August 9, 2023 • 25 mins
Ever thought about the complexities of communicating with borrowers who don't speak your language? In our latest podcast, we take you on an enlightening journey through our experiences of overcoming language barriers using translation apps like Google Translate and Apple Translate. Additionally, we highlight the crucial role bilingual individuals play in facilitating conversations between lenders and investors.
But that's not all we have in store for you. We further delve into an insightful analysis of the current state of the secondary market for non-performing and performing loan pricing. Drawing upon our experiences, we shed light on the effects of pandemic-related forbearance programs, rising interest rates, and the surge in equity in the market. We also have a stimulating discussion on the growing interest in private mortgage origination and seller financing. Lastly, we impart our unique insights into portfolio management and the unexpected surprises that come with loans. So, tune in, and don't forget to bring your questions and topics for us to discuss in future episodes!
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 Bogart,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 Notebuyers.
Now here's your host, justinBogart.
Justin Bogard (00:46):
Welcome to episode number 16 of season five
of the Be the Bank podcastbrought to you by American
Notebuyers.
Today we're actually going tobe discussing a little bit on
how to communicate withborrowers when they don't speak
your common language.
For example, I speak Englishand I need to talk to somebody
that speaks Spanish.
Well, how do you kind of getthat translation across to where
(01:07):
you can have a goodconversation and find out what
the needs and wants of theborrower are, or the issues that
they have?
And then we're also going totalk about current pricing in
the performing andnon-performing loan space as it
pertains to the average everyday note investor in our
industry.
Stay tuned.
Hey, richard, welcome.
(01:36):
How are you?
Thank you, good news, sir.
I've done pretty good.
Summer is just about over.
School is getting ready tostart as early as next week as
we're recording this broadcast.
So it has really flown by thissummer.
Richard Thornton (01:51):
Have you had any more of those magnificent
rain and thunder and lightningstorms that we had when I
visited you last?
That was kind of fun.
Justin Bogard (02:01):
You know the other—it's funny you asked that
because the other night we didit was when I was sleeping and I
remember waking up, you know,probably like three or four in
the morning, I was obviously ina fog state of mind and I
remember there was a bunch oflike lightning going on outside
and loud rain.
But then when I woke up in themorning I thought it was a dream
, because everything seemed liketo be bright and sunny and no
(02:23):
issue—no issue outside.
So—but yeah, we did have apretty bad thunderstorm roll
through recently.
Richard Thornton (02:30):
I love those.
You know we used to live in DCand for a fair amount of that
time we lived in a golf courseand so we could sit off the
third hole and had a great viewof sort of the east.
We were slightly west lookingto the east, and all the storms
(02:52):
would come down from the east.
So we'd get lawn chairs and putthem out on the front porch and
watch the storms come down thehillside and whatnot and see all
that thunder and lightning.
That was pretty fun, fun forlittle kids and everything else.
Justin Bogard (03:07):
Yeah, I always like watching the storm stuff.
That's kind of cool.
If those of you that would liketo see the video stream of our
podcast, we do this—we film thison our YouTube channel, the
American Note Buyer's YouTubechannel, so please check us out
and subscribe there as well.
So today, richard, I startedmentioning about communicating
with borrowers when they don'tspeak your language.
(03:28):
I believe you speak a littlebit of Spanish, but you don't
have like a—like a secondarylanguage that you speak fluently
.
Is that—is that correct?
That is correct.
So I'm not—I'm not sure what youdo, but I tend to have quite a
bit of Spanish—mainlySpanish—only speaking borrowers
recently with some loans thatwe've bought, especially locally
(03:49):
here in the Indianapolis area,and so I find that some of them
actually can speak both Spanishand English and read it and
write it very well, and some ofthem, just you know, are just
barely—as much as I can speak.
Spanish is about as much as theycan speak English.
So there's, like you know,some—it's almost like conflict
there, to where I'm trying toask them something or they're
(04:10):
trying to ask me something andit's hard to get across.
So at times in the past I'vehad like somebody that
speaks—that's bilingual andwould get on a phone call with
me and I would say, okay, saythis to the borrower, and then
they would say it and they wouldlisten to the borrowed response
and they would say it back tome in English and we would get
through a conversation that way.
But I've been using textmessage a lot because a lot of
(04:33):
people just like text messages,and so when I use the Google
Translate app from Spanish toEnglish or English to Spanish,
I'm able to like copy and pasteinformation in there to kind of
get the point across, and itseems to work pretty well.
Richard Thornton (04:47):
So, yeah, I mean, it's a close approximation
.
Yeah, as you said that I justremembered—it's popped into my
mind—a friend of mine a coupleyears ago.
He works in the hotel industryand quite often works behind the
front desk.
Yeah, yeah, yeah, yeah, yeah,yeah, and he's worked at a very
(05:09):
nice hotel in Mexico City and hesaid you'd be amazed at the
number of Americans that come inthere and just wanna put an O
or an E on the end of theEnglish word and think that it's
Spanish, Like, just like.
Can I have a Romero, you know?
And he says it's just kind oflaughable.
(05:29):
You know what some of thesepeople say sometimes and I think
they're speaking sort of.
They think it's pigeon Spanish,but it's nowhere even close.
But anyway, Google Translatedoes a far better job in that
and also, if you have a Mac,Apple Translate has a very good
program.
But I tend to use in ourtravels.
I tend to use Google Translatequite a lot and actually got all
(05:54):
around the countryside inVietnam last time I went with
Google Translate and cause a lotof people in Vietnam speak
nothing but Vietnamese periods.
Yeah.
Justin Bogard (06:07):
Yeah, it's amazing how it can take what you
wanna say and put it in anotherlanguage.
Now there is, everybody hasthose specific regions within
certain areas of like you knowthe United States how they talk
a little bit different in NewYork or in Chicago, or you know
maybe somewhere else, and youhear different tones and
different words that they kindof change and stretch and move.
(06:29):
So the Google Translateobviously won't catch all that.
So sometimes I have a borrowerthat speaks mainly Spanish and
they speak a different type ofSpanish I don't know how to
describe it.
Maybe it's just a moredifferent region, I guess and so
when I put it in GoogleTranslate, it just spits back
the same thing to me, cause it'sjust like throwing up his hands
(06:50):
, going like I don't know whatthis is, but they're using like
the same letters.
So I think when it comes to atext, they do short-handed text
words as well in Spanish, towhere the translator won't
exactly know what it means,cause it's not going to read
context right, it's just goingto go straight character for
character as far as what it does.
So if you can get past that,the communication works well.
(07:11):
But ultimately I think if youhad a true translator that could
speak you know the languagefluently on both sides.
I think that's ultimately thebest way to go, but at least the
Google Translate can, like yousaid, it can get you by and get
you down the road pretty far.
Richard Thornton (07:24):
It can.
You know, last time I was inNew York is on the subway and
this woman from, who seeminglywas from New Jersey, was there
with her small child and she,very level with the child, was,
you know, bouncing all aroundthe subway and she said, you
know, he said careful, I don'twant you to break your face.
You know, and that was, youknow, in typical New Jersey
(07:46):
style, a nice way of saying Idon't want you to get hurt,
darling.
I'm not sure how GoogleTranslate would translate break
your face, but anyway.
Justin Bogard (07:57):
That's fun.
If anybody has any funnytranslator stories that they've
used on some sort of translatorapp, we'd love for you to write
in the comments.
You know kind of what that wasand we'll probably end up
sharing that in our next episode.
So we encourage you to do thatand go to our American Notepad,
our YouTube channel, underepisode 16, and you can read
your, you can put your commentin there in season five.
Richard Thornton (08:17):
Yeah, you can tell that we're in August here
and in the vacation season,right, Because this topic is
just not all that heavy, youknow?
I mean it's nice.
Justin Bogard (08:30):
But yes, speaking of vacations, I went on a fun
little vacation not too long agoActually a week ago from the
time we were recording this andwe went to Cedar Point, which is
an amusement park in Sandusky,ohio.
It's an actual point that comesoff of Ohio into Lake Erie and
it, you know, it points you likein the direction of Canada.
(08:53):
Well, on this point they'vebuilt a giant amusement park,
like, if you walk a loop aroundthe amusement park, it's about a
two mile loop.
It's huge, wow, okay.
And they have tons of rollercoasters and they have a water
park there too.
Well, we went for the rollercoasters.
So, as me and my daughters, mydad, my sister and two of her
(09:13):
kids went as well, and it waskind of fun, we stayed there for
a couple of days and got tostay on a hotel like inside the
park.
So we just got to walk out likeright to the gate from the
hotel.
So it was pretty fun.
But, man, we were worn out,richard, when we were done.
Richard Thornton (09:29):
If I remember correctly, you're a real roller
coaster, aficionado right.
Justin Bogard (09:34):
Well, I do like to ride them, and my daughters
definitely like to ride them,which is great for us as a kind
of a tight knit group.
But I had my Apple watch on andmy phone in my pocket so I
could record all the steps andthe mileage that it would
calculate, and so I believe weaveraged about maybe 20,000
steps per day.
(09:54):
And it came out close to alittle bit over nine miles that
we were walking in one day.
So we did that for two days andso, by the time the second day
was done, we were all, just likeyou know, time out, throwing
the towel, going.
Man, our feet can't take itanymore.
So, yeah, did you lose anyweight?
Oh yeah, oh yeah.
We actually would buy the allday dining plan, past to where
(10:20):
you'd wear wristband.
You'd pay like I don't knowwhat it was like 40 or $45 for
the day and you could eat asmany times as you want, as long
as it was like 90 minutes apart.
So if you're staying at thepark for the entire duration,
that's open.
I mean, that's, that's like a12 hour stretch, 13 hour stretch
, right there.
So you could you could eatseveral meals if you wanted to.
Now, I was trying not to eatthat much because all they had
there was like not healthy stuff, you know, if you can imagine.
(10:43):
So it was a lot of a lot ofbeef, a lot of, you know, greasy
, greasy food.
So anyways, it was a funvacation.
I like looking forward to doingit again next year, next summer
, cool, cool.
But that's not.
That's another light topic fortoday.
Let's get into a more seriousnote conversation topic today
and that is the buzz that I'mhearing and I think that you're
(11:06):
hearing as well, because wetalked a little bit about this
offline is really the pricingwhen it comes to buying non
performing loans or performingloans in our environment.
Today.
We know that the interest rateshave really jumped up, richard,
over the past year quite a bit,and I think they're still
hovering around 7% today, as, aswe're recording this podcast
(11:27):
today, and a lot of peoplecontinually ask me the questions
like how does the mortgage rate, you know, affect pricing?
How does it affect yourindustry as well?
And I say it really doesn'taffect it.
But, richard, maybe what doesaffect our pricing is really
who's holding all the paper andwhy are they holding on the
paper and then, what are theywilling to sell it for, for when
(11:50):
they want to sell it?
And I think that really setsthe pricing for our industry as
second hand, you know, secondarymarket note buyers.
What do you think?
Richard Thornton (12:00):
Well, what I think is interesting is that the
we're experiencing what I wouldcall the tsunami.
That wasn't.
Everybody was saying, oh gee,we're going to get by this
tsunami of non performing paper.
Yeah, it didn't come out of thebanks because of the pandemic
and blah, blah, blah, blah, orit just hasn't happened.
(12:20):
You know, there was too manyforbearance programs, as a lot
of us know.
Last time around we did this,rates were high, equity was low.
Now guess what?
Prices have crept up a littlebit, but when most of this stuff
hit, the market rates were lowand equity was high.
So a lot of people were able torefinance and or sell their
(12:44):
homes or get their forbearanceor whatever.
So maybe I'm missing something,but I'm not seeing any huge
increase, uptick in nonperforming paper or even
reperforming paper.
I mean, yeah, a little bitmaybe, but it's kind of like
rising tide as opposed to atsunami.
Justin Bogard (13:05):
Yeah, it's interesting you say that the way
that you said that a fewminutes ago about the rates were
low and the equity was high,well, now the rates are high and
the equity is still high.
So it's like one part of theequation hasn't changed and the
other part has just flipped, ashas done the inverse of what it
is.
So I just think that the pricesfor the secondary market, which
(13:28):
we buy for, aren't going tochange a whole lot right now
just because of what you justmentioned, and they're all yeah.
Richard Thornton (13:35):
I mean, the way I read it is that rates were
low long enough for anybody whowas in real pandemic problems
to do whatever they needed to do, and so most of them did just
that Either they wrote it out,they went out and got another
job, they got forbearance orwhatever.
And yes, rates are higher now.
(13:57):
So it is slowing down the newhome buyer market and things
like that, but it really hasn'timpacted us that much in the
secondary market and the privatemarket.
Justin Bogard (14:08):
Yeah, so the pricing hasn't really done much
to us as far as what we buy itfor in the secondary market.
It's kind of been the same forthe last I don't know, I'd
probably say four years at leastbut the amount of inventory, I
think, is starting to change asfar as origination inventory on
the private mortgage excuse me,the private mortgage market,
because I am seeing a lot morechatter on, you know, private
(14:32):
Facebook groups, public Facebookgroups about people that are
kind of lightly experienced realestate investors that are
starting to see like, hey, maybeI should originate a note,
maybe I should sell my propertyon seller financing, and they're
asking questions like how dopeople do this?
If someone wants to buy thisnote, what are they looking to
buy for?
So it's interesting that I'mstarting to see that a lot more
(14:54):
now.
Richard Thornton (14:55):
Right.
Justin Bogard (14:55):
Are you seeing the same thing?
Richard Thornton (14:57):
Yeah, I am, and what I've I mean.
If you think about it, thatmakes complete sense because
even though rates are or notrates, I'm sorry prices are down
a little bit from what we havehad.
We're still at historic highs.
So maybe somebody could havegotten $150,000 for their house
(15:17):
and now they can only get 130.
I don't know what.
We know pick a number, but it'sstill so much higher than they
ever thought they were going toget and they're saying gosh,
this is one of the best timesfor me to create a note, because
I do have more equity, I cansell it for a higher price, I
can get a bigger down payment.
It's a safer transaction.
(15:39):
I'd like to have the money, solet's do that.
So it just makes a lot of sensethat we'd start seeing increase
in volume.
Justin Bogard (15:48):
Now the question is education.
So how much education do wehave out in the marketplace for
novice seller finance years tomake good decisions on having
secure documentation, making theright decisions to protect the
borrower and the lender itself,and for the secondary lender
that may come in and end upbuying this paper?
Richard Thornton (16:11):
Not enough.
But you know what, probablyquite soon we can go to chat GTP
and say write me a sellerfinance note that covers all of
the important factors.
And it will do that.
Justin Bogard (16:24):
Have you done that?
Have you typed in that exactphrase?
Richard Thornton (16:27):
I have not, but what I have done is
something similar to that and onother subjects.
Justin Bogard (16:35):
Yeah.
Richard Thornton (16:36):
And I've been amazed at how good it is really.
Every once in a while you hit aboner and you go oh, now that's
just too general, but there'sbeen several instances where
I've done things like that andit's remarkable how good it is,
especially if you can use chatGTP for as opposed to three and
a half.
Justin Bogard (16:57):
Yeah, I've used it a couple of times to help
write some marketing or salesthings and it gets you where you
need to go, like on the highway.
You just got to pick the laneyou want to be in, as far as, if
you want to be more persuasive,you want to be more
professional or funny orsarcastic, it's pretty
interesting how it can changeits tone pretty quickly on how
you want the message to bedelivered, but it doesn't give
(17:19):
you the exact thing you want.
It gets you like, I think, whatyou said 95%.
There You're really close.
Richard Thornton (17:26):
Yeah, and I must admit, whoever the
programmers are for all this,they've put a little bit of
humor into it too, which I kindof like.
So I'd say something like writeme a mortgage note.
And the response I get is well,certainly I'd be happy to write
that for you.
You get this note and you'regoing oh OK, that's fine.
Justin Bogard (17:54):
We have talked about that before JetGDP and
it's kind of amazing how what itdoes, and I'm sure we're going
to look back a year later fromnow and be like, oh my gosh,
it's so different than what itwas as we're talking today, as
far as perfecting it and havingit do a better job of
understanding what you're tryingto say and what you're trying
(18:14):
to accomplish, but it'sdefinitely something you should
look into if you haven't donethat already.
Richard Thornton (18:19):
Those of you that are listening to us here
yeah, it's something that it'sworth keeping ahead of and
figuring out, because, on theone hand, a lot of people are
saying it's going to eliminate alot of jobs.
I really think it is going toeliminate a lot of jobs, but I
think the creation of theautomobile put a lot of horse
(18:42):
and bugger carriers and makersout of business too.
So I think we will morph intosomething.
This is going to be a hugemorph, and it will affect our
industry as well as everybodyelse's.
Justin Bogard (18:55):
I think in a short term it could replace a
lot of jobs.
But it's just like anythingelse that a computer does that
ends up replacing somebody's job, there always has to be
somebody that designs it andperfects it and understands it
and programs it on the back end.
So I think as many jobs thatyou end up losing short term, it
creates longer term jobs on theback end of it as well and it
(19:18):
just requires us as users upfront just to be more educated
as far as going after you knowemployment and getting just the
proper education onunderstanding like this is a
niche that you need to go after.
Like we're always short onnurses and doctors right, and
hospitals, so it's like there'salways a need for people to go
down that industry to, you know,fill those jobs for everybody.
Richard Thornton (19:39):
So yeah, I think it will morph.
It's just morphing more quicklythan we're used to in the past.
Justin Bogard (19:45):
I think so.
Yeah, I think this day and ageI think you're right Now do they
have an app on your phone?
Do you know that you can do iton your phone?
So I've just used it on thedesktop before.
Richard Thornton (19:54):
That's a good question.
I know I'm sure you could useit.
They don't have an app, or theymay have an app.
I don't think they do, but youcan use it.
I just use it through Google onmy desktop, so you can
certainly do that in your phone.
Justin Bogard (20:06):
Interesting.
All right, have you hadanything else interesting happen
to you this past week or twothat I haven't heard from you
already?
Richard Thornton (20:15):
Not in the notes space, not really For
those of you who were.
I can't remember what programwe did it on, but I was
discussing last time that thereare two warrants for my arrest.
Justin Bogard (20:35):
Oh yeah, Right now.
Richard Thornton (20:37):
And it's because I have a property in St
Louis.
They set two court dates forthe recloser proceedings and
since I hold the land contract,I'm technically the owner, or my
company is, and I didn't makemy court appearances because
they were sent to their longaddress.
(20:58):
They were sent to an oldaddress.
So I'm actually going to go tovirtual court tomorrow and find
out how to resolve all that.
So I can.
For those of you who arecurious about all that, ia
didn't even know that couldhappen, but I'm sure it can be
resolved fairly easily.
Justin Bogard (21:16):
Yeah, I think so too.
Richard Thornton (21:19):
But at this point it's fairly humorous.
It may cost me a little bit ofmoney to unwind.
Justin Bogard (21:24):
Keep us posted, richard.
Hopefully by those records thenext one we'll have an answer.
Richard Thornton (21:29):
Oh, I may be sitting here in a suit that's
got little stripes across it orsomething.
Justin Bogard (21:33):
An orange jumpsuit.
I think they wear the black andwhite horizontal stripes
anymore.
Richard Thornton (21:40):
No, I'm dating myself.
Justin Bogard (21:42):
There you go Right Another topic portfolio
management.
So just to kind of step intowhat it's like to be a portfolio
manager.
Richard Thornton (21:56):
There, what's going on for the fund for you?
Justin Bogard (21:58):
The dynamics of a fund or just a large portfolio
in general is quite humorous.
You obviously hope to haveeverybody on the positive
direction and everything goinggreat because you know you're
obviously making the most moneyyou can.
But you always have a few loansin a portfolio that you know
aren't going the way that youwant and may kind of drag some
(22:20):
things down.
But it's funny you have polaropposites, richard to where you
have some loans that are justpaying ahead and paying early
and eager to get the loanmatured and paid off, and you
have other loans that get, youknow, two or three months behind
and they kind of drag a littlebit.
So those two kind of offseteach other and everything else
just kind of lands in the sweetspot in the middle to where
(22:40):
they're.
Just you know they're on timeor they're just a little bit
late and it's just really coolto see that in the portfolio in
general.
So it just goes to show when wetalked about this before I think
we talked about this on aspecial webinar we had to where
it's much better to own a large,vast amount of notes, as it is
to own one, because you want theone note to be paying really
(23:01):
well and to go really well foryou, instead of the one that's
dragging you down.
Because if you have, you know,a bunch of loans, if one of them
goes down or a couple of themgo down and slow you down, it's
like it doesn't really pull downthe entire portfolio.
You don't really see a lot ofeffect from it.
So we have good balance in ourportfolio is what I'm saying and
that's what's nice to see as aportfolio manager.
Richard Thornton (23:22):
Yeah, and I think there's a lot of surprises
.
Hopefully most of them are forthe good.
But you know, there's our loan,like our what we call our
sister's loan, which isbasically we got out of.
It just got because there wasdispute between two sisters and
there was non payments and nowthere's a lot of payments and it
turns out it's going to be soldand been a very profitable deal
(23:46):
.
Justin Bogard (23:47):
Yes, some of the some of the more interesting
deals turned out to be the moreprofitable deals, because all we
do is just listen and we we try, we try to fix by just helping
the borrower and putting theborrower's needs before ours,
and they end up coming back tous and end up making the most
profitable loans for us.
So it's, we're pretty happywith those, definitely Right.
(24:10):
All right, richard, that'sabout all the time we have for
today.
Thanks again for being on ourpodcast episode number 16,
season five of the be the bankpodcast brought to you by
American Notebuyers.
Don't forget to check out ourYouTube channel, american
Notebuyers, and we will see youon the next episode.
Richard Thornton (24:26):
Yeah, if anybody has any topics that
would like us to address, toplease, you know, drop an email
to either Justin or me or text,and we'll be glad to put it on
the show info at a and b fundsdot com.
Justin Bogard (24:40):
till next time, see you.
Richard Thornton (24:41):
Okay, see you.
Narrator (24:47):
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 Notebuyers.
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 Bogart,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 Notebuyers.
Now here's your host, justinBogart.
Justin Bogard (00:46):
Welcome to episode number 16 of season five
of the Be the Bank podcastbrought to you by American
Notebuyers.
Today we're actually going tobe discussing a little bit on
how to communicate withborrowers when they don't speak
your common language.
For example, I speak Englishand I need to talk to somebody
that speaks Spanish.
Well, how do you kind of getthat translation across to where
(01:07):
you can have a goodconversation and find out what
the needs and wants of theborrower are, or the issues that
they have?
And then we're also going totalk about current pricing in
the performing andnon-performing loan space as it
pertains to the average everyday note investor in our
industry.
Stay tuned.
Hey, richard, welcome.
(01:36):
How are you?
Thank you, good news, sir.
I've done pretty good.
Summer is just about over.
School is getting ready tostart as early as next week as
we're recording this broadcast.
So it has really flown by thissummer.
Richard Thornton (01:51):
Have you had any more of those magnificent
rain and thunder and lightningstorms that we had when I
visited you last?
That was kind of fun.
Justin Bogard (02:01):
You know the other—it's funny you asked that
because the other night we didit was when I was sleeping and I
remember waking up, you know,probably like three or four in
the morning, I was obviously ina fog state of mind and I
remember there was a bunch oflike lightning going on outside
and loud rain.
But then when I woke up in themorning I thought it was a dream
, because everything seemed liketo be bright and sunny and no
(02:23):
issue—no issue outside.
So—but yeah, we did have apretty bad thunderstorm roll
through recently.
Richard Thornton (02:30):
I love those.
You know we used to live in DCand for a fair amount of that
time we lived in a golf courseand so we could sit off the
third hole and had a great viewof sort of the east.
We were slightly west lookingto the east, and all the storms
(02:52):
would come down from the east.
So we'd get lawn chairs and putthem out on the front porch and
watch the storms come down thehillside and whatnot and see all
that thunder and lightning.
That was pretty fun, fun forlittle kids and everything else.
Justin Bogard (03:07):
Yeah, I always like watching the storm stuff.
That's kind of cool.
If those of you that would liketo see the video stream of our
podcast, we do this—we film thison our YouTube channel, the
American Note Buyer's YouTubechannel, so please check us out
and subscribe there as well.
So today, richard, I startedmentioning about communicating
with borrowers when they don'tspeak your language.
(03:28):
I believe you speak a littlebit of Spanish, but you don't
have like a—like a secondarylanguage that you speak fluently
.
Is that—is that correct?
That is correct.
So I'm not—I'm not sure what youdo, but I tend to have quite a
bit of Spanish—mainlySpanish—only speaking borrowers
recently with some loans thatwe've bought, especially locally
(03:49):
here in the Indianapolis area,and so I find that some of them
actually can speak both Spanishand English and read it and
write it very well, and some ofthem, just you know, are just
barely—as much as I can speak.
Spanish is about as much as theycan speak English.
So there's, like you know,some—it's almost like conflict
there, to where I'm trying toask them something or they're
(04:10):
trying to ask me something andit's hard to get across.
So at times in the past I'vehad like somebody that
speaks—that's bilingual andwould get on a phone call with
me and I would say, okay, saythis to the borrower, and then
they would say it and they wouldlisten to the borrowed response
and they would say it back tome in English and we would get
through a conversation that way.
But I've been using textmessage a lot because a lot of
(04:33):
people just like text messages,and so when I use the Google
Translate app from Spanish toEnglish or English to Spanish,
I'm able to like copy and pasteinformation in there to kind of
get the point across, and itseems to work pretty well.
Richard Thornton (04:47):
So, yeah, I mean, it's a close approximation
.
Yeah, as you said that I justremembered—it's popped into my
mind—a friend of mine a coupleyears ago.
He works in the hotel industryand quite often works behind the
front desk.
Yeah, yeah, yeah, yeah, yeah,yeah, and he's worked at a very
(05:09):
nice hotel in Mexico City and hesaid you'd be amazed at the
number of Americans that come inthere and just wanna put an O
or an E on the end of theEnglish word and think that it's
Spanish, Like, just like.
Can I have a Romero, you know?
And he says it's just kind oflaughable.
(05:29):
You know what some of thesepeople say sometimes and I think
they're speaking sort of.
They think it's pigeon Spanish,but it's nowhere even close.
But anyway, Google Translatedoes a far better job in that
and also, if you have a Mac,Apple Translate has a very good
program.
But I tend to use in ourtravels.
I tend to use Google Translatequite a lot and actually got all
(05:54):
around the countryside inVietnam last time I went with
Google Translate and cause a lotof people in Vietnam speak
nothing but Vietnamese periods.
Yeah.
Justin Bogard (06:07):
Yeah, it's amazing how it can take what you
wanna say and put it in anotherlanguage.
Now there is, everybody hasthose specific regions within
certain areas of like you knowthe United States how they talk
a little bit different in NewYork or in Chicago, or you know
maybe somewhere else, and youhear different tones and
different words that they kindof change and stretch and move.
(06:29):
So the Google Translateobviously won't catch all that.
So sometimes I have a borrowerthat speaks mainly Spanish and
they speak a different type ofSpanish I don't know how to
describe it.
Maybe it's just a moredifferent region, I guess and so
when I put it in GoogleTranslate, it just spits back
the same thing to me, cause it'sjust like throwing up his hands
(06:50):
, going like I don't know whatthis is, but they're using like
the same letters.
So I think when it comes to atext, they do short-handed text
words as well in Spanish, towhere the translator won't
exactly know what it means,cause it's not going to read
context right, it's just goingto go straight character for
character as far as what it does.
So if you can get past that,the communication works well.
(07:11):
But ultimately I think if youhad a true translator that could
speak you know the languagefluently on both sides.
I think that's ultimately thebest way to go, but at least the
Google Translate can, like yousaid, it can get you by and get
you down the road pretty far.
Richard Thornton (07:24):
It can.
You know, last time I was inNew York is on the subway and
this woman from, who seeminglywas from New Jersey, was there
with her small child and she,very level with the child, was,
you know, bouncing all aroundthe subway and she said, you
know, he said careful, I don'twant you to break your face.
You know, and that was, youknow, in typical New Jersey
(07:46):
style, a nice way of saying Idon't want you to get hurt,
darling.
I'm not sure how GoogleTranslate would translate break
your face, but anyway.
Justin Bogard (07:57):
That's fun.
If anybody has any funnytranslator stories that they've
used on some sort of translatorapp, we'd love for you to write
in the comments.
You know kind of what that wasand we'll probably end up
sharing that in our next episode.
So we encourage you to do thatand go to our American Notepad,
our YouTube channel, underepisode 16, and you can read
your, you can put your commentin there in season five.
Richard Thornton (08:17):
Yeah, you can tell that we're in August here
and in the vacation season,right, Because this topic is
just not all that heavy, youknow?
I mean it's nice.
Justin Bogard (08:30):
But yes, speaking of vacations, I went on a fun
little vacation not too long agoActually a week ago from the
time we were recording this andwe went to Cedar Point, which is
an amusement park in Sandusky,ohio.
It's an actual point that comesoff of Ohio into Lake Erie and
it, you know, it points you likein the direction of Canada.
(08:53):
Well, on this point they'vebuilt a giant amusement park,
like, if you walk a loop aroundthe amusement park, it's about a
two mile loop.
It's huge, wow, okay.
And they have tons of rollercoasters and they have a water
park there too.
Well, we went for the rollercoasters.
So, as me and my daughters, mydad, my sister and two of her
(09:13):
kids went as well, and it waskind of fun, we stayed there for
a couple of days and got tostay on a hotel like inside the
park.
So we just got to walk out likeright to the gate from the
hotel.
So it was pretty fun.
But, man, we were worn out,richard, when we were done.
Richard Thornton (09:29):
If I remember correctly, you're a real roller
coaster, aficionado right.
Justin Bogard (09:34):
Well, I do like to ride them, and my daughters
definitely like to ride them,which is great for us as a kind
of a tight knit group.
But I had my Apple watch on andmy phone in my pocket so I
could record all the steps andthe mileage that it would
calculate, and so I believe weaveraged about maybe 20,000
steps per day.
(09:54):
And it came out close to alittle bit over nine miles that
we were walking in one day.
So we did that for two days andso, by the time the second day
was done, we were all, just likeyou know, time out, throwing
the towel, going.
Man, our feet can't take itanymore.
So, yeah, did you lose anyweight?
Oh yeah, oh yeah.
We actually would buy the allday dining plan, past to where
(10:20):
you'd wear wristband.
You'd pay like I don't knowwhat it was like 40 or $45 for
the day and you could eat asmany times as you want, as long
as it was like 90 minutes apart.
So if you're staying at thepark for the entire duration,
that's open.
I mean, that's, that's like a12 hour stretch, 13 hour stretch
, right there.
So you could you could eatseveral meals if you wanted to.
Now, I was trying not to eatthat much because all they had
there was like not healthy stuff, you know, if you can imagine.
(10:43):
So it was a lot of a lot ofbeef, a lot of, you know, greasy
, greasy food.
So anyways, it was a funvacation.
I like looking forward to doingit again next year, next summer
, cool, cool.
But that's not.
That's another light topic fortoday.
Let's get into a more seriousnote conversation topic today
and that is the buzz that I'mhearing and I think that you're
(11:06):
hearing as well, because wetalked a little bit about this
offline is really the pricingwhen it comes to buying non
performing loans or performingloans in our environment.
Today.
We know that the interest rateshave really jumped up, richard,
over the past year quite a bit,and I think they're still
hovering around 7% today, as, aswe're recording this podcast
(11:27):
today, and a lot of peoplecontinually ask me the questions
like how does the mortgage rate, you know, affect pricing?
How does it affect yourindustry as well?
And I say it really doesn'taffect it.
But, richard, maybe what doesaffect our pricing is really
who's holding all the paper andwhy are they holding on the
paper and then, what are theywilling to sell it for, for when
(11:50):
they want to sell it?
And I think that really setsthe pricing for our industry as
second hand, you know, secondarymarket note buyers.
What do you think?
Richard Thornton (12:00):
Well, what I think is interesting is that the
we're experiencing what I wouldcall the tsunami.
That wasn't.
Everybody was saying, oh gee,we're going to get by this
tsunami of non performing paper.
Yeah, it didn't come out of thebanks because of the pandemic
and blah, blah, blah, blah, orit just hasn't happened.
(12:20):
You know, there was too manyforbearance programs, as a lot
of us know.
Last time around we did this,rates were high, equity was low.
Now guess what?
Prices have crept up a littlebit, but when most of this stuff
hit, the market rates were lowand equity was high.
So a lot of people were able torefinance and or sell their
(12:44):
homes or get their forbearanceor whatever.
So maybe I'm missing something,but I'm not seeing any huge
increase, uptick in nonperforming paper or even
reperforming paper.
I mean, yeah, a little bitmaybe, but it's kind of like
rising tide as opposed to atsunami.
Justin Bogard (13:05):
Yeah, it's interesting you say that the way
that you said that a fewminutes ago about the rates were
low and the equity was high,well, now the rates are high and
the equity is still high.
So it's like one part of theequation hasn't changed and the
other part has just flipped, ashas done the inverse of what it
is.
So I just think that the pricesfor the secondary market, which
(13:28):
we buy for, aren't going tochange a whole lot right now
just because of what you justmentioned, and they're all yeah.
Richard Thornton (13:35):
I mean, the way I read it is that rates were
low long enough for anybody whowas in real pandemic problems
to do whatever they needed to do, and so most of them did just
that Either they wrote it out,they went out and got another
job, they got forbearance orwhatever.
And yes, rates are higher now.
(13:57):
So it is slowing down the newhome buyer market and things
like that, but it really hasn'timpacted us that much in the
secondary market and the privatemarket.
Justin Bogard (14:08):
Yeah, so the pricing hasn't really done much
to us as far as what we buy itfor in the secondary market.
It's kind of been the same forthe last I don't know, I'd
probably say four years at leastbut the amount of inventory, I
think, is starting to change asfar as origination inventory on
the private mortgage excuse me,the private mortgage market,
because I am seeing a lot morechatter on, you know, private
(14:32):
Facebook groups, public Facebookgroups about people that are
kind of lightly experienced realestate investors that are
starting to see like, hey, maybeI should originate a note,
maybe I should sell my propertyon seller financing, and they're
asking questions like how dopeople do this?
If someone wants to buy thisnote, what are they looking to
buy for?
So it's interesting that I'mstarting to see that a lot more
(14:54):
now.
Richard Thornton (14:55):
Right.
Justin Bogard (14:55):
Are you seeing the same thing?
Richard Thornton (14:57):
Yeah, I am, and what I've I mean.
If you think about it, thatmakes complete sense because
even though rates are or notrates, I'm sorry prices are down
a little bit from what we havehad.
We're still at historic highs.
So maybe somebody could havegotten $150,000 for their house
(15:17):
and now they can only get 130.
I don't know what.
We know pick a number, but it'sstill so much higher than they
ever thought they were going toget and they're saying gosh,
this is one of the best timesfor me to create a note, because
I do have more equity, I cansell it for a higher price, I
can get a bigger down payment.
It's a safer transaction.
(15:39):
I'd like to have the money, solet's do that.
So it just makes a lot of sensethat we'd start seeing increase
in volume.
Justin Bogard (15:48):
Now the question is education.
So how much education do wehave out in the marketplace for
novice seller finance years tomake good decisions on having
secure documentation, making theright decisions to protect the
borrower and the lender itself,and for the secondary lender
that may come in and end upbuying this paper?
Richard Thornton (16:11):
Not enough.
But you know what, probablyquite soon we can go to chat GTP
and say write me a sellerfinance note that covers all of
the important factors.
And it will do that.
Justin Bogard (16:24):
Have you done that?
Have you typed in that exactphrase?
Richard Thornton (16:27):
I have not, but what I have done is
something similar to that and onother subjects.
Justin Bogard (16:35):
Yeah.
Richard Thornton (16:36):
And I've been amazed at how good it is really.
Every once in a while you hit aboner and you go oh, now that's
just too general, but there'sbeen several instances where
I've done things like that andit's remarkable how good it is,
especially if you can use chatGTP for as opposed to three and
a half.
Justin Bogard (16:57):
Yeah, I've used it a couple of times to help
write some marketing or salesthings and it gets you where you
need to go, like on the highway.
You just got to pick the laneyou want to be in, as far as, if
you want to be more persuasive,you want to be more
professional or funny orsarcastic, it's pretty
interesting how it can changeits tone pretty quickly on how
you want the message to bedelivered, but it doesn't give
(17:19):
you the exact thing you want.
It gets you like, I think, whatyou said 95%.
There You're really close.
Richard Thornton (17:26):
Yeah, and I must admit, whoever the
programmers are for all this,they've put a little bit of
humor into it too, which I kindof like.
So I'd say something like writeme a mortgage note.
And the response I get is well,certainly I'd be happy to write
that for you.
You get this note and you'regoing oh OK, that's fine.
Justin Bogard (17:54):
We have talked about that before JetGDP and
it's kind of amazing how what itdoes, and I'm sure we're going
to look back a year later fromnow and be like, oh my gosh,
it's so different than what itwas as we're talking today, as
far as perfecting it and havingit do a better job of
understanding what you're tryingto say and what you're trying
(18:14):
to accomplish, but it'sdefinitely something you should
look into if you haven't donethat already.
Richard Thornton (18:19):
Those of you that are listening to us here
yeah, it's something that it'sworth keeping ahead of and
figuring out, because, on theone hand, a lot of people are
saying it's going to eliminate alot of jobs.
I really think it is going toeliminate a lot of jobs, but I
think the creation of theautomobile put a lot of horse
(18:42):
and bugger carriers and makersout of business too.
So I think we will morph intosomething.
This is going to be a hugemorph, and it will affect our
industry as well as everybodyelse's.
Justin Bogard (18:55):
I think in a short term it could replace a
lot of jobs.
But it's just like anythingelse that a computer does that
ends up replacing somebody's job, there always has to be
somebody that designs it andperfects it and understands it
and programs it on the back end.
So I think as many jobs thatyou end up losing short term, it
creates longer term jobs on theback end of it as well and it
(19:18):
just requires us as users upfront just to be more educated
as far as going after you knowemployment and getting just the
proper education onunderstanding like this is a
niche that you need to go after.
Like we're always short onnurses and doctors right, and
hospitals, so it's like there'salways a need for people to go
down that industry to, you know,fill those jobs for everybody.
Richard Thornton (19:39):
So yeah, I think it will morph.
It's just morphing more quicklythan we're used to in the past.
Justin Bogard (19:45):
I think so.
Yeah, I think this day and ageI think you're right Now do they
have an app on your phone?
Do you know that you can do iton your phone?
So I've just used it on thedesktop before.
Richard Thornton (19:54):
That's a good question.
I know I'm sure you could useit.
They don't have an app, or theymay have an app.
I don't think they do, but youcan use it.
I just use it through Google onmy desktop, so you can
certainly do that in your phone.
Justin Bogard (20:06):
Interesting.
All right, have you hadanything else interesting happen
to you this past week or twothat I haven't heard from you
already?
Richard Thornton (20:15):
Not in the notes space, not really For
those of you who were.
I can't remember what programwe did it on, but I was
discussing last time that thereare two warrants for my arrest.
Justin Bogard (20:35):
Oh yeah, Right now.
Richard Thornton (20:37):
And it's because I have a property in St
Louis.
They set two court dates forthe recloser proceedings and
since I hold the land contract,I'm technically the owner, or my
company is, and I didn't makemy court appearances because
they were sent to their longaddress.
(20:58):
They were sent to an oldaddress.
So I'm actually going to go tovirtual court tomorrow and find
out how to resolve all that.
So I can.
For those of you who arecurious about all that, ia
didn't even know that couldhappen, but I'm sure it can be
resolved fairly easily.
Justin Bogard (21:16):
Yeah, I think so too.
Richard Thornton (21:19):
But at this point it's fairly humorous.
It may cost me a little bit ofmoney to unwind.
Justin Bogard (21:24):
Keep us posted, richard.
Hopefully by those records thenext one we'll have an answer.
Richard Thornton (21:29):
Oh, I may be sitting here in a suit that's
got little stripes across it orsomething.
Justin Bogard (21:33):
An orange jumpsuit.
I think they wear the black andwhite horizontal stripes
anymore.
Richard Thornton (21:40):
No, I'm dating myself.
Justin Bogard (21:42):
There you go Right Another topic portfolio
management.
So just to kind of step intowhat it's like to be a portfolio
manager.
Richard Thornton (21:56):
There, what's going on for the fund for you?
Justin Bogard (21:58):
The dynamics of a fund or just a large portfolio
in general is quite humorous.
You obviously hope to haveeverybody on the positive
direction and everything goinggreat because you know you're
obviously making the most moneyyou can.
But you always have a few loansin a portfolio that you know
aren't going the way that youwant and may kind of drag some
(22:20):
things down.
But it's funny you have polaropposites, richard to where you
have some loans that are justpaying ahead and paying early
and eager to get the loanmatured and paid off, and you
have other loans that get, youknow, two or three months behind
and they kind of drag a littlebit.
So those two kind of offseteach other and everything else
just kind of lands in the sweetspot in the middle to where
(22:40):
they're.
Just you know they're on timeor they're just a little bit
late and it's just really coolto see that in the portfolio in
general.
So it just goes to show when wetalked about this before I think
we talked about this on aspecial webinar we had to where
it's much better to own a large,vast amount of notes, as it is
to own one, because you want theone note to be paying really
(23:01):
well and to go really well foryou, instead of the one that's
dragging you down.
Because if you have, you know,a bunch of loans, if one of them
goes down or a couple of themgo down and slow you down, it's
like it doesn't really pull downthe entire portfolio.
You don't really see a lot ofeffect from it.
So we have good balance in ourportfolio is what I'm saying and
that's what's nice to see as aportfolio manager.
Richard Thornton (23:22):
Yeah, and I think there's a lot of surprises
.
Hopefully most of them are forthe good.
But you know, there's our loan,like our what we call our
sister's loan, which isbasically we got out of.
It just got because there wasdispute between two sisters and
there was non payments and nowthere's a lot of payments and it
turns out it's going to be soldand been a very profitable deal
(23:46):
.
Justin Bogard (23:47):
Yes, some of the some of the more interesting
deals turned out to be the moreprofitable deals, because all we
do is just listen and we we try, we try to fix by just helping
the borrower and putting theborrower's needs before ours,
and they end up coming back tous and end up making the most
profitable loans for us.
So it's, we're pretty happywith those, definitely Right.
(24:10):
All right, richard, that'sabout all the time we have for
today.
Thanks again for being on ourpodcast episode number 16,
season five of the be the bankpodcast brought to you by
American Notebuyers.
Don't forget to check out ourYouTube channel, american
Notebuyers, and we will see youon the next episode.
Richard Thornton (24:26):
Yeah, if anybody has any topics that
would like us to address, toplease, you know, drop an email
to either Justin or me or text,and we'll be glad to put it on
the show info at a and b fundsdot com.
Justin Bogard (24:40):
till next time, see you.
Richard Thornton (24:41):
Okay, see you.
Narrator (24:47):
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 Notebuyers.
Thanks again for listening.
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