February 21, 2024 • 33 mins
A riveting conversation that bridges the gap between investing and loan servicing. We navigate the challenges and victories of launching and scaling a successful loan servicing company, Jamie lays bare the critical steps necessary for a smooth takeoff. We explore the vital importance of matching state licenses with customer demand, maintaining strict compliance with legal regulations, and the delicate balance of collection and compliance roles within the industry.
Jamie and I also discuss the growth and transformation of Bi-Fi, from weathering ownership changes and tackling past servicing issues to introducing a new business development lead focused on enhancing the investor experience. This episode is brimming with heart and strategy, offering a glimpse into the perseverance it takes to thrive in the ever-evolving world of real estate investment and entrepreneurship.
Resources and links discussed:
- Videocast on our YouTube Channel
- ANB Funds Website - https://anbfunds.com
- BIFI Loan Servicing - https://bifils.com
- From Adversity To Abundance - Podcast by Jamie Bateman
About the Host:
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Connect with the Host:
Facebook - bethebank
Twitter - bethebank1
Instagram - bethebankpodcast
American Note Buyers - https://anbfunds.com/
Monthly Broadcast - https://youtube.com/playlist?list=PLzc944w1xydt5aLDrrEPHJhdJeDkBjjD4
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Narrator (00:01):
Interested in real estate.
How about wealth?
Well, they go hand in hand, andhere you'll learn all about it.
Welcome to Be the Bank, apodcast where we discuss and
debate the topics centeredaround real estate investing.
Your host, Justin Bogard,shares insights into investing
in real estate to create realwealth and passive income for
(00:22):
you and your family.
He'll share stories of realestate investments done right,
Walk you through the process ofowning a real estate note and,
most importantly, educate you soyou can be the bank.
This is Be the Bank brought toyou by American Note Buyers.
Now here's your host, JustinBogard.
Justin Bogard (00:46):
Hey, listener, this is season six, episode
number four almost at six,episode number four on Be the
Bank podcast.
Today I have a friend of mine,mr Jamie Bateman.
He is the guy running things atBifinal and Servicing.
He also has a couple of fundsthat he's managed in the past
and still manages today and thehighlight of our conversation
(01:06):
today is going to be kind ofaround servicing and kind of how
a servicing company works andjust kind of all around
questions that people havearound servicing companies.
So you're not going to want tomiss this, so stay tuned.
Mr Jamie Bateman, welcome tothe Be the Bank podcast.
Jamie Bateman (01:33):
Justin, thank you so much for having me.
Man, this is going to be fun.
Justin Bogard (01:37):
You're welcome.
I'll send you an invoice afterwe're done.
Absolutely.
Jamie Bateman (01:45):
And I'll send it back with a link to my podcast.
You were on.
Justin Bogard (01:51):
With a slightly more of a fee on top of that.
Jamie Bateman (01:54):
Exactly Upcharge.
Justin Bogard (01:59):
All right, jamie.
So thanks again for being onthe show.
This is, I think, your secondtime on the Be the Bank podcast
and it's been a few years, butthanks for being on again.
We know each other kind ofthrough the investing circle
here and it's not a very bigcircle, so a lot of us know each
other.
But you don't live where I am.
I'm in Indiana, so you're in,I'm in outside of Baltimore,
(02:21):
Maryland.
Jamie Bateman (02:22):
So you must be an Orioles fan.
I am an Orioles fan.
I follow the Ravens a littlebit more, although that stings
right now.
Justin Bogard (02:30):
Yeah, and the.
Jamie Bateman (02:31):
Orioles, of course, were just sold last week
.
So that was interesting.
They were sold.
Yeah, the ownership changed.
I don't know a lot about it,but so that was a big news in
Orioles Orioles land.
But yeah, I grew up going toMemorial Stadium and then Camden
Yards was obviously one of thenicer parks once it, when it was
(02:53):
built, and I think it still isone, one of the nicer ones.
Justin Bogard (02:57):
It looks pretty cool.
A friend of mine went out thereand he said it's a pretty
awesome place to go watch a game.
I thought the Orioles I didn'tknow about the Orioles ownership
changing hands.
I ought to read about thatbecause I kind of follow
baseball.
The AL East is kind of theteams that I watch.
Because I'm a Red Sox fan.
It's because there's not reallyany American League good teams
around where I'm at, so theWhite Sox are the kind of
closest where I'm at.
(03:18):
But I got the Cubs, the WhiteSox and the Reds and a lot of
people like the Cardinalsbecause they're close by too,
and we've got Detroit.
That's up there just a littlebit, a few more hours.
So yeah, Midwest is kind ofcool.
You can hit a lot of differentbaseball parks right here, For
sure.
We're not here to talk aboutthat, All right.
So you're in Maryland.
You started a servicing companya few years ago and you also
(03:40):
before that you kind of were aI'm assuming a landlord turned
note investor.
Jamie Bateman (03:46):
Yeah, absolutely.
And so landlord turned leanlord.
Narrator (03:52):
Yeah.
Jamie Bateman (03:53):
But my favorite one caveat, though, with that is
that I don't it's not like Iabandoned all my rentals and
then I just went 100% into notes.
I actually kind of see themworking hand in hand.
In fact, through my noteinvesting we've acquired one
other single family rental.
That's in Florida.
So to me they work welltogether and they're not their.
(04:15):
Note investing is just another,another strategy.
That's really in that largerreal estate investing asset
class.
Justin Bogard (04:24):
Well, it's disappointing to hear you say
that, because I thought youwould just doggone rentals.
Well, that's all the time wehave for today.
Thanks for being here.
Jamie Bateman (04:30):
Yeah, all right, I guess man, this invoice is
growing by the minute.
Yeah, look, the truth is, everyasset class has pros and cons
and we you know.
I know we're not going to diveinto all those today, but I love
notes.
I love note investing.
The passive side of it is ishuge, but our rentals have been
(04:52):
an important part of my ownportfolio as well, and continue
to be so.
Justin Bogard (04:58):
Yeah, I can see rentals being pretty, pretty
profitable and it depends on thesituation.
I always thought the rentals atleast around here in
Indianapolis area where I livethe more expensive ones seem to
thrive better than the lower endones, Just because there's so
much turnover and damage andstuff done to the lower end ones
.
So I think if you had aportfolio of a, you know, higher
valued assets, it probablyprobably would pan off a little
(05:20):
bit better.
But notes fits my eye, so tospeak, and I just stay in that
lane and I'm pretty content withit.
So you have a couple of fundsthat you've managed in the past.
Right, yeah, that's right.
Jamie Bateman (05:34):
Currently still, we have one fund that's winding
down.
It's a three year fund,non-performing note fund, and
that one has been a lot of workand but also has been profitable
, and that one had a definedthree year term.
So it's winding down this year.
And then the other fund is are-performing slash performing
(05:55):
note fund.
That's a little morepredictable, a little more
boring, if you will.
It provides the passiveinvestor more of a predictable
passive monthly return.
So but yeah, both have beengood.
Justin Bogard (06:11):
Awesome.
So that is the Labrador lendingcenter.
And those of you that aren'twatching the video of this, we
are streaming this on ourYouTube channel for American
Notebuyers so you can check outJamie's little tag there.
So Labrador lending.
How'd you come up with the nameLabrador lending?
Jamie Bateman (06:28):
Yeah, I mean.
So it's actually, in hindsight,a little bit misleading because
we don't do actual lending andthat's probably a topic for
another.
So but we don't reallyoriginate loans.
We have done a couple, butthat's not the.
You know, we buy existing debtlike you do, and so.
But Labrador lending we live onLabrador Lane.
(06:49):
My kids Lab actually have anentity that's called Labrador
properties that has rentals init as well, and my kids were the
Labradors when they were inelementary school, which still
surprises me that elementaryschools have have mascots now.
But yeah, that Labrador lendingjust made made sense.
(07:11):
So what's?
Justin Bogard (07:12):
cool.
I wasn't expecting that to bethe street you live on.
Cool, yeah.
So when?
When did you start by five loanservicing?
Jamie Bateman (07:22):
technically it was January 4th 2021 and, as
we're recording this, tomorrowmorning I have a podcast episode
coming out on the fromadversity to abundance podcast.
That goes into depth from myperspective, but more so from
Shanti Duffy's perspective, andwe can get into who she is.
She's the director ofoperations at Bifi.
(07:45):
To answer your question, alittle over three years ago,
january 4th 2021 but we'd put ina good amount of work prior to
actually, you know, creating theLLC.
So probably three and a halfyears ago now, we were kind of
planning things.
Justin Bogard (08:01):
What in the hell made you decide to start?
A loan servicing company.
Jamie Bateman (08:05):
I asked myself that every day.
No, look, I look, I try to keepit real and things.
There have been ups and downs,for sure, and tons of lessons
I've learned and I think we'lltouch on a couple of those.
You know, you hang around Chris70 too much and and he pushes
you into.
Yeah to get uncomfortable.
(08:26):
Chris is a fellow note investorand a peer of ours and he's in
some ways been a mentor of mineas well, and Chris and I were
just frustrated with the servicethat we were, the level of
service we were being providedas note investors.
Fun, you know, fund managersfrom other servicing companies
and that's not to say that otherservicers are all terrible, and
(08:52):
you know they're.
They do nothing.
Well, that's not it at all.
But we thought that, you know,we could have a little bit,
maybe a little more control ofthe servicing element of, you
know, as far as our own loans go, but primarily to provide
investors with An investor firstservicing company that really
(09:13):
prided itself on communicationand and, and you know, properly
managing the servicing part ofof alone.
So it was out of frustrationwith other servicers, quite
honestly.
But for the record, I still usetwo other servicers today I've
used five total, and so I know,you know, they all have pros and
(09:35):
cons.
Yeah, no perfect servicers outthere, but that was the impetus
behind by file on servicing,okay, and so my questions are
gonna be more business relatedquestions here, so love it.
Justin Bogard (09:48):
what?
What is the biggest hurdle whenyou're setting up a loan
servicing company that you haveto go through?
I'm sure there's a bunch of redtape that me, a consumer of a
loan service company, doesn'tdoesn't know about.
Jamie Bateman (10:02):
Yeah, if you don't mind, I'm going to read
this quote.
I have a quote here and thenI'm going to answer your
question.
So this is from.
It was published in Forbes andit's a guy who I follow on
Twitter.
His name is Brent, be sure.
Be sure.
I'm not sure how you say it,but his quote was he's the CEO
(10:24):
of Permanent Equity.
You can look him up.
His quote is all businesses areloosely functioning, disasters,
and some are profitable despiteit, he said.
At 30,000 feet, the world isbeautiful and orderly.
On the ground, it's chaotic andconfusing.
Nothing ever goes to plan.
Surprises lurk around everycorner, things are constantly
breaking, someone is alwaysupset, mistakes are made daily.
(10:47):
Expecting anything, anythingless, is out of touch with
reality.
Now, with that backdrop, to methat's actually been very
comforting to know that, yeah,look, no company has it all
figured out.
There's no perfect organization.
That's what you're creating.
A business is all about solvingproblems, and the day you're
(11:09):
not solving problems or facingproblems, then you're really not
adding value.
So what are you bringing to themarketplace?
Starting a servicing company inparticular has, you're
absolutely right tons of hurdles, especially if you're dealing
with the owner occupied space.
So that's something that'simportant to point out because
there are servicers whoprimarily or only focus on hard
(11:33):
money loans, investment property, business purpose loans, right.
So private money loans, hardmoney loans where the property
is not occupied by the owner,right.
That type of servicing companycomes with a lot fewer hurdles
when it comes to state licensing.
So the licensing piece andquite honestly, this is a
(11:55):
mistake that we made.
I would do it differently if Ihad to start one from scratch
again but the licensing piece isa huge, huge hurdle.
It's very cumbersome, veryexpensive, very time consuming,
very state dependent.
So lots of nuance there thatwe're not going to be able to
cover entirely.
And but honestly, we don't wantto put your listener to sleep
(12:18):
but that is a big piece of youknow, that's one of the major
hurdles in the beginning whenyou're doing owner occupied loan
servicing.
Justin Bogard (12:26):
So is it a process for getting a license in
a certain state?
Like you file documentation tosay, hey, I'm a loan servicing
company and I want to get alicense, and then you probably
have to answer many questionsand provide certain things, and
then somebody has to approve itand do you get audited.
Is that kind of a little bit ofhelpers?
Jamie Bateman (12:45):
It is a little bit how it works it's.
This is where I start to soundlike an attorney and I say it
depends, and you don't have togo into a very specific.
Justin Bogard (12:53):
I'm just trying to get like the 30,000 foot view
of like how does, how does theprocess work from start to
finish, and how long does ittypically take?
Jamie Bateman (13:01):
Yeah, the problem I'm not dodging the question.
I completely.
It's a critical question, right, but if you're applying for a
loan service, you know aservicing license in Texas
versus New York entirelydifferent, entirely different.
You know processes, but ingeneral, some states do require
you to have full, a full gapaudited financials, so where you
(13:26):
do actually have to pay for anaudit and the year end audit In
fact, we're going through our2023 year end audit right now to
reapply and to renew and applyfor additional state state
licenses right now, but 30,000foot view you should consider,
at least, I'd say, two to threemonths before you're going to
(13:46):
get most licenses back.
And there also are net worthrequirements and when I say that
that's the business, so not mynet worth, but the business is
equity, right, so it really doesvary considerably per state,
though.
So it is those are some of thehurdles is having audited
(14:07):
financials and then also networth requirement for the
business itself.
Justin Bogard (14:11):
Two or three months actually sounds kind of
quick just in relative terms inour business, considering how
things can take and stuff,especially when you get the
foreclosures.
But yeah, that doesn't seem toobad at all.
But yeah, I'm sure the monetaryinvestment can be pretty steep
too to get those licenses.
Jamie Bateman (14:26):
And again I'm answering really from like one
state.
You know so if you're workingon many states, it's going to
take a lot more time, so itmight take six months.
Just because you don't have,you're not only doing that in a
vacuum, but that's definitelyone of the one of the initial
hurdles and I refer to a lessonlearned and this is just my own
(14:47):
takeaway is from a more of abusiness standpoint is one of
the tips I would give peoplewhether you're starting a loan
servicing company or anybusiness that's kind of service
related is make sure you havethe demand there initially
before you set up, before youinvest a lot into licenses and
then you're signing up forannual renewals and you're
(15:09):
committing yourself to higherexpenses.
So I would have scaled if I hadto start over.
I would get fewer licensesinitially maybe five to 10
states and then make sure wehave the demand and the number
of loans there to service thoseand then slowly acquire
(15:30):
additional licenses.
The hard part is some peoplesome note investors and lenders
really want to work with justone servicer, so they want one
solution.
So that can be tricky when wecould.
Only we don't service everystate.
Currently we have 25 licensesand growing.
It's pretty good.
Yeah.
Justin Bogard (15:48):
Yeah, so when you're setting up a loan
servicing company and goingthrough the red tape and you're
learning about the staterequirements and you're getting
the licenses, and there's alsofederal requirements too and, as
it pertains to you know,notifying and disclosing to the
borrower of a change of serviceor a change of ownership of that
note as well, so how do youlearn about those things?
(16:10):
Are you like reaching out toother people to say, hey, what
specific things are going on?
Or an attorney says like, hey,here's what you got to go
through and walk this way, yeah.
Jamie Bateman (16:21):
To be perfectly honest, it's where I do rely
pretty heavily on my team andthe CFPB guides.
A large part of therequirements as far as the
timeline that you referred to,hello and goodbye letters and
RESPA and CFPB are kind of thefederal guidelines.
Your listener can Google those.
(16:41):
We do have training for anyonewho's going to be reaching out
to borrowers directly to makesure that we're following
federal guidelines.
We're not texting people atthree in the morning hey, you
got to pay your mortgage, or youknow there are federal
regulations as far as how, whatis too frequent, you know what's
considered harassment orsomething like that.
(17:01):
But that is.
That is the primary function of.
In my mind, the two functionsthat a loan servicing company
provides are one is collectingpayment and then dispersing
those funds to the lender, buttwo, making sure that everyone
is compliant.
So one of the reasons to use aloan servicer and not self
(17:23):
service your own loan is thatyou have.
Then you alluded to foreclosure.
We can produce, you know, pay,pay history that is backed up
and can be presented in court tohelp with that foreclosure
process.
But yeah, to be perfectlyhonest, I've been more involved
(17:44):
in the state processes as far asstate licensing, because that's
some.
Those are things, honestly,that I need to sign off on as
CEO, typically as an officer ofthe company, whereas I'm not
personally calling andinteracting with with borrowers,
so I'm not personally involvedin the day to day of the.
You know those, the morefederal related requirements.
Justin Bogard (18:08):
Very cool.
So a lot of red tape Just wantto make that.
So this world that we're in andthe note investing world, the
note investing community, it'snot a very big community and,
like I said in the opening thing, when, when you got on, like we
all kind of know each other,yeah, and then you also know
rumors and you also hear thingsout there and kind of wonder
(18:30):
what's true and what's not.
And obviously, with a rumor,there's three sides to every
story.
There's one side, there's theother side and there's the stuff
in the middle.
That's probably the accuratestuff.
Sure, so, like any other companythat starts up or any other fun
that's out there that we knowthere's, there's always things
that you hear about struggles,and so your company by FI is is
one of those companies that havehad rumors out there that
(18:51):
they've had some struggles inthere and you've actually went
out and kind of got in front ofit and mentioned, you know,
through you know a blastmessaging through, you know
people that are inclined to say,hey, here's, here's some
transitions that we're goingthrough, here's some changes
that are happening and blah blah.
And I just kind of wanted togive you the floor to kind of
walk through this kind of whenyou start up a business, how it
(19:12):
struggled and then kind of howyou kind of shifted your focus
back towards other things andgot on the right track and the
path, yeah, and before it was alot more clear and and more fun.
Jamie Bateman (19:23):
Well, I had heard that you, you learn more
through your, through adversity,than you know success.
So I just I wanted to learn alot, so the so we created a
bunch of adversity.
You know I'm kidding, but look,the reality is we've had a lot
of ups and downs.
I, in hindsight, several of thedowns could have been prevented
(19:43):
and again, I've walked awaywith a bunch of.
I haven't walked away, I'mcontinuing to learn, but looking
back, I've gained a lot ofknowledge.
With regard to lessons learned,you know, I actually would point
your listener to the episode.
It's our 100th episode becausewe go into a lot of detail on
(20:05):
adversity to abundance podcastand I'm I just think, if
anyone's interested in more ofthe true behind the scenes
details of by fi, chante gives areally good.
It's from her perspectivemostly, and Chante is our
director of operations, like Ialluded to, and she's the
servicing guru in our, in ourcompany.
(20:27):
I mean we have a team as well.
But so, for further detail,check that out.
But yeah, I mean the first year,just to kind of quickly hit
some some the timeline and some,yeah, maybe low lights and
highlights during 2021, chris 70, shanti Duffy and and I were
(20:48):
putting together our plan andGetting licenses.
So when I say our plan, I meanSOPs.
How are we gonna handleforeclosures?
What are we gonna charge forfor this?
You know, what are the monthlyservicing fees?
What are?
What are the the?
The whole fee schedule?
What's um?
What are we offering right?
So what services actually arewe offering?
(21:08):
Because you think, oh, everyservicer has the same.
Justin Bogard (21:10):
Well, no, what's your value at?
You know how does it make usour?
Jamie Bateman (21:13):
value at 100%.
What's, um, what?
What?
Why are?
Why would someone choose us,right?
You know, and that's where it'swe.
What we did was Chris and I arevery active note investors.
Chris had already run, at thistime, probably six, maybe seven,
note funds when we were threeyears ago, and you know so, not
(21:35):
only the two of us Shanti alsois an active note investor, but
we also had meetings with activeinvestors to find out what were
their pain points with otherservicers and, ultimately, the
big thing was communication.
That's the.
That's probably the main piece.
But so for 2021, we wereputting together those processes
(21:57):
and are Kind of the just theoverall plan as well as
Obtaining licenses.
That was really kind of justlaying the groundwork for the,
for the company.
And then in late 2020, soAugust of 2021, chris and I
Boarded our own loans at Bifi,and when I say our own loans,
(22:18):
those were funds that we weremanaging that, funds that we ran
or still run as well as just,you know, owned by our entity.
So, yeah, we wanted to makesure, yes, these were live loans
and these are real.
If these are not play moneykind of thing, right.
Yeah but we wanted to make surewe would feel the pain first, if
there, if there was to paint,paint right.
(22:38):
And so we did that for a coupleof months September and October
, really the two months that weserviced our own loans and then
we felt comfortable right after.
I would say early November of2021 is when we kind of opened
up the doors to third-partyServicing.
So servicing, you know, loansfor other note investors like
(23:02):
yourself.
And so I Would say, during then, over the next I know we're not
, we don't have a too much timebut over the next, say, a Year,
almost year, 10 to 12 monthsthings were going pretty well at
by.
Yeah, we were growing, you know, slowly growing.
(23:22):
Yeah, we certainly, you knowyou don't just hit the ground
running and Make a milliondollars, you know, a year out of
the gate, right, so we weren't,we weren't profitable.
It's not like, you know, it'snot like, and most companies
aren't.
Justin Bogard (23:36):
And now, that's most.
Most are not.
Yeah, for these three to fiveyears.
Jamie Bateman (23:39):
Yeah, so, and we knew that was that was to be
expected, right, the the biggest.
Just being totally honest withyou, it.
Things took a turn for theworse in late 2022 and what
happened?
That the you know you can get,like you said.
There's other perspectives, forsure, but from my perspective,
(24:01):
what was going on was we put toomuch on Shantae's plate.
Chris and I did, and when I saythat, I mean, um, you know, we
expected, yes, we'd put a lot ofwork into this ourselves, yeah,
put a lot of money into it, butwe kind of expected that she
could take the ball and run withit.
Now, before anyone hears thatthat, uh, she's not, you know,
(24:24):
able to take the ball and runwith it, that's not what I'm
saying.
What I'm saying is creating aservicing company from scratch
by.
We bought office space in NewJersey.
That was a big deal.
So there were a lot of piecesthat Chante had to deal with
that Chris and I either weren'tdealing with because we were
remote or we didn't have thetime because we were dealing
(24:45):
with our funds and everythingelse, yeah, and that she had
never dealt with before.
So, creating processes, youknow, it's one thing to she she
worked at Madison management forabout nine years and she rose
through the ranks and she wasvery well respected and gained a
ton of knowledge.
But she didn't start Madisonmanagement.
You know, she didn't start acompany there, right?
(25:05):
She'd never been a landlord.
So all of a sudden the HVACgoes out in our, in our, office
space, or she has to collectrent from the tenant next door
because we bought two to officespaces.
Well, these are not thingsshe's ever done before, and and
so there were a lot of hurdles.
Those are just a couple ofexamples.
(25:26):
Well, a lot of challenges thatthat Chante specifically had
never dealt with and quitefrankly, in hindsight it was
like it was probably on on.
I don't want to say unfair, butjust unrealistic of Chris and
me to expect that this couldjust take off and be successful
out of the gate like that.
So things somewhat devolved.
(25:49):
Honestly, what we tried to dowas we, we brought in someone
and I'll just fast forward herebut we, we hired someone to be
more of the business andaccounting and sort of a model,
role model for Chante from abusiness standpoint, almost like
a mentor and a guide.
Yeah, and Chante could stillthen.
Then what would?
(26:09):
The thought was that we wouldfree her up to focus on loan
servicing, which is really whatshe does best.
I mean that she's she's anabsolute beast when it comes to
servicing loans.
Yeah, unfortunately, that didnot go well.
We didn't hire the right person.
Quite honestly, and coming outof into 2023.
That's when, I would say, bifihit rock bottom.
Chante had actually left thecompany and she talks about this
(26:32):
on my podcast.
Yeah, she had some things goingon personally in her own, in
her own world.
You know that she had a lot ofpodcasts.
Yeah, she had some things goingon personally in her own, in
her own world.
You know that she had to get,get right, and it's one of the
risks you run when you have asmall company.
You know if, if someone leaves,say, let's just say FCI,
(26:53):
they're a bigger servicingcompany.
If one of their employeesleaves tomorrow for six months,
you might not notice as a client, right?
Or if you do, it's a littleblip, chante.
When Chante left, it was a big,big deal, and so it did take us
quite, quite a bit of time todig out of the hole that was
created in the beginning part of2023.
(27:15):
And I'm happy to say we'verebounded and we're making a ton
of progress.
We've already, we've put in.
I'm super excited about thefuture of Bi-Fi, you know but
but the reality is it has it.
We've had, we've had some lowpoints, for sure.
Justin Bogard (27:30):
That was your adversity, that you didn't
intend to happen, but that'sright, yes, but that's
understandable and, like wementioned before, anybody that
has a company started a companythere there are things that are
just you can't foresee happeningand you gotta be able to be
malleable.
You know you can't be able toflex and bend and pivot and move
and change direction if youneed to, and it definitely
(27:52):
sounds like we've had a lot ofoffline conversations so I know
a little bit more of the whatyou do, what you've been through
then what we're explaining here.
But this is a short podcastthat we're just trying to give
you the high level of thestruggle and then how you've
Redefined everything and kind ofmoving forward today, fast
forward to today.
You're obviously you are aservicing company and you do
service many loans and we stillhave loans with you and stuff.
Jamie Bateman (28:15):
so yeah, well, let me just say that some of the
, so the ownership structure haschanged in the last few months
and you know, chris is no longerAn owner of by five, christ
seven, he is still a client ofby fives, and chris and I are on
great terms.
We're gonna be on your showhere in a couple days and this
(28:38):
is the release after valentine'sday, but yeah, so look back for
that for 14th broadcast and seeif chris and I got along or not
.
But we still communicate andwe're still in touch on a lot of
different things.
And what he decided was that hehad to focus focuses huge right
(28:58):
in business in general, and Ithink he'd taken on a bit too
much, to be honest, and I thinkyou would admit that, and so
he's.
He had to focus on what he hadgoing on with his regulation a
and his big fund, and so he leftby five august and then we
actually there's some morerecent changes that have been
(29:20):
very positive from a resourcestandpoint, in late december in
particular, and some of that Ican't get into, but I'm really
excited about the future andsome of the resources that and
support that are have beenbrought to by fire already as
and are on the horizon.
So I think that's just gonnareally provide a higher level of
(29:41):
service for clients and andI'll be perfectly honest, I was
looking like the dumb idiot whowas just too stubborn to walk
away, didn't want to admitdefeat there for a little bit it
wasn't looking good.
Just be being real, yeah, butand I'm not saying I'm not ready
to spike the football, but it'slooking a lot better than it
was in, say, august, september,october of twenty twenty three.
Justin Bogard (30:06):
Well, you're an entrepreneur in heart and if
it's not in your any on anyentrepreneurs heart to give up.
And because you didn't give up,you know that you can.
You can see the light in thetunnel.
So, speaker, you're reallyclose to being there or you're
already there and you're gettingready to break through.
I'm really cool what you'vebeen through.
I mean I obviously it wasn'tfun going through the low points
(30:26):
.
But, yeah, all of us out therewe think, especially you know
the younger, the youngergeneration that comes through
and starts to build these newbusinesses are just businesses
in our industry and you know it.
It kind of looks easier.
We think we know the way to doit and it's really a blend of
knowing what the experiencefolks out there have been doing,
how they started theircompanies, in a blend of what
(30:48):
technology is helping todayversus what they didn't have
back then, all those thingsabout.
So there's, it is a struggleand if anybody out there thinks
that you know anybody that'sstarted a fund or started a
company in the notes base,that's been easy and it's been.
You know they hit 100% perfect.
You know dart throws everysingle time.
It's absolutely not the case atall every single person we
(31:10):
could put on this podcast and wecan interview them and they
would all talk about what, whatyou have talked about today and
some of the stakes and strugglesthat they've been through and
how they overcame it but I sawit over come and how you pick
yourself up right, move forward.
Jamie Bateman (31:22):
Absolutely, and I just you know, does it get old
talking about yeah?
I don't love to focus on thenegative right, but at the same
time, one of the things I wantto make clear is I am not
walking away from any, any.
If we've, if we, messed up theservicing on a loan back, you
know a year ago, I'm owning thatright.
I'm not, I'm not walking awayfrom that.
(31:43):
That's so we're.
We're facing it head on, we'recleaning up the issues and
that's why We've also hiredsomeone to come on as our
business development lead andhit what the one of the first
things he did was Set up a callwith any investor, any current
client who wanted to talk to him, so that we could understand
the pain points and address them, as opposed to just pretend
everything's fine or ignore theissues.
Justin Bogard (32:04):
It's because you care yeah, absolutely.
I do and.
Jamie Bateman (32:07):
I, I do and my goal is just can continue to
provide a high level of serviceand continue to improve the
service, the level of servicethat we're, that we're providing
, and again, we're these recentchanges, which I'll be able to
speak about more in the future.
Yeah, I'm thrilled about it.
So the we're able to lean on abig partner who is providing a
(32:33):
lot of the day to day support,meaning when I say support, I
mean it support, hr support,accounting support, the business
side as opposed to the loanservicing side.
That we know really well, andso it's been able to provide
shanta and me a lot of clarityand focus On the investor to be
able to provide that higherlevel of service.
(32:55):
So, by five has a bright futurefor sure that's awesome, jamie.
Justin Bogard (33:00):
You're awesome.
Thanks for being on the podcasttoday.
This is episode number four,season six maybe the bank
podcast, jamie Bateman of byfive, loan servicing and
Labrador lending.
As we know, that's the streetthat he kind of lives on there.
That's right.
Thanks a lot, man, for being onthe show today.
Can't wait to do the broadcasttogether here in a few days as
we're recording this, so we willcatch you all on the next
(33:21):
episode.
Thanks, jamie, see you.
Thanks, justin.
Narrator (33:28):
Thanks for listening to be the bank.
We hope you learned somethingfrom today's show.
If you enjoyed this episode,please rate, review us.
Plus, check out our channel onYouTube and follow us on
Facebook and Twitter at be thebank and on Instagram at be the
bank podcast.
Be the bank is sponsored byAmerican note buyers.
Thanks again for listening.
Interested in real estate.
How about wealth?
Well, they go hand in hand, andhere you'll learn all about it.
Welcome to Be the Bank, apodcast where we discuss and
debate the topics centeredaround real estate investing.
Your host, Justin Bogard,shares insights into investing
in real estate to create realwealth and passive income for
(00:22):
you and your family.
He'll share stories of realestate investments done right,
Walk you through the process ofowning a real estate note and,
most importantly, educate you soyou can be the bank.
This is Be the Bank brought toyou by American Note Buyers.
Now here's your host, JustinBogard.
Justin Bogard (00:46):
Hey, listener, this is season six, episode
number four almost at six,episode number four on Be the
Bank podcast.
Today I have a friend of mine,mr Jamie Bateman.
He is the guy running things atBifinal and Servicing.
He also has a couple of fundsthat he's managed in the past
and still manages today and thehighlight of our conversation
(01:06):
today is going to be kind ofaround servicing and kind of how
a servicing company works andjust kind of all around
questions that people havearound servicing companies.
So you're not going to want tomiss this, so stay tuned.
Mr Jamie Bateman, welcome tothe Be the Bank podcast.
Jamie Bateman (01:33):
Justin, thank you so much for having me.
Man, this is going to be fun.
Justin Bogard (01:37):
You're welcome.
I'll send you an invoice afterwe're done.
Absolutely.
Jamie Bateman (01:45):
And I'll send it back with a link to my podcast.
You were on.
Justin Bogard (01:51):
With a slightly more of a fee on top of that.
Jamie Bateman (01:54):
Exactly Upcharge.
Justin Bogard (01:59):
All right, jamie.
So thanks again for being onthe show.
This is, I think, your secondtime on the Be the Bank podcast
and it's been a few years, butthanks for being on again.
We know each other kind ofthrough the investing circle
here and it's not a very bigcircle, so a lot of us know each
other.
But you don't live where I am.
I'm in Indiana, so you're in,I'm in outside of Baltimore,
(02:21):
Maryland.
Jamie Bateman (02:22):
So you must be an Orioles fan.
I am an Orioles fan.
I follow the Ravens a littlebit more, although that stings
right now.
Justin Bogard (02:30):
Yeah, and the.
Jamie Bateman (02:31):
Orioles, of course, were just sold last week
.
So that was interesting.
They were sold.
Yeah, the ownership changed.
I don't know a lot about it,but so that was a big news in
Orioles Orioles land.
But yeah, I grew up going toMemorial Stadium and then Camden
Yards was obviously one of thenicer parks once it, when it was
(02:53):
built, and I think it still isone, one of the nicer ones.
Justin Bogard (02:57):
It looks pretty cool.
A friend of mine went out thereand he said it's a pretty
awesome place to go watch a game.
I thought the Orioles I didn'tknow about the Orioles ownership
changing hands.
I ought to read about thatbecause I kind of follow
baseball.
The AL East is kind of theteams that I watch.
Because I'm a Red Sox fan.
It's because there's not reallyany American League good teams
around where I'm at, so theWhite Sox are the kind of
closest where I'm at.
(03:18):
But I got the Cubs, the WhiteSox and the Reds and a lot of
people like the Cardinalsbecause they're close by too,
and we've got Detroit.
That's up there just a littlebit, a few more hours.
So yeah, Midwest is kind ofcool.
You can hit a lot of differentbaseball parks right here, For
sure.
We're not here to talk aboutthat, All right.
So you're in Maryland.
You started a servicing companya few years ago and you also
(03:40):
before that you kind of were aI'm assuming a landlord turned
note investor.
Jamie Bateman (03:46):
Yeah, absolutely.
And so landlord turned leanlord.
Narrator (03:52):
Yeah.
Jamie Bateman (03:53):
But my favorite one caveat, though, with that is
that I don't it's not like Iabandoned all my rentals and
then I just went 100% into notes.
I actually kind of see themworking hand in hand.
In fact, through my noteinvesting we've acquired one
other single family rental.
That's in Florida.
So to me they work welltogether and they're not their.
(04:15):
Note investing is just another,another strategy.
That's really in that largerreal estate investing asset
class.
Justin Bogard (04:24):
Well, it's disappointing to hear you say
that, because I thought youwould just doggone rentals.
Well, that's all the time wehave for today.
Thanks for being here.
Jamie Bateman (04:30):
Yeah, all right, I guess man, this invoice is
growing by the minute.
Yeah, look, the truth is, everyasset class has pros and cons
and we you know.
I know we're not going to diveinto all those today, but I love
notes.
I love note investing.
The passive side of it is ishuge, but our rentals have been
(04:52):
an important part of my ownportfolio as well, and continue
to be so.
Justin Bogard (04:58):
Yeah, I can see rentals being pretty, pretty
profitable and it depends on thesituation.
I always thought the rentals atleast around here in
Indianapolis area where I livethe more expensive ones seem to
thrive better than the lower endones, Just because there's so
much turnover and damage andstuff done to the lower end ones
.
So I think if you had aportfolio of a, you know, higher
valued assets, it probablyprobably would pan off a little
(05:20):
bit better.
But notes fits my eye, so tospeak, and I just stay in that
lane and I'm pretty content withit.
So you have a couple of fundsthat you've managed in the past.
Right, yeah, that's right.
Jamie Bateman (05:34):
Currently still, we have one fund that's winding
down.
It's a three year fund,non-performing note fund, and
that one has been a lot of workand but also has been profitable
, and that one had a definedthree year term.
So it's winding down this year.
And then the other fund is are-performing slash performing
(05:55):
note fund.
That's a little morepredictable, a little more
boring, if you will.
It provides the passiveinvestor more of a predictable
passive monthly return.
So but yeah, both have beengood.
Justin Bogard (06:11):
Awesome.
So that is the Labrador lendingcenter.
And those of you that aren'twatching the video of this, we
are streaming this on ourYouTube channel for American
Notebuyers so you can check outJamie's little tag there.
So Labrador lending.
How'd you come up with the nameLabrador lending?
Jamie Bateman (06:28):
Yeah, I mean.
So it's actually, in hindsight,a little bit misleading because
we don't do actual lending andthat's probably a topic for
another.
So but we don't reallyoriginate loans.
We have done a couple, butthat's not the.
You know, we buy existing debtlike you do, and so.
But Labrador lending we live onLabrador Lane.
(06:49):
My kids Lab actually have anentity that's called Labrador
properties that has rentals init as well, and my kids were the
Labradors when they were inelementary school, which still
surprises me that elementaryschools have have mascots now.
But yeah, that Labrador lendingjust made made sense.
(07:11):
So what's?
Justin Bogard (07:12):
cool.
I wasn't expecting that to bethe street you live on.
Cool, yeah.
So when?
When did you start by five loanservicing?
Jamie Bateman (07:22):
technically it was January 4th 2021 and, as
we're recording this, tomorrowmorning I have a podcast episode
coming out on the fromadversity to abundance podcast.
That goes into depth from myperspective, but more so from
Shanti Duffy's perspective, andwe can get into who she is.
She's the director ofoperations at Bifi.
(07:45):
To answer your question, alittle over three years ago,
january 4th 2021 but we'd put ina good amount of work prior to
actually, you know, creating theLLC.
So probably three and a halfyears ago now, we were kind of
planning things.
Justin Bogard (08:01):
What in the hell made you decide to start?
A loan servicing company.
Jamie Bateman (08:05):
I asked myself that every day.
No, look, I look, I try to keepit real and things.
There have been ups and downs,for sure, and tons of lessons
I've learned and I think we'lltouch on a couple of those.
You know, you hang around Chris70 too much and and he pushes
you into.
Yeah to get uncomfortable.
(08:26):
Chris is a fellow note investorand a peer of ours and he's in
some ways been a mentor of mineas well, and Chris and I were
just frustrated with the servicethat we were, the level of
service we were being providedas note investors.
Fun, you know, fund managersfrom other servicing companies
and that's not to say that otherservicers are all terrible, and
(08:52):
you know they're.
They do nothing.
Well, that's not it at all.
But we thought that, you know,we could have a little bit,
maybe a little more control ofthe servicing element of, you
know, as far as our own loans go, but primarily to provide
investors with An investor firstservicing company that really
(09:13):
prided itself on communicationand and, and you know, properly
managing the servicing part ofof alone.
So it was out of frustrationwith other servicers, quite
honestly.
But for the record, I still usetwo other servicers today I've
used five total, and so I know,you know, they all have pros and
(09:35):
cons.
Yeah, no perfect servicers outthere, but that was the impetus
behind by file on servicing,okay, and so my questions are
gonna be more business relatedquestions here, so love it.
Justin Bogard (09:48):
what?
What is the biggest hurdle whenyou're setting up a loan
servicing company that you haveto go through?
I'm sure there's a bunch of redtape that me, a consumer of a
loan service company, doesn'tdoesn't know about.
Jamie Bateman (10:02):
Yeah, if you don't mind, I'm going to read
this quote.
I have a quote here and thenI'm going to answer your
question.
So this is from.
It was published in Forbes andit's a guy who I follow on
Twitter.
His name is Brent, be sure.
Be sure.
I'm not sure how you say it,but his quote was he's the CEO
(10:24):
of Permanent Equity.
You can look him up.
His quote is all businesses areloosely functioning, disasters,
and some are profitable despiteit, he said.
At 30,000 feet, the world isbeautiful and orderly.
On the ground, it's chaotic andconfusing.
Nothing ever goes to plan.
Surprises lurk around everycorner, things are constantly
breaking, someone is alwaysupset, mistakes are made daily.
(10:47):
Expecting anything, anythingless, is out of touch with
reality.
Now, with that backdrop, to methat's actually been very
comforting to know that, yeah,look, no company has it all
figured out.
There's no perfect organization.
That's what you're creating.
A business is all about solvingproblems, and the day you're
(11:09):
not solving problems or facingproblems, then you're really not
adding value.
So what are you bringing to themarketplace?
Starting a servicing company inparticular has, you're
absolutely right tons of hurdles, especially if you're dealing
with the owner occupied space.
So that's something that'simportant to point out because
there are servicers whoprimarily or only focus on hard
(11:33):
money loans, investment property, business purpose loans, right.
So private money loans, hardmoney loans where the property
is not occupied by the owner,right.
That type of servicing companycomes with a lot fewer hurdles
when it comes to state licensing.
So the licensing piece andquite honestly, this is a
(11:55):
mistake that we made.
I would do it differently if Ihad to start one from scratch
again but the licensing piece isa huge, huge hurdle.
It's very cumbersome, veryexpensive, very time consuming,
very state dependent.
So lots of nuance there thatwe're not going to be able to
cover entirely.
And but honestly, we don't wantto put your listener to sleep
(12:18):
but that is a big piece of youknow, that's one of the major
hurdles in the beginning whenyou're doing owner occupied loan
servicing.
Justin Bogard (12:26):
So is it a process for getting a license in
a certain state?
Like you file documentation tosay, hey, I'm a loan servicing
company and I want to get alicense, and then you probably
have to answer many questionsand provide certain things, and
then somebody has to approve itand do you get audited.
Is that kind of a little bit ofhelpers?
Jamie Bateman (12:45):
It is a little bit how it works it's.
This is where I start to soundlike an attorney and I say it
depends, and you don't have togo into a very specific.
Justin Bogard (12:53):
I'm just trying to get like the 30,000 foot view
of like how does, how does theprocess work from start to
finish, and how long does ittypically take?
Jamie Bateman (13:01):
Yeah, the problem I'm not dodging the question.
I completely.
It's a critical question, right, but if you're applying for a
loan service, you know aservicing license in Texas
versus New York entirelydifferent, entirely different.
You know processes, but ingeneral, some states do require
you to have full, a full gapaudited financials, so where you
(13:26):
do actually have to pay for anaudit and the year end audit In
fact, we're going through our2023 year end audit right now to
reapply and to renew and applyfor additional state state
licenses right now, but 30,000foot view you should consider,
at least, I'd say, two to threemonths before you're going to
(13:46):
get most licenses back.
And there also are net worthrequirements and when I say that
that's the business, so not mynet worth, but the business is
equity, right, so it really doesvary considerably per state,
though.
So it is those are some of thehurdles is having audited
(14:07):
financials and then also networth requirement for the
business itself.
Justin Bogard (14:11):
Two or three months actually sounds kind of
quick just in relative terms inour business, considering how
things can take and stuff,especially when you get the
foreclosures.
But yeah, that doesn't seem toobad at all.
But yeah, I'm sure the monetaryinvestment can be pretty steep
too to get those licenses.
Jamie Bateman (14:26):
And again I'm answering really from like one
state.
You know so if you're workingon many states, it's going to
take a lot more time, so itmight take six months.
Just because you don't have,you're not only doing that in a
vacuum, but that's definitelyone of the one of the initial
hurdles and I refer to a lessonlearned and this is just my own
(14:47):
takeaway is from a more of abusiness standpoint is one of
the tips I would give peoplewhether you're starting a loan
servicing company or anybusiness that's kind of service
related is make sure you havethe demand there initially
before you set up, before youinvest a lot into licenses and
then you're signing up forannual renewals and you're
(15:09):
committing yourself to higherexpenses.
So I would have scaled if I hadto start over.
I would get fewer licensesinitially maybe five to 10
states and then make sure wehave the demand and the number
of loans there to service thoseand then slowly acquire
(15:30):
additional licenses.
The hard part is some peoplesome note investors and lenders
really want to work with justone servicer, so they want one
solution.
So that can be tricky when wecould.
Only we don't service everystate.
Currently we have 25 licensesand growing.
It's pretty good.
Yeah.
Justin Bogard (15:48):
Yeah, so when you're setting up a loan
servicing company and goingthrough the red tape and you're
learning about the staterequirements and you're getting
the licenses, and there's alsofederal requirements too and, as
it pertains to you know,notifying and disclosing to the
borrower of a change of serviceor a change of ownership of that
note as well, so how do youlearn about those things?
(16:10):
Are you like reaching out toother people to say, hey, what
specific things are going on?
Or an attorney says like, hey,here's what you got to go
through and walk this way, yeah.
Jamie Bateman (16:21):
To be perfectly honest, it's where I do rely
pretty heavily on my team andthe CFPB guides.
A large part of therequirements as far as the
timeline that you referred to,hello and goodbye letters and
RESPA and CFPB are kind of thefederal guidelines.
Your listener can Google those.
(16:41):
We do have training for anyonewho's going to be reaching out
to borrowers directly to makesure that we're following
federal guidelines.
We're not texting people atthree in the morning hey, you
got to pay your mortgage, or youknow there are federal
regulations as far as how, whatis too frequent, you know what's
considered harassment orsomething like that.
(17:01):
But that is.
That is the primary function of.
In my mind, the two functionsthat a loan servicing company
provides are one is collectingpayment and then dispersing
those funds to the lender, buttwo, making sure that everyone
is compliant.
So one of the reasons to use aloan servicer and not self
(17:23):
service your own loan is thatyou have.
Then you alluded to foreclosure.
We can produce, you know, pay,pay history that is backed up
and can be presented in court tohelp with that foreclosure
process.
But yeah, to be perfectlyhonest, I've been more involved
(17:44):
in the state processes as far asstate licensing, because that's
some.
Those are things, honestly,that I need to sign off on as
CEO, typically as an officer ofthe company, whereas I'm not
personally calling andinteracting with with borrowers,
so I'm not personally involvedin the day to day of the.
You know those, the morefederal related requirements.
Justin Bogard (18:08):
Very cool.
So a lot of red tape Just wantto make that.
So this world that we're in andthe note investing world, the
note investing community, it'snot a very big community and,
like I said in the opening thing, when, when you got on, like we
all kind of know each other,yeah, and then you also know
rumors and you also hear thingsout there and kind of wonder
(18:30):
what's true and what's not.
And obviously, with a rumor,there's three sides to every
story.
There's one side, there's theother side and there's the stuff
in the middle.
That's probably the accuratestuff.
Sure, so, like any other companythat starts up or any other fun
that's out there that we knowthere's, there's always things
that you hear about struggles,and so your company by FI is is
one of those companies that havehad rumors out there that
(18:51):
they've had some struggles inthere and you've actually went
out and kind of got in front ofit and mentioned, you know,
through you know a blastmessaging through, you know
people that are inclined to say,hey, here's, here's some
transitions that we're goingthrough, here's some changes
that are happening and blah blah.
And I just kind of wanted togive you the floor to kind of
walk through this kind of whenyou start up a business, how it
(19:12):
struggled and then kind of howyou kind of shifted your focus
back towards other things andgot on the right track and the
path, yeah, and before it was alot more clear and and more fun.
Jamie Bateman (19:23):
Well, I had heard that you, you learn more
through your, through adversity,than you know success.
So I just I wanted to learn alot, so the so we created a
bunch of adversity.
You know I'm kidding, but look,the reality is we've had a lot
of ups and downs.
I, in hindsight, several of thedowns could have been prevented
(19:43):
and again, I've walked awaywith a bunch of.
I haven't walked away, I'mcontinuing to learn, but looking
back, I've gained a lot ofknowledge.
With regard to lessons learned,you know, I actually would point
your listener to the episode.
It's our 100th episode becausewe go into a lot of detail on
(20:05):
adversity to abundance podcastand I'm I just think, if
anyone's interested in more ofthe true behind the scenes
details of by fi, chante gives areally good.
It's from her perspectivemostly, and Chante is our
director of operations, like Ialluded to, and she's the
servicing guru in our, in ourcompany.
(20:27):
I mean we have a team as well.
But so, for further detail,check that out.
But yeah, I mean the first year,just to kind of quickly hit
some some the timeline and some,yeah, maybe low lights and
highlights during 2021, chris 70, shanti Duffy and and I were
(20:48):
putting together our plan andGetting licenses.
So when I say our plan, I meanSOPs.
How are we gonna handleforeclosures?
What are we gonna charge forfor this?
You know, what are the monthlyservicing fees?
What are?
What are the the?
The whole fee schedule?
What's um?
What are we offering right?
So what services actually arewe offering?
(21:08):
Because you think, oh, everyservicer has the same.
Justin Bogard (21:10):
Well, no, what's your value at?
You know how does it make usour?
Jamie Bateman (21:13):
value at 100%.
What's, um, what?
What?
Why are?
Why would someone choose us,right?
You know, and that's where it'swe.
What we did was Chris and I arevery active note investors.
Chris had already run, at thistime, probably six, maybe seven,
note funds when we were threeyears ago, and you know so, not
(21:35):
only the two of us Shanti alsois an active note investor, but
we also had meetings with activeinvestors to find out what were
their pain points with otherservicers and, ultimately, the
big thing was communication.
That's the.
That's probably the main piece.
But so for 2021, we wereputting together those processes
(21:57):
and are Kind of the just theoverall plan as well as
Obtaining licenses.
That was really kind of justlaying the groundwork for the,
for the company.
And then in late 2020, soAugust of 2021, chris and I
Boarded our own loans at Bifi,and when I say our own loans,
(22:18):
those were funds that we weremanaging that, funds that we ran
or still run as well as just,you know, owned by our entity.
So, yeah, we wanted to makesure, yes, these were live loans
and these are real.
If these are not play moneykind of thing, right.
Yeah but we wanted to make surewe would feel the pain first, if
there, if there was to paint,paint right.
(22:38):
And so we did that for a coupleof months September and October
, really the two months that weserviced our own loans and then
we felt comfortable right after.
I would say early November of2021 is when we kind of opened
up the doors to third-partyServicing.
So servicing, you know, loansfor other note investors like
(23:02):
yourself.
And so I Would say, during then, over the next I know we're not
, we don't have a too much timebut over the next, say, a Year,
almost year, 10 to 12 monthsthings were going pretty well at
by.
Yeah, we were growing, you know, slowly growing.
(23:22):
Yeah, we certainly, you knowyou don't just hit the ground
running and Make a milliondollars, you know, a year out of
the gate, right, so we weren't,we weren't profitable.
It's not like, you know, it'snot like, and most companies
aren't.
Justin Bogard (23:36):
And now, that's most.
Most are not.
Yeah, for these three to fiveyears.
Jamie Bateman (23:39):
Yeah, so, and we knew that was that was to be
expected, right, the the biggest.
Just being totally honest withyou, it.
Things took a turn for theworse in late 2022 and what
happened?
That the you know you can get,like you said.
There's other perspectives, forsure, but from my perspective,
(24:01):
what was going on was we put toomuch on Shantae's plate.
Chris and I did, and when I saythat, I mean, um, you know, we
expected, yes, we'd put a lot ofwork into this ourselves, yeah,
put a lot of money into it, butwe kind of expected that she
could take the ball and run withit.
Now, before anyone hears thatthat, uh, she's not, you know,
(24:24):
able to take the ball and runwith it, that's not what I'm
saying.
What I'm saying is creating aservicing company from scratch
by.
We bought office space in NewJersey.
That was a big deal.
So there were a lot of piecesthat Chante had to deal with
that Chris and I either weren'tdealing with because we were
remote or we didn't have thetime because we were dealing
(24:45):
with our funds and everythingelse, yeah, and that she had
never dealt with before.
So, creating processes, youknow, it's one thing to she she
worked at Madison management forabout nine years and she rose
through the ranks and she wasvery well respected and gained a
ton of knowledge.
But she didn't start Madisonmanagement.
You know, she didn't start acompany there, right?
(25:05):
She'd never been a landlord.
So all of a sudden the HVACgoes out in our, in our, office
space, or she has to collectrent from the tenant next door
because we bought two to officespaces.
Well, these are not thingsshe's ever done before, and and
so there were a lot of hurdles.
Those are just a couple ofexamples.
(25:26):
Well, a lot of challenges thatthat Chante specifically had
never dealt with and quitefrankly, in hindsight it was
like it was probably on on.
I don't want to say unfair, butjust unrealistic of Chris and
me to expect that this couldjust take off and be successful
out of the gate like that.
So things somewhat devolved.
(25:49):
Honestly, what we tried to dowas we, we brought in someone
and I'll just fast forward herebut we, we hired someone to be
more of the business andaccounting and sort of a model,
role model for Chante from abusiness standpoint, almost like
a mentor and a guide.
Yeah, and Chante could stillthen.
Then what would?
(26:09):
The thought was that we wouldfree her up to focus on loan
servicing, which is really whatshe does best.
I mean that she's she's anabsolute beast when it comes to
servicing loans.
Yeah, unfortunately, that didnot go well.
We didn't hire the right person.
Quite honestly, and coming outof into 2023.
That's when, I would say, bifihit rock bottom.
Chante had actually left thecompany and she talks about this
(26:32):
on my podcast.
Yeah, she had some things goingon personally in her own, in
her own world.
You know that she had a lot ofpodcasts.
Yeah, she had some things goingon personally in her own, in
her own world.
You know that she had to get,get right, and it's one of the
risks you run when you have asmall company.
You know if, if someone leaves,say, let's just say FCI,
(26:53):
they're a bigger servicingcompany.
If one of their employeesleaves tomorrow for six months,
you might not notice as a client, right?
Or if you do, it's a littleblip, chante.
When Chante left, it was a big,big deal, and so it did take us
quite, quite a bit of time todig out of the hole that was
created in the beginning part of2023.
(27:15):
And I'm happy to say we'verebounded and we're making a ton
of progress.
We've already, we've put in.
I'm super excited about thefuture of Bi-Fi, you know but
but the reality is it has it.
We've had, we've had some lowpoints, for sure.
Justin Bogard (27:30):
That was your adversity, that you didn't
intend to happen, but that'sright, yes, but that's
understandable and, like wementioned before, anybody that
has a company started a companythere there are things that are
just you can't foresee happeningand you gotta be able to be
malleable.
You know you can't be able toflex and bend and pivot and move
and change direction if youneed to, and it definitely
(27:52):
sounds like we've had a lot ofoffline conversations so I know
a little bit more of the whatyou do, what you've been through
then what we're explaining here.
But this is a short podcastthat we're just trying to give
you the high level of thestruggle and then how you've
Redefined everything and kind ofmoving forward today, fast
forward to today.
You're obviously you are aservicing company and you do
service many loans and we stillhave loans with you and stuff.
Jamie Bateman (28:15):
so yeah, well, let me just say that some of the
, so the ownership structure haschanged in the last few months
and you know, chris is no longerAn owner of by five, christ
seven, he is still a client ofby fives, and chris and I are on
great terms.
We're gonna be on your showhere in a couple days and this
(28:38):
is the release after valentine'sday, but yeah, so look back for
that for 14th broadcast and seeif chris and I got along or not
.
But we still communicate andwe're still in touch on a lot of
different things.
And what he decided was that hehad to focus focuses huge right
(28:58):
in business in general, and Ithink he'd taken on a bit too
much, to be honest, and I thinkyou would admit that, and so
he's.
He had to focus on what he hadgoing on with his regulation a
and his big fund, and so he leftby five august and then we
actually there's some morerecent changes that have been
(29:20):
very positive from a resourcestandpoint, in late december in
particular, and some of that Ican't get into, but I'm really
excited about the future andsome of the resources that and
support that are have beenbrought to by fire already as
and are on the horizon.
So I think that's just gonnareally provide a higher level of
(29:41):
service for clients and andI'll be perfectly honest, I was
looking like the dumb idiot whowas just too stubborn to walk
away, didn't want to admitdefeat there for a little bit it
wasn't looking good.
Just be being real, yeah, butand I'm not saying I'm not ready
to spike the football, but it'slooking a lot better than it
was in, say, august, september,october of twenty twenty three.
Justin Bogard (30:06):
Well, you're an entrepreneur in heart and if
it's not in your any on anyentrepreneurs heart to give up.
And because you didn't give up,you know that you can.
You can see the light in thetunnel.
So, speaker, you're reallyclose to being there or you're
already there and you're gettingready to break through.
I'm really cool what you'vebeen through.
I mean I obviously it wasn'tfun going through the low points
(30:26):
.
But, yeah, all of us out therewe think, especially you know
the younger, the youngergeneration that comes through
and starts to build these newbusinesses are just businesses
in our industry and you know it.
It kind of looks easier.
We think we know the way to doit and it's really a blend of
knowing what the experiencefolks out there have been doing,
how they started theircompanies, in a blend of what
(30:48):
technology is helping todayversus what they didn't have
back then, all those thingsabout.
So there's, it is a struggleand if anybody out there thinks
that you know anybody that'sstarted a fund or started a
company in the notes base,that's been easy and it's been.
You know they hit 100% perfect.
You know dart throws everysingle time.
It's absolutely not the case atall every single person we
(31:10):
could put on this podcast and wecan interview them and they
would all talk about what, whatyou have talked about today and
some of the stakes and strugglesthat they've been through and
how they overcame it but I sawit over come and how you pick
yourself up right, move forward.
Jamie Bateman (31:22):
Absolutely, and I just you know, does it get old
talking about yeah?
I don't love to focus on thenegative right, but at the same
time, one of the things I wantto make clear is I am not
walking away from any, any.
If we've, if we, messed up theservicing on a loan back, you
know a year ago, I'm owning thatright.
I'm not, I'm not walking awayfrom that.
(31:43):
That's so we're.
We're facing it head on, we'recleaning up the issues and
that's why We've also hiredsomeone to come on as our
business development lead andhit what the one of the first
things he did was Set up a callwith any investor, any current
client who wanted to talk to him, so that we could understand
the pain points and address them, as opposed to just pretend
everything's fine or ignore theissues.
Justin Bogard (32:04):
It's because you care yeah, absolutely.
I do and.
Jamie Bateman (32:07):
I, I do and my goal is just can continue to
provide a high level of serviceand continue to improve the
service, the level of servicethat we're, that we're providing
, and again, we're these recentchanges, which I'll be able to
speak about more in the future.
Yeah, I'm thrilled about it.
So the we're able to lean on abig partner who is providing a
(32:33):
lot of the day to day support,meaning when I say support, I
mean it support, hr support,accounting support, the business
side as opposed to the loanservicing side.
That we know really well, andso it's been able to provide
shanta and me a lot of clarityand focus On the investor to be
able to provide that higherlevel of service.
(32:55):
So, by five has a bright futurefor sure that's awesome, jamie.
Justin Bogard (33:00):
You're awesome.
Thanks for being on the podcasttoday.
This is episode number four,season six maybe the bank
podcast, jamie Bateman of byfive, loan servicing and
Labrador lending.
As we know, that's the streetthat he kind of lives on there.
That's right.
Thanks a lot, man, for being onthe show today.
Can't wait to do the broadcasttogether here in a few days as
we're recording this, so we willcatch you all on the next
(33:21):
episode.
Thanks, jamie, see you.
Thanks, justin.
Narrator (33:28):
Thanks for listening to be the bank.
We hope you learned somethingfrom today's show.
If you enjoyed this episode,please rate, review us.
Plus, check out our channel onYouTube and follow us on
Facebook and Twitter at be thebank and on Instagram at be the
bank podcast.
Be the bank is sponsored byAmerican note buyers.
Thanks again for listening.
Popular Podcasts
Cold Case Files: Miami
Joyce Sapp, 76; Bryan Herrera, 16; and Laurance Webb, 32—three Miami residents whose lives were stolen in brutal, unsolved homicides. Cold Case Files: Miami follows award‑winning radio host and City of Miami Police reserve officer Enrique Santos as he partners with the department’s Cold Case Homicide Unit, determined family members, and the advocates who spend their lives fighting for justice for the victims who can no longer fight for themselves.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.