November 15, 2023 • 28 mins
We dive right into the intricacies of real estate investing, with a front-row seat to our learnings from note expo and what AI is doing. Listening to Damon West, a former footballer and sentenced to life in prision and now a best-selling author, was inspirational. We also indulge in some light-hearted banter about East Coast timezone differences during daylight savings and Richard's amusing encounters with whales and hummingbirds.
As we journey on, we draw parallels between the cumbersome process of manually filing paperwork with the county recorder and the ease of accomplishing tasks online in the digital era. Discover how AI is fundamentally altering real estate procedures such as buying lists, creating renderings, and streamlining complex tasks. We delve into the implications of AI replacing mundane tasks, and how it can potentially alter human interactions. We extend the conversation to AI's influence over a spectrum of industries, focusing primarily on real estate. From pre-operation building mapping, loan package analysis, to extracting information from documents, AI is genuinely the game-changer. We conclude by emphasizing the importance of caution when integrating AI into business operations. Tune in for a thought-provoking discussion!
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,
Look 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, JustinBogard.
Justin Bogard (00:46):
Welcome back to another episode number 23 to be
exact, on season five on the Bethe Bank podcast.
Just a few more episodes lefttill the end of the season.
Today we are going to actuallybe talking a little bit more
about AI, and we've talked aboutthis in the past.
I recently went to a noteconference and we're going to be
discussing kind of what Ilearned from that as well, and
(01:07):
you're going to see Mr RichardThornton on today as my co-host,
so stay tuned.
Thornton Thornton, thorntonThornton.
How's it going?
Richard Thornton (01:25):
Pretty good, Mr Justin.
How is it in your neck of thewoods today?
Justin Bogard (01:30):
We are still hovering around the mid 60, high
70 window.
Today might be the last day forthat.
The daylight savings stuff isreally messing with me.
Yesterday the girls and I wentto dinner after school and met
my dad because he was on thenorth side of Indianapolis,
which is kind of where we live,and they get off the bus around
(01:52):
like 415 or so.
Then we're driving over to meethim.
I think it's around like maybe445 and it's already getting
dark.
It's just kind of ominous.
So my time zone is the Easterntime zone, as you know.
But for the listening audiencehere I am on the very west of
the Eastern time zone.
So like states like Maine thatare the furthest east that you
(02:17):
go in that time zone slot thesunrise and sunset is
significantly different thanmine.
So I think it's around, richard, maybe 720 to 730 now the
sunrise is and the sunset ismore like right at five.
So it's only going to get worse.
Richard Thornton (02:33):
For the next month.
It's a little bit like livingin Norway or someplace like that
.
I've been there at both seasons.
I've been in Norway during thesummer solstice, where it never
quite gets dark Long.
About midnight it gets sort ofwhat we would call dusk, and
then the sun comes back up.
And then I've been there moretowards November, where it's
(02:57):
just dark all the time.
Justin Bogard (03:01):
Wow.
Richard Thornton (03:02):
No fun.
Justin Bogard (03:03):
No fun at all.
So, on your time zone, whereyou're at Petaluma, are you in
the middle of the Pacific timezone?
Are you towards one side or theother, or do you even know what
?
Richard Thornton (03:12):
the line is yeah, I never really looked at
it like that.
Yeah, I think we're moretowards the eastern side, but we
never have any argument withthe fish out in the ocean.
But who gets to experience timefor it?
They don't seem to care.
Justin Bogard (03:31):
I like that.
I wasn't expecting you to saythat it's very funny.
Richard Thornton (03:34):
Yeah, well, I know that I've had some issues
with whales every once in awhile, but yeah.
You speak dolphin, I speakdolphin.
Didn't you ever watch Flipper?
Yes, that's what Flipper didall the time.
Justin Bogard (03:54):
Nothing like Flipper, well, yeah, I would try
to do it, but I'm laughing toomuch.
I'm just going to make evenmore.
Richard Thornton (04:03):
It's like what am I saying?
Justin Bogard (04:04):
Come on, all right.
Richard Thornton (04:10):
I will share something with you that was
quite odd and I still don't knowwhy it happened.
In my office here it's thesecond floor and I was looking
out of the window on a telephonepole and I counted, there was
15 hummingbirds that all decidedto sit on the telephone line,
(04:35):
sort of bundled up together.
I don't think I've ever seen 15hummingbirds in one spot one
time, certainly stationary, everin my life, yeah.
Justin Bogard (04:49):
I don't think I've seen that many before.
I've seen two.
My grandmother's got somereally cool feeders at her house
and she likes to feed thehummingbirds and they'll just
sit there just like cover,moving their wings at.
You know a rapid pace that noone can even tell their if it
moving.
Anyways, I wanted to bring upnote expo because there let's go
(05:12):
.
Richard Thornton (05:12):
Whales and hummingbirds.
Justin Bogard (05:13):
No, no, it's not Okay.
This is not beat.
Be the bird or be the whale.
Richard Thornton (05:19):
We'll teach you how to be the bird.
Somebody the bird.
Okay, go ahead.
Justin Bogard (05:26):
Dallas, texas.
For those of you that are justlistening to us, we also film
and stream this on our Americannote buyers YouTube channel, so
come check us out there.
So this is a event that I go toannually.
You did not go this year.
Richard Thornton (05:39):
But I went this year.
Justin Bogard (05:40):
I'm sorry what.
Richard Thornton (05:41):
I was a bad boy.
I did not.
Justin Bogard (05:45):
Well, it's fun, you know.
We get to see a lot of ourpeople in the note community
that we know throughout the yearand we don't get to see them in
person a Whole lot, but it'skind of cool.
Everyone meets at one spot.
This is kind of the biggest onein the year that there are
other conferences out there forno investing, but this is what's
considered the the biggest one.
So we had a keynote speakerthere.
His name was Damon West, andDamon was a Pretty good high
(06:11):
school athlete in football andscrew up in Texas I forget what
city and then he actually wasgood enough to get a division
one scholarship to a College inTexas and so he went there and I
think I don't know if was rightwhen he got there or during his
college season he ended uphurting himself pretty bad I
think it was a shoulder orsomething to where he couldn't
play anymore, and then so hewent into like the financial
(06:33):
industry, working at like a WallStreet type of job.
I'm trying to fast-track this tothe answer, richard.
So fast track.
Yeah, he ended up after a fewyears doing that, gotten, got
into like meth and got into somedrugs and then he ended up
being like a I don't know if youcall him a professional burglar
(06:53):
, but basically he was breakinginto people's houses and stuff
and then eventually he gotcaught by the by SWAT, I would
assume and so then he got Sentto jail and then he had a trial
and during the trial the juryconvicted him of so many counts
of burglary and they Suggestedto the judge to sentence him for
(07:15):
life in prison, which life inprison and the state of Texas, I
believe, is like over 70 years.
So they did convict him of thatand they and they put him in
jail and they went to a supermax facility in the state of
Texas I forget where.
I think this is close to Dallasor maybe close to Houston, but
he went there and so he's, hehas to go to jail and he's he's
(07:37):
telling about the story, aboutyou know how.
He's just this, you know this,this young or white kid I would
say he's probably like it andmaybe in his let's just call it
like late 20s, mid, early 30s,and so he goes to jail for about
six or seven years and tellsthe stories about how he has to
get along with, you know, peopleand stuff and his, his whole
(08:01):
thing about the story was beinga coffee bean and so after about
six or seven years, theProbation or the parole hearing
came up for him, his firstparole hearing, and they
basically said, like you know,you, you have just changed this
jail and we just we want tounderstand like how, how this
happened and stuff, and and sohe was explaining the story
(08:23):
about how he was just trying tobe a coffee being and just what
that means is like he's justtrying to bring positivity to
everybody and everything aroundhim, and he got this be the
coffee beans from another guy ina different, in a different
prison and so he ended upgetting out on parole and he's
able to go around to differentJails and and he works at
(08:47):
Networks.
He goes, does a lot of speakingthings for state farm agencies
and stuff and speaking about hisinspirational story and stuff.
So he's done like a couple ofcollege teams Clemson, alabama,
he's.
He's done this stuff for likethe Dallas Cowboys and it's a
really cool motivational thing.
So, anyways, the same as DamonWest.
If you guys look him up, it'scalled be the coffee bean, his
book.
(09:07):
It's a definitely a two-timebest-selling Book on the New
York Times, so that was theopener for that and I was pretty
, pretty excited after that.
Richard Thornton (09:19):
So is there any metaphor about getting
roasted or anything like that?
Justin Bogard (09:24):
It could be.
I think about that.
That's a good one.
I Mean yeah, but you need to.
I don't want to spoil the wholething.
I'll let you guys read theexcerpt on it.
But it's a pretty.
It's a pretty great story.
I'm definitely gonna get thebook, or at least the audiobook,
if I can't get the book to readit.
Pretty cool.
But the the whole premisebehind the note.
Expo is just a conference thatKind of gives you the flavor of
(09:48):
what's been happening throughoutthe year and a flavor of what
they see is gonna happening,gonna happen here in the future,
with, you know, all theinterest rates rising, with all
the the negative connotationthat comes with, like commercial
loans being called do and andhow, you know office space in
the downtown metro areas arebecoming very vacant, like 20 to
(10:09):
25 plus Percent vacancy.
So that's, that's gonna be aproblem and I don't think it's
gonna get any better.
Richard Thornton (10:16):
What are they saying about commercial?
Justin Bogard (10:18):
So they're saying just be, be weary of the fact
that you know if anybody is inapartment syndications or
multi-family syndications likeyou, that's not the right
investment to be in right now.
There'll be some people thatthat can come out Okay in this,
but it all signs are pointingtowards like that's not what you
want to do right now.
You want to be a little bitmore conservative and the
(10:39):
residential space isn't nearlyas complex and and Dire as the
commercial space is right now.
Is is is the crux of whatthey're saying.
So it's good to be in the, inthe, in the note business and
the residential side, which is,you know, primarily what we're
doing exactly right.
Richard Thornton (10:59):
Yeah, exactly right.
Justin Bogard (11:02):
So one of the talks you ever heard of a TED
talk.
Richard Thornton (11:06):
I've heard of many Ted ducks.
Justin Bogard (11:07):
Okay, so you know the premise behind a TED talk,
where it's just a quick Talk onjust a topic and it's really
impactful.
Richard Thornton (11:14):
I know Ted personally.
Justin Bogard (11:16):
Ted talk, his name's talk, hmm.
So Bob repasses the guy thatputs on this note expo one of
the guys and he does his ownversion of Ted talk called note
talks, and he has a few peoplealways go up there.
They give like just 15 minutespeeches about a certain topic
and stuff and one of thespeeches was the guy for Company
(11:38):
called paper stack in therelike an online exchange company
that that buys and that off hasa marketplace for people to buy
and sell like real estate notesstuff.
So he's the CEO and he gets upthere and he's he's a guy that's
really into tech and always is.
It's like finding out ways, youknow, to be efficient and use
automation and stuff like that.
And so they we're talking aboutAI and they were talking about
(12:00):
how they're trying to integrateyou know AI as much as possible
and a lot of their you knowSteps that they do and they see
AI, just you know, everexploding even more For what
they can do to our industry,because our industry is more
kind of archaic.
You know we for the longesttime and I'm sure, richard, you
know this feeling because you'vebeen in the traditional real
(12:22):
estate stuff a lot Longer than Ihave.
But, you know, used to have togo to the county to record
things.
There wasn't a way to sendthings electronically, right,
used to have to actually reviewstuff in person, right, richard,
at the county and supposed tolike having somebody you know
create a file or a document foryou and send it to you in 48
hours.
So, things were way different.
You know, not too long ago,would you say maybe 12 to 15
(12:44):
years ago, it was probably stilllike that.
Richard Thornton (12:46):
Yeah, so 15, 15.
Justin Bogard (12:49):
So it's been very recent that we've been able to
do like online Notarizations.
You know virtual closings, youknow researching anything that
you need to do online as opposedto like going to the courthouse
so you can, you pretty much doeverything virtual now with it
comes to real estate, and sothey were just talking about how
they're using and implementingAI into the different ways that
(13:10):
they can close transactions.
Richard Thornton (13:14):
So that's interesting.
I mean I would, I would thinkthat that would be as you're
saying, that, and I'm actuallythinking that there are some
counties that are still back inthe 70s, you know, I mean Go to
go to Astubula, ohio, and ohyeah.
You, you have to what.
(13:35):
You heard me tell stories aboutthat, but yeah you have to file,
you have to either walk in thedoor and put it in the the
filing box Yourself on thecounter, or you have to get
somebody to walk it in for you,and it cost you anywhere from 75
to $100.
And if you're out of state, likeI am, you mail it to the, to
the Person that's going torecord it not the recorder, but
(13:58):
the person who's going to walkit over to the recorder's office
and they set it in there, andso in counties like that, ai is
not going to have much of animpact for a while.
However, in in largercommunities and I don't mean I'm
gonna talk about San Francisco,petaluma or or, but I mean
cities, I think of probably50,000 and 60,000 or over for
(14:22):
the most part we can go in anddownload those docs
automatically off their websites, and In that case, any county
that has done that AI is goingto be directly applicable to
that.
I mean, we talk about buyinglists right now.
Yeah, they'll be able to use aAI crawler that'll walk through
(14:48):
Any database and be able to tellyou exactly when the mortgages
do what the dates are.
It a lot of time you go downthe.
The detail information will bepretty spectacular, I think.
Justin Bogard (15:01):
Yeah, just even outside of Our, our industry, of
what we're talking about withAI being applicable, it's it's
just amazing in general what itcan do.
So recently I just sawsomething on I think it was
linked in and it was a post ofshowing Somebody that did like a
drawing of something, and theydid it by hand and then they had
(15:22):
AI take it and render it andmake it like how it, how it it
thinks it should look, and itwas just like it was so unique,
and so it was really cool how AIwas able to, you know, do what
it did.
But it's interesting.
So I have mixed feelings aboutthis.
At first, you know, I was kindof taken back from this and I
(15:44):
was thinking all right, what is,what are we talking about?
Ai?
Obviously it means artificialintelligence, but what is it
really doing and what are wetalking about?
So it's a quantum computer,basically, that's running bits
of information and analyzingthings at a rate that we can't
even fathom, and then, on top ofthat, it has the ability to
kind of learn and do thingsbased on what it sees and what's
(16:08):
going on.
So it's pretty neat in generalof how that works.
But in the same token, I alsohave my reservations about like
what?
What should we be using thisfor?
Is it is?
It should be like simple,mundane tasks Like you know, we
talked about whatever episode itwas a while back or should it
be like doing processing thingsthat are very complex and have
(16:31):
sometimes they need a humaninteraction to them, or what we
perceive to have a humaninteraction to it, to make a
decision that's not only basedon logic but also based on
emotion?
It just seems kind offarfetched of how, how that
should be working in society,because, if you think about it,
I mean it could replaceeverything and every everyone
around us, right, if it, if itwent to scale to the point to
(16:54):
where you know it was able to doanything that a human can do.
Richard Thornton (16:59):
Yeah, at some point I still see it as a tool.
I know the.
You know there were a number ofpeople running around and I've
been following this a lot, asyou know, Okay but you know,
with their hair on fire, sayingthe sky is falling and we're all
going to be out of jobs in 10years, and things like that.
Well, people adapt.
So the story I like to tellabout that is I didn't realize
(17:21):
this, but when the mechanicaltelephone operator came out
remember, you see movies, yousee the it's usually a woman
operator sitting there sayingyou know number please, and
sticking all the little all ofthose operators, nationwide,
were replaced in one night.
(17:41):
So they had a nationwiderollout of all the telephone
companies and they completelyswitched that old system off and
went to the new, moremechanized system that you know
we have an approximation of now,at once.
Well, that was hundreds ofthousands of jobs.
Guess what?
(18:01):
You know, we didn't have thismassive employment or anything
like that, and they did that allat once.
And so I think there's anatural progression where people
lose their jobs and people findnew ones, and I think that's
that's going to happen here.
That's sort of one thing.
The other thing is that I?
The more I heard about AI, Ithought, well, it's not really
(18:25):
going to be applicable to whatwe do Because, let's face it,
notes are just too funky.
But last week I was listening toa podcast where the military is
now using AI in drones thatwill fit in the palm of your
(18:45):
hand.
The entire drone and the bladeswill fit into your hand and
they throw it up in the air andturn the sucker on and it'll go
into a building and it actuallyflies all around through all the
hallways of the building andthis sounds really sci-fi.
It identifies the bad guys, youknow, it can tell a bad guy
(19:07):
from a good guy somehow andcompletely map the building.
So before they even go in abuilding, they totally know
what's going on.
Well, the uncertainties thatthey have in all of that are far
beyond anything that we'regoing to be presenting them in
notes.
So I mean, we're pretty simplecompared to all that.
(19:28):
Now, I don't think what we'redoing is all that profitable.
So, there again, I don't thinkit's gonna be coming to a
theater soon, but I do thinkit's gonna change our industry
significantly.
Justin Bogard (19:41):
There's definitely a lot of efficiencies
that it can add.
It can analyze things beforeyou buy it and run Some of these
hedge funds.
They get a couple of hundred toa thousand loans that come in
and they have to look at thisthing and they usually have
several people thumbing throughan Excel spreadsheet, analyzing
it, looking at over, verifyingit.
(20:01):
But they can put this thing insome sort of AI filter based on
what it needs to be, and theycan give it some sort of score,
I guess, on each asset on whereit needs to be with certain
attributes, and they can plug inthere and then AI can run it
within, you know, like, let'sjust say, a billionth of a
second and spit out the resultsof what you could have taken
(20:22):
several hours to do or severaldays to do with several people.
So that it definitely gives theman advantage that the larger
players on that aspect of it andnot to mention it and you
mentioned this lightly on justgoing through that OCR, that you
know the character recognitionon documents and just reading
through it and skimming andpulling out, extracting
(20:44):
information based on how it'sworded and what it says in the
paragraph of exactly theinformation you need to like
write your next conveyance oryour next launch or assignment.
So there's a ton of advantagesthat does that way, and then you
still need someone to check itto make sure that it's operating
it correctly.
But there are some advantagesto that.
I definitely see that and Iagree with you.
(21:05):
It's not gonna like completely,you know, make things to where
nobody's gonna be able to closea transaction without AI.
It's just.
I think it's gonna make thingsmore efficient and a lot more
correct.
Richard Thornton (21:18):
Yeah, and so there's also I mean, you know
more about databases than I do,but another one I was listening
to there's a lot of relationaldatabase information that they
can they're already gathering,and just a very simple example,
that is and this certainly goesto the big boys, the guys on
Wall Street who are analyzingportfolios but will eventually
(21:40):
get down to us Somebody's youknow a paper stack or somebody's
gonna offer this on a smallerpackage but they found a very
close relationship between thenumber of days in which somebody
pays a credit card and theirchance of default on a mortgage,
(22:02):
on a home mortgage, like peoplewho pay their credit cards in
general within zero to five days, you know, have a maybe a 2%
chance of default and five to 10days have got a five.
And I'm making those numbers up.
But there's a directrelationship between those
things.
(22:22):
And it took AI on a huge, huge,because you can say, well, gee,
that's something you could dowith statistical database.
Yes, but it's taking astatistical database much, much
longer than it is AI to figurethose things out.
We will see a lot more of thattype of thing.
Justin Bogard (22:42):
Yeah, getting granular with those details.
Richard Thornton (22:45):
Yeah, which I found?
Is it fast-running, quitefrankly?
Justin Bogard (22:48):
Well, it'll help with forecasting Completely.
Yeah, completely.
It'll make things a lot moreaccurate as far as what's going
to happen, based on what didhappen going forward.
Richard Thornton (22:58):
To agree that people use their credit cards
more, their debit cards moretheir Apple Pay or whatever.
That's all collectible.
Yeah, you got to believe thatone of the big data sources that
Apple is getting out of yourApple Pay is they know what
you're buying and when you'rebuying it, and they're telling
whoever is selling something,what Justin and Richard are
(23:22):
buying and when they're buyingit.
Justin Bogard (23:25):
Exactly On the other side of the coin, it does
feel like it's space race.
What I mean by that is thatpeople are trying to and we'll
just say in, big companies aretrying to implement AI, I think,
too quickly and unique ways totry to be the first one to do
something, as opposed tostepping back and saying, hey,
(23:48):
wait a minute, let's refine thisand make sure this is an
appropriate application, or dowe need to rethink?
Do we want it doing AI, doingthis particular step or this
process right now, today, orshould we think about this
further down the road?
Because I think other people,like Elon Musk has mentioned,
we're going too fast.
(24:08):
We need to slow down.
As far as how we're introducingit, I feel like a lot of people
just want to rush and be like.
They hear the word AI oh great,I'm going to be able to run my
multi-billion dollar businessoff of two people and they're
thinking like how muchefficiency they can have.
Instead of going, wait a minute, let's take a step back here.
Richard Thornton (24:28):
It's a double-edged sword.
You mentioned quantum computersand I know you said quantum,
but I don't think you quitemeant a true quantum computer,
because I don't think weactually have a true quantum
computer yet.
But when we do, and we're closeto that, also pulling that
(24:48):
together with AI, what they'resaying is that our enemies who
will remain nameless at thispoint, but the bad guys, and not
just the mafia type of themafia's, but their countries are
(25:08):
racing as fast as they can onthis because they will be able
to crack all of our encryptionand everything eventually.
I mean what we know aboutencryption right now.
He's just going to fall by thewayside.
It's probably I think certainlywithin the next 20 years.
All this is going to happen.
Justin Bogard (25:29):
Well then, that is.
The other scary thing is thatwhatever you hear on the news
that we'll call in quote, thegood guys are doing the stuff
that you don't know that's goingon.
That the bad guys are doing isprobably either advancing what
we're doing or what we're saying, or it's at the same level.
So it's only a matter of timetill a criminal figures out how
to break something that we'vecreated, because that's their
(25:53):
job in life is to be the axiomof this.
Richard Thornton (25:56):
Right, right.
So I mean so bringing back downto where we are right now.
How is it going to affect us inthe next three to five years in
the node industry?
Probably not that much.
I mean.
I think it can help usunderwriting a.
I'll digress just a little bit,but one of my neighbors has one
(26:21):
of the largest secondaryshort-term rental companies in
the country.
What do I mean by secondary?
A lot of people, when they getonto Airbnb or VRBO, think that
they're actually dealing withAirbnb or VRBO, but there's a
whole white label behind them.
So, like they have any largerproperty, they go directly to
(26:44):
this group.
Well, they've found out thatthey're now able to underwrite.
They're already doing this.
If there's 25 different AItools that they have implemented
, they can underwrite somebody'scredit and see if they're a
good person to rent to withinseconds, and they could not do
that even last year.
(27:06):
They couldn't do that.
Do that, that's that speed.
Justin Bogard (27:12):
That's interesting.
Yeah, ai, what can you say?
Richard Thornton (27:20):
AI, AI.
Justin Bogard (27:21):
All right.
So that was a good topic today,beating that up.
Thanks for hanging out with ustoday.
And this is episode number 23of season five on the B2B
Podcast.
I almost said broadcast on thepodcast.
Richard Thornton (27:33):
Podcast.
If you're from Maine.
It's podcast.
Justin Bogard (27:38):
Yes, yes, they would say it differently there.
Yes, I agree.
All right, we will see you guyson the next episode.
And Richard, as my friend Eddiewould say, I'm out of soap.
Richard Thornton (27:50):
All right, my friend, talk to you later.
Bye.
Narrator (28:17):
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,
Look 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, JustinBogard.
Justin Bogard (00:46):
Welcome back to another episode number 23 to be
exact, on season five on the Bethe Bank podcast.
Just a few more episodes lefttill the end of the season.
Today we are going to actuallybe talking a little bit more
about AI, and we've talked aboutthis in the past.
I recently went to a noteconference and we're going to be
discussing kind of what Ilearned from that as well, and
(01:07):
you're going to see Mr RichardThornton on today as my co-host,
so stay tuned.
Thornton Thornton, thorntonThornton.
How's it going?
Richard Thornton (01:25):
Pretty good, Mr Justin.
How is it in your neck of thewoods today?
Justin Bogard (01:30):
We are still hovering around the mid 60, high
70 window.
Today might be the last day forthat.
The daylight savings stuff isreally messing with me.
Yesterday the girls and I wentto dinner after school and met
my dad because he was on thenorth side of Indianapolis,
which is kind of where we live,and they get off the bus around
(01:52):
like 415 or so.
Then we're driving over to meethim.
I think it's around like maybe445 and it's already getting
dark.
It's just kind of ominous.
So my time zone is the Easterntime zone, as you know.
But for the listening audiencehere I am on the very west of
the Eastern time zone.
So like states like Maine thatare the furthest east that you
(02:17):
go in that time zone slot thesunrise and sunset is
significantly different thanmine.
So I think it's around, richard, maybe 720 to 730 now the
sunrise is and the sunset ismore like right at five.
So it's only going to get worse.
Richard Thornton (02:33):
For the next month.
It's a little bit like livingin Norway or someplace like that
.
I've been there at both seasons.
I've been in Norway during thesummer solstice, where it never
quite gets dark Long.
About midnight it gets sort ofwhat we would call dusk, and
then the sun comes back up.
And then I've been there moretowards November, where it's
(02:57):
just dark all the time.
Justin Bogard (03:01):
Wow.
Richard Thornton (03:02):
No fun.
Justin Bogard (03:03):
No fun at all.
So, on your time zone, whereyou're at Petaluma, are you in
the middle of the Pacific timezone?
Are you towards one side or theother, or do you even know what
?
Richard Thornton (03:12):
the line is yeah, I never really looked at
it like that.
Yeah, I think we're moretowards the eastern side, but we
never have any argument withthe fish out in the ocean.
But who gets to experience timefor it?
They don't seem to care.
Justin Bogard (03:31):
I like that.
I wasn't expecting you to saythat it's very funny.
Richard Thornton (03:34):
Yeah, well, I know that I've had some issues
with whales every once in awhile, but yeah.
You speak dolphin, I speakdolphin.
Didn't you ever watch Flipper?
Yes, that's what Flipper didall the time.
Justin Bogard (03:54):
Nothing like Flipper, well, yeah, I would try
to do it, but I'm laughing toomuch.
I'm just going to make evenmore.
Richard Thornton (04:03):
It's like what am I saying?
Justin Bogard (04:04):
Come on, all right.
Richard Thornton (04:10):
I will share something with you that was
quite odd and I still don't knowwhy it happened.
In my office here it's thesecond floor and I was looking
out of the window on a telephonepole and I counted, there was
15 hummingbirds that all decidedto sit on the telephone line,
(04:35):
sort of bundled up together.
I don't think I've ever seen 15hummingbirds in one spot one
time, certainly stationary, everin my life, yeah.
Justin Bogard (04:49):
I don't think I've seen that many before.
I've seen two.
My grandmother's got somereally cool feeders at her house
and she likes to feed thehummingbirds and they'll just
sit there just like cover,moving their wings at.
You know a rapid pace that noone can even tell their if it
moving.
Anyways, I wanted to bring upnote expo because there let's go
(05:12):
.
Richard Thornton (05:12):
Whales and hummingbirds.
Justin Bogard (05:13):
No, no, it's not Okay.
This is not beat.
Be the bird or be the whale.
Richard Thornton (05:19):
We'll teach you how to be the bird.
Somebody the bird.
Okay, go ahead.
Justin Bogard (05:26):
Dallas, texas.
For those of you that are justlistening to us, we also film
and stream this on our Americannote buyers YouTube channel, so
come check us out there.
So this is a event that I go toannually.
You did not go this year.
Richard Thornton (05:39):
But I went this year.
Justin Bogard (05:40):
I'm sorry what.
Richard Thornton (05:41):
I was a bad boy.
I did not.
Justin Bogard (05:45):
Well, it's fun, you know.
We get to see a lot of ourpeople in the note community
that we know throughout the yearand we don't get to see them in
person a Whole lot, but it'skind of cool.
Everyone meets at one spot.
This is kind of the biggest onein the year that there are
other conferences out there forno investing, but this is what's
considered the the biggest one.
So we had a keynote speakerthere.
His name was Damon West, andDamon was a Pretty good high
(06:11):
school athlete in football andscrew up in Texas I forget what
city and then he actually wasgood enough to get a division
one scholarship to a College inTexas and so he went there and I
think I don't know if was rightwhen he got there or during his
college season he ended uphurting himself pretty bad I
think it was a shoulder orsomething to where he couldn't
play anymore, and then so hewent into like the financial
(06:33):
industry, working at like a WallStreet type of job.
I'm trying to fast-track this tothe answer, richard.
So fast track.
Yeah, he ended up after a fewyears doing that, gotten, got
into like meth and got into somedrugs and then he ended up
being like a I don't know if youcall him a professional burglar
(06:53):
, but basically he was breakinginto people's houses and stuff
and then eventually he gotcaught by the by SWAT, I would
assume and so then he got Sentto jail and then he had a trial
and during the trial the juryconvicted him of so many counts
of burglary and they Suggestedto the judge to sentence him for
(07:15):
life in prison, which life inprison and the state of Texas, I
believe, is like over 70 years.
So they did convict him of thatand they and they put him in
jail and they went to a supermax facility in the state of
Texas I forget where.
I think this is close to Dallasor maybe close to Houston, but
he went there and so he's, hehas to go to jail and he's he's
(07:37):
telling about the story, aboutyou know how.
He's just this, you know this,this young or white kid I would
say he's probably like it andmaybe in his let's just call it
like late 20s, mid, early 30s,and so he goes to jail for about
six or seven years and tellsthe stories about how he has to
get along with, you know, peopleand stuff and his, his whole
(08:01):
thing about the story was beinga coffee bean and so after about
six or seven years, theProbation or the parole hearing
came up for him, his firstparole hearing, and they
basically said, like you know,you, you have just changed this
jail and we just we want tounderstand like how, how this
happened and stuff, and and sohe was explaining the story
(08:23):
about how he was just trying tobe a coffee being and just what
that means is like he's justtrying to bring positivity to
everybody and everything aroundhim, and he got this be the
coffee beans from another guy ina different, in a different
prison and so he ended upgetting out on parole and he's
able to go around to differentJails and and he works at
(08:47):
Networks.
He goes, does a lot of speakingthings for state farm agencies
and stuff and speaking about hisinspirational story and stuff.
So he's done like a couple ofcollege teams Clemson, alabama,
he's.
He's done this stuff for likethe Dallas Cowboys and it's a
really cool motivational thing.
So, anyways, the same as DamonWest.
If you guys look him up, it'scalled be the coffee bean, his
book.
(09:07):
It's a definitely a two-timebest-selling Book on the New
York Times, so that was theopener for that and I was pretty
, pretty excited after that.
Richard Thornton (09:19):
So is there any metaphor about getting
roasted or anything like that?
Justin Bogard (09:24):
It could be.
I think about that.
That's a good one.
I Mean yeah, but you need to.
I don't want to spoil the wholething.
I'll let you guys read theexcerpt on it.
But it's a pretty.
It's a pretty great story.
I'm definitely gonna get thebook, or at least the audiobook,
if I can't get the book to readit.
Pretty cool.
But the the whole premisebehind the note.
Expo is just a conference thatKind of gives you the flavor of
(09:48):
what's been happening throughoutthe year and a flavor of what
they see is gonna happening,gonna happen here in the future,
with, you know, all theinterest rates rising, with all
the the negative connotationthat comes with, like commercial
loans being called do and andhow, you know office space in
the downtown metro areas arebecoming very vacant, like 20 to
(10:09):
25 plus Percent vacancy.
So that's, that's gonna be aproblem and I don't think it's
gonna get any better.
Richard Thornton (10:16):
What are they saying about commercial?
Justin Bogard (10:18):
So they're saying just be, be weary of the fact
that you know if anybody is inapartment syndications or
multi-family syndications likeyou, that's not the right
investment to be in right now.
There'll be some people thatthat can come out Okay in this,
but it all signs are pointingtowards like that's not what you
want to do right now.
You want to be a little bitmore conservative and the
(10:39):
residential space isn't nearlyas complex and and Dire as the
commercial space is right now.
Is is is the crux of whatthey're saying.
So it's good to be in the, inthe, in the note business and
the residential side, which is,you know, primarily what we're
doing exactly right.
Richard Thornton (10:59):
Yeah, exactly right.
Justin Bogard (11:02):
So one of the talks you ever heard of a TED
talk.
Richard Thornton (11:06):
I've heard of many Ted ducks.
Justin Bogard (11:07):
Okay, so you know the premise behind a TED talk,
where it's just a quick Talk onjust a topic and it's really
impactful.
Richard Thornton (11:14):
I know Ted personally.
Justin Bogard (11:16):
Ted talk, his name's talk, hmm.
So Bob repasses the guy thatputs on this note expo one of
the guys and he does his ownversion of Ted talk called note
talks, and he has a few peoplealways go up there.
They give like just 15 minutespeeches about a certain topic
and stuff and one of thespeeches was the guy for Company
(11:38):
called paper stack in therelike an online exchange company
that that buys and that off hasa marketplace for people to buy
and sell like real estate notesstuff.
So he's the CEO and he gets upthere and he's he's a guy that's
really into tech and always is.
It's like finding out ways, youknow, to be efficient and use
automation and stuff like that.
And so they we're talking aboutAI and they were talking about
(12:00):
how they're trying to integrateyou know AI as much as possible
and a lot of their you knowSteps that they do and they see
AI, just you know, everexploding even more For what
they can do to our industry,because our industry is more
kind of archaic.
You know we for the longesttime and I'm sure, richard, you
know this feeling because you'vebeen in the traditional real
(12:22):
estate stuff a lot Longer than Ihave.
But, you know, used to have togo to the county to record
things.
There wasn't a way to sendthings electronically, right,
used to have to actually reviewstuff in person, right, richard,
at the county and supposed tolike having somebody you know
create a file or a document foryou and send it to you in 48
hours.
So, things were way different.
You know, not too long ago,would you say maybe 12 to 15
(12:44):
years ago, it was probably stilllike that.
Richard Thornton (12:46):
Yeah, so 15, 15.
Justin Bogard (12:49):
So it's been very recent that we've been able to
do like online Notarizations.
You know virtual closings, youknow researching anything that
you need to do online as opposedto like going to the courthouse
so you can, you pretty much doeverything virtual now with it
comes to real estate, and sothey were just talking about how
they're using and implementingAI into the different ways that
(13:10):
they can close transactions.
Richard Thornton (13:14):
So that's interesting.
I mean I would, I would thinkthat that would be as you're
saying, that, and I'm actuallythinking that there are some
counties that are still back inthe 70s, you know, I mean Go to
go to Astubula, ohio, and ohyeah.
You, you have to what.
(13:35):
You heard me tell stories aboutthat, but yeah you have to file,
you have to either walk in thedoor and put it in the the
filing box Yourself on thecounter, or you have to get
somebody to walk it in for you,and it cost you anywhere from 75
to $100.
And if you're out of state, likeI am, you mail it to the, to
the Person that's going torecord it not the recorder, but
(13:58):
the person who's going to walkit over to the recorder's office
and they set it in there, andso in counties like that, ai is
not going to have much of animpact for a while.
However, in in largercommunities and I don't mean I'm
gonna talk about San Francisco,petaluma or or, but I mean
cities, I think of probably50,000 and 60,000 or over for
(14:22):
the most part we can go in anddownload those docs
automatically off their websites, and In that case, any county
that has done that AI is goingto be directly applicable to
that.
I mean, we talk about buyinglists right now.
Yeah, they'll be able to use aAI crawler that'll walk through
(14:48):
Any database and be able to tellyou exactly when the mortgages
do what the dates are.
It a lot of time you go downthe.
The detail information will bepretty spectacular, I think.
Justin Bogard (15:01):
Yeah, just even outside of Our, our industry, of
what we're talking about withAI being applicable, it's it's
just amazing in general what itcan do.
So recently I just sawsomething on I think it was
linked in and it was a post ofshowing Somebody that did like a
drawing of something, and theydid it by hand and then they had
(15:22):
AI take it and render it andmake it like how it, how it it
thinks it should look, and itwas just like it was so unique,
and so it was really cool how AIwas able to, you know, do what
it did.
But it's interesting.
So I have mixed feelings aboutthis.
At first, you know, I was kindof taken back from this and I
(15:44):
was thinking all right, what is,what are we talking about?
Ai?
Obviously it means artificialintelligence, but what is it
really doing and what are wetalking about?
So it's a quantum computer,basically, that's running bits
of information and analyzingthings at a rate that we can't
even fathom, and then, on top ofthat, it has the ability to
kind of learn and do thingsbased on what it sees and what's
(16:08):
going on.
So it's pretty neat in generalof how that works.
But in the same token, I alsohave my reservations about like
what?
What should we be using thisfor?
Is it is?
It should be like simple,mundane tasks Like you know, we
talked about whatever episode itwas a while back or should it
be like doing processing thingsthat are very complex and have
(16:31):
sometimes they need a humaninteraction to them, or what we
perceive to have a humaninteraction to it, to make a
decision that's not only basedon logic but also based on
emotion?
It just seems kind offarfetched of how, how that
should be working in society,because, if you think about it,
I mean it could replaceeverything and every everyone
around us, right, if it, if itwent to scale to the point to
(16:54):
where you know it was able to doanything that a human can do.
Richard Thornton (16:59):
Yeah, at some point I still see it as a tool.
I know the.
You know there were a number ofpeople running around and I've
been following this a lot, asyou know, Okay but you know,
with their hair on fire, sayingthe sky is falling and we're all
going to be out of jobs in 10years, and things like that.
Well, people adapt.
So the story I like to tellabout that is I didn't realize
(17:21):
this, but when the mechanicaltelephone operator came out
remember, you see movies, yousee the it's usually a woman
operator sitting there sayingyou know number please, and
sticking all the little all ofthose operators, nationwide,
were replaced in one night.
(17:41):
So they had a nationwiderollout of all the telephone
companies and they completelyswitched that old system off and
went to the new, moremechanized system that you know
we have an approximation of now,at once.
Well, that was hundreds ofthousands of jobs.
Guess what?
(18:01):
You know, we didn't have thismassive employment or anything
like that, and they did that allat once.
And so I think there's anatural progression where people
lose their jobs and people findnew ones, and I think that's
that's going to happen here.
That's sort of one thing.
The other thing is that I?
The more I heard about AI, Ithought, well, it's not really
(18:25):
going to be applicable to whatwe do Because, let's face it,
notes are just too funky.
But last week I was listening toa podcast where the military is
now using AI in drones thatwill fit in the palm of your
(18:45):
hand.
The entire drone and the bladeswill fit into your hand and
they throw it up in the air andturn the sucker on and it'll go
into a building and it actuallyflies all around through all the
hallways of the building andthis sounds really sci-fi.
It identifies the bad guys, youknow, it can tell a bad guy
(19:07):
from a good guy somehow andcompletely map the building.
So before they even go in abuilding, they totally know
what's going on.
Well, the uncertainties thatthey have in all of that are far
beyond anything that we'regoing to be presenting them in
notes.
So I mean, we're pretty simplecompared to all that.
(19:28):
Now, I don't think what we'redoing is all that profitable.
So, there again, I don't thinkit's gonna be coming to a
theater soon, but I do thinkit's gonna change our industry
significantly.
Justin Bogard (19:41):
There's definitely a lot of efficiencies
that it can add.
It can analyze things beforeyou buy it and run Some of these
hedge funds.
They get a couple of hundred toa thousand loans that come in
and they have to look at thisthing and they usually have
several people thumbing throughan Excel spreadsheet, analyzing
it, looking at over, verifyingit.
(20:01):
But they can put this thing insome sort of AI filter based on
what it needs to be, and theycan give it some sort of score,
I guess, on each asset on whereit needs to be with certain
attributes, and they can plug inthere and then AI can run it
within, you know, like, let'sjust say, a billionth of a
second and spit out the resultsof what you could have taken
(20:22):
several hours to do or severaldays to do with several people.
So that it definitely gives theman advantage that the larger
players on that aspect of it andnot to mention it and you
mentioned this lightly on justgoing through that OCR, that you
know the character recognitionon documents and just reading
through it and skimming andpulling out, extracting
(20:44):
information based on how it'sworded and what it says in the
paragraph of exactly theinformation you need to like
write your next conveyance oryour next launch or assignment.
So there's a ton of advantagesthat does that way, and then you
still need someone to check itto make sure that it's operating
it correctly.
But there are some advantagesto that.
I definitely see that and Iagree with you.
(21:05):
It's not gonna like completely,you know, make things to where
nobody's gonna be able to closea transaction without AI.
It's just.
I think it's gonna make thingsmore efficient and a lot more
correct.
Richard Thornton (21:18):
Yeah, and so there's also I mean, you know
more about databases than I do,but another one I was listening
to there's a lot of relationaldatabase information that they
can they're already gathering,and just a very simple example,
that is and this certainly goesto the big boys, the guys on
Wall Street who are analyzingportfolios but will eventually
(21:40):
get down to us Somebody's youknow a paper stack or somebody's
gonna offer this on a smallerpackage but they found a very
close relationship between thenumber of days in which somebody
pays a credit card and theirchance of default on a mortgage,
(22:02):
on a home mortgage, like peoplewho pay their credit cards in
general within zero to five days, you know, have a maybe a 2%
chance of default and five to 10days have got a five.
And I'm making those numbers up.
But there's a directrelationship between those
things.
(22:22):
And it took AI on a huge, huge,because you can say, well, gee,
that's something you could dowith statistical database.
Yes, but it's taking astatistical database much, much
longer than it is AI to figurethose things out.
We will see a lot more of thattype of thing.
Justin Bogard (22:42):
Yeah, getting granular with those details.
Richard Thornton (22:45):
Yeah, which I found?
Is it fast-running, quitefrankly?
Justin Bogard (22:48):
Well, it'll help with forecasting Completely.
Yeah, completely.
It'll make things a lot moreaccurate as far as what's going
to happen, based on what didhappen going forward.
Richard Thornton (22:58):
To agree that people use their credit cards
more, their debit cards moretheir Apple Pay or whatever.
That's all collectible.
Yeah, you got to believe thatone of the big data sources that
Apple is getting out of yourApple Pay is they know what
you're buying and when you'rebuying it, and they're telling
whoever is selling something,what Justin and Richard are
(23:22):
buying and when they're buyingit.
Justin Bogard (23:25):
Exactly On the other side of the coin, it does
feel like it's space race.
What I mean by that is thatpeople are trying to and we'll
just say in, big companies aretrying to implement AI, I think,
too quickly and unique ways totry to be the first one to do
something, as opposed tostepping back and saying, hey,
(23:48):
wait a minute, let's refine thisand make sure this is an
appropriate application, or dowe need to rethink?
Do we want it doing AI, doingthis particular step or this
process right now, today, orshould we think about this
further down the road?
Because I think other people,like Elon Musk has mentioned,
we're going too fast.
(24:08):
We need to slow down.
As far as how we're introducingit, I feel like a lot of people
just want to rush and be like.
They hear the word AI oh great,I'm going to be able to run my
multi-billion dollar businessoff of two people and they're
thinking like how muchefficiency they can have.
Instead of going, wait a minute, let's take a step back here.
Richard Thornton (24:28):
It's a double-edged sword.
You mentioned quantum computersand I know you said quantum,
but I don't think you quitemeant a true quantum computer,
because I don't think weactually have a true quantum
computer yet.
But when we do, and we're closeto that, also pulling that
(24:48):
together with AI, what they'resaying is that our enemies who
will remain nameless at thispoint, but the bad guys, and not
just the mafia type of themafia's, but their countries are
(25:08):
racing as fast as they can onthis because they will be able
to crack all of our encryptionand everything eventually.
I mean what we know aboutencryption right now.
He's just going to fall by thewayside.
It's probably I think certainlywithin the next 20 years.
All this is going to happen.
Justin Bogard (25:29):
Well then, that is.
The other scary thing is thatwhatever you hear on the news
that we'll call in quote, thegood guys are doing the stuff
that you don't know that's goingon.
That the bad guys are doing isprobably either advancing what
we're doing or what we're saying, or it's at the same level.
So it's only a matter of timetill a criminal figures out how
to break something that we'vecreated, because that's their
(25:53):
job in life is to be the axiomof this.
Richard Thornton (25:56):
Right, right.
So I mean so bringing back downto where we are right now.
How is it going to affect us inthe next three to five years in
the node industry?
Probably not that much.
I mean.
I think it can help usunderwriting a.
I'll digress just a little bit,but one of my neighbors has one
(26:21):
of the largest secondaryshort-term rental companies in
the country.
What do I mean by secondary?
A lot of people, when they getonto Airbnb or VRBO, think that
they're actually dealing withAirbnb or VRBO, but there's a
whole white label behind them.
So, like they have any largerproperty, they go directly to
(26:44):
this group.
Well, they've found out thatthey're now able to underwrite.
They're already doing this.
If there's 25 different AItools that they have implemented
, they can underwrite somebody'scredit and see if they're a
good person to rent to withinseconds, and they could not do
that even last year.
(27:06):
They couldn't do that.
Do that, that's that speed.
Justin Bogard (27:12):
That's interesting.
Yeah, ai, what can you say?
Richard Thornton (27:20):
AI, AI.
Justin Bogard (27:21):
All right.
So that was a good topic today,beating that up.
Thanks for hanging out with ustoday.
And this is episode number 23of season five on the B2B
Podcast.
I almost said broadcast on thepodcast.
Richard Thornton (27:33):
Podcast.
If you're from Maine.
It's podcast.
Justin Bogard (27:38):
Yes, yes, they would say it differently there.
Yes, I agree.
All right, we will see you guyson the next episode.
And Richard, as my friend Eddiewould say, I'm out of soap.
Richard Thornton (27:50):
All right, my friend, talk to you later.
Bye.
Narrator (28:17):
Thanks again for listening.
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Joyce Sapp, 76; Bryan Herrera, 16; and Laurance Webb, 32—three Miami residents whose lives were stolen in brutal, unsolved homicides. Cold Case Files: Miami follows award‑winning radio host and City of Miami Police reserve officer Enrique Santos as he partners with the department’s Cold Case Homicide Unit, determined family members, and the advocates who spend their lives fighting for justice for the victims who can no longer fight for themselves.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.