
(33:32):
can't I can't look at that right. But the game
I play in on long term hold or investments I'm
buying or whatever I'm doing, I don't want to sit
there and pay nine percent juice. I'd rather just use
my own capital right now, and then let's have that again.
Remember every time I take my capital, I'm losing five
point twenty five on a Treasury bill. Right, so my
(33:53):
money's making five point twenty five and a treasury bill,
let's say a normal savings four point eight nine. But
there's the spread difference. If I went and borrowed, I could, Okay,
how I could say to you this way, I'll I'll
go pay seven percent on money. Right, I'm getting five
and a quarter. So this is what it's costing me.
Now I could swallow that, right because I got the
(34:14):
spread there. I'm making it on one end. Or I
just write the check I offered.
Speaker 4 (34:19):
You could invest with me and earn a lot more.
But that's you know, like listen, that's a topic for
another day. We can take it down there, but you
know it's SPoD. You need to be a borrower just
to do business with me. But so what we're so,
how have we positioned ourselves? Is we positioned ourselves knowing
that at some point in time there's going to be
a change in the cycle. And so I think what
we're seeing to you're gonna.
Speaker 2 (34:38):
Get my money is if I overlook every I can't
swear every sheet of everything that comes in when I
look at the specs of coming in, Okay, this is
what all right? Yeah, this foundation is not going to
cost them. Oh yeah, we bring you in. It's okay.
As long as I sit on that to prove every
one of those loans and we'd be good. Then we'll
talk about it afterwards.
Speaker 3 (34:58):
The cheapest credit officer we ever hired.
Speaker 2 (35:00):
There you go.
Speaker 3 (35:03):
She invests and she reviews all the construction.
Speaker 2 (35:07):
Absolutely day.
Speaker 4 (35:10):
Their office. Unfortunate, our offices on Lincoln Street in downtown driving.
Speaker 5 (35:14):
I'll give her a week before she's dying to get
back on the field. So but but I think you
can talk about it, and then you.
Speaker 2 (35:19):
Talk about go ahead, we're playing guys, go ahead, we'll
talk about I'm not.
Speaker 4 (35:25):
So today, what are we doing? Well, we're shifting out
of the products where we think that there's going to
be more stress, which is the first time home buyer market.
Speaker 2 (35:32):
I'll just come and shift less money than he changes
I'm playing goohead.
Speaker 4 (35:38):
And we're shifting into the projects where we think that
there's less stress and the buyer, the end buyer is
going to have the money to pay. And that's what
we're seeing, right. So the good projects and the higher
end projects are still doing well, right, so that those
that are closer to the segment that you're dealing. And
the other stuff we're doing is a lot of bridge lending.
So we're lending on a lot of.
Speaker 2 (35:54):
Palk about that. Let people understand what a bridge loan is.
You ask three people what a bridge loan is, they're
going to give you a three different explanation of what
a bridge loan is. I know what a bridge loan is.
I've debated people on that network right there what a
bridge loan is.
Speaker 4 (36:10):
So a bridge loan is a bridge to get you
from one place to another, and normally that is from
acquisition in our case to how.
Speaker 2 (36:18):
About this, let's stumb it down. I own a single
family home I haven't sold yet, but I've got a
million dollars with the equity in it. Right. I own
a free and clear but I want to go buy
this one from million dollars same price. But I gotta
sell this one. Right, So bridging to me is okay,
grab that, mister banker, close me up. Lean that first
(36:41):
properly that I own for nothing, and there's my bridge loan.
Speaker 4 (36:43):
Yes, okay, And that's one type of bridge loan, but
I think of the other type of bridge loan. So
if you're an.
Speaker 2 (36:49):
End user, is going to understand that type of a
bridge loan between okay.
Speaker 4 (36:52):
And then some of what we're doing is a little
bit more like institutional right. So I'm dealing typically with
larger clients and a lot of them and sophisticated clients.
So what am I getting today, Well, I'm getting a
lot of calls from guys that you know, historically wouldn't
or firms that wouldn't have used private lending or non
bank lending. And why why what are they seeing? Well,
they've got an opportunity to buy let's say, an office
(37:14):
asset downtown Boston for a quarter of what it trade before.
Speaker 2 (37:18):
But you know what paying for those right now?
Speaker 4 (37:19):
Right And they're paying you know, twenty five percent, twenty
five cents on the dollar of what the restaurant and
they're going to convert it to residential and there's tons
of incentives and when you look at it or you
know what, to be honest, at that price, just leaving
it as an office works. But they go to a
bank and a bank goes, oh my god, it's office.
I can't touch it. They go, well, no, no, no, but
it's office at twenty five percent of.
Speaker 2 (37:42):
Can't touch a horror of what it is. They're taking
massive hits on their books.
Speaker 4 (37:46):
Then where do they go And the bank will say, well, okay,
if you have a plan in place to convert it
to residential, will lend you the money because it because
it's residential, and that's cool, and that's you know, we
can get that approved. But if it's office, so what
do they need? They need a bridge loan to acquire
it to get there or so that's one they need
a bridge to get from one place to another in
order to get the bank loan. Another place is you know,
(38:07):
we've been financing quite a bit of multifamily, so somebody
will be able to buy a property you're either at
auction or off market at a very good price, but
the banks can't meet the timeline.
Speaker 2 (38:17):
How many auctions have taken place right now?
Speaker 4 (38:20):
Tons, I don't know. I mean they're always up. The
problem is that normally they used to get canceled all
the time, and now I think they're going through they
cancel It came up with.
Speaker 2 (38:28):
The interest payments. You see auctions going through right now.
Speaker 4 (38:32):
Auctions are starting to go through across America. It is
significantly low.
Speaker 2 (38:38):
Don't compare a mass. There's a lot of auctions in
Florida right now. Go look at the auction list in Florida.
Speaker 4 (38:42):
I don't know Florida.
Speaker 2 (38:44):
That's why I follow that one. Tons tons of them.
Not the greatest areas that a lot of them are going.
They're coming up for auction. So do you have any
questions on there that you know of guys? Okay, good,
because when he comes walking in, he sticks a phone
in my face with the clock, and I'm like, why'd
you come in here? We don't want to see your
(39:05):
face till you're like twenty seconds out because then you
stress me out. Then I look at you and I
lose my comfort. There you go, Okay, you're easy on
the ice. That really helps. Welcome to my producer. Go ahead, fins,
sure what you're saying, I'm sorry, So.
Speaker 4 (39:19):
I mean, I think that just sums it up. This
is just a bridge from one place to another.
Speaker 2 (39:23):
John, you're out there bing bings. I still got you.
There's being still out there. Do you have anything to
rebuttal what he's saying.
Speaker 7 (39:35):
I find it fascinating that over a year later, you're
still the bridge loan. You still can you head around?
Speaker 2 (39:43):
Yeah? Because to me, a bridge loan. I'll keep saying
that there's many different bridge loans, but the average person,
end user uses a bridge loan to what I'm explaining.
That's a more sophisticated bridge loan than what he's explaining.
But the average consumer needs that bridge to close on
(40:04):
their other house before because they didn't sell the other
house yet they need to close on the new house.
That's all end users need to realize what a bridge
loan is. Unless they're in the business and you want
to make it complicated. I want to make it uncomplicated.
But hold that thought. This is Sydney Stumble Toughest Nails
on WBZ News Radio ten thirty. Will be right back
to you, and welcome back to Toughest Nails on WBZ
(40:34):
News Radio ten thirty. I'm here with Sean Tyler. Okay, guys,
how do people reach you? I know, you're going to
do a second episode with me, but go ahead out
people reach you. You'll be back next week.
Speaker 4 (40:42):
Sean Telly Rand. You can find me on LinkedIn, Instagram
and our company has already advisors, and we're on Instagram
at night and it's on the We've got a web
page as well.
Speaker 2 (40:53):
Okay, Spey. Last name, so people care.
Speaker 4 (40:55):
Kelly Rand k E L l Y hyphen r A
n D first named Sean s.
Speaker 2 (41:00):
E A nyl Go ahead, yeah.
Speaker 5 (41:02):
And Tyler Winder most common one is on LinkedIn Tyler
t I L E R Winder w I n D
e R. Or you could find us on Instagram. Company
website is TB Winder or myself is mister underscore Winder.
But most likely you'll unfollow me because I like to
chat quite a bit about stupid topics like what.
Speaker 4 (41:19):
And what about your only fans page?
Speaker 5 (41:20):
My Only Fans is similar to the Instagram one, but
I think there's only one fan.
Speaker 2 (41:25):
On there, everybody. I have a great, safe weekend. This
is City Stumple. We'll see you next weekend.
For thirty five years, Cindy Stumpo has been a female
home builder with a passion for design, a mastery of detail,
and a commitment to her crack. With daughter Samantha Stumpo
by her side, I don't need my whole.
Speaker 2 (00:10):
Family on a date with me. That's a good note.
Speaker 3 (00:12):
It's goddemn weird.
Speaker 1 (00:13):
See. Stumpo Development is the only second generation female construction
company in the country.
Speaker 3 (00:18):
You're crazy, You're a wacko, You're insane. I mean, it
just doesn't end together.
Speaker 1 (00:24):
Cindy and Samantha welcome guests to explore the world of construction,
real estate, development, design, and more.
Speaker 3 (00:30):
Unpredictable. Every time I think I know what you want,
you switch it out. But that's what makes sure.
Speaker 1 (00:34):
Houses all your dy discuss anything that happens between the
roof and the foundation.
Speaker 3 (00:38):
Nothing is off limits. You truly do care about everybody.
Speaker 1 (00:41):
She can yell at, you can scream, but when you
get her alone, she's the best person on the planet.
Cindy Stumpo is tough as nails.
Speaker 2 (00:48):
Yea and welcome to Siddy stump with Tough's Nails on
WVZ News Radio ten thirty. I'm getting tired of that opening,
by the way, okay, and a student tonight we have
Nna Garrillell.
Speaker 4 (01:02):
John Kelly Wren, Tyler Winder.
Speaker 2 (01:03):
What do you too do? I'mna play like I don't
know you guys. What do you too do?
Speaker 4 (01:07):
Yeah?
Speaker 2 (01:08):
What do you do?
Speaker 4 (01:08):
I run a real estate credit fund in Boston, lends
to real estate developers.
Speaker 2 (01:12):
Want to talk to the mic, not me. I'm gonna
torch your daddy. Go ahead.
Speaker 4 (01:18):
So I'm a private lender. I lend to real estate
developers in the Boston area.
Speaker 2 (01:22):
Okay, And what's your raid's going for? Right now? As
a hard running guy, I know.
Speaker 4 (01:27):
Every deal is different twelve to thirteen so twelve to.
Speaker 2 (01:30):
Thirty percent, and these guys can afford to pay this
plus the land, plus the product, plus the labor and
still profit out.
Speaker 1 (01:38):
Huh.
Speaker 4 (01:39):
Yes.
Speaker 2 (01:40):
Anybody getting into trouble, any clients or anybody know. Of course,
of course there's trouble now.
Speaker 4 (01:44):
There's always, But there's always trouble. I would say historically,
I think one difference today, and I think we talked
about this before, is that the environment for development is
getting tougher today than it was several years ago.
Speaker 2 (01:57):
I'm so glad everybody sing of my tune today.
Speaker 4 (01:59):
Okay, so one of the the we have the rates.
But I think that's one thing. I think the other
thing is the development cycle is longer. And so what
we're seeing is developers are carrying projects for one thousand
and that that the cost may be slightly higher and
the sales price may be the same, But because the
project is stretched out for longer.
Speaker 2 (02:18):
We're not pulling their money out and we're not pulling
the money on the other end. And to get the
special permits and to get the it's just cuckoo crazy.
Oh but let's build them because we need them. But
while while they're saying that they got our hands tied
behind our backs, and that's what nobody understands.
Speaker 4 (02:34):
And so it's a tougher environment. And I think historically
what we've seen a while ago is we saw developers
make mistakes and things go wrong and the projects didn't
do well. I think what we're seeing today is some
developers are great developers, that they've been great developers, and
today they're running into problems because of cash flow, the
sales cycles slowed down, the development processes.
Speaker 2 (02:53):
Taking in one way, developer, it's a problem, guys thirty
eight years of experience, over leverage and undefunded the two
words that will bring you to your niece and you
will taste your own blood. I've said this all along,
said this my whole career. Over leveraged, underfunded period. Stop
trying to be the biggest guy in the block, right.
Speaker 4 (03:13):
Yep, take on. I mean we advise our clients. Hey,
you know you better have one or two projects well
capitalized than three or four thinly capitalized.
Speaker 2 (03:22):
Bingo. I agree. And what are you doing, handsome boy
over there?
Speaker 5 (03:27):
Hello, handsome boy in the corner, Tyler Winder. I have
a real estate brokerage and also real estate developer, one
of Sean's clients as well as we're developing single families
and condo conversions and then around Boston.
Speaker 2 (03:38):
All right, so let's be honest. How's it going for you?
Don't be passing any bologna like give it to us hogh.
Speaker 5 (03:44):
No one likes boloney. That's what we're all on here for, Okay,
I hit her out on the head. It's the sentiment
in the development world right now is it's extremely difficult
to get a product from acquisition all the way to
the end because the sale cycle is longer. There's a
lot of green tape, red tape, yellow tape that we
have to walk through every single step of.
Speaker 2 (04:01):
The parade tape.
Speaker 5 (04:02):
That's pretty much it is. Yeah, yeah, throw some parade
taper in hereally, but all of the outside noise that's
making a development project longer and longer and tougher to
get to a certain point.
Speaker 4 (04:14):
It's really putting it.
Speaker 2 (04:15):
Keep numbers simple, Let's keep numbers simple. We know what
I build in. What's your average average land price and
average development price? Like, give me your average.
Speaker 5 (04:25):
Average usually like let's call it a million dollars of
land acquisition, Okay, anywhere from.
Speaker 2 (04:31):
Great, you know, nine hundreds. Well, let's stay at the million.
Let's stay at the million. So let's say you borrow
a million from him. Right, here's your buddy. Yeah, how
much might does he have to put down because he's
your buddy.
Speaker 4 (04:42):
Like close twenty percent?
Speaker 2 (04:43):
So you're still asking for twenty percent down as a
hard money guy, right, because you want to be heavily protected.
Speaker 4 (04:48):
Right, And he has to be getting out of good value.
And I think one of the things that we got
to talk about.
Speaker 2 (04:52):
Hold on, let's throw all the sudden out he wants
to know that you're buying it actually the good value,
because if you don't, he's going to ask you for
thirty percent? Am I correct?
Speaker 4 (05:02):
Or just say we're not doing the deal because we
don't think it's good for you.
Speaker 2 (05:05):
So what makes you decide that, your Wizard of Oz?
Speaker 4 (05:09):
There you go, the Wizard of Oz. It's it's doing.
I mean, we've done three hundred and fifty loans out there,
we've left across over one hundred.
Speaker 2 (05:16):
Now, okay, but those three hundred loans that you've done,
or whatever you've done, if I'm not mistaken, you've done
it all in the good times, right the last twelve
years I.
Speaker 4 (05:25):
At this current firm, Yes, but I have also gone through.
Speaker 2 (05:28):
Eight And how you're too young? How old are?
Speaker 4 (05:30):
I'm not too young?
Speaker 2 (05:31):
I forgot? How old you?
Speaker 4 (05:33):
Forty five?
Speaker 2 (05:35):
Forty five? A wait? Brings you back to when.
Speaker 4 (05:39):
I was in way. I was at Lehman Brothers, okay,
in London, and I was working on financings. Brother Yeah,
we did. I started six and ended in O eight.
So I know, if you a bit about crisises and
financial crisises and what happens when things go south with
the financial you know system. So I've been around before.
Speaker 2 (06:01):
So you guys decide, okay, we're going to write his
loan a twenty percent. I might come in, you might
say I want forty percent on this deal. Thirty five right,
as long as you're just safe and secure, worth good.
Speaker 4 (06:14):
Yeah, And we're underwriting it both on what it's worth
today and then what it's worth that exit. And we're
writing it on exit assuming you know, we'll underwrite and say,
we've worked with Tyler enough that we know he knows
how to run his projects, and he knows his budgets, right,
we verified those budgets as well. We send it a
cost consultant to go through the budget. But we'll know.
You know, somebody comes in and it's they're building for
a one hundred and fifty bucks a square foot. You're going,
(06:35):
all right, that's.
Speaker 2 (06:35):
Not but you also know where the money is being
heavy loaded when you look at the We do espressa right,
we do, and every guy analog, every guy heavy loads
on site work.
Speaker 4 (06:46):
Yeah, maybe and maybe right because every single budget line.
You know, this happened to us recently. Somebody brought us
a budget and said, hey, we want this construction budget.
This is our budget and we looked at the framing budget.
We said that's a bit high. And my team going,
why is a framing budget so high? And I go, guys,
you know what the framing budget is, right that that
framing budget is their own crew. That's the dollars that
(07:08):
they can take to bring back in for the cash
for them to pay for the rest of the project.
And that's why it's early on in the project. But
we know that's the whole thing is that we don't
we don't allow that. We don't allow you.
Speaker 2 (07:19):
Actually think think about this, when you actually think what
a construction loan money is. We have to pay it
before you guys give it back to us. Right, it's
the most crazy thing you've ever seen. We have to
do the work, pay the guys. So you have to
have some money to self fund that development. Right. So
when I say to people, well, before you start a
(07:41):
custom home, whatever you're doing, do you have two one
thousand dollars to dump in, because before you get your
first K, you're going to go through one hundred easily
depending on what you're building. Right. So that's the funny
part about a construction loan or any loan that you
take hard money loan is that you guys don't pay
the developers or builders till the work is done. Yeah,
and you are not going to get a good deal
(08:02):
in a sub if you can't pay weekly like this.
Speaker 4 (08:06):
And the deposits upfront bing go. And so that's you mean,
I think people a lot of you know, especially if
you're doing larger projects. I think if people are doing
smaller projects where there's less renovation, it's more of a
down payment and you're really doing you know, kind of
a small fix and flip where you're just you know,
you'd say, putting lipstick on a pig. That's one thing, right,
And we don't finance a lot of those. Those aren't ours.
We're dealing more with the professionals. And we say our
(08:28):
clients are bankable clients with non bankable situations.
Speaker 2 (08:32):
Okay, well let me stop you there. If they're bankable clients,
why are they going to a bank and paying nine
percent for construction loan or eight and a half?
Speaker 4 (08:41):
I mean, by the time, if you look it out,
it's over a twelve month period with the profit margins
in there, one two things, nine and twelve. Isn't that
much of a difference? Especially when you're only paying on
drawing funds.
Speaker 2 (08:52):
Okay, well, let's stop with that. He buys something from
million dollars, he puts twenty percent down, he's putting two
hundred though thousand dollars down. He's financing eight hundred thousand.
That eight hundred thousand's costing him? How much a month?
Right now?
Speaker 4 (09:06):
One percent?
Speaker 2 (09:07):
Was it? Eight eight thousand dollars a month? Right? We
got a hold that thought that God, it comes in
my face so fast, I hold on. You listen to
Cidey Stumble Toughest Nails on WBZ He's Radio ten thirty.
Oh you get up on the screen. Love it? Okay, good,
We'll be right back.
Speaker 3 (09:23):
Sponsored by Floor and Decor, National Lumber and Village Band.
Speaker 2 (09:40):
And welcome to Sidney Stump o w Bzeen News Radio
ten thirty Toughest Nails and we are back in the
studio with Lena Grillou.
Speaker 4 (09:47):
Okay, Sean Kelly Wren Advisers and Tyler Winder.
Speaker 2 (09:52):
Okay, let's run through the numbers. So hypothetically, you got
eight hundred thousand on the land acquisition, right you're paying
eight thousand of the month. That's double to what you
were paying two years ago. Right, Oh yeah, okay, how
fast is that eight thousand? Well around as fast as
when I was young girl and I had that twenty
eight day cycle. Right, it comes back, roof comes really fast, right, boom,
(10:14):
twenty eight days. So eight thousand a month, Now, time's
that by twelve let's just say, twelve months before you
actually get the excavator to the ground. That's how much
money ninety six that you're never getting back, right, that
we're never getting back. But because that's never had to happen,
it's what I'm saying, he's.
Speaker 4 (10:33):
Not getting he's coming into these almost These are not
you know, projects where you're taking and we're just not
going to fund something where it's twelve months before you
get an excavator in the ground. Right, if you're not
ready to go and you can't go, go go.
Speaker 2 (10:47):
But what if we can't go, go go.
Speaker 4 (10:49):
Then don't borrow. This isn't this isn't the project for you, right,
this isn't the loan for you.
Speaker 2 (10:54):
But how do you know he's not going to get
held up in engineering for three months? Because because a
new engineer says, okay, so now engineering department works right now,
the building pot works as long as they buy the
twenty nine day send you well, we want you to
change that drainage, it stops all over again. You realize that, right,
(11:14):
they can do that by the state of Massachusetts and
many other states. So you have to the twenty nine
day to tell you go back, and then they have
to get in touch us civil engineer. You can't control that, and.
Speaker 5 (11:26):
There's always going to be those kind of hiccups are
going to come along.
Speaker 4 (11:29):
So everything out.
Speaker 2 (11:30):
They weren't every one of my plans every civil.
Speaker 5 (11:32):
Two years ago, three years ago, and money was extremely cheap.
We're able to move things quicker. We're underwriting these as
twelve month carry times. Now we're looking at it, it's
like you automatically have to bump a by right, single
family build from twelve months to eighteen months because the
permitting process, the engineering process to get started is so
much more difficult. So to Shaun's point, where he's going
to say, is like how much you're actually carrying. He's
(11:55):
not going to look at something that needs a special
permit that might take a year to get approvals.
Speaker 2 (12:00):
Okay, so if we take let's say, let's not even
play in my game because we can't play in my
game because that's.
Speaker 4 (12:10):
But I think part part of it is, and this
is underwriting it right. This is going out and saying, well,
what is the advantage of somebody using a private lender
versus a bank? And I always tell people go to
a bank. If you can get financed by a bank
and you can get the cheap rates, go to the bank.
That's not my this is and my clients are borrowing
from banks, just not.
Speaker 2 (12:29):
On that at first. Hard money guys to me, we're
guys that need to get to closing fast. You could
get them to closing fast, then they could refinance within
three four months.
Speaker 4 (12:39):
We have no prepayment penal, so you can refinance. And
we have guys we we finance something and somebody's already
telling us they're going to refinance us. They've already got
a bank. The bank just couldn't close in the timeline, correct.
So we have those projects. What we find often enough
is once people do a loan, they go, oh, you
know what, we're going to refinance with the bank. But
instead of doing it in thirty days, we're going to
add some value to the so we can bump up
(13:01):
the value or we can season it and maybe we
only need to get six months to seven seasoning, So
we'll hold the loan for six months because we're going
to see the value on the back end. And then
if you're looking at let's say it's a six percent
versus a twelve percent, well that's only half a year,
so that's three percent versus what you're paying six percent
for half a year. So it's only three percent differential
(13:22):
on the rate. And then at the end somebody's going
to refinance into another loan, but is getting the value
added by the bank. So there's a bit of a
strategy there from the borrowers.
Speaker 2 (13:31):
So let's just take you were in lending and you
got stuck in COVID and your your developers couldn't get this,
couldn't get that. Delays, delays, delays. Prior to COVID, it
would take c Stumble Development eight to nine months to
build a nine ten thousand script for house. We'd blow
up a thirty five hundred squrift for house in four months.
(13:52):
It was like, phof I can't do it has nothing
to do with my age. It has to do that.
The guys don't want to work as hard anymore. They
don't want to go was fast and furious anymore. COVID
was a game changer. And I think a lot of
my subs are aging out. A lot of my direct
guys are aging out. They're getting tired. I'm not getting
tired out there. I'm still like crazy Cindy out there.
(14:13):
But you got to get back to a time frame
that these guys are not going to let interest eat
them up and spit them out for breakfast like you
just can't when you're working to pay interest and you're
working to pay overhead, and when you see your bottom
line number and then you step in and then the taxes,
especially in a state, the mass tax, is this that everything?
(14:35):
What am I going to work for? And then I
got to get forty eight percent of the government, I
might as well retire. It gets to a point where
it doesn't make sense, right. So the question is to
make when back in the day, when guys went to
hard money guys, they moved that project along really fast.
They were banging them out. But you can't bang them
out anymore. So when you write alone, what's the average
(14:55):
time twelve months, fifteen months, eighteen months.
Speaker 4 (14:58):
I mean we talked about so we typically long term
for us is twelve months with a six month extension,
and the six month extension is there to say.
Speaker 2 (15:05):
Okay, but then you charge that six month extension of course, right,
so let the listeners know that you do pay. So
the first twelve months you pay a cent amount of points.
If they need to execute the next six months, it's
this amount of points again.
Speaker 4 (15:20):
Yep, it's you pay another point and an additional three
percent on the rate.
Speaker 2 (15:24):
Now with hard money, guys, you have points fluctuating with
what the market's doing too, or you locking them in
for that year.
Speaker 4 (15:31):
So we lock in for the year.
Speaker 2 (15:33):
You lock in for the year.
Speaker 4 (15:34):
Yeah, we don't. We don't fluctuate the rate at all.
It's just paying. And it's a twelve month long right.
If you can't get the rate right within those you know,
twelve months, you know, don't write the loan right if
you're so.
Speaker 2 (15:44):
It's actually funny one of my good friends, and I
won't mention a name, because very well known guy in
Boston said, what the hell am I doing?
Speaker 5 (15:51):
So?
Speaker 2 (15:51):
Then I just might as well open up a bank
like guy's worth over a billion? So he's what am
I messing around with here? Anymore? I could do so,
but a bank and lend money right period and not
to the stress of the aggravation of all the buildouts
of the commercial and this and that. But that's he
could say that, but I know who he is, and
(16:12):
that's his high It's like what gets me out of
bed every morning. I should be retired, right, That's that's
the truth. Let's call it what it is. I'm going
to do myself.
Speaker 4 (16:20):
Yeah, get boring.
Speaker 2 (16:21):
Right, So begins the banking industry. But I've saw how
that went too in nineteen ninety ninety one, ninety two,
nine three. That wasn't pretty sight, by the way, And
I think and I think that stayed with me, by
the way.
Speaker 4 (16:31):
And I think a lot of people think of the
hard money lending.
Speaker 1 (16:33):
Right.
Speaker 4 (16:34):
It's easier to do one loan, and people talk about, oh,
I'm going to do a private loan. I'm going to
do a loan in this and it's give one loan
and you collect the interest on one loan. Okay, Well,
let's do one hundred loans. You've got to And then,
by the way, you have to have one hundred loans
almost at all, you know, somewhere between seventy and one
hundred loans for fund at all times. Right, you have
to have diversification. You've got to collect payments in all those.
(16:54):
You've got to give issue construction draws and all of those.
You've got to review the paperwork. You've got to do payoffs,
you have to do modifications. So it's not you know, yes,
the loan, the lending. Everybody's like, oh, it seems like
it's passed well, the single loan. You're in and running
a business.
Speaker 2 (17:09):
Yeah you are, but you're pushing paper, you're moving, You're
you're you're sitting in an office. You can do this
from Florida. You can do this from Alaska. I got
to be out there on job sites. Yeah, which one
you want to do? At my age? Sit with you're
sitting or suit we're up sitting.
Speaker 4 (17:22):
I don't know. You know, I might want to get
back out on the job site. We'll see, I say,
bring me up in a few you know.
Speaker 2 (17:28):
The truth is I like being out there on the
job sites. That's what gets me up in the morning.
If I had to go to sit in an office
and do what you do.
Speaker 4 (17:33):
To be fair, I'm not really the one at the
office all day. I'm running around. I'm running around, not
necessarily on the job site every day, but and I've
had projects as well, so we have our own projects
that you know, I personally that's how we got into
the lending business as we were first owners, less developers
in that sense, more owners for the rental properties. And
so then we have a bunch of rental properties, but
we've probably renovated, you know, well over fifty maybe one
(17:56):
hundred years.
Speaker 2 (17:57):
Somebody in Texas wants to borrow from a hard money guy.
Do you guys all communicate with each other across state lines?
So you don't not, I mean prefer a business to each.
Speaker 4 (18:05):
Other sometimes there I mean, I know groups in Texas,
I know groups that are pan Us. There's groups that
I know. I even speak to groups in London or Ireland.
In Europe. You know, I know the the largest guys
in the private lending side in Europe. So I personally
have those conversations. I don't know if that's usual for
the industry, but but.
Speaker 2 (18:25):
Doesn't that set you upot from the boys to l
the men when you think about it?
Speaker 4 (18:28):
I think so, I think so, I mean.
Speaker 2 (18:30):
Because that becomes you become more national at that point,
meaning okay, I'm gonna call Joe Schmoe in Texas. I'm
gonna take an FMI off the deal, right and Joe
schmol is going to write the deal for the person Texas,
or Joe schmoll is gonna write the deal in Florida
or Arizona. See, that's the goal i'd go after right now.
Speaker 4 (18:49):
Yeah, And for me it's not. I mean, we we
do what we do, and we're lenders in Boston still here.
We're really good at what we do here. But you know,
when occasionally we'll lend in another state the client, you know,
if you want to go do something in Florida, we'd
look at it, right, But you know, would we do
something all over nationally? No, Occasionally we'll take a look
(19:10):
at something else.
Speaker 2 (19:11):
To me, that is is networking. So if somebody calls
you from another state, Yep, I got a guy to call,
here's his name, here's his number, and then you two
work out a deal for the referral fee, yep.
Speaker 4 (19:22):
Or we wouldn't. I mean, typically we're not taking.
Speaker 2 (19:24):
I'm putting a thought in your brain right now. I
don't know if it's a business, I'm.
Speaker 4 (19:27):
Gonna retire and just take referrals from the rest of
my life. I'm done. This is it.
Speaker 2 (19:31):
It's a good referral, by the way, all right, I right,
I'm going to break. This is city Stumping. You listen
to Tough his Nails on w b Z and He's
Radio tempt there and be right.
Speaker 3 (19:38):
Back, sponsored by Pellow Windows of Boston. Next Day Molding
and Kennedy Carr.
Speaker 2 (20:00):
And welcome back to City Stumble to his Nails on
WZ News Radio ten thirty and I'm here with Lena
Grillo and Tyler Winder you forget your name and Sean
Kelly Rant. Okay, there we go, we all back together again.
What was the question we had? Benay said the other question,
can you keep up with this?
Speaker 6 (20:20):
What are the current trends you were seeing in the
real estate market? And how should a new agent position
themselves to take advantage of these trends?
Speaker 5 (20:28):
So going agency side obviously a little bit different than
the lending and developer side of everything, but there's anything
in the real estate agency world. You're going to be
looking at this massive lawsuit that just passed that now
sellers don't have the option of necessarily paying a buyer's agent,
and a buyer's agent is going to have to get
signatures from their client in order to even show a house.
(20:49):
So a lot of the let's call it the rookie agents,
who may do one deal a year, just have the
active license. I think we're going to start seeing them
drift out of the industry just because there is this change.
I think the opportunity does come with change, with all
these new agents that can come in and take advantage
of a little bit of a turmoil in the agency side.
But strictly selling wise, that's the biggest thing that we're
(21:11):
seeing right now.
Speaker 2 (21:12):
I'm sorry, did he answer your question? Because I swear
I don't even know what the question was. I got
a little brain did here? Yeah?
Speaker 6 (21:17):
The question was what are the current trends you are
seeing in the real estate market and how should a
new agent position themselves to take advantage of these trends?
Speaker 2 (21:24):
Did you actually inner? Okay? Is the person happy with that?
It's okay? Thank you? Is there another question?
Speaker 6 (21:31):
Which industries do you think will benefit the most from.
Speaker 2 (21:33):
When you talk to somebody, you talk into the mic
and then look at him. We're teaching her how to
call position. Here, I'll turn your body thinking I'm tall.
Speaker 6 (21:41):
This thing is too short for me, I don't know
how to do well.
Speaker 2 (21:43):
We can't help it. You're five to eleven.
Speaker 6 (21:45):
Literally, Which industries do you think will benefit the most
from the expected rate cut, particularly when it comes to
securing financing?
Speaker 4 (21:56):
Which industries in general? I mean, I think anything that's
a heavy borrow.
Speaker 2 (22:00):
Or Mady, do you understand the question?
Speaker 4 (22:02):
But I think I think we have a tough discussion
about Let's let's have a different discussion about interest rates.
So let's go ask the question of why are we
dropping interest rates? Right? Is it because of inflation? Well,
we haven't hit our inflation target, So if infrastrates start
coming down substantially, it's not because of inflation. It's because
people are having fundamental worries about the economy. Right, So
(22:22):
I think that the view if interest rates are following
very hard, it's because the economy is not doing very
well at all. And I think we're seeing this right now.
If you go look, auto delinquencies are spiking, FHA, housing
delinquencies are spiking.
Speaker 2 (22:36):
Credit card Because John's going to debate that we is
bing bong bing yet being on here, okay, perfect being,
did you hear what he just said?
Speaker 7 (22:53):
Lena was going in and out.
Speaker 2 (22:55):
Oh God, damn, Lena, she's screwing up my whole little
vibe going here the phone delinquencies I heard about ahead.
Speaker 4 (23:06):
Yeah. The fundamental point I'm making is is people are
looking and saying, hey, when interest rates fall, that's going
to be good for real estate and a lot of
other industries that borrow a lot, including the auto industry
and everyone else. My fundamental view on this is, if
interest rates come down hard, it's because the Fed is saying, hey,
(23:27):
we see real turbulence in the economy, and we see
some really bad things on the horizon, and the economy
isn't doing as well. So it's not because inflation is
coming down. Interest rates are dropping because the economy and
jobs aren't doing as well, right, and the average consumer
isn't doing well.
Speaker 2 (23:43):
But what did you say about it?
Speaker 4 (23:44):
Agree?
Speaker 7 (23:45):
I agree with that one India and and last week
and the last I think it's last week of the
week before last segment that we uh, you and I
were discussing. I said, bad news is good news in
the real estate industry and the world the mortgage industry,
because we don't want to see three percent race. If
we see three percent race again, we're in trouble. That
means that we had to let me a bad news.
Speaker 2 (24:06):
Correct. I hear what you're saying. But you said something
about what do you call loans? Takes me up.
Speaker 4 (24:12):
The delinquencies on the loans that are on the margins,
so FHA delinquencies were up or v H A FHA
some of the the higher lower down payment loans, the
delinquencies seem to be up.
Speaker 2 (24:26):
Hey, John, you said the opposite last night on on chat.
I just want you to know that. Did you hear
what he just said?
Speaker 4 (24:31):
No?
Speaker 7 (24:32):
What I what I said was there're they're performing. And
I also said that the VA loans was required zero down.
Speaker 2 (24:39):
No, we weren't talking. We talked about VA loans. Put
that aside. But that's a that's a small percentage of
people that get VA loans. Okay, we were talking about
exactly what he just said, and you said they were
the best programs ever and they're doing really well.
Speaker 7 (24:54):
No, Actually know what what I said, Cindy was you
can't lock people for putting down law law now putting
that a lot of money, I said, because you know
it was because of the FAHA loan itself, that conventional mortgages,
because Traditionally you had to put twenty percent down. It
wasn't until the FAHA came into the market in the
nineteen thirties that people started putting less money down and
(25:17):
conventional mortgages.
Speaker 2 (25:18):
Had to actually Okay, all right, I'll hold you there.
What did he just delivered to you about that? Though?
Speaker 3 (25:27):
Wait?
Speaker 2 (25:27):
I think grand Cardon called you out on that last
night when he said those are loans that are going
to go bad the fastest, and he just said it
to you just now. Did you hear what he said?
Speaker 4 (25:38):
Yeah? I heard him.
Speaker 7 (25:39):
I said, I heard what he said. Once again, I
have to go look at that data. But right now,
and this is a tough economy, things have been getting
tougher for people. I'm not and I can't dispute that.
I can't disagree. I agree with that and this moment.
But once again, just because someone put a lot of
money down doesn't that they're a bad bet. That's all
(26:02):
I'm trying to say.
Speaker 2 (26:02):
You can't just okay and that and that's fine. I
hear you, And no one's a bad person. Okay, what
are the loans the lower end? When you're putting the
lower end of money down, how are those loans doing
right now.
Speaker 4 (26:16):
So the delinquencies are increasing. I don't quote me on
the exact figure. And I think you know, to this point,
ninety percent of borrowers are still ninety plus percent of
borrowers are still paying on time. That's my last recollection.
Speaker 2 (26:29):
Okay.
Speaker 4 (26:30):
I think what you're seeing is you're seeing a worrying trend.
And so what we're talking about is less the actual numbers,
because if you look at mortgage delinquencies overall, on average,
they're very low, historically very low, right because people right
now have you know two and three person, I mean,
you can't pay that mortgage. You know, it's a bigger issue.
The worrying trend is if you look across sector segments
(26:52):
of where people are borrowing, and this is even student loans, right,
so they just came off of their loan forbearance, right spikes.
Delinquencies on student loans have just spiked again. And so
when you look at the consumer and all their loans
and their borrowings on the margins, the delinquencies are starting
to grow up quite substantially.
Speaker 2 (27:11):
About credit card debt.
Speaker 4 (27:13):
Credit card debt is up, delinquen.
Speaker 2 (27:16):
We have any factual information of how much. No, not me.
Does anybody on on Chadow have any of that? Because
you guys are really good fast on Google. I can
I can locate that, can you please? I just want
to know so in your opinion as a hard money lender, right,
you get a lot. You're putting your money on the streets. Now,
(27:39):
what is it? What's the money? One point one four?
Speaker 4 (27:43):
What the total delinquencies or the total credit card debt?
Speaker 2 (27:46):
Total credit card debt?
Speaker 4 (27:47):
But that's up. But how much of the delinquencies the
delinquency rate is should be. It's not huge, but it's
it's right a trend.
Speaker 2 (27:58):
I'm going somewhere with us.
Speaker 4 (28:00):
And autodelinquencies are up. SMP just put out a report
on it.
Speaker 2 (28:04):
Okay, so there's more delinquencies now than there was four
years ago? Can we say that?
Speaker 4 (28:09):
Clearly?
Speaker 2 (28:10):
Clearly? Clearly Okay, more than fifty over the last year,
thank you so much.
Speaker 4 (28:18):
Increased increased by more than fifty percent. Yep, yep.
Speaker 2 (28:21):
So we'll indeed go alhead for the delinquency rate.
Speaker 7 (28:26):
For delinquency rate. Right now, we're at three point two
five percent of Americans are delinquent. That's up from three
point one and and I'm getting this from lending three
dot com. The most recent and thirty eight DELINQUISCY thirty eight.
Speaker 4 (28:43):
But that so what what happens is when you look
at that data and you start looking at the averages.
It's when you disaggregate those averages when it gets really
interesting is because what you'll see is, and this is
what I'm expecting to see but not having the data
in front of me, is you'll see that those borrowers
that are the lower interest rate twenty percent down, high
income borrowers are probably doing better, and their delinquency rate
(29:03):
hasn't barely moved. And then when you go and you
start breaking it down, you say, okay, well, FHA mortgages
are what percentage of the market, but their delinquency rates
now are not at three percent. Those are the ones
that are going from whatever it was maybe before a
three percent to now a much higher rate, and so
that must be up much higher. So it's really disaggregating
that data and looking on the margins and seeing that
(29:25):
certain segments are much higher.
Speaker 2 (29:28):
Okay, So here again, you've got the money out in
the streets. You're the guy that's worring. Are you worrying?
Are you nervous. Tell me where you stand on a
scale of one to ten. We were cocky three years ago.
Go where you fell three years ago.
Speaker 4 (29:41):
Go back three years and I'll go back.
Speaker 2 (29:43):
Where do you feel? What do you feel?
Speaker 4 (29:44):
So go back to you know when I came out
of school and I started working.
Speaker 2 (29:48):
He's making me hold that thought, Hold that thought. Oh ah, yeah,
he's stick out. What we see him walk in the room.
You want to throw him out and gone, all right,
hold that thought. Welcome to Cindney Stumpo and we'll be
right back. Went Toughest Nails on WZ News Radio attempt
and you can see him game really.
Speaker 3 (30:01):
Tied sponsored by Newbrook Realty Group, Boston, would Smaller Insurance
World Auto Body and Tasca Drive Auto Body.
Speaker 2 (30:20):
And Welcome back to city Stoppo Tough his Nails on
WBZ News Radio ten thirty. And I'm here with Lena.
Speaker 4 (30:25):
Grillo and Tyler Winder, Sean Kelly Rand.
Speaker 2 (30:29):
And we got a live group from Chadas Social Audio
and we have Jonathan Bing with us on here. We're
discussing go ahead.
Speaker 4 (30:36):
Finish Delinquency is the economy yeprtgages.
Speaker 2 (30:40):
I asked the question to you where we were three
years ago, right, Yep, you were in a more comfortable
position lending money. Are you more comfortable three four years
ago than you are right now?
Speaker 4 (30:50):
I would say we're about the same, and that's that's
a personal statement, not we're in a statement on the economy.
And I think when we set it up, let's talk
about why we got into the lending business. Okay, So
we're in the lending business. Before we're in the lending business,
we're owners and operators, and we went into the lending
business in twenty seventeen.
Speaker 2 (31:05):
I get a hold in there for one minute. You
got banks tightening up out there, and you're telling me
you don't feel the same way as a hard minded guy.
Speaker 4 (31:14):
We feel pretty comfortable with our lending today.
Speaker 2 (31:17):
Exactly how you felt two three.
Speaker 4 (31:19):
Is not exactly exactly. I don't you know, we're are you?
Speaker 3 (31:22):
Okay?
Speaker 4 (31:23):
Well, let me talk about what we do and why
we do it.
Speaker 5 (31:25):
Right.
Speaker 4 (31:26):
So, my job is protect my investor's capital and my
own capital, and that's why we started this business. And
so we were on the equity side in twenty seventeen,
we switched into a private lending structure. Why because we
were worried back in twenty seventeen looking back ten years
ago to two thousand and seven, saying hey, we're on
ten year cycles. We don't know when the next cycle
is going to hit, but we got to get ready now, right,
(31:47):
So twenty seventeen nineteen it was coming. Twenty seventeen, we said,
button down that patch.
Speaker 2 (31:53):
Yeah.
Speaker 4 (31:53):
In twenty nineteen, right before the pandemic, right in nineteen,
we felt the market slowed down absolute and so actually
from our investors standpoint, that was one of our worst
years was the twenty nineteen and kind of twenty twenty
for returns. Why because we piled up on cash when
cash was zero and we said hair investors going, why
aren't you putting the cash out?
Speaker 2 (32:14):
Why aren't was going to repeat it cycles.
Speaker 4 (32:17):
Right, and we were looking at it. We saw it
slowed down and we were getting ahead of it. We
didn't know that billions are going to be trillions are
gonna be pumped into the market.
Speaker 2 (32:25):
Would have been right if COVID didn't happen.
Speaker 4 (32:28):
And so coming out of it, so how have we
played right? So we always played defensive. We're lended and
so what are we seeing is you're talking about some
of the things are getting tough run development. One of
the things we're shifting into is we see it right.
So early on, we did a lot of condo plays, right,
so we were lending to developers that were, you know,
converting residential to condos. Well, right now we say, hey,
(32:49):
if rates are going up, who borrows a lot of money? Well,
it's first time home buyers. What are first time home
buyers buying? Well, they're buying condos. So let's shift away
from the condo in first time home buyer market and
let's focus on the markets that are the markets where
they're putting down more. I mean, are your buyers, Cindy,
worried about whether they can borrow money from the bank
and at what rate? Or are they coming in all cash.
(33:09):
It's just not the same concern.
Speaker 2 (33:11):
It's a different I come on, I'm playing in a
whole different league, folks. You can't even come So that's
that's I am not okay. So what we do is
not even half a percent of the population, not even
a point, not a half quarter percent of the population,
right quarter to a half of the population in a
country can afford to see stumble home. Right, So we
(33:32):
can't I can't look at that right. But the game
I play in on long term hold or investments I'm
buying or whatever I'm doing, I don't want to sit
there and pay nine percent juice. I'd rather just use
my own capital right now, and then let's have that again.
Remember every time I take my capital, I'm losing five
point twenty five on a Treasury bill. Right, so my
(33:53):
money's making five point twenty five and a treasury bill,
let's say a normal savings four point eight nine. But
there's the spread difference. If I went and borrowed, I could, Okay,
how I could say to you this way, I'll I'll
go pay seven percent on money. Right, I'm getting five
and a quarter. So this is what it's costing me.
Now I could swallow that, right because I got the
(34:14):
spread there. I'm making it on one end. Or I
just write the check I offered.
Speaker 4 (34:19):
You could invest with me and earn a lot more.
But that's you know, like listen, that's a topic for
another day. We can take it down there, but you
know it's SPoD. You need to be a borrower just
to do business with me. But so what we're so,
how have we positioned ourselves? Is we positioned ourselves knowing
that at some point in time there's going to be
a change in the cycle. And so I think what
we're seeing to you're gonna.
Speaker 2 (34:38):
Get my money is if I overlook every I can't
swear every sheet of everything that comes in when I
look at the specs of coming in, Okay, this is
what all right? Yeah, this foundation is not going to
cost them. Oh yeah, we bring you in. It's okay.
As long as I sit on that to prove every
one of those loans and we'd be good. Then we'll
talk about it afterwards.
Speaker 3 (34:58):
The cheapest credit officer we ever hired.
Speaker 2 (35:00):
There you go.
Speaker 3 (35:03):
She invests and she reviews all the construction.
Speaker 2 (35:07):
Absolutely day.
Speaker 4 (35:10):
Their office. Unfortunate, our offices on Lincoln Street in downtown driving.
Speaker 5 (35:14):
I'll give her a week before she's dying to get
back on the field. So but but I think you
can talk about it, and then you.
Speaker 2 (35:19):
Talk about go ahead, we're playing guys, go ahead, we'll
talk about I'm not.
Speaker 4 (35:25):
So today, what are we doing? Well, we're shifting out
of the products where we think that there's going to
be more stress, which is the first time home buyer market.
Speaker 2 (35:32):
I'll just come and shift less money than he changes
I'm playing goohead.
Speaker 4 (35:38):
And we're shifting into the projects where we think that
there's less stress and the buyer, the end buyer is
going to have the money to pay. And that's what
we're seeing, right. So the good projects and the higher
end projects are still doing well, right, so that those
that are closer to the segment that you're dealing. And
the other stuff we're doing is a lot of bridge lending.
So we're lending on a lot of.
Speaker 2 (35:54):
Palk about that. Let people understand what a bridge loan is.
You ask three people what a bridge loan is, they're
going to give you a three different explanation of what
a bridge loan is. I know what a bridge loan is.
I've debated people on that network right there what a
bridge loan is.
Speaker 4 (36:10):
So a bridge loan is a bridge to get you
from one place to another, and normally that is from
acquisition in our case to how.
Speaker 2 (36:18):
About this, let's stumb it down. I own a single
family home I haven't sold yet, but I've got a
million dollars with the equity in it. Right. I own
a free and clear but I want to go buy
this one from million dollars same price. But I gotta
sell this one. Right, So bridging to me is okay,
grab that, mister banker, close me up. Lean that first
(36:41):
properly that I own for nothing, and there's my bridge loan.
Speaker 4 (36:43):
Yes, okay, And that's one type of bridge loan, but
I think of the other type of bridge loan. So
if you're an.
Speaker 2 (36:49):
End user, is going to understand that type of a
bridge loan between okay.
Speaker 4 (36:52):
And then some of what we're doing is a little
bit more like institutional right. So I'm dealing typically with
larger clients and a lot of them and sophisticated clients.
So what am I getting today, Well, I'm getting a
lot of calls from guys that you know, historically wouldn't
or firms that wouldn't have used private lending or non
bank lending. And why why what are they seeing? Well,
they've got an opportunity to buy let's say, an office
(37:14):
asset downtown Boston for a quarter of what it trade before.
Speaker 2 (37:18):
But you know what paying for those right now?
Speaker 4 (37:19):
Right And they're paying you know, twenty five percent, twenty
five cents on the dollar of what the restaurant and
they're going to convert it to residential and there's tons
of incentives and when you look at it or you
know what, to be honest, at that price, just leaving
it as an office works. But they go to a
bank and a bank goes, oh my god, it's office.
I can't touch it. They go, well, no, no, no, but
it's office at twenty five percent of.
Speaker 2 (37:42):
Can't touch a horror of what it is. They're taking
massive hits on their books.
Speaker 4 (37:46):
Then where do they go And the bank will say, well, okay,
if you have a plan in place to convert it
to residential, will lend you the money because it because
it's residential, and that's cool, and that's you know, we
can get that approved. But if it's office, so what
do they need? They need a bridge loan to acquire
it to get there or so that's one they need
a bridge to get from one place to another in
order to get the bank loan. Another place is you know,
(38:07):
we've been financing quite a bit of multifamily, so somebody
will be able to buy a property you're either at
auction or off market at a very good price, but
the banks can't meet the timeline.
Speaker 2 (38:17):
How many auctions have taken place right now?
Speaker 4 (38:20):
Tons, I don't know. I mean they're always up. The
problem is that normally they used to get canceled all
the time, and now I think they're going through they
cancel It came up with.
Speaker 2 (38:28):
The interest payments. You see auctions going through right now.
Speaker 4 (38:32):
Auctions are starting to go through across America. It is
significantly low.
Speaker 2 (38:38):
Don't compare a mass. There's a lot of auctions in
Florida right now. Go look at the auction list in Florida.
Speaker 4 (38:42):
I don't know Florida.
Speaker 2 (38:44):
That's why I follow that one. Tons tons of them.
Not the greatest areas that a lot of them are going.
They're coming up for auction. So do you have any
questions on there that you know of guys? Okay, good,
because when he comes walking in, he sticks a phone
in my face with the clock, and I'm like, why'd
you come in here? We don't want to see your
(39:05):
face till you're like twenty seconds out because then you
stress me out. Then I look at you and I
lose my comfort. There you go, Okay, you're easy on
the ice. That really helps. Welcome to my producer. Go ahead, fins,
sure what you're saying, I'm sorry, So.
Speaker 4 (39:19):
I mean, I think that just sums it up. This
is just a bridge from one place to another.
Speaker 2 (39:23):
John, you're out there bing bings. I still got you.
There's being still out there. Do you have anything to
rebuttal what he's saying.
Speaker 7 (39:35):
I find it fascinating that over a year later, you're
still the bridge loan. You still can you head around?
Speaker 2 (39:43):
Yeah? Because to me, a bridge loan. I'll keep saying
that there's many different bridge loans, but the average person,
end user uses a bridge loan to what I'm explaining.
That's a more sophisticated bridge loan than what he's explaining.
But the average consumer needs that bridge to close on
(40:04):
their other house before because they didn't sell the other
house yet they need to close on the new house.
That's all end users need to realize what a bridge
loan is. Unless they're in the business and you want
to make it complicated. I want to make it uncomplicated.
But hold that thought. This is Sydney Stumble Toughest Nails
on WBZ News Radio ten thirty. Will be right back
to you, and welcome back to Toughest Nails on WBZ
(40:34):
News Radio ten thirty. I'm here with Sean Tyler. Okay, guys,
how do people reach you? I know, you're going to
do a second episode with me, but go ahead out
people reach you. You'll be back next week.
Speaker 4 (40:42):
Sean Telly Rand. You can find me on LinkedIn, Instagram
and our company has already advisors, and we're on Instagram
at night and it's on the We've got a web
page as well.
Speaker 2 (40:53):
Okay, Spey. Last name, so people care.
Speaker 4 (40:55):
Kelly Rand k E L l Y hyphen r A
n D first named Sean s.
Speaker 2 (41:00):
E A nyl Go ahead, yeah.
Speaker 5 (41:02):
And Tyler Winder most common one is on LinkedIn Tyler
t I L E R Winder w I n D
e R. Or you could find us on Instagram. Company
website is TB Winder or myself is mister underscore Winder.
But most likely you'll unfollow me because I like to
chat quite a bit about stupid topics like what.
Speaker 4 (41:19):
And what about your only fans page?
Speaker 5 (41:20):
My Only Fans is similar to the Instagram one, but
I think there's only one fan.
Speaker 2 (41:25):
On there, everybody. I have a great, safe weekend. This
is City Stumple. We'll see you next weekend.
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