March 6, 2024 • 33 mins
Unlock the secrets of savvy real estate investments with the wisdom of Vanessa Gomez LaGatta, former high-flyer in the investment banking sphere, now a trailblazer in the seller financing notes niche. Her banking prowess, coupled with a firm grasp on the complexities of real estate notes, promises to guide you through the labyrinth of loan-to-value ratios and beyond.
Embark on a journey through the landscape of investment opportunities with Vanessa's expert navigation. Learn how strategic partnerships and meticulous underwriting can not only safeguard your investments but cultivate enduring relationships with borrowers. Vanessa's approach to fast funding and the perks of repeat borrowers illuminate a path to financial growth. Whether you're an established investor or just starting out, this episode is your gateway to understanding the nuances of being the bank and redefining wealth creation through real estate.
Resources and links discussed:
- Videocast on our YouTube Channel
- ANB Funds Website - https://anbfunds.com
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 (00:02):
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
(00:23):
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 Justin Bogard here on
the Be the Bank podcast.
This is season six, episodenumber five.
Today I have a person that Idon't know very well, but I know
who she is and we've hadconversations and we hung up
before with her and her husband,and so she has a very strong
background in banking and hasbeen on the note scene for a
(01:08):
little bit now and she'sdefinitely somebody that brings
a lot to the table and she'sgoing to have a lot of cool
things to talk about.
We're kind of going to focusour conversations today on kind
of underwriting, as it were.
So some of you may not havethat skill set as a strong skill
set, and so this will be a funconversation today.
So stay tuned and welcome tothe show.
(01:28):
Vanessa Gomez-Lagato.
And it's funny when you starttalking in these podcasts and
all of a sudden you getsomething in your throat and
you're just like, wow, this isthe wrong time to clear my
(01:49):
throat.
Vanessa Gomez LaGatta (01:51):
I hear you.
I have a glass of water just incase.
Justin Bogard (01:54):
Yeah, yeah, I had to grab something a little bit
warm before we got on the showtoday, just because today it's
not cool, but it's like I don'tknow dreary, it's like dark and
cloudy and I just, I don't knowyou feel cold, even though it's
not cold outside.
It's actually like 65 degreesoutside.
Vanessa Gomez LaGatta (02:09):
Oh wow.
We're actually in Vegas at thestructured finance Vegas
conference, so it's a littlechilly outside, surprisingly.
Justin Bogard (02:17):
Vegas baby.
That's why I think every timesomeone says Vegas, Vegas baby.
Vanessa Gomez LaGatta (02:22):
It's been good.
It's been good.
Justin Bogard (02:24):
Awesome.
Well, thanks for being on thepodcast today.
I know this is your first timebeing on our show, but probably
not on others.
I'm sure you've been on thepodcast before.
But, vanessa, the audience thatwe have here today, they don't
know you and they would like toknow you and just kind of, I
wanted to set the table a littlebit and kind of let us know
kind of your background and howyou kind of gotten to sell our
(02:46):
financing notes, and then we'rejust going to carry on the
conversation there.
Vanessa Gomez LaGatta (02:50):
Oh, no, sounds great.
But first thank you for havingme on the podcast, justin.
I'm excited to be here todayand just share a little bit
about my background.
So I started my career atCredit Swiss, which is a bulge
bracket shop, rising up todirector in the investment
making division and focusing onleverage finance.
What I'd worked on were large,complex leverage facilities for
(03:17):
financial sponsors andcorporates throughout the United
States.
I did have a specialty in theenergy space.
From there I went to go workfor an energy public company,
moving to Texas from New YorkCity and from there it was a
very active company.
We did a lot of complex M&Atransactions as well as tapping
(03:40):
the capital markets, andultimately I took over as CFO
until we sold the company acouple years later.
After becoming CFO.
Then I did a little stint inthe turnaround or structuring
space and then I joined anotherenergy-related company, sdfo,
(04:01):
and I took them and helped thememerge out of bankruptcy.
So after go ahead, sorry.
Justin Bogard (04:08):
Let's just say the question.
You say energy and I'm makingassumptions here, but
specifically what you talkedabout in energy is this like gas
, electric, water type energy,like what?
Vanessa Gomez LaGatt (04:19):
Absolutely so.
It's called an exploration andproduction company.
So what we did is we drilledwells into the ground and
extracted gas and oil.
The company I worked forspecifically was more
gas-weighted than oil-weighted,and we had production in Texas,
some in Colorado, Canada andsome up in Alaska.
Justin Bogard (04:41):
Yeah, Texas definitely makes sense, Drilling
right.
Vanessa Gomez LaGatta (04:45):
There's a lot of drilling, especially
around the DFW.
Justin Bogard (04:49):
Yeah, I've been to Dallas many times I know you
have too and you live close tothere but I never see any oil
rigs or wells until I get reallyfar away from the city, if I'm
driving somewhere else or goingto a different location.
But you actually see them inthe Dallas metro area.
Vanessa Gomez LaGatta (05:06):
Oh yes.
So if you drive actually fromDallas to Fort Worth off of 30,
there's different wells that youcan see and what you'll see?
You won't see the drilling riganymore, you'll just see the pad
that has all the productionequipment that is the result of
the wells being drilled.
But there's production all overthe metro area and what's
(05:31):
interesting is in the energyspace they've gotten more and
more sophisticated as the yearshave gone by.
It's been several years since Iworked in an oil and gas
company.
But what they do is they drilllaterally, so they drill down,
and diagonally and they can gofrom miles upon miles and so you
can actually reach quiteextensive under residential
(05:53):
homes or businesses, lakes etcetera, and so it's actually
pretty.
It's very sophisticated andcomplex and I don't necessarily
think the media talks about thetechnology behind it.
Justin Bogard (06:06):
But it's pretty impressive.
It sounds amazing.
It still fascinates me thatthere's oil underground and we
haven't ran out of it yet.
I'll keep tapping into it withall these countries that always
are going after the oil.
It's just fascinating to me.
I'm sorry I jumped in and letyou finish your history here.
Vanessa Gomez LaGatta (06:25):
No.
So after my stint and a coupleof public companies, I decided I
wanted a different kind ofchallenge, and so we started an
investment platform which is allof CoVe Partners, and it's an
investment platform that investsin opportunistically and our
real investment strategy isdeploying capital and downside
(06:48):
protected assets with equity,like returns or attractive risk
adjusted returns.
So that really started earnestabout three and a half years ago
.
Shortly after kicking off theplatform, mike left his
corporate world and joined, andnow we've both been active in
investing in the single familyspace as well as and in that
(07:12):
space we originate and buyprivate money loans and then, as
well as, investing in thesecondary residential mortgage
loan pools, which has been, morerecently, our big focus.
Justin Bogard (07:27):
So you mentioned downside, downside, on the type
of investment that you go for.
What is the main downside thatyou're looking for in investment
?
Vanessa Gomez LaGatta (07:39):
So what we look at for investment and
I'll use real estate becauseit's a good example, right?
So right now there's 84 millionmortgages in the US.
Those mortgages have a debt of$12 trillion, and then if you
look at the value associatedwith all of those, if you look
(08:02):
at the average home price in theUS, what you find is that the
loan devalue in single familyresidential is almost 50% loan
devalue, and so when you take astep back and you think about
this asset can lose 50% of itsvalue before the lenders start
experiencing pressure on gettingtheir capital back.
(08:26):
There's a lot of cushion there,and then, in particular, on
buying in the secondary loanmarket.
We don't buy at par, we buy ata discount to par.
So our investment to our, theamount of capital that we've
deployed based on the value, iseven lower than the loan to
(08:48):
value, and so there's evenfurther protection from that,
and that's very attractive forus.
Justin Bogard (08:54):
You said that very well and I don't know why
more people don't get into realestate just for that reason,
whether they don't get the notespecifically or not.
But that's just.
That's just a great way to putit.
Vanessa Gomez LaGatt (09:05):
Absolutely it's.
It's when you talk to peopleand you explain it to them, just
as I just did now, they're like, oh, that's super interesting
and and I don't think peoplereally put two and two together
Because there's so much equityvalue in the residential market
space right now.
(09:25):
We're also seeing a lot of newproducts coming to market, which
is very interesting too.
Justin Bogard (09:30):
I think what?
What rings the bell in people'sears, the way that you said it
which I like, the way that yousaid it is the 50% loan to value
already right there.
So they're like, oh, so thisthing is worth 100,000.
The borrower has 50,000 ofequity, but you're not paying
$50,000 for the note, like no.
So overall, you know your, yourinvestment to value is very
(09:54):
significantly lower risk thanwhat you think.
When you're investing in just atraditional property and let's
say you get the property for,you know, 85 cents on the dollar
.
If you buy it straight out fromthat person, you know, at a
discount, our discounts muchdifferent because we're levered
off of the off of the unpaidbalance as opposed to the actual
property value.
So it's just really cool wayyou put it.
I haven't heard somebody put itthat way, so I like it.
Vanessa Gomez LaGatta (10:16):
Oh, thank you, it's, it's what makes us
attract to the space.
Justin Bogard (10:20):
So Absolutely it's fun.
So you and Mike are runningthis investment company and are
you raising private capital aswell.
Vanessa Gomez LaGatta (10:32):
So today we've done all our investments
based on principal capital.
As we continue to grow, buyinglarger and more pools, we would
look to partner with otherinvestment platforms, family
offices, etc.
To be able to kind of expandwhat we are are just a number of
pools that we can buy.
So right now, today, we've doneall principal capital and we
(10:54):
are we're open to theconversation of partnering with
people to co invest on thesepools.
Justin Bogard (11:02):
That's really where you make a big.
A big hit against against ataking out a tape is when you
can partner with people and takedown bigger, bigger loan
amounts, as opposed to, you know, when I've.
Since I've been started out, II typically am buying loans
around the 30,000 to about 1,000range and since I started the
fund last year, that's reallywhat I've been able to look at
(11:24):
assets you know higher than 100kin value and be like, oh, I can
, I can buy two or three ofthese now and and not just you
know focus on well, if I boughtthat one, I'd be tapped.
I bought one loan, right.
So it's a different ballgamewhen you can buy in bulk and
also in higher and unpaidbalance value.
Vanessa Gomez LaGatta (11:40):
Well, so, for example, we're looking at a
tape right now that has 18loans kind of UPB I'm just going
to use around numbers about $4million, looking at probably a
purchase price, you know,somewhere between, I'm just
gonna say, $3 million, and it's18 loans and the average UPB on
that is around $230,000.
Justin Bogard (11:59):
Yeah, this is not like a lot of loans.
Vanessa Gomez LaGatta (12:03):
There's some high dollar loans in the
pool, but that's also where Ithink there's opportunity to be
able to, you know, take down alittle bit bigger pools, because
there's a lot of people whoplay in the smaller balance
space and where you get abovethat $150,000 UPB you know, not
everybody can play in that spaceand it provides an opportunity
(12:24):
for us to be able to come in andplay.
Justin Bogard (12:27):
You mentioned earlier about private money
loans.
Did I hear you say hard moneyloans?
Is that one of the types ofloans that you guys like to go
after?
Vanessa Gomez LaGatta (12:37):
So we originate private money loans
and we also will buy privatemoney loans if other people have
originated.
So we will do the primary andsecond play, the secondary space
in that specific asset class.
Justin Bogard (12:54):
I'm gonna get in the weeds here.
So are you.
I'm talking about like a fixand flip type of loan to where
they're borrowing money on ashort term basis with the
intention of eitherrenegotiating the terms with you
for a full amiturization of 30years or selling the property
and paying off the interest onlydebt.
Is that the type of loan thatI'm hearing, the private money
(13:14):
that you're saying?
Vanessa Gomez LaGatta (13:15):
So it's a little bit of a comment.
So what?
When I originate a privatemoney loan, it's usually for,
let's just say, a fix and flip.
I do new construction and I doland development as well, but
let's just take the fix and flip, because I think it's a perfect
example.
Those are six.
I do six month deals right.
So the ten or six months.
Generally my rates are somewherebetween my 10 and 12% on an
(13:39):
annual basis, and thenorigination fees between two and
4%, and we I mean the, the ICOMoperators or sponsors come in.
We fund the purchase price aswell as the rehab, because we
like to be 100% of the capitalstructure.
That allows us to kind of havea good sense of where they are
(14:01):
in the project, how the rehab isactually progressing, and then,
once the rehab is done, then ithits the market and usually our
operators are very efficient.
They have very defined scopesof work, very defined timelines,
and so when we go into a dealwe actually know what
(14:22):
everything's supposed to looklike and everything.
You know.
Nothing's ever perfect, Thingsgo wrong, but just given that
there is goals and objectivesand and and posts that we check
in on, it makes the process veryefficient and our operators are
very good at executing whatI've had.
Deals so cool, sorry, go ahead.
Justin Bogard (14:42):
No, that was a delay there, sorry, finish what
you were saying.
Vanessa Gomez LaGatta (14:45):
I was going to say we have operators
that come in and there are, youknow, extensive rehabs that take
, you know, call it, severalmonths to get done, and then we
have some that are more cosmeticin nature and we're they're in
and out in two weeks and put itback on the market.
So we kind of see everythingyou know, from super fast rehab
to getting it back on the market, to a little bit more extensive
(15:07):
types of rehabs, and then ittaking closer to the full six
months and, depending on thesituation, we might go a little
bit longer and we just discussthat up front.
Justin Bogard (15:17):
Okay, what type of skin in the game does your
borrower have with thesespecific loans?
Vanessa Gomez LaGatta (15:22):
Great question.
So it really depends on the ARVand where they are buying the
loan.
We like to have a loan to valueof around mid 70s and below.
What I would also say, though,is that we really a lot of our
(15:45):
operators don't have a lot ofcash, and so expecting there to
be a huge check of skin in thegame and have them pay, you know
, monthly interest, I think isunrealistic, and so a lot of
times, we really end uppartnering up with operators who
are able to buy the propertiesat very attractive rates to the
(16:08):
ARV.
Justin Bogard (16:09):
Gotcha.
Okay, what experience level doyou require of these operators
or sponsors to do these projectsand to get loans with you?
Vanessa Gomez LaGatta (16:19):
So we are not the lender for everybody.
We are not.
We don't, we don't go around,and you know I don't do a ton of
marketing.
Really, people who come to usare through word of mouth, and
and because it's through word ofmouth, people who we have done
business with know our diligenceapproach as well as what we
(16:43):
look for in projects, and so, asyou know, our names get out
there and people meet and areintroduced to us.
They also kind of understandwhat they're getting into, and
so we look for operators to havesome experience in this space.
We look for them to have.
What's most important is thateither they themselves are doing
(17:03):
the work or that they haveteams that they've worked with
and done projects before.
That's a that's a really bigone for us, because finding good
service providers the tradesout there that actually complete
the work and do a good job, isharder than you would think and
somebody who can then get thejob done in a timely fashion.
(17:24):
So that's everybody.
But so we look for people whohave done a couple of projects
before, who have the serviceproviders to be able to get the
jobs done, and at the end of theday, we talk to everybody,
whether it's on the phone callZoom, we prefer Zoom or in
(17:44):
person, and we really, forhonest, are working people.
Justin Bogard (18:04):
Vanessa, are you still there?
Vanessa Gomez LaGatta (18:08):
Yeah, sorry, it was coming in and out.
Justin Bogard (18:11):
I'm in a hotel, yeah, that's okay.
I'm here, I think yeah, Ifigure your Wi-Fi is probably
spotty at times.
I think that, if I couldparaphrase what you were saying,
you're looking for people thatjust just are honest and
transparent, they're hardworkingand they, they just you know
that they're going to get thejob done.
My follow up question to thatwas going to be do you let them
(18:31):
do multiple projects with you orwith other lenders at the same
time?
And if, if yes, how many do youallow them to do?
Because I'm sure at some pointthey get strung out.
As far as you know, they'reburning the candle at both ends,
so to speak, and do yourecognize that point?
Vanessa Gomez LaGatt (18:52):
Absolutely .
That's something we talk aboutin front.
So when we're talking to, no, Ican hear me.
Justin Bogard (18:58):
Okay, yeah, yeah, can you hear me?
Vanessa Gomez LaGatta (19:01):
Okay, Sorry about that.
So that is one of the questions.
When we are first beingintroduced to new sponsors, we
ask them like how many projectscan you take on at one time?
Where do you think you would beat full capacity?
And then also understanding thetype of projects that they are
on.
So, for example, if they'redoing all new construction,
(19:21):
that's a lot more intense typeof work and I know that they're
not going to be able to handle,call it, 10 projects at one time
.
If they're rehabs, they'reacross the street.
Okay, you can do a lot morethan that of those.
And so it's really situationalat the end of the day, and a lot
of times my borrowers I'm doinga lot of their projects they
like our approach, they like ourdiligence, and what I was
(19:43):
trying to say a little bitearlier is that, yes, we are the
private money lender, but wereally look at it as we are your
financing partner.
I put on my Chief InvestmentOfficer hat on and I walked
through the projects with them.
I show them how I've calculatedmy numbers and what their
returns will look like on theirbase case from an ARV
(20:05):
perspective.
I run downside cases and I runupside cases and I'm like this
is what the numbers look like.
Is there enough for you to feelengaged enough on this project?
And so we have thosediscussions and one of my
biggest things is we want tomake sure that there's enough
juice for them, at the end ofthe day, to stay focused.
Justin Bogard (20:27):
Yeah, I like the way that you approach the
private money, the slash hardmoney, the way you originate the
loans and, quite frankly, Idon't think a lot of lenders do
the extensive diligence thatthey need to.
You know, some of these newerfix and flip folks come into our
space and they look at lendersand they're like scratching
(20:49):
their head, going like why aretheir rates so high?
Why are they asking for suchlow LTVs?
And for all the reasons thatyou explain, your diligence with
underwriting these projects isexactly the reason why.
Because you have to protectyourself, especially when you're
doing many of these loans atthe same time, because they can
(21:10):
all start going bad, especiallyif they're in the same
concentrated area and the realestate kind of flips upside down
for a little bit.
You definitely want to giveyourself some protection.
So if you guys are out therethinking about doing hard money
loans the way that Vanessa isdescribing it, the way that she
walks through it, is the waythat's your, that's like the
baseline you need to also findways to make sure that to
protect yourself in other waystoo, you know, for your whole
(21:33):
portfolio.
So, yeah, I really don't thinka lot of lenders are as diligent
as you guys are.
Vanessa Gomez LaGatta (21:39):
Well, that's something we pride
ourselves on and that's what Isay.
We're not the lender foreverybody, because if our
partners don't see the value inour diligence approach and how
thorough we are, then ultimatelywe know when something goes
wrong.
We're not going to probablyhave a rational conversation at
the end of the day to try tofind a solution.
And we've had some interestingthings happen over the years and
(22:02):
what we found is that ourborrowers have been very
rational and, as a result, wehave been rational back right.
It is not all about us justbeing the lender and saying you
have to.
You have to only abide by theterms on the paper.
We're going to come up with asolution that works for
(22:24):
everybody, because one of ourbiggest things is we want repeat
borrowers, we want people thatunderstand our underwriting, we
want people that we trust, andso let's do it again and again,
and again.
And if our borrowers see us asjust transactional, we want
(22:46):
relationship-based borrowers andthat's really important to us.
Justin Bogard (22:50):
Yeah, you said it before, I said it out loud, but
I was thinking the same thingyou were.
It's a repeat customer.
Once you set up a repeatcustomer, that becomes a
profitable customer because it'sfar less time to interview them
in the beginning.
You can skip a lot of thatstuff up front and go straight
to the project and get to themeat of the numbers and go okay,
yes, this one works, this onedoesn't.
And then you have a trackrecord with that person and be
(23:11):
like yeah, I know they've done acouple of deals.
They did a couple of deals withme.
It's different than them justdoing a couple of deals, you
know, in general with a coupleof people.
Vanessa Gomez LaGatta (23:20):
So I fully agree with the way you
approach that.
It makes a difference.
I just had a borrower.
We did a deal in early 2022.
The deal went well, everythingwent good, hadn't heard from
them in a while and then, all ofa sudden, I get a you know a
phone call to express the emailI have a deal.
Are you still lending money?
Can you know?
Can, can you act quickly?
I'm like, absolutely, you knowwhat I do.
(23:41):
Let's, let's send me theinformation and let's go to it.
And within they reached out tome Thursday evening.
By Friday morning I already hada commitment letter out to them
so they were able to send totheir you know seller so that
they can, you know, agree to theterms and get the track
contract signed, so that andthat's a bit of that
(24:01):
relationship right, and that wecan move.
We can move more quickly thanmost and and, as a result, you
know, there people find value inthat.
Justin Bogard (24:13):
Absolutely.
I'm sure you guys alsooriginate just owner occupied
homes as well not as much justbecause we are the private
lender there's.
Vanessa Gomez LaGatta (24:25):
We don't take, we don't take ownership of
the homes, but when thingsdon't go right and they do we do
.
We have taken possession ofhomes and we, once we take
possession of the homes, doingseller finances clearly one
strategy that we employ, andhave done so.
Justin Bogard (24:44):
What do you typically like to see on a
seller finance deal where itsowner occupied for skin in the
game?
Vanessa Gomez LaGatta (24:52):
So at least 10%.
But what I would also say isthat we try to be creative as
well, right, one of the thingsthat we I think the seller
finance market rate is they'renon-qualified people, right,
they can't go to the bank and goget a loan, and so a lot of
times those are business ownersof trades and everything, and
(25:15):
for us we really we like thatborrower.
Why?
Yeah, because they'rehard-working, they're honest
people, right.
Those that goes back to, youknow, the same people we support
on the origination side, and so, from that perspective, we like
to see that they have aconsistency of jobs.
We like to see who's living inthe house, you know.
(25:40):
And then we also like to see isthere family around?
Do they have family in the citythat they're in, telling us a
little bit more about who theborrower is?
And then, from a you know, justa pure financial perspective,
we usually see financialstatements from, or bank account
statements from, their businessand then personally.
And the other thing that wefind we don't necessarily
(26:02):
because we don't do a ton ofthese I don't have them are
mellowed, but we do have themserviced and and I think that's
really critical from a servicingperspective to have it
professionally serviced.
I still reach out to ourborrower when they haven't paid,
but having the servicer thereas is really critical what is
(26:25):
the fastest?
oh, sorry, sorry one one otherthing I do want to highlight.
So a lot of times, becausethese, these individuals do not
have consistency, we go into itknowing that it's not going to
be a steady as a normal you know, qualified mortgage, yeah, and
so what we look to do is alsosee what other assets can they
(26:47):
pledge in support of the loan.
So, for example, on one of ourhomes they were gonna finish the
rehab on the house and theywere going to live in their RV
that they were able to getconnected at the home.
So we have title to the RV aswell as a mortgage filed, and so
(27:08):
it's just and extra support andbecause the person couldn't put
down as much as we wanted, wetook that.
We had a we structured as thefirst and second lean.
The RV supports both leans, butthe intent is that when they're
done with the home, on therenovation they've moved in, is
to sell the RV and thoseproceeds would pay off.
Justin Bogard (27:28):
The second link sense and then we got extra
assets right extra assets allthe time and don't forget to get
those, to get those titles onthose vehicles and RVs oh yeah
oh yeah, it needs to be in yourpossession what was gonna ask is
I'm curious to know what is thefastest on your private money
(27:51):
loans that you do for your fixand flippers, what's the fastest
that you've ever had it fundedand then and then back to you
completed mature?
Vanessa Gomez LaGatta (28:02):
actually I had one last week.
I set money out on Wednesday,it got repaid on Friday so
that's almost like atransactional money at that
point right, that wastransaction.
But I've also done stuff, many,many, many deals with these
borrowers and they had.
They had somebody on the backend to buy it and they just
(28:23):
needed.
It was effectively aback-to-back, but the title
company required them to closefully on the purchase and then
have a day and then have thesecond closing a day after, and
so the title company was reallydriving on why it wasn't
actually saying a same-daytransaction.
Outside of that, I've had someland that we, that we funded and
(28:48):
that closed call early Decemberand by end of December I've
been paid off.
Justin Bogard (28:54):
That's pretty cool it's, it can go quickly
that business in general issomething I kind of wanted to
tinker with.
Richard and I had done a coupleof deals like that before and
we was looking at ourselves likeman.
I wish we could have like fiveor six these lined up every
month and just be in and out ina couple of days.
Vanessa Gomez LaGatta (29:14):
That's, that's like a lenders dream
right there it is, but I wouldalso say it's not.
It's not, it's 90, it's caught.
5% of the portfolio, right,like most of it is not that way
and I would.
I would also say that these arereplete borrowers, right?
So some of these are sizes thatI normally don't play in, right
(29:37):
?
But they bought the house, theyit was essentially you're
really buying the land and toflip it, and so those aren't the
types of transactions that wenormally lend on, but it's
relationship based, and ourborrowers come in and say, hey,
would you do this?
Of course let's do it, andactually we are quite supportive
(29:58):
.
You know, a lot of times theycome in and they say we have
contract.
I've done this with one of theborrowers where they got a
contract.
We talked about what it wouldtake to do the rehab and they
said will you give us a month tosee if we can sell it?
Because we have too manyprojects and we'd like to see if
we could just do a you know amode, what's called it like a
(30:20):
whole, hold it.
And so what we did is, again,we try to be creative from a
structuring perspective.
So what we said is, for thefirst month, try to sell it, and
if you don't sell it, thenwe'll kick in the rehab loan at
that point and then we'll gofrom there Still keeping the six
months right.
So the rehab had to be somethingdone quickly.
(30:42):
Ultimately.
They had thought they had abuyer within the month.
They fell through right at theend of the month and then we
flipped into the rehab portionof the loan and they're actually
working on it right now and Ishould be getting my last draw
request on that probably thisweek.
And so we try again.
We try to be creative, andthat's where that relationship
aspect is super importantListening to what our borrowers
(31:04):
need and then thinking how canwe be responsive.
That makes it a win-win foreverybody.
Justin Bogard (31:12):
Vanessa, quickly, where are you doing these
rehabs at?
Is it just basically at a DFW,or?
Vanessa Gomez LaGatta (31:22):
It's a great question.
So we are in the DFW area,that's where we live and we like
the DFW area, so a lot of ouroperators are in the DFW area,
but we will do private moneyloans throughout the state of
Texas.
Justin Bogard (31:35):
Okay, and then how can we get a hold of?
How do you guys?
Vanessa Gomez LaGatta (31:41):
So I can share my contact information.
But the best is to emailoperations at all of dashcovecom
.
That reaches everybody on theteam and just to make sure that
we get back to you guys.
Justin Bogard (31:55):
So that's that was operations at all of
olive-covecom.
Vanessa Gomez LaGatta (32:03):
That's exactly right.
Justin Bogard (32:04):
All right, olaclecom.
All right, Vanessa, we are outof time today.
Thank you so much for being onthe podcast.
This is episode number five,season six, of the VDK be the
bank broadcast podcast.
My gosh, my tongue is all tiedtoday.
So yeah, thanks for being on.
This has been an awesome littleconversation today and I really
enjoyed the private moneyconversation that we had on the
(32:26):
underwriting.
That was pretty fun.
Vanessa Gomez LaGatt (32:27):
Absolutely .
Thank you for having me.
It's been fun.
Justin Bogard (32:30):
All right, you're welcome.
We'll catch you guys on thenext episode, if I can get my
mouth to work correctly.
Oh, there we go.
Vanessa Gomez LaGatta (32:36):
All right , see you guys Bye, thank you.
Narrator (32:42):
Thanks for listening to Be the Bank.
We hope you learned somethingfrom today's show.
If you enjoyed this episode,please rate and 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
(00:23):
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 Justin Bogard here on
the Be the Bank podcast.
This is season six, episodenumber five.
Today I have a person that Idon't know very well, but I know
who she is and we've hadconversations and we hung up
before with her and her husband,and so she has a very strong
background in banking and hasbeen on the note scene for a
(01:08):
little bit now and she'sdefinitely somebody that brings
a lot to the table and she'sgoing to have a lot of cool
things to talk about.
We're kind of going to focusour conversations today on kind
of underwriting, as it were.
So some of you may not havethat skill set as a strong skill
set, and so this will be a funconversation today.
So stay tuned and welcome tothe show.
(01:28):
Vanessa Gomez-Lagato.
And it's funny when you starttalking in these podcasts and
all of a sudden you getsomething in your throat and
you're just like, wow, this isthe wrong time to clear my
(01:49):
throat.
Vanessa Gomez LaGatta (01:51):
I hear you.
I have a glass of water just incase.
Justin Bogard (01:54):
Yeah, yeah, I had to grab something a little bit
warm before we got on the showtoday, just because today it's
not cool, but it's like I don'tknow dreary, it's like dark and
cloudy and I just, I don't knowyou feel cold, even though it's
not cold outside.
It's actually like 65 degreesoutside.
Vanessa Gomez LaGatta (02:09):
Oh wow.
We're actually in Vegas at thestructured finance Vegas
conference, so it's a littlechilly outside, surprisingly.
Justin Bogard (02:17):
Vegas baby.
That's why I think every timesomeone says Vegas, Vegas baby.
Vanessa Gomez LaGatta (02:22):
It's been good.
It's been good.
Justin Bogard (02:24):
Awesome.
Well, thanks for being on thepodcast today.
I know this is your first timebeing on our show, but probably
not on others.
I'm sure you've been on thepodcast before.
But, vanessa, the audience thatwe have here today, they don't
know you and they would like toknow you and just kind of, I
wanted to set the table a littlebit and kind of let us know
kind of your background and howyou kind of gotten to sell our
(02:46):
financing notes, and then we'rejust going to carry on the
conversation there.
Vanessa Gomez LaGatta (02:50):
Oh, no, sounds great.
But first thank you for havingme on the podcast, justin.
I'm excited to be here todayand just share a little bit
about my background.
So I started my career atCredit Swiss, which is a bulge
bracket shop, rising up todirector in the investment
making division and focusing onleverage finance.
What I'd worked on were large,complex leverage facilities for
(03:17):
financial sponsors andcorporates throughout the United
States.
I did have a specialty in theenergy space.
From there I went to go workfor an energy public company,
moving to Texas from New YorkCity and from there it was a
very active company.
We did a lot of complex M&Atransactions as well as tapping
(03:40):
the capital markets, andultimately I took over as CFO
until we sold the company acouple years later.
After becoming CFO.
Then I did a little stint inthe turnaround or structuring
space and then I joined anotherenergy-related company, sdfo,
(04:01):
and I took them and helped thememerge out of bankruptcy.
So after go ahead, sorry.
Justin Bogard (04:08):
Let's just say the question.
You say energy and I'm makingassumptions here, but
specifically what you talkedabout in energy is this like gas
, electric, water type energy,like what?
Vanessa Gomez LaGatt (04:19):
Absolutely so.
It's called an exploration andproduction company.
So what we did is we drilledwells into the ground and
extracted gas and oil.
The company I worked forspecifically was more
gas-weighted than oil-weighted,and we had production in Texas,
some in Colorado, Canada andsome up in Alaska.
Justin Bogard (04:41):
Yeah, Texas definitely makes sense, Drilling
right.
Vanessa Gomez LaGatta (04:45):
There's a lot of drilling, especially
around the DFW.
Justin Bogard (04:49):
Yeah, I've been to Dallas many times I know you
have too and you live close tothere but I never see any oil
rigs or wells until I get reallyfar away from the city, if I'm
driving somewhere else or goingto a different location.
But you actually see them inthe Dallas metro area.
Vanessa Gomez LaGatta (05:06):
Oh yes.
So if you drive actually fromDallas to Fort Worth off of 30,
there's different wells that youcan see and what you'll see?
You won't see the drilling riganymore, you'll just see the pad
that has all the productionequipment that is the result of
the wells being drilled.
But there's production all overthe metro area and what's
(05:31):
interesting is in the energyspace they've gotten more and
more sophisticated as the yearshave gone by.
It's been several years since Iworked in an oil and gas
company.
But what they do is they drilllaterally, so they drill down,
and diagonally and they can gofrom miles upon miles and so you
can actually reach quiteextensive under residential
(05:53):
homes or businesses, lakes etcetera, and so it's actually
pretty.
It's very sophisticated andcomplex and I don't necessarily
think the media talks about thetechnology behind it.
Justin Bogard (06:06):
But it's pretty impressive.
It sounds amazing.
It still fascinates me thatthere's oil underground and we
haven't ran out of it yet.
I'll keep tapping into it withall these countries that always
are going after the oil.
It's just fascinating to me.
I'm sorry I jumped in and letyou finish your history here.
Vanessa Gomez LaGatta (06:25):
No.
So after my stint and a coupleof public companies, I decided I
wanted a different kind ofchallenge, and so we started an
investment platform which is allof CoVe Partners, and it's an
investment platform that investsin opportunistically and our
real investment strategy isdeploying capital and downside
(06:48):
protected assets with equity,like returns or attractive risk
adjusted returns.
So that really started earnestabout three and a half years ago
.
Shortly after kicking off theplatform, mike left his
corporate world and joined, andnow we've both been active in
investing in the single familyspace as well as and in that
(07:12):
space we originate and buyprivate money loans and then, as
well as, investing in thesecondary residential mortgage
loan pools, which has been, morerecently, our big focus.
Justin Bogard (07:27):
So you mentioned downside, downside, on the type
of investment that you go for.
What is the main downside thatyou're looking for in investment
?
Vanessa Gomez LaGatta (07:39):
So what we look at for investment and
I'll use real estate becauseit's a good example, right?
So right now there's 84 millionmortgages in the US.
Those mortgages have a debt of$12 trillion, and then if you
look at the value associatedwith all of those, if you look
(08:02):
at the average home price in theUS, what you find is that the
loan devalue in single familyresidential is almost 50% loan
devalue, and so when you take astep back and you think about
this asset can lose 50% of itsvalue before the lenders start
experiencing pressure on gettingtheir capital back.
(08:26):
There's a lot of cushion there,and then, in particular, on
buying in the secondary loanmarket.
We don't buy at par, we buy ata discount to par.
So our investment to our, theamount of capital that we've
deployed based on the value, iseven lower than the loan to
(08:48):
value, and so there's evenfurther protection from that,
and that's very attractive forus.
Justin Bogard (08:54):
You said that very well and I don't know why
more people don't get into realestate just for that reason,
whether they don't get the notespecifically or not.
But that's just.
That's just a great way to putit.
Vanessa Gomez LaGatt (09:05):
Absolutely it's.
It's when you talk to peopleand you explain it to them, just
as I just did now, they're like, oh, that's super interesting
and and I don't think peoplereally put two and two together
Because there's so much equityvalue in the residential market
space right now.
(09:25):
We're also seeing a lot of newproducts coming to market, which
is very interesting too.
Justin Bogard (09:30):
I think what?
What rings the bell in people'sears, the way that you said it
which I like, the way that yousaid it is the 50% loan to value
already right there.
So they're like, oh, so thisthing is worth 100,000.
The borrower has 50,000 ofequity, but you're not paying
$50,000 for the note, like no.
So overall, you know your, yourinvestment to value is very
(09:54):
significantly lower risk thanwhat you think.
When you're investing in just atraditional property and let's
say you get the property for,you know, 85 cents on the dollar
.
If you buy it straight out fromthat person, you know, at a
discount, our discounts muchdifferent because we're levered
off of the off of the unpaidbalance as opposed to the actual
property value.
So it's just really cool wayyou put it.
I haven't heard somebody put itthat way, so I like it.
Vanessa Gomez LaGatta (10:16):
Oh, thank you, it's, it's what makes us
attract to the space.
Justin Bogard (10:20):
So Absolutely it's fun.
So you and Mike are runningthis investment company and are
you raising private capital aswell.
Vanessa Gomez LaGatta (10:32):
So today we've done all our investments
based on principal capital.
As we continue to grow, buyinglarger and more pools, we would
look to partner with otherinvestment platforms, family
offices, etc.
To be able to kind of expandwhat we are are just a number of
pools that we can buy.
So right now, today, we've doneall principal capital and we
(10:54):
are we're open to theconversation of partnering with
people to co invest on thesepools.
Justin Bogard (11:02):
That's really where you make a big.
A big hit against against ataking out a tape is when you
can partner with people and takedown bigger, bigger loan
amounts, as opposed to, you know, when I've.
Since I've been started out, II typically am buying loans
around the 30,000 to about 1,000range and since I started the
fund last year, that's reallywhat I've been able to look at
(11:24):
assets you know higher than 100kin value and be like, oh, I can
, I can buy two or three ofthese now and and not just you
know focus on well, if I boughtthat one, I'd be tapped.
I bought one loan, right.
So it's a different ballgamewhen you can buy in bulk and
also in higher and unpaidbalance value.
Vanessa Gomez LaGatta (11:40):
Well, so, for example, we're looking at a
tape right now that has 18loans kind of UPB I'm just going
to use around numbers about $4million, looking at probably a
purchase price, you know,somewhere between, I'm just
gonna say, $3 million, and it's18 loans and the average UPB on
that is around $230,000.
Justin Bogard (11:59):
Yeah, this is not like a lot of loans.
Vanessa Gomez LaGatta (12:03):
There's some high dollar loans in the
pool, but that's also where Ithink there's opportunity to be
able to, you know, take down alittle bit bigger pools, because
there's a lot of people whoplay in the smaller balance
space and where you get abovethat $150,000 UPB you know, not
everybody can play in that spaceand it provides an opportunity
(12:24):
for us to be able to come in andplay.
Justin Bogard (12:27):
You mentioned earlier about private money
loans.
Did I hear you say hard moneyloans?
Is that one of the types ofloans that you guys like to go
after?
Vanessa Gomez LaGatta (12:37):
So we originate private money loans
and we also will buy privatemoney loans if other people have
originated.
So we will do the primary andsecond play, the secondary space
in that specific asset class.
Justin Bogard (12:54):
I'm gonna get in the weeds here.
So are you.
I'm talking about like a fixand flip type of loan to where
they're borrowing money on ashort term basis with the
intention of eitherrenegotiating the terms with you
for a full amiturization of 30years or selling the property
and paying off the interest onlydebt.
Is that the type of loan thatI'm hearing, the private money
(13:14):
that you're saying?
Vanessa Gomez LaGatta (13:15):
So it's a little bit of a comment.
So what?
When I originate a privatemoney loan, it's usually for,
let's just say, a fix and flip.
I do new construction and I doland development as well, but
let's just take the fix and flip, because I think it's a perfect
example.
Those are six.
I do six month deals right.
So the ten or six months.
Generally my rates are somewherebetween my 10 and 12% on an
(13:39):
annual basis, and thenorigination fees between two and
4%, and we I mean the, the ICOMoperators or sponsors come in.
We fund the purchase price aswell as the rehab, because we
like to be 100% of the capitalstructure.
That allows us to kind of havea good sense of where they are
(14:01):
in the project, how the rehab isactually progressing, and then,
once the rehab is done, then ithits the market and usually our
operators are very efficient.
They have very defined scopesof work, very defined timelines,
and so when we go into a dealwe actually know what
(14:22):
everything's supposed to looklike and everything.
You know.
Nothing's ever perfect, Thingsgo wrong, but just given that
there is goals and objectivesand and and posts that we check
in on, it makes the process veryefficient and our operators are
very good at executing whatI've had.
Deals so cool, sorry, go ahead.
Justin Bogard (14:42):
No, that was a delay there, sorry, finish what
you were saying.
Vanessa Gomez LaGatta (14:45):
I was going to say we have operators
that come in and there are, youknow, extensive rehabs that take
, you know, call it, severalmonths to get done, and then we
have some that are more cosmeticin nature and we're they're in
and out in two weeks and put itback on the market.
So we kind of see everythingyou know, from super fast rehab
to getting it back on the market, to a little bit more extensive
(15:07):
types of rehabs, and then ittaking closer to the full six
months and, depending on thesituation, we might go a little
bit longer and we just discussthat up front.
Justin Bogard (15:17):
Okay, what type of skin in the game does your
borrower have with thesespecific loans?
Vanessa Gomez LaGatta (15:22):
Great question.
So it really depends on the ARVand where they are buying the
loan.
We like to have a loan to valueof around mid 70s and below.
What I would also say, though,is that we really a lot of our
(15:45):
operators don't have a lot ofcash, and so expecting there to
be a huge check of skin in thegame and have them pay, you know
, monthly interest, I think isunrealistic, and so a lot of
times, we really end uppartnering up with operators who
are able to buy the propertiesat very attractive rates to the
(16:08):
ARV.
Justin Bogard (16:09):
Gotcha.
Okay, what experience level doyou require of these operators
or sponsors to do these projectsand to get loans with you?
Vanessa Gomez LaGatta (16:19):
So we are not the lender for everybody.
We are not.
We don't, we don't go around,and you know I don't do a ton of
marketing.
Really, people who come to usare through word of mouth, and
and because it's through word ofmouth, people who we have done
business with know our diligenceapproach as well as what we
(16:43):
look for in projects, and so, asyou know, our names get out
there and people meet and areintroduced to us.
They also kind of understandwhat they're getting into, and
so we look for operators to havesome experience in this space.
We look for them to have.
What's most important is thateither they themselves are doing
(17:03):
the work or that they haveteams that they've worked with
and done projects before.
That's a that's a really bigone for us, because finding good
service providers the tradesout there that actually complete
the work and do a good job, isharder than you would think and
somebody who can then get thejob done in a timely fashion.
(17:24):
So that's everybody.
But so we look for people whohave done a couple of projects
before, who have the serviceproviders to be able to get the
jobs done, and at the end of theday, we talk to everybody,
whether it's on the phone callZoom, we prefer Zoom or in
(17:44):
person, and we really, forhonest, are working people.
Justin Bogard (18:04):
Vanessa, are you still there?
Vanessa Gomez LaGatta (18:08):
Yeah, sorry, it was coming in and out.
Justin Bogard (18:11):
I'm in a hotel, yeah, that's okay.
I'm here, I think yeah, Ifigure your Wi-Fi is probably
spotty at times.
I think that, if I couldparaphrase what you were saying,
you're looking for people thatjust just are honest and
transparent, they're hardworkingand they, they just you know
that they're going to get thejob done.
My follow up question to thatwas going to be do you let them
(18:31):
do multiple projects with you orwith other lenders at the same
time?
And if, if yes, how many do youallow them to do?
Because I'm sure at some pointthey get strung out.
As far as you know, they'reburning the candle at both ends,
so to speak, and do yourecognize that point?
Vanessa Gomez LaGatt (18:52):
Absolutely .
That's something we talk aboutin front.
So when we're talking to, no, Ican hear me.
Justin Bogard (18:58):
Okay, yeah, yeah, can you hear me?
Vanessa Gomez LaGatta (19:01):
Okay, Sorry about that.
So that is one of the questions.
When we are first beingintroduced to new sponsors, we
ask them like how many projectscan you take on at one time?
Where do you think you would beat full capacity?
And then also understanding thetype of projects that they are
on.
So, for example, if they'redoing all new construction,
(19:21):
that's a lot more intense typeof work and I know that they're
not going to be able to handle,call it, 10 projects at one time
.
If they're rehabs, they'reacross the street.
Okay, you can do a lot morethan that of those.
And so it's really situationalat the end of the day, and a lot
of times my borrowers I'm doinga lot of their projects they
like our approach, they like ourdiligence, and what I was
(19:43):
trying to say a little bitearlier is that, yes, we are the
private money lender, but wereally look at it as we are your
financing partner.
I put on my Chief InvestmentOfficer hat on and I walked
through the projects with them.
I show them how I've calculatedmy numbers and what their
returns will look like on theirbase case from an ARV
(20:05):
perspective.
I run downside cases and I runupside cases and I'm like this
is what the numbers look like.
Is there enough for you to feelengaged enough on this project?
And so we have thosediscussions and one of my
biggest things is we want tomake sure that there's enough
juice for them, at the end ofthe day, to stay focused.
Justin Bogard (20:27):
Yeah, I like the way that you approach the
private money, the slash hardmoney, the way you originate the
loans and, quite frankly, Idon't think a lot of lenders do
the extensive diligence thatthey need to.
You know, some of these newerfix and flip folks come into our
space and they look at lendersand they're like scratching
(20:49):
their head, going like why aretheir rates so high?
Why are they asking for suchlow LTVs?
And for all the reasons thatyou explain, your diligence with
underwriting these projects isexactly the reason why.
Because you have to protectyourself, especially when you're
doing many of these loans atthe same time, because they can
(21:10):
all start going bad, especiallyif they're in the same
concentrated area and the realestate kind of flips upside down
for a little bit.
You definitely want to giveyourself some protection.
So if you guys are out therethinking about doing hard money
loans the way that Vanessa isdescribing it, the way that she
walks through it, is the waythat's your, that's like the
baseline you need to also findways to make sure that to
protect yourself in other waystoo, you know, for your whole
(21:33):
portfolio.
So, yeah, I really don't thinka lot of lenders are as diligent
as you guys are.
Vanessa Gomez LaGatta (21:39):
Well, that's something we pride
ourselves on and that's what Isay.
We're not the lender foreverybody, because if our
partners don't see the value inour diligence approach and how
thorough we are, then ultimatelywe know when something goes
wrong.
We're not going to probablyhave a rational conversation at
the end of the day to try tofind a solution.
And we've had some interestingthings happen over the years and
(22:02):
what we found is that ourborrowers have been very
rational and, as a result, wehave been rational back right.
It is not all about us justbeing the lender and saying you
have to.
You have to only abide by theterms on the paper.
We're going to come up with asolution that works for
(22:24):
everybody, because one of ourbiggest things is we want repeat
borrowers, we want people thatunderstand our underwriting, we
want people that we trust, andso let's do it again and again,
and again.
And if our borrowers see us asjust transactional, we want
(22:46):
relationship-based borrowers andthat's really important to us.
Justin Bogard (22:50):
Yeah, you said it before, I said it out loud, but
I was thinking the same thingyou were.
It's a repeat customer.
Once you set up a repeatcustomer, that becomes a
profitable customer because it'sfar less time to interview them
in the beginning.
You can skip a lot of thatstuff up front and go straight
to the project and get to themeat of the numbers and go okay,
yes, this one works, this onedoesn't.
And then you have a trackrecord with that person and be
(23:11):
like yeah, I know they've done acouple of deals.
They did a couple of deals withme.
It's different than them justdoing a couple of deals, you
know, in general with a coupleof people.
Vanessa Gomez LaGatta (23:20):
So I fully agree with the way you
approach that.
It makes a difference.
I just had a borrower.
We did a deal in early 2022.
The deal went well, everythingwent good, hadn't heard from
them in a while and then, all ofa sudden, I get a you know a
phone call to express the emailI have a deal.
Are you still lending money?
Can you know?
Can, can you act quickly?
I'm like, absolutely, you knowwhat I do.
(23:41):
Let's, let's send me theinformation and let's go to it.
And within they reached out tome Thursday evening.
By Friday morning I already hada commitment letter out to them
so they were able to send totheir you know seller so that
they can, you know, agree to theterms and get the track
contract signed, so that andthat's a bit of that
(24:01):
relationship right, and that wecan move.
We can move more quickly thanmost and and, as a result, you
know, there people find value inthat.
Justin Bogard (24:13):
Absolutely.
I'm sure you guys alsooriginate just owner occupied
homes as well not as much justbecause we are the private
lender there's.
Vanessa Gomez LaGatta (24:25):
We don't take, we don't take ownership of
the homes, but when thingsdon't go right and they do we do
.
We have taken possession ofhomes and we, once we take
possession of the homes, doingseller finances clearly one
strategy that we employ, andhave done so.
Justin Bogard (24:44):
What do you typically like to see on a
seller finance deal where itsowner occupied for skin in the
game?
Vanessa Gomez LaGatta (24:52):
So at least 10%.
But what I would also say isthat we try to be creative as
well, right, one of the thingsthat we I think the seller
finance market rate is they'renon-qualified people, right,
they can't go to the bank and goget a loan, and so a lot of
times those are business ownersof trades and everything, and
(25:15):
for us we really we like thatborrower.
Why?
Yeah, because they'rehard-working, they're honest
people, right.
Those that goes back to, youknow, the same people we support
on the origination side, and so, from that perspective, we like
to see that they have aconsistency of jobs.
We like to see who's living inthe house, you know.
(25:40):
And then we also like to see isthere family around?
Do they have family in the citythat they're in, telling us a
little bit more about who theborrower is?
And then, from a you know, justa pure financial perspective,
we usually see financialstatements from, or bank account
statements from, their businessand then personally.
And the other thing that wefind we don't necessarily
(26:02):
because we don't do a ton ofthese I don't have them are
mellowed, but we do have themserviced and and I think that's
really critical from a servicingperspective to have it
professionally serviced.
I still reach out to ourborrower when they haven't paid,
but having the servicer thereas is really critical what is
(26:25):
the fastest?
oh, sorry, sorry one one otherthing I do want to highlight.
So a lot of times, becausethese, these individuals do not
have consistency, we go into itknowing that it's not going to
be a steady as a normal you know, qualified mortgage, yeah, and
so what we look to do is alsosee what other assets can they
(26:47):
pledge in support of the loan.
So, for example, on one of ourhomes they were gonna finish the
rehab on the house and theywere going to live in their RV
that they were able to getconnected at the home.
So we have title to the RV aswell as a mortgage filed, and so
(27:08):
it's just and extra support andbecause the person couldn't put
down as much as we wanted, wetook that.
We had a we structured as thefirst and second lean.
The RV supports both leans, butthe intent is that when they're
done with the home, on therenovation they've moved in, is
to sell the RV and thoseproceeds would pay off.
Justin Bogard (27:28):
The second link sense and then we got extra
assets right extra assets allthe time and don't forget to get
those, to get those titles onthose vehicles and RVs oh yeah
oh yeah, it needs to be in yourpossession what was gonna ask is
I'm curious to know what is thefastest on your private money
(27:51):
loans that you do for your fixand flippers, what's the fastest
that you've ever had it fundedand then and then back to you
completed mature?
Vanessa Gomez LaGatta (28:02):
actually I had one last week.
I set money out on Wednesday,it got repaid on Friday so
that's almost like atransactional money at that
point right, that wastransaction.
But I've also done stuff, many,many, many deals with these
borrowers and they had.
They had somebody on the backend to buy it and they just
(28:23):
needed.
It was effectively aback-to-back, but the title
company required them to closefully on the purchase and then
have a day and then have thesecond closing a day after, and
so the title company was reallydriving on why it wasn't
actually saying a same-daytransaction.
Outside of that, I've had someland that we, that we funded and
(28:48):
that closed call early Decemberand by end of December I've
been paid off.
Justin Bogard (28:54):
That's pretty cool it's, it can go quickly
that business in general issomething I kind of wanted to
tinker with.
Richard and I had done a coupleof deals like that before and
we was looking at ourselves likeman.
I wish we could have like fiveor six these lined up every
month and just be in and out ina couple of days.
Vanessa Gomez LaGatta (29:14):
That's, that's like a lenders dream
right there it is, but I wouldalso say it's not.
It's not, it's 90, it's caught.
5% of the portfolio, right,like most of it is not that way
and I would.
I would also say that these arereplete borrowers, right?
So some of these are sizes thatI normally don't play in, right
(29:37):
?
But they bought the house, theyit was essentially you're
really buying the land and toflip it, and so those aren't the
types of transactions that wenormally lend on, but it's
relationship based, and ourborrowers come in and say, hey,
would you do this?
Of course let's do it, andactually we are quite supportive
(29:58):
.
You know, a lot of times theycome in and they say we have
contract.
I've done this with one of theborrowers where they got a
contract.
We talked about what it wouldtake to do the rehab and they
said will you give us a month tosee if we can sell it?
Because we have too manyprojects and we'd like to see if
we could just do a you know amode, what's called it like a
(30:20):
whole, hold it.
And so what we did is, again,we try to be creative from a
structuring perspective.
So what we said is, for thefirst month, try to sell it, and
if you don't sell it, thenwe'll kick in the rehab loan at
that point and then we'll gofrom there Still keeping the six
months right.
So the rehab had to be somethingdone quickly.
(30:42):
Ultimately.
They had thought they had abuyer within the month.
They fell through right at theend of the month and then we
flipped into the rehab portionof the loan and they're actually
working on it right now and Ishould be getting my last draw
request on that probably thisweek.
And so we try again.
We try to be creative, andthat's where that relationship
aspect is super importantListening to what our borrowers
(31:04):
need and then thinking how canwe be responsive.
That makes it a win-win foreverybody.
Justin Bogard (31:12):
Vanessa, quickly, where are you doing these
rehabs at?
Is it just basically at a DFW,or?
Vanessa Gomez LaGatta (31:22):
It's a great question.
So we are in the DFW area,that's where we live and we like
the DFW area, so a lot of ouroperators are in the DFW area,
but we will do private moneyloans throughout the state of
Texas.
Justin Bogard (31:35):
Okay, and then how can we get a hold of?
How do you guys?
Vanessa Gomez LaGatta (31:41):
So I can share my contact information.
But the best is to emailoperations at all of dashcovecom
.
That reaches everybody on theteam and just to make sure that
we get back to you guys.
Justin Bogard (31:55):
So that's that was operations at all of
olive-covecom.
Vanessa Gomez LaGatta (32:03):
That's exactly right.
Justin Bogard (32:04):
All right, olaclecom.
All right, Vanessa, we are outof time today.
Thank you so much for being onthe podcast.
This is episode number five,season six, of the VDK be the
bank broadcast podcast.
My gosh, my tongue is all tiedtoday.
So yeah, thanks for being on.
This has been an awesome littleconversation today and I really
enjoyed the private moneyconversation that we had on the
(32:26):
underwriting.
That was pretty fun.
Vanessa Gomez LaGatt (32:27):
Absolutely .
Thank you for having me.
It's been fun.
Justin Bogard (32:30):
All right, you're welcome.
We'll catch you guys on thenext episode, if I can get my
mouth to work correctly.
Oh, there we go.
Vanessa Gomez LaGatta (32:36):
All right , see you guys Bye, thank you.
Narrator (32:42):
Thanks for listening to Be the Bank.
We hope you learned somethingfrom today's show.
If you enjoyed this episode,please rate and 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.
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