January 31, 2025 • 33 mins
Born and raised in Lakewood, California, Craig Hill attended Lakewood High, Long Beach City College, and received his Bachelor of Science degree from California State University, Long Beach. While attending CSULB, he followed his love of baseball by making his profession buying and selling baseball cards.
In 1984, Craig took his first job in the lending industry working for Vanguard Mortgage as a loan officer and loan manager. While employed there, he met and began funding REO purchases with Bruce Norris. When Bruce officially started The Norris Group in 1994, Craig came aboard as both loan officer and investment manager and never looked back. Since that time, they have arranged hundreds of millions worth of investor loans.
Recently Craig served several years as vice chairman for Exbound, a nonprofit organization designed to help developmentally disabled adults increase their social interaction. Craig enjoys sports and spending time with his wife Laura and daughter Caitlin.
In this episode:
- Craig Evans introduces Craig Hill, his background, and early career in lending.
- Joining The Norris Group : Why Craig Hill left Vanguard Mortgage to partner with Bruce Norris.
- The Changing Landscape of Hard Money Lending: How investor-focused lending has evolved over the years.
- The Norris Group’s Underwriting Process.
- Property Evaluation Strategies: Key factors in assessing profitable investment opportunities.
- Protecting Investors & Ensuring Quality: How The Norris Group prioritizes investor security and deal integrity.
- Craig Hill’s insights on securing funding and making smart investment decisions.
- The importance of underwriting in building trust and long-term success in real estate investing.
The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.
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Narrator (00:01):
Welcome to The Norris Group real estate podcast, a
show committed to bringing youinsights from thought leaders
shaping the real estateindustry. In each episode, we'll
dive into conversations withindustry experts and local
insiders, all aimed at helpingyou thrive in an ever-changing
real estate market. continuingthe legacy that Bruce Norris
(00:24):
created, sharing valuableknowledge, and empowering you on
your real estate journey.
Whether you're a seasoned pro ora newcomer, this is your go-to
source for insider tips, markettrends and success strategies.
Here's your host, Craig Evans.
Craig Evans (00:45):
Hey everybody. It is Craig Evans from The Norris
Group here. We are super excitedtoday to have a great show for
you. We've actually got one ofour internal officers with us.
Craig Hill is our Loan Officerand Underwriter for The Norris
group. Craig was born and raisedin Lakewood, California, while
Craig attended Lakewood highLong Beach City College and
(01:07):
received his Bachelor of Sciencedegree from California State
University Long Beach. Whileattending CSULB, he followed his
love of baseball by making hisprofession buying and selling
baseball cards. In 1984 Craigtook his first job in the
lending industry, working forVanguard Mortgage as a Loan
Officer and Loan Manager. Whileemployed there, he met and began
(01:32):
funding REO purchases with noneother than Bruce Norris. When
Bruce officially started TheNorris Group in 1994 Craig came
aboard as both a Loan Officerand an Investment Manager, and
never looked back. Since thattime, they have arranged
hundreds of millions worth ofinvestor loans together between
Bruce and Craig. Recently, Craigserved several years as Vice
(01:55):
Chairman for Exbound, anonprofit organization designed
to help developmentally disabledadults increase their social
interaction. Craig enjoys sportsand spending time with his wife,
Laura and daughter, Caitlin.
Craig, it is so good to have youon today, my friend. I know
you're busy and we got a lot ofthings going with a lot of
different things.
Craig Hill (02:16):
Thanks for having me. I appreciate it.
Craig Evans (02:17):
I appreciate you carving out some time. I guess
you didn't really have an optionsince I said, Hey, we're doing a
piece on you today, right?
Craig Hill (02:24):
Yeah, yeah, I guess not this. This one was not
optional.
Craig Evans (02:29):
Well, listen, let's just jump right into stuff,
okay. Because I want to get intowhat we do, and what we're about
and how things started, right?
So, you know, I've heard Brucetalked a lot about in the early
days of his investing career,and that he was working to find
deals, and that you were a bigpart of that early on as his
money source, right? So, do me afavor, tell our audience how you
(02:54):
and Bruce really first startedconnecting and working together.
Craig Hill (02:59):
Yeah. Well, it's an interesting story for a couple
reasons. This is probably goingback 30 plus, maybe almost 35
years ago when, I first metBruce. He had somebody that was
actually kind of calling on hardmoney loan companies at the
time, and he was trying to seesomebody that would be a fit.
(03:23):
Well, this person that he hadcome to see me, we got along
real good. So Bruce, you know,Bruce set up a meeting. So Bruce
and I met for the first time.
Now, what's interesting aboutthe hard money loan loan
business at this time, and a lotof people don't realize this,
because now hard money is almostsynonymous with investors.
Craig Evans (03:44):
Yep.
Craig Hill (03:44):
Well, when Bruce and I first met, that was not the
case. Like, basically, hardmoney was based on, like, one
fact, like, it's worth what youpay for it. Like, so, here I am
with Bruce, just kind of a quickscenario of our first
transactions together. Hebrought me two deals in Marino
(04:08):
Valley. He used to work a lot inMarino Valley, California. So,
now the numbers aren't going tomake sense, but you'll see the
point. So they were probablyworth between 90 and 100 grand
when fixed up.
Craig Evans (04:21):
Okay.
Craig Hill (04:21):
Well, Bruce brought him to me, and he had paid 42
and 39, okay. So it was my jobto convince the ownership at the
time that these were good deals.
Now bear in mind hard money atthis time, that same house in
Marino Valley, if you hadsomebody living there that had
(04:43):
never made a payment and wasdesperate to get money, we
probably would have let 60,000to that client, okay.
Craig Evans (04:56):
Okay.
Craig Hill (04:56):
That's just the nature of the business, you
know? That's who went. Nowintroduce Bruce, who totally
throws everything upside down.
Well, here's a guy with a lot ofmoney, good credit experience,
but he's buying these housesfor, let's just say, 40 grand,
okay. So, all of a sudden, thatupsets the apple cart, right?
Craig Evans (05:19):
Right.
Craig Hill (05:19):
Because I know Bruce is thinking "Shouldn't I get
60?" you know? And you know, theownership at the time was
thinking, Well, geez, we shouldgive him like 25.
Craig Evans (05:31):
Yeah.
Craig Hill (05:33):
So basically, what I had to do was I just basically
convinced the ownership thatthis was transformational, like
this is going to be a whole newway to do this, at least for me,
personally.
Craig Evans (05:47):
Sure.
Craig Hill (05:48):
I don't see anything that makes more sense than this.
So I was able to get Bruce whathe paid, for him.
Craig Evans (05:55):
Okay.
Craig Hill (05:55):
So, it was somewhat of a compromise. So Bruce was
happy with that, and basicallywhat he did to like, kind of
reward the effort. I think hepaid probably six months in
advance of interest, so.
Craig Evans (06:10):
Okay.
Craig Hill (06:10):
Right away, how many clients do we have that is doing
that right?
Craig Evans (06:14):
Right. Exactly.
Craig Hill (06:16):
We're lucky if we get one payment in six months
the way the business was, okay.
So all of a sudden the lightwent out on in my head, and I
totally disregarded the hardmoney model that I knew.
Craig Evans (06:30):
Okay.
Craig Hill (06:31):
And I started working with Bruce. And what
that meant was I went, this was,if people remember the dirt, you
know, that go way back the HUDAuctions, right? Those were when
Bruce and I first startedtogether. Well, everybody else
would be grinding for the monthtrying to get a few deals. I'd
(06:52):
just wait for Bruce to go to theHUD auction and send me over
like a sheet of paper with thefine deals he just bought,
right? So for me, this made alot more sense.
Craig Evans (07:03):
Yep.
Craig Hill (07:04):
So I just kind of started thinking, well, Bruce
can't be the only one out there.
So,if anybody else, once again,long time, and even not so long,
because Mike is still aprominent figure. Now, my second
client was Mike Cantu.
Craig Evans (07:21):
Okay.
Craig Hill (07:22):
So, I was able to get Mike on board, and how we
met. Mike was Robin. Robin, hadup at the time. She worked in
our like, kind of a doing a lotof things, but she was involved
with the foreclosures too.
Craig Evans (07:38):
Yeah.
Craig Hill (07:38):
So Mike was trying to buy one of our foreclosures,
and Robin said, 'you should talkto Craig'. So I talked to Mike,
I told him what we were doing,and all of a sudden, now I had
two guys sending me all thesedeals.
Craig Evans (07:56):
Right.
Craig Hill (07:57):
Whereas I'd get more deals from those two guys in a
month, and everybody else didtheir whole client base for two
or three months.
Craig Evans (08:03):
Yeah.
Craig Hill (08:04):
So it's sort of revolutionized. And now, like I
say, it's synonymous with hardmoney it's investors. A lot of
people don't do what issituational hard money anymore.
So it was really kind ofrevolutionary. And I mentioned
Robin's name because Robin,probably about a year and a half
(08:25):
into this, maybe less, Brucedecided he wanted, it'd be a
good idea to open up a hardmoney company of his own. And so
basically, you know, that's whathe did, when he opened up The
Norris Group, he asked me if I'dcome and do the the long
business for him.
Craig Evans (08:44):
Well, so let me ask you that, why is that an aspect
that you know, you're obviouslywith Vanguard, you got, you're
with a company that's got brandrecognition and is already
rolling. I think maybe you'veanswered it. But I want to hear
if there's other ideas therethat you know, why did you feel
comfortable say, Hey, I'm gonnalead what's known and go with
(09:07):
Bruce into in essence, let'sface it, at that time, it's kind
of a fledgling startup, right? Imean, yeah, you were doing loans
and stuff. It was, it was abrand new...
Craig Hill (09:15):
Yeah, yeah. And anybody that knows me that's
been around me these last 30years, they know that is totally
out of my character.
Craig Evans (09:23):
Sure.
Craig Hill (09:24):
Totally out of my character. So Bruce and I met
numerous times, and I just, themore I talked with Bruce, I just
felt like there were, like a lotof, there was a lot of potential
for what I could do that maybe Iwasn't doing at the company I
was with.
Craig Evans (09:44):
Okay.
Craig Hill (09:45):
It just really felt like I just really followed my
gut and it seemed like the rightdecision, and looking back on it
now, obviously I have, you know,no regrets at all. We were the
perfect fit for 30 years.
Craig Evans (10:00):
Yeah.
Craig Hill (10:01):
But it was also a good opportunity for me. Where I
was, I just did, like, one sideof the business. I just
generated the deals. Well, as Iwas near the end, getting ready
to leave with Bruce, I wanted todo everything, because I talked
(10:22):
to people about what I did, andthen, well, Craig, can I get in
on this? So I was doing a lot ofvolume, so I was able to tell
them that, you know, hey, I'dlike to start funding some of my
own deals. So going with Bruce.
It was kind of interesting theway it worked out because our,
(10:43):
kind of, our initial plan is,you know, how those initial
plans go, like, I was going tobe like, the one that, like, had
the borrowers, if you will, andthen he would be more on the
money side initially with, youknow, bringing people in and
ironically, the way it kind ofturned out, a lot of the money,
people at the company I was withwanted to follow me because they
(11:08):
knew the quality of paper that Idid, even going, you know, back
before there was a Bruce. I wasthat they used to joke I was
charging hard money rates andwriting B paper like that's kind
of how, I've always been, thatway. I've always wanted to write
good paper. So that was naturalfor maybe them to want to come
(11:32):
to my side. But it turned out tobe, with all of Bruce's, his
love for speaking. It justturned into this natural
chemistry where he was actuallygood at generating the interest
in the borrowers. And then Iturned out that I was really,
really good with the the moneyside of it. Yeah, it just kind
of morphed from there. And then,like I say, when Bruce started
(11:56):
The Norris Group. Robin camewith me and set up all the like
the loan side of it. Anybodythat say knows me knows Robin,
and then say Rob did who's stillwith the company, and Robin
still is there as needed, kindof a part time help. Rhonda was
actually the first person thatBruce hired, because she set up
(12:21):
the whole office for and she hadworked at a real estate company.
So, that's kind of how it allbegan. And we just, you know,
the the chemistry and thecamaraderie that the say, the
four of us shared for all thoseyears was, you know, it was,
just was, and has been a greatexperience. And then, you know,
(12:46):
the transition seems to beseamless with the, you know, how
everybody feels now. So it's,that's kind of the background.
But it really is interesting howhard money changed from being,
you know, lending situationallyto lending to investors.
Craig Evans (13:03):
Sure. Well, you know, since I've taken over The
Norris Group, where we're 13months into kind of the change
of me owning now and stuff, and,you know, the interesting thing
is, we still got a lot of newinvestors and other real estate
professionals want to jump intothe investment side, of hard
(13:25):
money, trust deed lending,things like that. So, you know,
so for those that are new, whatI want to do is, I want to jump
into the technical side of theloan business a little bit. So
first of all, let's kind of backin and because there's a lot of,
you know, there's a lot of termsthat we throw around. And in the
business, we throw aroundbetween, you know, hard money
lending, private lending, trustdeed position, first position,
(13:48):
trust deed position, all ofthese things, Bruce, or Craig, I
said Bruce, Craig, if you will,kind of take us through a little
bit and tell us, you know,what's hard money, what's
private money? What's, you know,trust deeds, walk people through
that process.
Craig Hill (14:06):
Yeah, well, interestingly enough, the first
because I get that, that's aquestion I get a lot like, it's
a term to so many people. So thefirst thing I say is, I start
out by saying, the paperwork ofit is really no different than
Bank of America. So, if youunderstand, like when you get a
(14:31):
first on your house with Bank ofAmerica, you understand the
paperwork with hard money, it'sreally not any different. So,
that's probably the easiest waysay to start the conversation.
The second aspect of it is a lotof people think, you know, hard
(14:54):
money is almost a blank checkfor whatever they need. Like,
you know. Whether it's personalloan or we get a lot of, just
there's such a wide variety ofpeople, they just hear the term
hard money, and they think,'Well, geez, I can get that'.
Craig Evans (15:11):
Right.
Craig Hill (15:12):
So, that's kind of a misconception. From a borrower's
point of view, hard money, it'sgoing to be easier in some ways,
because the qualifying isn'tthere, you know, at the Norris
group, we've got to develop ourown process based on just, just
a couple different factors, likewe're looking at, we are looking
(15:33):
at credit, and primarily we'relooking at liquid cash, because,
you know, somebody really needsto have the ability to do this
business before they should doit, you know? And this doesn't
limit, you know, we get a lot ofnew calls, a lot of new people
that want to do this. So it'snot discouraging to them. It's
(15:58):
just that, when, we get somebodywe're probably different in the
sense that we really want tomake sure that they're
successful. So you know, if theymight not have the liquid cash
that we're looking for, I alwaysask them, like, Well, do you
have somebody that is unique toyou, that would be willing to
work with you, mainly, like afamily member this or that, you
(16:20):
know, somebody that's unique tothem. So, we're pretty flexible
in that way. So when it comes tohard money, there is a lot more
flexibility. And then a lot ofpeople think hard money will
lend you more on a deal. Well,if you want to get 90% or
(16:41):
something on a typical deal.
Now, I'll have to backtrack alittle bit, but the bank will
lend you that on a propertythat's fixed up. So, we're
dealing with the property thatneeds work. So the numbers work
a little differently, but it'sreally a combination of, like,
what the property will be worthwhen it's fixed up, what you're
(17:06):
buying it for, and then how muchthe repairs are. So you're kind
of looking at and I'm kind ofjumping around a little bit, so
kind of straight me out, if you
Craig Evans (17:20):
Well, yeah, I want to because, I was actually about
feel that...
to go there, as far as what thatfrom an asset lending, what
we're looking at in thosecomponents, and how we're
judging the money that's givenout, and how, from an
underwriting perspective, whatyou're viewing, but I want to
clear up a few things, because,you know, we do things a lot
(17:40):
different than other people,right? So, you've got hard money
lending that comes out of funds.
You've got hard money lendingthat comes from certain
individuals, from groups, thingslike that. I think I want to
clear up and make sure that ouraudience understands currently
and in the past, how most of ourtrust deeds, or how most of our
hard money loans have, havetranspired is kind of in a first
(18:02):
position trust deed perspective,you know. So can you walk them
through what that? Because Istill get that asked probably at
least once or twice a month,saying, hey, what's the real
difference in a first positiontrust deed? Because, that's kind
of unique to California and afew other states, but there are
(18:23):
so many other states that don'thave trust deeds. You know that
it's a mortgage, right? But it'swho owns that. So I wanted to
get you to kind of go throughand explain, like, Hey, what is
that trust deed? What's thatfirst position in that spot? And
what does that mean, you know?
Craig Hill (18:40):
Yeah, so basically a mortgage in first position, or a
trust deed they are going to besimilar. So where we're unique
on that part of it is a lot ofcompanies have gone to like
funds and things like that. Sowe're still doing business, I
guess you can almost call it theold fashioned way. At least part
(19:01):
of our business, we aredeveloping a fund that will also
help increase it from what thebuyers are looking for, but most
of the loans we do, it's justone investor in one trust deed.
So going back to the Bank ofAmerica, example, you know, John
(19:21):
Smith has a first trust deed onthe property, so he's secured
that way, there's nothing beforehim. So that's how we do it. So
it's just, you know, it's justone investor, one trust deed,
and the people that invest withus, the money side of it, they
really like that, because it'snot as easy to find that, going
(19:43):
back, you know, 20 years, that'sall was, we're one of the unique
options with that.
Craig Evans (19:50):
Yeah, and there's a lot of value to that when you're
doing kind of a private one toone relationship of lending,
because you don't have aconglomerate in there, you know,
going in, okay, here's the paperyou're writing. This is the
relationship that's coming outof that. And there's no other
people stepping in and makingdecisions that make that, you
(20:12):
know, start to get awkward, andthere's relationships that start
to be built out of that, youknow, I think that's a lot of
the key, that people sometimesmiss, that where a value to a
one-to-one trust deed is it's adifferent way. It's an old
school way of kind of doingthings, but it's still a very
valuable way between theborrower and the lender,
(20:32):
providing, you know, a goodappetite or a good option to be
able to get loans when they needthem, and also investments for
investors, right? And I thinkthat's a lot of times what
people miss out of that, so.
Craig Hill (20:46):
Yeah, I mean, they're able to, basically, when
we sell a trustee, you know, toan investor, they're able to
look at the appraisal, they seewhat the house is, they see
where it is, that they know thatthe worst case scenario on that
is they could ultimately end upwith that as a rental.
Craig Evans (21:05):
Yeah.
Craig Hill (21:05):
You know, so that they have a very clear path of
what all the options are.
Fortunately for us, you know, wehave had very, very few that are
in that situation. So most ofthe time they're just going to
get payments, and that's goingto, you know, then they're going
to get paid off. But you alwaysgot to make them aware of what
that worst case scenario wouldbe. And once again, it's a very
(21:27):
rational, you know, easy tounderstand scenario, because
it's one house, one trust deed,they know what the property is,
you know? So, it's, it's easy inthat respect.
Craig Evans (21:44):
Well, you know, let's kind of go back to the B
of A analogy, you know, so manypeople call what we do, you
know, from an like asset basedlending.
Craig Hill (21:55):
Right.
Craig Evans (21:57):
In that process, you know, let's kind of go back
again and just discuss brieflythe differences between how we
approve a borrower, approve themcredit worthy to do this deal,
even though, yes, we're assetbased lending, compared to a
conventional qualifyingsituation through a B of A,
something like that.
Craig Hill (22:17):
Yeah, ourselves, maybe even comparison which
would be more appropriate toother like hard money companies,
okay.
Craig Evans (22:26):
Yeah.
Craig Hill (22:27):
A lot of them really are almost strictly asset based,
like they're they're not lookingat the borrower, probably in the
common sense way that we do,like we're trying to look at it,
we're not we don't have a a formand a set of numbers that they
have to get these numbers toqualify. As I've mentioned
(22:49):
earlier, we're really looking.
We want to make sure that thisperson is going to have a
successful outcome.
Craig Evans (22:56):
Yep.
Craig Hill (22:57):
And there is a way to do that. You can look at the
property. And you know, onceagain, with some of these newer
clients that want to get intobuying aspect of it, in the
property, the whole deal is morethan just numbers. And sometimes
(23:17):
new people don't understand,like, well, it could show you a
deal with certain numbers thatlook better, but it's not as
good a deal as the one next toit. So..
Craig Evans (23:28):
When you're talking about a borrower where it comes
into us, right? Let's say we getan application that comes in and
you or Joey, you know, as ourteam is looking at these
applications when they're comingin, your head of underwriting.
So what are some of the firstthings that you look for in
application before you even havethe conversation with the
(23:49):
borrower?
Craig Hill (23:50):
Yeah, no, the first thing I do, and this almost it's
so Elementary, but this haschanged over the last 10 plus
years probably the first thing Ido is look at the Google
overhead.
Craig Evans (24:03):
Okay.
Craig Hill (24:03):
Because that will tell you a lot, like, some of
these are easy, but there areother things. But for instance,
is it next to a commercialbuilding?
Craig Evans (24:15):
Sure.
Craig Hill (24:16):
Because there are so many things that like would make
this house less sellable thananother, okay? Or you're looking
at the overhead, and there's astreet of houses, and then the
neighborhood right behind it,and almost everything around it
is a brand new track, okay,well, when you're just pulling
(24:37):
numbers, you're pulling numbersfrom this track. You're not
pulling numbers from just thatstreet. So there's a lot of
things that can be ascertainedby just looking at the overhead.
You know, you can see, is it? Isit like not too far from a
freeway, you know? Are thererailroad tracks nearby? Is there
(24:59):
a huge power, you know,sometimes there's a huge power
pole in the backyard. I mean, ifthe husband and wife go to look
at that house, the wife's goingto say, you know, I don't want
that. And especially right now,we're not in a market now, you
know, unfortunately, some peoplewill get into this business
when, like, you know, you couldalmost sell a box, you know.
Craig Evans (25:22):
Yep.
Craig Hill (25:23):
Because it's so frantic, but you kind of have to
deal with it like in a marketwhere you have to feel like
there could be competition.
Craig Evans (25:31):
Yep.
Craig Hill (25:32):
And what are all the reasons that would make the
couple decide this house isbetter than yours. It doesn't
mean that you still but that allaffects price and things,
because too often, with newpeople, they want to just when
it's a newer deal, they want tojust they so want to say yes to
(25:53):
the, you know, they're trying tofind a reason. They want to say
yes.
Craig Evans (25:58):
Right?
Craig Hill (25:59):
And see once again, anybody that knows me, I want to
say no. Well, I just want tomake sure that I give them, they
make sure they answer all thequestions, and as long as
they're all, you know, then it'sa good deal. But you want to
make sure you ask all thosequestions.
Craig Evans (26:17):
Well, you know, Craig, as I'm sitting here
listening, I'm thinking about,you know, one of the things that
I looked at when I was buyingThe Norris Group, and Bruce and
I were coming down to, okay,it's coming down to the end of
2023, 2024 would be the date wedo this. Am I really going to
(26:37):
buy this company, right? One ofthe things that I really had to
look at was, what was thehistory of the paper that The
Norris Group has written, right?
What's, what's the quality ofpaper? How many defaults had we
had all that kind of stuff,right? Because that tells us,
how are we underwriting, from aborrower perspective, how are we
underwriting and protecting ourinvestors? Those were things
that I had to look at, right?
(26:59):
And obviously that as The NorrisGroup, we've got a great track
record in what we do there. AndI think what I want to make sure
our audience catches out of thisis, this isn't just about like
what you're looking at or whatthey need to think about, but if
they can really understand howyou're viewing a property, and
that's not setting you on apedestal, or things like that.
(27:21):
But the reality is, you got, youknow, almost three decades of
history of looking at the atdeals and understanding, 'Hey,
where's a good deal at', right?
And, and so, like you say, somany people want to jump in, and
this is their first deal, ortheir third deal, and they think
this is great, and they'remissing the important things
that you as that objective thirdparty looked at it on Google
(27:41):
overhead and just said, 'youmissed it, there's a grow house,
two houses...'
Craig Hill (27:49):
Yeah, yeah, yeah, no, yeah. It is important that
they start to look for like,okay, and like, I always tell
them I don't have all theanswers, but I'm going to try to
give you as many questions as Ican so you can find out the
answers, you know, sometimesmight be something on title that
doesn't make sense.
Craig Evans (28:10):
Well, I think that's important as people,
especially our borrowers, right?
There's a huge protection on ourinvestors, understanding that
that's the approach you take toprotect their money, right? So
when you're talking to investorson a one to one relationship of
a trust deed, they they knowthey can trust you in the paper
you're bringing to them, right?
(28:30):
It should make that, thatdecision a lot easier. But I
think the thing that'sinteresting out of this, Craig
is I really want our audience tohear if there are borrowers and
if they're considering being,you know, being borrowing, or
being someone is borrowing fromus. Boy, you know, so often I
know in my past that theunderwriter is like, that's the
one you want to fight with. It'slike, come on, you know? Boy, I
(28:53):
think if more people wouldlisten to some of the wisdom
that you bring to that table,there's a lot of things they can
glean and start to understand,how do they better vet a product
before they even start making,you know, offers and trying to,
you know, take them down.
There's a lot of things that I'mseeing out of that I wanted our
audience to hear, versus justthese are questions you're
(29:15):
asking, right?
Craig Hill (29:17):
Oh, yeah, no. And I have a whole laundry list of
people that I've talked to aboutdeals, and like, you know, they
haven't done them, and they'vethanked me, you know. And in all
honesty, to be fair, there'salways, you know, used to be at
least one guy in a seminar thatwould search me out said he
bought the deal anyway, and heturned out great, which is good,
(29:39):
I'm glad, you know. But overall,you just try to make sure that
you make everybody aware of allthe different aspects that they
that could come up. Becauseoften, you know, a lot of times
Craig, it's interesting too, thenew people. You just go through
the numbers with them, like, didthey tell they tell me they have
(30:02):
this deal, and I break it down,kind of like, I'll say, 'Okay,
what are you going to be able tosell the house for? What are you
buying it for? What are yourrepairs?', okay? And I always
try to emphasize to them, youcan't miss on the repairs, and
you can't miss on the ARV,because, as you know, they're
(30:25):
always high on the ARV and lowon the repair. So human nature,
that's right, you know. And ifI, if I just look at a very, you
know, second grade math formula,and I add up the purchase price
and the repairs, and it's wellover 80% of the ARV, there not
(30:46):
enough room in there for. Imean, you know, and so many of
them are so grateful for thatlittle bit of information, just
like, because they're thinking,you know, it's 500 and they're
getting 480 they're going tomake out, you know what I mean?
They just, sometimes you just,the simplest things are a useful
(31:06):
tool for them. So now, whenthey're analyzing the next deal,
that they're going to kind of atleast break it down and start
backing it out that way.
Because, you know, by the timesyou put in cost, and you know,
everything else, that 20% turnsinto 10, like, nobody's
business.
Craig Evans (31:23):
Sure.
Craig Hill (31:23):
So, you know, sometimes it's just a matter of
a simple formula, you know, tohelp them, like, start to see
the deals and what I'll do withnew people, and I can't do this,
like, indefinitely, but ifsomebody is really close and
looking at a deal. I say, hey,just send it over, give me just
some basic details. And I said,we'll go over it. We'll go over,
(31:46):
you know, we'll, you know, we'lltake a look at it to see, you
know, if you're in the ballparkor something, because, you know,
you like to get them off to astar. And I always tell them,
you can never tell somebody,okay, you're gonna make money
here, you know. But what we tryto do is say, you know, 'this
(32:06):
really looks like you might losemoney,' which is even a better
service.
Craig Evans (32:11):
Yep, that's right.
Craig Hill (32:12):
You know. So if I used to have a guy where I used,
which I am worn Italian, I don'tknow how many years, but when I
did, I told him, You don't haveto tell me, I look good, but if
like this is really stupid, justtell me right now. You know, I'd
rather know that, sign up.
Craig Evans (32:29):
Hey, everybody that's going to do it for part
one with Craig Hill, we'll lookforward to see you next week.
Narrator (32:33):
For more information on hard money loans, trust deed
investing, and upcoming eventswith The Norris group. Check out
thenorrisgroup.com. For moreinformation on passive investing
through the DBL Capital RealEstate Investment Fund, please
visit dblapital.com.
Joey Romero (32:53):
The Norris group originates and services loans in
California and Florida underCalifornia DRE license 01219911.
Florida mortgage lender license1577 and NMLS license 1623669.
For more information on hardmoney lending go to
thenorrisgroup.com and click thehard money tab.
Welcome to The Norris Group real estate podcast, a
show committed to bringing youinsights from thought leaders
shaping the real estateindustry. In each episode, we'll
dive into conversations withindustry experts and local
insiders, all aimed at helpingyou thrive in an ever-changing
real estate market. continuingthe legacy that Bruce Norris
(00:24):
created, sharing valuableknowledge, and empowering you on
your real estate journey.
Whether you're a seasoned pro ora newcomer, this is your go-to
source for insider tips, markettrends and success strategies.
Here's your host, Craig Evans.
Craig Evans (00:45):
Hey everybody. It is Craig Evans from The Norris
Group here. We are super excitedtoday to have a great show for
you. We've actually got one ofour internal officers with us.
Craig Hill is our Loan Officerand Underwriter for The Norris
group. Craig was born and raisedin Lakewood, California, while
Craig attended Lakewood highLong Beach City College and
(01:07):
received his Bachelor of Sciencedegree from California State
University Long Beach. Whileattending CSULB, he followed his
love of baseball by making hisprofession buying and selling
baseball cards. In 1984 Craigtook his first job in the
lending industry, working forVanguard Mortgage as a Loan
Officer and Loan Manager. Whileemployed there, he met and began
(01:32):
funding REO purchases with noneother than Bruce Norris. When
Bruce officially started TheNorris Group in 1994 Craig came
aboard as both a Loan Officerand an Investment Manager, and
never looked back. Since thattime, they have arranged
hundreds of millions worth ofinvestor loans together between
Bruce and Craig. Recently, Craigserved several years as Vice
(01:55):
Chairman for Exbound, anonprofit organization designed
to help developmentally disabledadults increase their social
interaction. Craig enjoys sportsand spending time with his wife,
Laura and daughter, Caitlin.
Craig, it is so good to have youon today, my friend. I know
you're busy and we got a lot ofthings going with a lot of
different things.
Craig Hill (02:16):
Thanks for having me. I appreciate it.
Craig Evans (02:17):
I appreciate you carving out some time. I guess
you didn't really have an optionsince I said, Hey, we're doing a
piece on you today, right?
Craig Hill (02:24):
Yeah, yeah, I guess not this. This one was not
optional.
Craig Evans (02:29):
Well, listen, let's just jump right into stuff,
okay. Because I want to get intowhat we do, and what we're about
and how things started, right?
So, you know, I've heard Brucetalked a lot about in the early
days of his investing career,and that he was working to find
deals, and that you were a bigpart of that early on as his
money source, right? So, do me afavor, tell our audience how you
(02:54):
and Bruce really first startedconnecting and working together.
Craig Hill (02:59):
Yeah. Well, it's an interesting story for a couple
reasons. This is probably goingback 30 plus, maybe almost 35
years ago when, I first metBruce. He had somebody that was
actually kind of calling on hardmoney loan companies at the
time, and he was trying to seesomebody that would be a fit.
(03:23):
Well, this person that he hadcome to see me, we got along
real good. So Bruce, you know,Bruce set up a meeting. So Bruce
and I met for the first time.
Now, what's interesting aboutthe hard money loan loan
business at this time, and a lotof people don't realize this,
because now hard money is almostsynonymous with investors.
Craig Evans (03:44):
Yep.
Craig Hill (03:44):
Well, when Bruce and I first met, that was not the
case. Like, basically, hardmoney was based on, like, one
fact, like, it's worth what youpay for it. Like, so, here I am
with Bruce, just kind of a quickscenario of our first
transactions together. Hebrought me two deals in Marino
(04:08):
Valley. He used to work a lot inMarino Valley, California. So,
now the numbers aren't going tomake sense, but you'll see the
point. So they were probablyworth between 90 and 100 grand
when fixed up.
Craig Evans (04:21):
Okay.
Craig Hill (04:21):
Well, Bruce brought him to me, and he had paid 42
and 39, okay. So it was my jobto convince the ownership at the
time that these were good deals.
Now bear in mind hard money atthis time, that same house in
Marino Valley, if you hadsomebody living there that had
(04:43):
never made a payment and wasdesperate to get money, we
probably would have let 60,000to that client, okay.
Craig Evans (04:56):
Okay.
Craig Hill (04:56):
That's just the nature of the business, you
know? That's who went. Nowintroduce Bruce, who totally
throws everything upside down.
Well, here's a guy with a lot ofmoney, good credit experience,
but he's buying these housesfor, let's just say, 40 grand,
okay. So, all of a sudden, thatupsets the apple cart, right?
Craig Evans (05:19):
Right.
Craig Hill (05:19):
Because I know Bruce is thinking "Shouldn't I get
60?" you know? And you know, theownership at the time was
thinking, Well, geez, we shouldgive him like 25.
Craig Evans (05:31):
Yeah.
Craig Hill (05:33):
So basically, what I had to do was I just basically
convinced the ownership thatthis was transformational, like
this is going to be a whole newway to do this, at least for me,
personally.
Craig Evans (05:47):
Sure.
Craig Hill (05:48):
I don't see anything that makes more sense than this.
So I was able to get Bruce whathe paid, for him.
Craig Evans (05:55):
Okay.
Craig Hill (05:55):
So, it was somewhat of a compromise. So Bruce was
happy with that, and basicallywhat he did to like, kind of
reward the effort. I think hepaid probably six months in
advance of interest, so.
Craig Evans (06:10):
Okay.
Craig Hill (06:10):
Right away, how many clients do we have that is doing
that right?
Craig Evans (06:14):
Right. Exactly.
Craig Hill (06:16):
We're lucky if we get one payment in six months
the way the business was, okay.
So all of a sudden the lightwent out on in my head, and I
totally disregarded the hardmoney model that I knew.
Craig Evans (06:30):
Okay.
Craig Hill (06:31):
And I started working with Bruce. And what
that meant was I went, this was,if people remember the dirt, you
know, that go way back the HUDAuctions, right? Those were when
Bruce and I first startedtogether. Well, everybody else
would be grinding for the monthtrying to get a few deals. I'd
(06:52):
just wait for Bruce to go to theHUD auction and send me over
like a sheet of paper with thefine deals he just bought,
right? So for me, this made alot more sense.
Craig Evans (07:03):
Yep.
Craig Hill (07:04):
So I just kind of started thinking, well, Bruce
can't be the only one out there.
So,if anybody else, once again,long time, and even not so long,
because Mike is still aprominent figure. Now, my second
client was Mike Cantu.
Craig Evans (07:21):
Okay.
Craig Hill (07:22):
So, I was able to get Mike on board, and how we
met. Mike was Robin. Robin, hadup at the time. She worked in
our like, kind of a doing a lotof things, but she was involved
with the foreclosures too.
Craig Evans (07:38):
Yeah.
Craig Hill (07:38):
So Mike was trying to buy one of our foreclosures,
and Robin said, 'you should talkto Craig'. So I talked to Mike,
I told him what we were doing,and all of a sudden, now I had
two guys sending me all thesedeals.
Craig Evans (07:56):
Right.
Craig Hill (07:57):
Whereas I'd get more deals from those two guys in a
month, and everybody else didtheir whole client base for two
or three months.
Craig Evans (08:03):
Yeah.
Craig Hill (08:04):
So it's sort of revolutionized. And now, like I
say, it's synonymous with hardmoney it's investors. A lot of
people don't do what issituational hard money anymore.
So it was really kind ofrevolutionary. And I mentioned
Robin's name because Robin,probably about a year and a half
(08:25):
into this, maybe less, Brucedecided he wanted, it'd be a
good idea to open up a hardmoney company of his own. And so
basically, you know, that's whathe did, when he opened up The
Norris Group, he asked me if I'dcome and do the the long
business for him.
Craig Evans (08:44):
Well, so let me ask you that, why is that an aspect
that you know, you're obviouslywith Vanguard, you got, you're
with a company that's got brandrecognition and is already
rolling. I think maybe you'veanswered it. But I want to hear
if there's other ideas therethat you know, why did you feel
comfortable say, Hey, I'm gonnalead what's known and go with
(09:07):
Bruce into in essence, let'sface it, at that time, it's kind
of a fledgling startup, right? Imean, yeah, you were doing loans
and stuff. It was, it was abrand new...
Craig Hill (09:15):
Yeah, yeah. And anybody that knows me that's
been around me these last 30years, they know that is totally
out of my character.
Craig Evans (09:23):
Sure.
Craig Hill (09:24):
Totally out of my character. So Bruce and I met
numerous times, and I just, themore I talked with Bruce, I just
felt like there were, like a lotof, there was a lot of potential
for what I could do that maybe Iwasn't doing at the company I
was with.
Craig Evans (09:44):
Okay.
Craig Hill (09:45):
It just really felt like I just really followed my
gut and it seemed like the rightdecision, and looking back on it
now, obviously I have, you know,no regrets at all. We were the
perfect fit for 30 years.
Craig Evans (10:00):
Yeah.
Craig Hill (10:01):
But it was also a good opportunity for me. Where I
was, I just did, like, one sideof the business. I just
generated the deals. Well, as Iwas near the end, getting ready
to leave with Bruce, I wanted todo everything, because I talked
(10:22):
to people about what I did, andthen, well, Craig, can I get in
on this? So I was doing a lot ofvolume, so I was able to tell
them that, you know, hey, I'dlike to start funding some of my
own deals. So going with Bruce.
It was kind of interesting theway it worked out because our,
(10:43):
kind of, our initial plan is,you know, how those initial
plans go, like, I was going tobe like, the one that, like, had
the borrowers, if you will, andthen he would be more on the
money side initially with, youknow, bringing people in and
ironically, the way it kind ofturned out, a lot of the money,
people at the company I was withwanted to follow me because they
(11:08):
knew the quality of paper that Idid, even going, you know, back
before there was a Bruce. I wasthat they used to joke I was
charging hard money rates andwriting B paper like that's kind
of how, I've always been, thatway. I've always wanted to write
good paper. So that was naturalfor maybe them to want to come
(11:32):
to my side. But it turned out tobe, with all of Bruce's, his
love for speaking. It justturned into this natural
chemistry where he was actuallygood at generating the interest
in the borrowers. And then Iturned out that I was really,
really good with the the moneyside of it. Yeah, it just kind
of morphed from there. And then,like I say, when Bruce started
(11:56):
The Norris Group. Robin camewith me and set up all the like
the loan side of it. Anybodythat say knows me knows Robin,
and then say Rob did who's stillwith the company, and Robin
still is there as needed, kindof a part time help. Rhonda was
actually the first person thatBruce hired, because she set up
(12:21):
the whole office for and she hadworked at a real estate company.
So, that's kind of how it allbegan. And we just, you know,
the the chemistry and thecamaraderie that the say, the
four of us shared for all thoseyears was, you know, it was,
just was, and has been a greatexperience. And then, you know,
(12:46):
the transition seems to beseamless with the, you know, how
everybody feels now. So it's,that's kind of the background.
But it really is interesting howhard money changed from being,
you know, lending situationallyto lending to investors.
Craig Evans (13:03):
Sure. Well, you know, since I've taken over The
Norris Group, where we're 13months into kind of the change
of me owning now and stuff, and,you know, the interesting thing
is, we still got a lot of newinvestors and other real estate
professionals want to jump intothe investment side, of hard
(13:25):
money, trust deed lending,things like that. So, you know,
so for those that are new, whatI want to do is, I want to jump
into the technical side of theloan business a little bit. So
first of all, let's kind of backin and because there's a lot of,
you know, there's a lot of termsthat we throw around. And in the
business, we throw aroundbetween, you know, hard money
lending, private lending, trustdeed position, first position,
(13:48):
trust deed position, all ofthese things, Bruce, or Craig, I
said Bruce, Craig, if you will,kind of take us through a little
bit and tell us, you know,what's hard money, what's
private money? What's, you know,trust deeds, walk people through
that process.
Craig Hill (14:06):
Yeah, well, interestingly enough, the first
because I get that, that's aquestion I get a lot like, it's
a term to so many people. So thefirst thing I say is, I start
out by saying, the paperwork ofit is really no different than
Bank of America. So, if youunderstand, like when you get a
(14:31):
first on your house with Bank ofAmerica, you understand the
paperwork with hard money, it'sreally not any different. So,
that's probably the easiest waysay to start the conversation.
The second aspect of it is a lotof people think, you know, hard
(14:54):
money is almost a blank checkfor whatever they need. Like,
you know. Whether it's personalloan or we get a lot of, just
there's such a wide variety ofpeople, they just hear the term
hard money, and they think,'Well, geez, I can get that'.
Craig Evans (15:11):
Right.
Craig Hill (15:12):
So, that's kind of a misconception. From a borrower's
point of view, hard money, it'sgoing to be easier in some ways,
because the qualifying isn'tthere, you know, at the Norris
group, we've got to develop ourown process based on just, just
a couple different factors, likewe're looking at, we are looking
(15:33):
at credit, and primarily we'relooking at liquid cash, because,
you know, somebody really needsto have the ability to do this
business before they should doit, you know? And this doesn't
limit, you know, we get a lot ofnew calls, a lot of new people
that want to do this. So it'snot discouraging to them. It's
(15:58):
just that, when, we get somebodywe're probably different in the
sense that we really want tomake sure that they're
successful. So you know, if theymight not have the liquid cash
that we're looking for, I alwaysask them, like, Well, do you
have somebody that is unique toyou, that would be willing to
work with you, mainly, like afamily member this or that, you
(16:20):
know, somebody that's unique tothem. So, we're pretty flexible
in that way. So when it comes tohard money, there is a lot more
flexibility. And then a lot ofpeople think hard money will
lend you more on a deal. Well,if you want to get 90% or
(16:41):
something on a typical deal.
Now, I'll have to backtrack alittle bit, but the bank will
lend you that on a propertythat's fixed up. So, we're
dealing with the property thatneeds work. So the numbers work
a little differently, but it'sreally a combination of, like,
what the property will be worthwhen it's fixed up, what you're
(17:06):
buying it for, and then how muchthe repairs are. So you're kind
of looking at and I'm kind ofjumping around a little bit, so
kind of straight me out, if you
Craig Evans (17:20):
Well, yeah, I want to because, I was actually about
feel that...
to go there, as far as what thatfrom an asset lending, what
we're looking at in thosecomponents, and how we're
judging the money that's givenout, and how, from an
underwriting perspective, whatyou're viewing, but I want to
clear up a few things, because,you know, we do things a lot
(17:40):
different than other people,right? So, you've got hard money
lending that comes out of funds.
You've got hard money lendingthat comes from certain
individuals, from groups, thingslike that. I think I want to
clear up and make sure that ouraudience understands currently
and in the past, how most of ourtrust deeds, or how most of our
hard money loans have, havetranspired is kind of in a first
(18:02):
position trust deed perspective,you know. So can you walk them
through what that? Because Istill get that asked probably at
least once or twice a month,saying, hey, what's the real
difference in a first positiontrust deed? Because, that's kind
of unique to California and afew other states, but there are
(18:23):
so many other states that don'thave trust deeds. You know that
it's a mortgage, right? But it'swho owns that. So I wanted to
get you to kind of go throughand explain, like, Hey, what is
that trust deed? What's thatfirst position in that spot? And
what does that mean, you know?
Craig Hill (18:40):
Yeah, so basically a mortgage in first position, or a
trust deed they are going to besimilar. So where we're unique
on that part of it is a lot ofcompanies have gone to like
funds and things like that. Sowe're still doing business, I
guess you can almost call it theold fashioned way. At least part
(19:01):
of our business, we aredeveloping a fund that will also
help increase it from what thebuyers are looking for, but most
of the loans we do, it's justone investor in one trust deed.
So going back to the Bank ofAmerica, example, you know, John
(19:21):
Smith has a first trust deed onthe property, so he's secured
that way, there's nothing beforehim. So that's how we do it. So
it's just, you know, it's justone investor, one trust deed,
and the people that invest withus, the money side of it, they
really like that, because it'snot as easy to find that, going
(19:43):
back, you know, 20 years, that'sall was, we're one of the unique
options with that.
Craig Evans (19:50):
Yeah, and there's a lot of value to that when you're
doing kind of a private one toone relationship of lending,
because you don't have aconglomerate in there, you know,
going in, okay, here's the paperyou're writing. This is the
relationship that's coming outof that. And there's no other
people stepping in and makingdecisions that make that, you
(20:12):
know, start to get awkward, andthere's relationships that start
to be built out of that, youknow, I think that's a lot of
the key, that people sometimesmiss, that where a value to a
one-to-one trust deed is it's adifferent way. It's an old
school way of kind of doingthings, but it's still a very
valuable way between theborrower and the lender,
(20:32):
providing, you know, a goodappetite or a good option to be
able to get loans when they needthem, and also investments for
investors, right? And I thinkthat's a lot of times what
people miss out of that, so.
Craig Hill (20:46):
Yeah, I mean, they're able to, basically, when
we sell a trustee, you know, toan investor, they're able to
look at the appraisal, they seewhat the house is, they see
where it is, that they know thatthe worst case scenario on that
is they could ultimately end upwith that as a rental.
Craig Evans (21:05):
Yeah.
Craig Hill (21:05):
You know, so that they have a very clear path of
what all the options are.
Fortunately for us, you know, wehave had very, very few that are
in that situation. So most ofthe time they're just going to
get payments, and that's goingto, you know, then they're going
to get paid off. But you alwaysgot to make them aware of what
that worst case scenario wouldbe. And once again, it's a very
(21:27):
rational, you know, easy tounderstand scenario, because
it's one house, one trust deed,they know what the property is,
you know? So, it's, it's easy inthat respect.
Craig Evans (21:44):
Well, you know, let's kind of go back to the B
of A analogy, you know, so manypeople call what we do, you
know, from an like asset basedlending.
Craig Hill (21:55):
Right.
Craig Evans (21:57):
In that process, you know, let's kind of go back
again and just discuss brieflythe differences between how we
approve a borrower, approve themcredit worthy to do this deal,
even though, yes, we're assetbased lending, compared to a
conventional qualifyingsituation through a B of A,
something like that.
Craig Hill (22:17):
Yeah, ourselves, maybe even comparison which
would be more appropriate toother like hard money companies,
okay.
Craig Evans (22:26):
Yeah.
Craig Hill (22:27):
A lot of them really are almost strictly asset based,
like they're they're not lookingat the borrower, probably in the
common sense way that we do,like we're trying to look at it,
we're not we don't have a a formand a set of numbers that they
have to get these numbers toqualify. As I've mentioned
(22:49):
earlier, we're really looking.
We want to make sure that thisperson is going to have a
successful outcome.
Craig Evans (22:56):
Yep.
Craig Hill (22:57):
And there is a way to do that. You can look at the
property. And you know, onceagain, with some of these newer
clients that want to get intobuying aspect of it, in the
property, the whole deal is morethan just numbers. And sometimes
(23:17):
new people don't understand,like, well, it could show you a
deal with certain numbers thatlook better, but it's not as
good a deal as the one next toit. So..
Craig Evans (23:28):
When you're talking about a borrower where it comes
into us, right? Let's say we getan application that comes in and
you or Joey, you know, as ourteam is looking at these
applications when they're comingin, your head of underwriting.
So what are some of the firstthings that you look for in
application before you even havethe conversation with the
(23:49):
borrower?
Craig Hill (23:50):
Yeah, no, the first thing I do, and this almost it's
so Elementary, but this haschanged over the last 10 plus
years probably the first thing Ido is look at the Google
overhead.
Craig Evans (24:03):
Okay.
Craig Hill (24:03):
Because that will tell you a lot, like, some of
these are easy, but there areother things. But for instance,
is it next to a commercialbuilding?
Craig Evans (24:15):
Sure.
Craig Hill (24:16):
Because there are so many things that like would make
this house less sellable thananother, okay? Or you're looking
at the overhead, and there's astreet of houses, and then the
neighborhood right behind it,and almost everything around it
is a brand new track, okay,well, when you're just pulling
(24:37):
numbers, you're pulling numbersfrom this track. You're not
pulling numbers from just thatstreet. So there's a lot of
things that can be ascertainedby just looking at the overhead.
You know, you can see, is it? Isit like not too far from a
freeway, you know? Are thererailroad tracks nearby? Is there
(24:59):
a huge power, you know,sometimes there's a huge power
pole in the backyard. I mean, ifthe husband and wife go to look
at that house, the wife's goingto say, you know, I don't want
that. And especially right now,we're not in a market now, you
know, unfortunately, some peoplewill get into this business
when, like, you know, you couldalmost sell a box, you know.
Craig Evans (25:22):
Yep.
Craig Hill (25:23):
Because it's so frantic, but you kind of have to
deal with it like in a marketwhere you have to feel like
there could be competition.
Craig Evans (25:31):
Yep.
Craig Hill (25:32):
And what are all the reasons that would make the
couple decide this house isbetter than yours. It doesn't
mean that you still but that allaffects price and things,
because too often, with newpeople, they want to just when
it's a newer deal, they want tojust they so want to say yes to
(25:53):
the, you know, they're trying tofind a reason. They want to say
yes.
Craig Evans (25:58):
Right?
Craig Hill (25:59):
And see once again, anybody that knows me, I want to
say no. Well, I just want tomake sure that I give them, they
make sure they answer all thequestions, and as long as
they're all, you know, then it'sa good deal. But you want to
make sure you ask all thosequestions.
Craig Evans (26:17):
Well, you know, Craig, as I'm sitting here
listening, I'm thinking about,you know, one of the things that
I looked at when I was buyingThe Norris Group, and Bruce and
I were coming down to, okay,it's coming down to the end of
2023, 2024 would be the date wedo this. Am I really going to
(26:37):
buy this company, right? One ofthe things that I really had to
look at was, what was thehistory of the paper that The
Norris Group has written, right?
What's, what's the quality ofpaper? How many defaults had we
had all that kind of stuff,right? Because that tells us,
how are we underwriting, from aborrower perspective, how are we
underwriting and protecting ourinvestors? Those were things
that I had to look at, right?
(26:59):
And obviously that as The NorrisGroup, we've got a great track
record in what we do there. AndI think what I want to make sure
our audience catches out of thisis, this isn't just about like
what you're looking at or whatthey need to think about, but if
they can really understand howyou're viewing a property, and
that's not setting you on apedestal, or things like that.
(27:21):
But the reality is, you got, youknow, almost three decades of
history of looking at the atdeals and understanding, 'Hey,
where's a good deal at', right?
And, and so, like you say, somany people want to jump in, and
this is their first deal, ortheir third deal, and they think
this is great, and they'remissing the important things
that you as that objective thirdparty looked at it on Google
(27:41):
overhead and just said, 'youmissed it, there's a grow house,
two houses...'
Craig Hill (27:49):
Yeah, yeah, yeah, no, yeah. It is important that
they start to look for like,okay, and like, I always tell
them I don't have all theanswers, but I'm going to try to
give you as many questions as Ican so you can find out the
answers, you know, sometimesmight be something on title that
doesn't make sense.
Craig Evans (28:10):
Well, I think that's important as people,
especially our borrowers, right?
There's a huge protection on ourinvestors, understanding that
that's the approach you take toprotect their money, right? So
when you're talking to investorson a one to one relationship of
a trust deed, they they knowthey can trust you in the paper
you're bringing to them, right?
(28:30):
It should make that, thatdecision a lot easier. But I
think the thing that'sinteresting out of this, Craig
is I really want our audience tohear if there are borrowers and
if they're considering being,you know, being borrowing, or
being someone is borrowing fromus. Boy, you know, so often I
know in my past that theunderwriter is like, that's the
one you want to fight with. It'slike, come on, you know? Boy, I
(28:53):
think if more people wouldlisten to some of the wisdom
that you bring to that table,there's a lot of things they can
glean and start to understand,how do they better vet a product
before they even start making,you know, offers and trying to,
you know, take them down.
There's a lot of things that I'mseeing out of that I wanted our
audience to hear, versus justthese are questions you're
(29:15):
asking, right?
Craig Hill (29:17):
Oh, yeah, no. And I have a whole laundry list of
people that I've talked to aboutdeals, and like, you know, they
haven't done them, and they'vethanked me, you know. And in all
honesty, to be fair, there'salways, you know, used to be at
least one guy in a seminar thatwould search me out said he
bought the deal anyway, and heturned out great, which is good,
(29:39):
I'm glad, you know. But overall,you just try to make sure that
you make everybody aware of allthe different aspects that they
that could come up. Becauseoften, you know, a lot of times
Craig, it's interesting too, thenew people. You just go through
the numbers with them, like, didthey tell they tell me they have
(30:02):
this deal, and I break it down,kind of like, I'll say, 'Okay,
what are you going to be able tosell the house for? What are you
buying it for? What are yourrepairs?', okay? And I always
try to emphasize to them, youcan't miss on the repairs, and
you can't miss on the ARV,because, as you know, they're
(30:25):
always high on the ARV and lowon the repair. So human nature,
that's right, you know. And ifI, if I just look at a very, you
know, second grade math formula,and I add up the purchase price
and the repairs, and it's wellover 80% of the ARV, there not
(30:46):
enough room in there for. Imean, you know, and so many of
them are so grateful for thatlittle bit of information, just
like, because they're thinking,you know, it's 500 and they're
getting 480 they're going tomake out, you know what I mean?
They just, sometimes you just,the simplest things are a useful
(31:06):
tool for them. So now, whenthey're analyzing the next deal,
that they're going to kind of atleast break it down and start
backing it out that way.
Because, you know, by the timesyou put in cost, and you know,
everything else, that 20% turnsinto 10, like, nobody's
business.
Craig Evans (31:23):
Sure.
Craig Hill (31:23):
So, you know, sometimes it's just a matter of
a simple formula, you know, tohelp them, like, start to see
the deals and what I'll do withnew people, and I can't do this,
like, indefinitely, but ifsomebody is really close and
looking at a deal. I say, hey,just send it over, give me just
some basic details. And I said,we'll go over it. We'll go over,
(31:46):
you know, we'll, you know, we'lltake a look at it to see, you
know, if you're in the ballparkor something, because, you know,
you like to get them off to astar. And I always tell them,
you can never tell somebody,okay, you're gonna make money
here, you know. But what we tryto do is say, you know, 'this
(32:06):
really looks like you might losemoney,' which is even a better
service.
Craig Evans (32:11):
Yep, that's right.
Craig Hill (32:12):
You know. So if I used to have a guy where I used,
which I am worn Italian, I don'tknow how many years, but when I
did, I told him, You don't haveto tell me, I look good, but if
like this is really stupid, justtell me right now. You know, I'd
rather know that, sign up.
Craig Evans (32:29):
Hey, everybody that's going to do it for part
one with Craig Hill, we'll lookforward to see you next week.
Narrator (32:33):
For more information on hard money loans, trust deed
investing, and upcoming eventswith The Norris group. Check out
thenorrisgroup.com. For moreinformation on passive investing
through the DBL Capital RealEstate Investment Fund, please
visit dblapital.com.
Joey Romero (32:53):
The Norris group originates and services loans in
California and Florida underCalifornia DRE license 01219911.
Florida mortgage lender license1577 and NMLS license 1623669.
For more information on hardmoney lending go to
thenorrisgroup.com and click thehard money tab.
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