Episode 42: Unleashing the Sales Warrior Within: An Interview with Eric Rosenstock

In this podcast episode, Mordecai Rosenberg hosts Eric Rosenstock, a seasoned loan originator, to discuss various aspects of the multifamily mortgage industry. They start by discussing Eric's career journey, noting the importance of persistence, self-belief, and willingness to learn in achieving success. Eric's multifaceted role at Greystone involves building relationships, analyzing deal structures, and coordinating with various teams to ensure successful transactions.

 Discussing the multifamily loan origination process, they highlight how originators must understand the needs of multifamily owners and recommend suitable loan products. The conversation underlines the importance of trust in these relationships, emphasizing that originators must truly understand their clients' needs and communicate effectively to foster this trust.

The conversation wraps up with a discussion on market challenges, the importance of execution, and the value of knowledge and experience. They delve into the complexity of the current market, noting the challenges presented by rising interest rates and the ongoing impact of the pandemic. The pair suggest that in the face of these obstacles, more sophisticated producers with a deep understanding of their product and the market stand a better chance of success.

What separates the top salespeople from the rest of the industry. (0:15)
What’s the sales process like when you’re starting out? (1:43)
Perseverance in the face of competition. (6:44)
What’s an originator? -. (14:54)
Selling on knowledge vs. selling on sales. (17:00)
Balancing origination with family. (25:24)
How to avoid big mistakes in business and life. (30:41)
The importance of having a relationship with your clients -. (36:24)
The importance of having a mentor in the industry. (42:07)
What are you doing if you’re starting out? (49:05)
What’s the return on equity? -. (54:05)

lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt

Episode Transcript

Mordecai Rosenberg (00:15):
Welcome back to the Origination podcast where
we speak to the top salespeoplein the multifamily industry to
try to understand what separatesthe top performers from the rest
of the pack. On this episode,I'll be speaking with Eric
Rosenstock, Managing Director atGreystone. We talk a lot about
what it takes to be successfulin origination. But the first

(00:37):
thing you need to do is you needto get that opportunity you need
to get hired as an originator.
How do you do that? In someways, the sales process starts
then; it starts with puttingyourself in a position where you
can be successful. As you'llhear in our discussion, that
also takes persistence, as wellas this unflinching confidence

(00:58):
that you can be successful. Howdo you grow that quality of
confidence? I'm still not sureif it's something that's just
factory installed, and eitheryou have to do, or you don't, or
if it can be developed. But Iknow and I've seen firsthand how
Eric has persisted, you know,through the tough times, to be

(01:24):
able to bring in billions ofdollars of business. There's a
lot to be learned from thisconversation. I hope you enjoy
it. Without further ado, let'stalk to Eric.
Eric Rosenstock. I'm glad tofinally have you on the podcast.

Eric Rosenstock (01:43):
Yeah. Thank you Mordecai, for having me. I
appreciate it.

Mordecai Rosenberg (01:48):
Now, Eric, normally, I start by talking
about, you know, early salesjobs. But what I don't talk
about as much is the sales thatis required to even get a sales
job. And you worked very, veryhard to get your first
origination position. Yeah, youwere kind of relentless. I mean,

(02:15):
I interviewed with you. I don'tthink I hired hired you you like
you kept at it. You kept on andkept on going. Right. And
finally, you found the position.
But, you know, that's prettycourageous. I mean, origination
itself is a is a hard job.
Right? But how do you thinkabout, you know, just selling

(02:39):
yourself in order to even putyourself in that position? Like
what was going through your mindas you were going through that
process?

Eric Rosenstock (02:48):
So yeah, I mean, thank you for bringing
that up. And just for referenceto give background to the story.
So someone introduced me toGreystone when I was coming out
of high school, I interviewedwith two guys that worked here
at Greystone ultimately gotturned down for the job. And a
couple of years later appliedfor another job got turned down

(03:11):
and didn't take no for an answerand eventually pushed in until I
got hired.

Mordecai Rosenberg (03:16):
In Arizona, That's just me just to set the
stage for everybody. Let's let'stalk about just like where your
production is today. Like justover the last, whatever period
of time you want to use lastthree years, you know, or
whatever you want to like,what's your annual production or
total production mean, youbecome one of the top producers
in that company? You know,what's, that just to give

(03:37):
everyone? Perspective?

Eric Rosenstock (03:41):
Yeah, sure. So the funny thing is, I mean, I
honestly don't count. And oftenI get interviewed, but different
publications in they often askedme, Eric, what is your total
production volume? And I neverlike to count, I hate counted.
What I could tell you is justone interesting factor. You
know, I was browsing on theinternet the other day, and I

(04:02):
was on commercial observer and Ifigured let me type in my name,
I'm just curious, like, whatpops up and I did that. And
there was a whole page dedicatedto any article of which they
have a deal that they covered meon. And they covered over a
billion and a half dollars thatI did, if however many billion
I've done, it's never enough tobe honest with you, it's never

(04:25):
enough. So I don't know and Idon't count.

Mordecai Rosenberg (04:29):
Yeah, but a billion dollars, just the press
releases. You know, it'sprettyy, it's, you know, it's
got to be, you know, multiplethat, you know, so it's, it's my
point in bringing that up, youknow, and I don't usually talk
to people about their actualproduction numbers, but I think
to go from you having to fightfor a position to your level of

(04:50):
production is, I mean, it'sremarkable. So yeah, so what was
going to see so you you getintroduced to Greystone and you
don't take no for an answer. Howdoes that go? How do you keep on
coming coming back when mostpeople that you they interview,
they get turned down and that'sit like, have you kind of keep

(05:11):
on going on and what's the driveto keep on doing that?

Eric Rosenstock (05:14):
Yeah. So I think one of the biggest
attributes that I have isperseverance. When I set a goal
I'm going to figure it out onand I'm going to do it. My Word
is something that is wortheverything to me. So if I tell
myself something, or if I tellmy friends something, I'm never
going to tell you somethingunless I know for certain that I

(05:35):
could carry through on it. Youknow, during that time, I knew
that there was a greatlikelihood that I would end up
at Greystone. What was themotivating factor? Frankly, when
I was coming out of high school,I met these two gentlemen that
were Greystone relativelysuccessful at the time. And I
remember looking at them, I musthave been 18, or 19. And I said

(05:59):
to myself, I don't think theseguys are any smarter than I am,
any better of a Salesman, Ithink they're kind of like in
line with my capabilities andthey're being successful and I
want that, too. So whateverthey're doing. I you know, I
firmly believe that I can dothat, too. So I kind of set that

(06:20):
goal in my head. And that's whyI went after it wasn't so much
like how do I sell myself toGreystone in order to get this
job, but it was more or less,just, I know that they're going
to need me, they're gonna wantme, I know that I could be an
advocate for them. And I knowthat I could be successful as
well. It will be a mutuallybeneficial, right role for both

(06:42):
of them and I.

Mordecai Rosenberg (06:44):
You use the word perseverance in the two
other words that come to mindour confidence, and in
competition, right, because tosay, like, oh, they, I could do
what they're doing right, thereis an element of competition in
there, which is like, there's noreason why they should be
successful, more successful thanI could be. But then there's the

(07:05):
confidence, which is, you know,a little bit of a dream, right?
It's like, because there'snothing to you can't fake your,
your claim on. You know, it'sone thing if you've, if you've
been a multibillion dollaroriginator at another firm and
say, like, 'Look, I know, Ialready know I can do it.' Here,
you're starting with very littleexperience. And still they have

(07:25):
my confidence. Well, do youthink that's something that's
just factory installed or canthat be learned or taught to
someone?

Eric Rosenstock (07:37):
So I firmly believe that perseverance,
tenacity, hunger, drive, call itwilling to succeed at all costs,
I think is instilled in aperson. I find it very hard to
teach that to certain people.
Okay. And I find it hard tobelieve that you could teach
that to someone. I think thatthat's something that either

(08:00):
certain people are just morehungry than others. And that's
okay. Right. Everyone has acertain level of drive. And to
some people, they'd rather haveless of a drive and more of a
peaceful life, so to speakoutside of the workplace, which
is fine as well, right. But Ithink that tenacity, the level
of tenacity that I have, again,I think it was instilled in me,

(08:20):
since I was a little kid. Ithink that, you know, playing a
lot of basketball as I wasgrowing up, that competitive
nature was instilled in me. ButI like being the best that I
could be. And I like success.
And I chase success. Yeah, andthat's how I that's how I was

(08:41):
built.

Mordecai Rosenberg (08:42):
Yeah. I mean, I think it's really
instilled from a young age, butto me that that's probably just,
it can be just inborn. You know,it's just what you have, right,
and I don't know. I mean, whatdo you think about when you have

(09:03):
originators that are that arestarting out? I mean, it's a
pretty humbling experience tostart in origination. I mean,
you're gonna get a lot of nose,you're gonna get maybe you'll
get your first like, shot atsomething. You get your first
deal, find out and then it fallsout. Something happens along the
way. It's like, I'll get anotherone. So how do you encourage

(09:27):
someone I mean, you can'tnecessarily coach this idea of,
I mean, it's really justbelieving in your own fantasy
and then it becomes a realitybecause for you, it's, it's
already there. You know, it'salmost that you call it
manifesting or something likethat, but what how do you if
you're, if you're talking to afairly bringing salesperson and

(09:53):
they and you're giving themadvice, what do you what do you
say?

Eric Rosenstock (09:56):
So it's funny back in the day, I've had I've
had an interesting evolution inthis industry. But I remember
having a meeting with HR. Theyasked me, Eric, you know, how do
you want to go about hiringpeople? And I remember thinking,

(10:16):
do I want a Harvard graduate? DoI want someone that went to MIT,
Wharton, and then I thoughtabout it. And I said, I could
care less what the resume says.
I think that to be a successfuloriginator in this industry,
there's three things you need.
This is it's something that alsoI think it's in this level of

(10:37):
this order of importance. So thefirst category that I always put
out there is, again, tenacity,perseverance, drive hunger,
because I firmly believe that'sjust instilled in a person. And
if someone has the willingnessand the drive to succeed, that's
the first key ingredient thatyou need, you know, the

(11:00):
foundation of a successfuloriginator. The second box,
second most important thing thatI would put is honesty and
integrity. Because I think thathonesty will always prevail. I
think in this business, there'sa lot of gray area. And I think
the people that will succeed,the most long term are going to

(11:22):
be the people that everything'sblack and white. So I admire
second, most importantly,honesty and integrity. I think
honesty is everything. Third,and lastly is smarts. You have
to be smart, you have to applyyourself. You don't have to be a
rocket scientist to besuccessful in this industry,
right. And I think back to mydays in elementary school, I was

(11:44):
at the top of my class inhonestly, any subject other than
math, math was always a strongpoint of mine. But other than
that I was not the top of myclass in any subject. So I think
that those are three keyingredients that you need to be
a successful originator, applyyourself 100% of the time.
Always be honest. And and think.
Be smart. Think like a mortgagebanker, don't think like a

(12:09):
salesman.

Mordecai Rosenberg (12:13):
Explain that if like a mortgage banker that
like salesman.

Eric Rosenstock (12:19):
Oftentimes, I walk in to a client's you know,
office for potential meeting,right, we're having a meeting on
a potential deal. And I go intothat meeting, having done a ton
of research both on the sponsor,as well as that specific asset.

(12:40):
I understand their occupancydelinquency, as I understand the
maturity of that loan, Iunderstand the economic, local
economic drivers that are bothgoing to drive in a why or a
negative, right organic rategrowth, and I'll have all these
different things mapped out. Andalmost 100% of the time, when I
walk out of that meeting,I cometo a resolution that I believe

(13:05):
is the best suited product forthem, that has nothing to do
with a product that I thoughtwas going to suit them from the
onset of that meeting. Whichmeans that don't always put your
product that you want to sellfirst. Right, because
oftentimes, that's not the rightproduct. If you want to be a

(13:26):
seasoned mortgage banker, youhave to understand the
intricacies between all properdifferent product types that
could possibly finance that dealin the most complex and
sophisticated manner that wouldsuit their business needs most.
Right? So I always say everydeal, its its own story. It's

(13:50):
got a bio, it's great, you gotto understand the bio, no deal
is going to be the same. Right?
You can't just look at a dealand say, hey, it's in Nashville,
Tennessee, and it's a Class A itwas just built in 2022. And it's
98% occupied, and we're, youknow, no concessions and things
great. Like, that's awesome. Butyou don't know if there's

(14:10):
competition directly across thestreet, it's about to open, that
has much better amenities, andnow all of a sudden,
delinquencies are gonna startpiling up. So when I say apply
yourself and be smart and thinklike a mortgage banker, don't
just sell a product for knowingthe high level selling points of
that product. But sell theindustry as a whole, that you

(14:31):
represent many different producttypes. You understand the
intricacies within theunderwriting of every single
product type, and then you'regoing to move to formally
different possible solutions forthem to identify the best
optimization on their businessplan with all this resources
that you as a mortgage bankerhave.

Mordecai Rosenberg (14:54):
The analogy that comes to mind is I feel
like I'm a medical doctor.
Because as we know no mortgagebankers do save more lives than
doctors do. It's true. Yeah.
Obviously, there's lots oforiginators, that you kind of
learn your products. Right. Andthen that's what you that's what
you know, right. That's, youknow, it's Fannie, Freddie, FHA.

(15:15):
But then when there are otherproducts, either that your firm
starts to offer, right thatmaybe they don't want to learn
about those, but certainlyproducts, outside of what your
firm offers, you know, whatbanks are offering what life
companies are offering rightthere, they're not necessarily
looking to get educated. But ifyou thought about a salesperson

(15:39):
is there where they have aproduct to sell, right, and
whatever their product is,that's what they're trying to
sell. A medical doctor is tryingto see what their patient needs
and whatever procedures areavailable, whatever the new
science is, that has shown thatsomething could help their
patient, they want to offer thatto their patient, and maybe it's

(16:04):
offering a threat directlybecause they learn it, or maybe
it is, you know, aligningthemselves with specialists who
can do that surgery orprocedure, but you want to, it's
about the patient. What the wayyou're talking about, you know,
becoming really justunderstanding what the needs are

(16:27):
in that meeting. And then notreally, you're not going in with
this conception of, I want tosell this Fannie Mae product,
but going in and just wanting tolisten. And then offering the
best thing suggesting the bestthing which maybe maybe you have
to offer, maybe you don't, butyou can give, you're giving them
the best advice. Right, thattakes, I think part of that is

(16:49):
really concerning yourself withthe interests of the customer.
And not just the interest, andnot just your personal interests
of what you want to sell.

Eric Rosenstock (17:00):
That's right.
And I'll tell you further, whenI think about the sale in this
industry. So some people say,Eric, you're the best salesman,
and again, everyone's bestsalesmen. Everyone has a
different technique, right?

Mordecai Rosenberg (17:14):
Oh, really?
Who wouldn't say you're thebest?

Eric Rosenstock (17:17):
Exactly, exactly.

Mordecai Rosenberg (17:18):
Pretty much what everyone knows already.

Eric Rosenstock (17:22):
Exactly. But I often think that I'm actually
the worst salesman. What do Imean by that? I don't often sell
too hard. My way of selling. SoI mean, I started out at
Greystone as an analyst, which Ithink was one of the best things
that happened to me, because youcan't just pick up the phone and
start calling someone in sellingthe product, but you don't

(17:43):
understand what's under thehood. So the way that I sell
honestly, is I just load myclient up on as much
underwriting knowledge aspossible. Explaining to them all
the different metrics that gointo all the different, you
know, variables within eachproduct, and letting letting

(18:05):
them conclude to the rightproduct type. So I often find
that selling on knowledge is alot more, it is a lot easier,
frankly, than selling on a sale.
So I mean, I like to take anyspecific product, whichever it
is, and one that we'rediscussing, and I'll say okay,
here are the pros here the cons.

(18:27):
Here's the pros here the cons ofthis product. And here's the
pros and the cons of thisproduct. And often my client
will say well, okay, which oneam I going with? My response is,
that's your call, you decide, Imean, you're driving the bus
here, you tell me what toexecute, and I'll do it for you.
But, I laid out all youroptions, right. So like, I like

(18:47):
selling just from walkingthrough the intricacies of every
single product type, theunderwriting the pros and cons
of which one is going to achievewhat and leaving the decision up
to them.

Mordecai Rosenberg (18:58):
Yeah. And I would imagine that you also can
help them frame the decision,which is, which is you could
say, I mean, are you Fannie Mae,seven year tenure or five year?
Yeah, FHA 35 year? Well, whatshould you know, CMBS? What
should I do? as well? You know,the first question is, well, how
long are you planning on holdingthe asset? You know, what's your

(19:21):
business plan is, are youplanning on holding this for
your kids? Are you hitting? Doyou have a are you a GP with a
promote structure where you needto sell or refinance and a
couple of years in order to makeyour money like, you can help
them, you can get them? Probablyone of the greatest gifts or
sales tactics is giving them aframework through which to make

(19:46):
a decision. That's a way tocreate clarity where in a
situation where they may befeeling confused.

Eric Rosenstock (19:54):
That's right.

Mordecai Rosenberg (19:55):
Yeah, one of the things I mean, you come into
the firm, you know, we can Wegive you a phone, we convinced
like some senior salesperson tolet you sit next to them. And,
you know, and help help you out.
But and then you starthammering, right there's, what
starts to happen in not such along amount of time is that

(20:16):
there are clients who seniororiginators myself included,
because I rejected for a lot ofyears, people who I had, who we
worked on for years and yearsand years, you know, I remember,
you know, meeting you and I hadin Florida that you brought me
to, it's someone who, you know,10 years you've pursued them and

(20:37):
just had not been able to getthem on the on the hook. And
then you're able to not only geta meeting, but then convert them
into like, you know, one of thefirm's largest clients. How do
you do that? How do your is yourskill? First of all, is that
mostly calling at the beginning?

(20:59):
And what are you saying in orderto get them to not hang up on
you? You know, those first fiveseconds?

Eric Rosenstock (21:08):
So I think that, first of all, they weren't
they were hanging up on me itwas okay.

Mordecai Rosenberg (21:15):
Well, that's a good point, right? Because
that's it. A lot of people, ifyou see a list of 100 calls to
make, right, you call someone ifthey slam slam the phone down on
you, then a lot of people say,okay, great. cross them off
twice, you know, so but you did.

Eric Rosenstock (21:32):
Yeah, I mean, I think the recipe again, there's
two recipes, there's one recipefor catching the client. And
then it's a lot more impressivekeeping the client. Okay, so
catching a client, I think isyou know, it's three things,
three key ingredients. It'sperseverance, walk, and a lot of

(21:53):
prayer. Right. So and I wouldhave traded in more luck and
more prayer for thatperseverance any day, but I'm
what everyone's going after thesame client. So there's no
secret sauce there. There's nosecret sauce. Definitely not
when I was starting out. I findit a lot easier now. Even though

(22:14):
I don't do much origination likepure prospecting origination
right now, just because I havesuch a Rolodex where I'm
servicing. But I will tell youthat now catching a new client
is way easier your because lotsof the big sponsors in the
country I've heard of me know ofme read me. So it's a lot easier
now for sure. But I say it wasjust it was perseverance, walk,

(22:38):
and a lot of prayer, catchingthat first client, because just
like I was at their door, so was35 other people.

Mordecai Rosenberg (22:46):
Yeah. Well, but there are 35 other people
also there. Right. And I don'tthink it's just that they're
less lucky.

Eric Rosenstock (22:57):
So maybe I'll perform them from, you know,
respectable, just just tenacity,right? I remember that client,
you're bringing up in Miami wasa huge catch in the FHA world,
right. And a lot of people haveflown down to Miami to try to
wine and dine this client. And Iwill tell you, interestingly

(23:18):
enough, the short story that youdon't know about that client. We
flew down to meet him, I flewdown to meet him two weeks after
that, okay. And then about twoweeks after that, again, I flew
down again. So I went down inthe course of six weeks, I went
down three times. And I figuredthat if I just stay in front of
him, maybe I have a chance. AndI remember the last time I flew

(23:40):
down and flew down to him with a$46 million hot application,
right and gave him a letter. AndI asked him to sign it on the
spot, and you refused. And hesaid, leave it on my desk. I'll
get back to you. So I flew backto New York. That was in March.
And a few days later, there wasa brand new restaurant that was
opening up on the Upper WestSide of Manhattan. And my wife

(24:05):
set dinner up for my birthday,it was us and one other couple
going out to this newrestaurant. And we ordered our
food. And we were even the breadwas even before the appetizers
came out. And that client calledme, I've never received an
incoming call from him everbefore. I turned to the table

(24:26):
and I said, Guys, I'm so sorry.
I have to excuse myself and Iran outside. Okay, Upper West
Side of Manhattan. It wassnowing, didn't have a coat and
I stood there for two hours onthe phone with him. Ditch my
birthday breakfast and my mybirthday dinner. And I said I'm
going to like if this guy'swants to talk to me. It's fine.
I don't need that dinner. And Istood there in the snow, talking

(24:48):
to him for two hours at a time.
That was when a lot of sponsorswould join this really equity
bond raises. So he wants to talkto me about that. Did a ton of
research in it knew nothingabout it did a ton of research,
spoke to the firm thatsyndicated the bonds, and got
back to him with some reallygood intel. But at least that

(25:11):
opened up a channel for us totalk. And that was the best
dinner ever.

Mordecai Rosenberg (25:18):
What did your wife think of the dinner?

Eric Rosenstock (25:20):
Well, I think now she thanks me for it.

Mordecai Rosenberg (25:24):
Right. But she could have been so happy
back, then.

Eric Rosenstock (25:26):
That's probably true. But looking back, it was
all worth it.

Mordecai Rosenberg (25:31):
Yeah, it's a really tough balance. You know,
the balancing origination withfamily. You know, I remember,
it's very hard to go onvacation. And when I would go on
vacation and be like, you know,my, when my kids were little,
you know, we'd come back in themiddle of the day, or, you know,

(25:52):
to get the kids to take a nap,this is going back quite a ways,
because my kids are now 17, 16,15, 14 and 10. But it's, you
know, and then I'd spend sowhile they were down at bed,
three hours just hammering out,you know, I'd have 100 emails.
Yeah, that just from thatmorning that had come in and had

(26:16):
to be dealt with. And there werecalls, right? It's, you know, it
does take, you can't, it's hardto do everything, you know,
something has to something hasto suffer. In over time, I think
you kind of figure out thebalance. But that is, you know,

(26:37):
maybe that's why people can hitthis hard in their during their
20s When they're just, you know,starting, you know, maybe before
they're married or first marriedto get but it's like, but it is,
that is a tough, tough balance.
I mean, it's, I can just imaginehow disappointed Your wife must
have been after she arrangedthis whole dinner, you know, and
how, and I'm probably like, alittle embarrassed with your in

(27:00):
front of your friends that youwere that she made made all
these plans, and you were theresitting outside?

Eric Rosenstock (27:07):
Yeah, I mean, I often think that origination is
not just a, you know, nine tofive job, right? It's a
lifestyle. And it really, reallyis. I'm thankful that I had the
opportunity to enter theirbusiness when I was much
younger, right? And that now,you know, getting getting a
little bit into it as I hit mymid 30s that all of a sudden now

(27:28):
I'm like, Okay, I've got areally, really deep bench of
clients that are continuing tobuy, sell, refinance, and and
I'm growing with my clients,right, both in business, but as
well as friends, right? We're,we're really growing as people.
Right? And, you know, I oftenthink about what it takes to be

(27:50):
successful. And then Ibifurcate, that question to
twofold business beingsuccessful in the short run is
easy, being successful in thisbusiness over a 2030 year
period, and doing 10 plusbillion dollars, right? That's a
lot more impressive than thatlongevity is something that I
have respect for, right? Whichis why I mean, going back to the

(28:12):
initial question, how manybillion have I done? There have
been times where I'm like, Letme count how many billion I've
done. And now I'm like, I don'tI don't really care. Like, it
could be 10, it could be 12. Itcould be 13. Like, I just want
to keep on going and I don'twant to put a benchmark to it.
What I do want to do is makesure that I am growing
professionally. Right, but aswell as the individual. And I

(28:34):
often tell clients, let's goout, let's chill. But do me a
favor, let's not even talkbusiness. And we joke basically
impossible to do. But I'vereally become like close
personal friends with a lot ofmy clients. And it's such a
different dynamic, where it'snot me selling them. And it's
not it's it's interesting,right? We'll fight for the check

(28:54):
after dinner because it'sgenuine friendship. Yeah, who we
are. I think that something likethat is achieved, though, over a
long period of time. So I'llgive you an example. Last week,
we're in San Antonio, I wasinvited to the Fannie Mae DUS
conference, where you know, veryselect spot and very select
producers from the industry areselected to go and, you know,

(29:19):
I'm sitting there by the bar,we're having drinks and you're
looking at the top 3540producers around the country,
right that have been doing itfor 2030 plus years. And you
have people from every singleshop, right new mark wells and
then T potential you name it.
And there was no sense ofcompetition. We're all friends.
Though.

Mordecai Rosenberg (29:43):
There's this like, club so to speak,

Eric Rosenstock (29:47):
that I feel fortunate to have entered, where
it's like there's the topproducers and we all just click
will have respect for eachother. We all communicate. We
all like one equally for all ofus. To succeed, and it's kind of
nice, where it's like, I know ifI'm competing against this guy,
but again, we're all in thatclub of the top two, three

(30:08):
producers. And every firm andtwo little clique will look out
for each other. And we'll neverspeak evil about one another.
Never. I mean, I think that Ihate. And that I think is an
actual amateur move in thisindustry, is when people speak
evil about another, I think thatit shows that you've been around
for a very short period of time,there's always going to be those

(30:28):
that try to put down others. Ithink the best attribute is
saying, he's amazing at what hedoes. He's fantastic. And
leaving it there. You don't evenhave to sell yourself. If that
guy wants to do business withyou don't come back.

Mordecai Rosenberg (30:41):
I was reading. You know, we're here
towards the beginning of May2023. I was reading some
articles, I guess the BerkshireHathaway shareholder meeting was
this past weekend. And so thereare lots of articles about
Warren Buffett and Q&A, and hewas dispensing some wisdom on on

(31:04):
life. And they said, I think thequestion was like, how do you
avoid big mistakes in life? Andin business? He waited a moment
he thought about it, and theysaid, Well, it's actually not
that complicated to write yourobituary and then live to that.

(31:25):
So it's talking about the about,like, no one wants to say, you
know, in their obituary, right,no one wants to write well, you
know, he was successful, but theway he did it was by like,
talking crap about all of hiscompetitors, and dragged
everyone through the mud likeyou want it you honestly, you
want to read that? Even when hewas in competition, he still

(31:48):
tried to bring, you know, pulleveryone out. You still spoke,
you know, always spoke kindlyabout people, you know, so I
thought that was a reallyinteresting perspective, just,
you know, write your eulogy, oryour obituary, and just live up
to that.

Eric Rosenstock (32:06):
I'm afraid that if I tried to write my obituary,
I'm going to be speechless inthe first sentence, but all
good.

Mordecai Rosenberg (32:13):
Yeah. Well, I will talk about how much you
could bench you know, becausethat's quite impressive as well.
What are you up to? Now? You'regonna max?,

Eric Rosenstock (32:22):
I actually had to start like, I couldn't keep
up with the eating. And if youdon't eat, you can't bench. But
I stopped at 130lb dumbbells ineach hand.

Mordecai Rosenberg (32:31):
130 lb dumbbells in each hand, so
260lbs Yeah. Yeah. How muchprotein do you try to consume?

Eric Rosenstock (32:41):
Not enough. I don't consume enough. I mean,
you're supposed to do onaverage, at least if you're
bodybuilding two grams, forevery pound you weigh, again,
very hard to be an originator.
And then also, hit the gym. Sohand it off and I figured let me
do another billion dollars thisyear. And, you know, the bench
will see me later.

Mordecai Rosenberg (33:03):
Yeah, yeah.
And also, I think trying to, togrant two grams of weight for
every pound of weight isprobably your cholestrol is
probably not looking that great.
After? That's right. We keepinto that. Yeah. The story that

(33:27):
you mentioned about lamb youmean, the fact that you went
there? Two more times, are youin the next, you know, in the
next three weeks, or whateverthe period of time with. I think
there is still a lot people alsofeel that, you know, once you
see someone in person, you'vechecked the box right now, like
I saw them in person, now we canwe can respond by email or phone

(33:49):
or text. I feel like now morethan ever, that in person
connection is really critical.
Because there's so much morethat's pulling up people's
attention. And I think even itgets more on the phone. I mean,
I, myself, you know, I won'tpick up a phone number that I
don't recognize, because it'sprobably you know, it's spam.

(34:10):
And if not to leave a voicemail,but to get someone on the phone
is harder to get some people aregetting pulled by text and
WhatsApp and Teams and andemails. Right. So I do think
that in person, connectionreally is important. And I feel
like the fact that you did it sorapidly, right? It's not like

(34:34):
okay, I'll come back in twomonths. Like, no, I'm coming
back next week or two weeks, andI'm going to come back in
another two weeks. I think thatreally helps to stand out.

Eric Rosenstock (34:46):
Yeah, and I think by the way, you're 100%
spot on, right, where prior toCOVID you ever wanted to even
get a pair of financials thathave a client that I was
prospecting right? And in personmeetings was typically needed.
Okay. And then I felt what wasinteresting is that during
COVID, while I didn't do as muchoutreach, probably as I should

(35:09):
have, but I had a lot of juniororiginators that were calling on
my behalf using my name, rightsaying, Hey, do you want to
speak with Eric Rosenstock? Andat that point already, my name
had sold me

Mordecai Rosenberg (35:18):
the, Do they want to stick with the Eric

Eric Rosenstock (35:23):
Exactly, and I can tell you that COVID actually
Rosentock?
made dynamic a little weird,where so many people do your
transaction with you never met,right? But it was like, here's a
term sheet, I'm gonna cash out$35 million, I'll give you
another $90 million in thissenior loan. And the response
was, right, where do I sign, theprice appreciation was too good

(35:45):
to be true. Everyone was like,I'll take it, I'll take it, I'll
take it. And all of a suddennow, when there's more
complexity, I think, than we'veever seen before, there's such a
disconnect between specificmarkets to others, where you
have certain markets that areliterally flattened, rent,
growth, expenses are going wayup, insurance line, items are

(36:06):
blowing up, taxes are gettingreassessed, etc. And then you
could go to certain markets,where organic rent growth still
today is above 20 plus percent,right? So all of a sudden, now,
everyone's like, whoa, wait, Iwant a mortgage banker that I
trust that I know that issitting by my side. And what
that's doing now is forcingproducers in the industry to get

(36:28):
back on planes sit down,properly, make an introduction
with that person understandwhere they are, so they could
get to know you as well. Or eatsome type of friendship. That's
a bond, a trusting bond. Right?
And I like it this way, muchbetter than, you know, just
transacting over an email,right? Granted, we all made

(36:48):
money. Sure. We made too muchmoney, I would argue way too
much money. But I think that nowit's we're back to the proper
way of doing business.

Mordecai Rosenberg (37:00):
Yeah. Yeah.
One other thing, I just want todraw attention to, as far as
what you talked about thatmeeting in Miami was the fact
that you brought a, anengagement letter printed out
for them to sign. And eventhough they even though we
didn't sign it right there, Icould tell you from that
meeting, that I attend to withyou that this, this is a guy who

(37:21):
has ADD, right, and as soon asyou're out the door, he's on to
the next thing, right. And soyou have to also know your
clients, right, some of themwill be very analytical and need
to give it to their attorney.
And, you know, it's like there'sa process, but some of them, you
need to get them to act whileyou have their attention. Right.

(37:45):
And so even though you didn'tget them to sign that engagement
letter, you probably do havestories where you came with it
and came with the engagementletter to a client and didn't
get them to sign right. And soyou have to really, probably, I
mean, a lot of entrepreneurs ingeneral, and developers and

(38:07):
owners of real estate, areentrepreneurs, like a high
percentage of them are ADD, it'sa, I think, kind of working with
that pushing to the sale whenyou have their attention, you
know, how do you think that isthat valuable?

Eric Rosenstock (38:22):
So I think it's very valuable. And I'll tell
you, honestly, I mean, I thinkmyself as someone who has ADD,
right, I don't have a lot ofpatience. And that's where I go
back and sell, I don't sell tosell, but I sell based upon
knowledge in the underwritingbecause I think that all of my
clients are smart people,they're smart individuals, these

(38:43):
are people that have made a tonof money, understanding how to
properly leverage real estate,and drive cash flow from that.
So these people, I think thatthey might be ADD, if you're
talking to them about the news,if you're talking to them about
politics, but if you're talkingto them about structuring their

(39:04):
deal, we all are completelyzoned in and focused on that.
And that's where I think that weconnect. And that's where I
think that now as I seasonednow, as a mortgage banker, and
can get way more granular, andagain, I think I know the
products, frankly, better thanmost people in the industry I
do, and therefore I get very,very granular sometimes more

(39:28):
than underwriters, where I'mjust like, I mean, I'll
personally underwrite the dealif I need to, and I will, often
that times, right, and thereforeI could get on the phone with a
client and say, Here's how I didthis. Here's how I set it up.
You're running x wide relativeto market. I need you to be here
and I think that you're probablyhere. Can we please dig through

(39:49):
if there are any add backs orwhatever, right? Whatever, it is
that both on the expense side aswell as the on the revenue side
if there's something thatthey're not dipping into that
they could write to takeadvantage of. But I think that
you'll have these people'sattention if you're giving them
something that is, number onehonest and number two of

(40:09):
sophistication.

Mordecai Rosenberg (40:12):
Yeah, and digging into the numbers, it
also shows that you're that youwant to help them. You know,
it's like you apply for amortgage for your house, and you
kind of give them theinformation, and then they spit
back. Okay, here's what you canqualify for, you know, here's an
appraisal. But you don't oftenhave a bank coming back and

(40:32):
saying, hey, the appraiserscoming back with these comps, it
feels like that's low for yourhouse, like, what else? Can you
show me that would help meincrease the value. Its the fact
that you are looking at theirnumbers and saying, Well, your
payroll looks very high comparedto what I'm used to seeing, is

(40:53):
there anything there that Idon't know, a corporate expense
that really, we could pull outbecause it's not actually
property related? That I thinkalso shows them that you're
trying to achieve what's bestfor, you know, for them. Eric,
another unique thing that I'veseen from you, is your willing

(41:14):
ness to partner with others, youknow, in the firm, you know, and
there's a lot of, I thinkthere's a tendency for
originators to just take on alone wolf style, or you call it
like a rugged individualistswhere they feel like they need
to do everything they need to,you know, not only sign up the

(41:37):
loan, but process it and manageit all the way through and be
the one to like, you know, runthe numbers. But that's not
scalable. You know, and I'veseen you partner with others,
like within the firm, when youthought that there was a
capability that you couldleverage in a skill that someone

(41:59):
else was, you know, just moreadept at then than you were Can
you talk about about that, alittle?

Eric Rosenstock (42:07):
Yeah, sure. I love that you brought that up. I
think that's an important point.
So when I started as a producer,right. After I was an analyst,
right, I was given the role tobe a junior originator, I was
going out, right, I think thatwas my first meeting ever, the
one that you cited in Miami. AndI remember the first day that I
ever signed an engagement letterthat same day, I signed two

(42:27):
other loans. And I remember thetotal loan amount that I signed
up that day was $101 million. Myfirst day ever that assigned any
engagement or assigned three,one in Atalana, Georgia, on in
Dallas, Texas, that deal Miami,Florida. So it's a good day, it
was a good day, I signed up $101million, the first day ever. I
mean, that was

Mordecai Rosenberg (42:50):
After how long? Hitting the phones?

Eric Rosenstock (42:53):
Probably about two years.

Mordecai Rosenberg (42:55):
Yeah. Wow.
Well, that's, I mean, that'sincredible. Right? We that mean,
that's hitting the phones hard.
You know, two years is I mean,that's, I think, important for
people that to hear that this isnot like an overnight thing.

Eric Rosenstock (43:08):
It was more than just two years. And I mean,
I used to get to the office atabout 430 to 530 in the morning,
on average. And then I used toleave at about 11pm /11:30pm,
depending upon the day. And Ioften used to think like, why am
I even leaving, I should justput a cot under my desk. Like,
I'm here to succeed. I have onemission right now. And that's

(43:32):
it. But what I will tell you isI think that greed is a terrible
thing and will always bringsomeone down. And I think that
I'm a very logical thinker,where I like to play odds. So
you're 100% right. When I firstcame in, I remember partnering
with certain people. Well, atthe time I was exceedingly green

(43:53):
didn't know much. I recognizethat I'd rather increase my odds
and share all the cake. Right,rather than take it all for
myself, and play with singledigit odds. Okay, I firmly
believe that it is impossible tobe successful as a producer in
this industry without a mentor.
I think you need a mentor. Ithink it's really important. And

(44:13):
I think unfortunately, a lot ofthe young guys are getting in
the industry now. Don't seevalue in a mentor. But I see
value in the mentor. And withthat as well, I think that you
have to pair yourself up withpeople that are going to give
you the knowledge, but also theexecution experience because

(44:34):
there's so much within that,where all of a sudden now where
are currently sit, I've seenevery hiccup possible in real
time execution of deals. Andthankfully, I'm far enough down
the road in my career where Ihave real deep relationships
with people and Fannie andFreddie and HUD and, and I'm
able to reach out to them anddiscuss it and it's something

(44:58):
frankly, all these issues, I'veseen every single issue that's
possibly come up. It's not likethis is an issue that I've never
seen before, right? So, youknow, I remember the first
hiccup I ever had on one of myclosings, I got really, really,
really nervous thinking my pastfive months of work is down the

(45:18):
drain. And I often think back tohow nervous I was in the first
execution, when the first hiccupcame up, where now it's like,
I've seen everything. I'm, youknow, I'm calm and collected, I
understand, you know, this is anissue, we'll get through it. But
frankly, I'm only able tounderstand the intricacies and

(45:40):
the different maneuvers, so tospeak, within the execution
because when I started out ofthe industry, I said, I want
knowledge more than money. So Iwas willing to give up all of
the commission, I didn't carefor the commission at all, all I
want to do is know every productbetter than my competition.

Mordecai Rosenberg (46:04):
And then there's the knowledge, but I
think also the execution, right?
Because if you are when you'reselling, you have two things
going against you when you startto originate. First, it's how do
I get this person to want totransact with me? Right? And
then how do I get them to trustme like with their baby? Because
if I don't know how to actuallyexecute, that I'm going to spend

(46:26):
all this time selling and tryingto tell them that oh, yeah,
trust me, but then I don't knowhow to get a Fannie Mae loan
done or an FHA loan done. It'sgonna be, you know, that's not a
recipe for success. So I thinkalso, probably at the beginning,
and even going forward, right,the fact that you can have
confidence in your execution,right, finding the people who

(46:46):
are the best executors withinthe firm and aligning yourself
with them gives you moreconfidence in selling.

Eric Rosenstock (46:58):
Yeah, and by the way, on that point,
Mordecai, so I think oftencertain producers think I'll
just read the guides, and I'llknow the product better than
anyone. And often at times, Ithink to myself, it's not about
understanding that specific, youknow, when I'm going for a
specific Fannie waiver, orsomething, how I work that it's
not even that. I think about,sometimes I get on the phone

(47:22):
with the team, right? Thesponsor, his attorney, and
everybody until the attorneyknew you have to do XYZ. This is
how you formulate it legally.
And he goes, Well, Eric, how doyou? Well, I, I know, because
I've done this 30, 40, 50 times,righ, on many, many
transactions. You know, Iremember a year and a half ago,
thinking to myself, Eric, thisis pretty cool, where I was on

(47:45):
the phone with, you know, prettyhigh, powerful attorneys. And I
was walking them through theintricacies of setting up an
inter creditor agreement, on acash, collateralized surplus
cash, loan, the intricaciesassociated with that, you don't

(48:06):
read about that in a guide,you'll learn about that from
leaning on people that aresmarter than you that have been
along around longer than youhave given them the credit. In
every which way. I don't justmean money, right? Until you
understand and you're confidentenough to go and execute. And I
think that again, people thatare greedy, they're going to be

(48:29):
short lived. Essentially, youwant to be in the field for a
long period of time. And you'reeyeing that $10, $20 billion of
production volume, historicalproduction volume, right, it's a
lot tougher said, right, a lottougher done than said, right,

(48:49):
for sure. So again, I think thatyou got to keep your eye on the
long term focus. And if you'rethinking short term, you might
make a couple of bucks, butultimately, the people that are
far more sophisticated than youare, are going to outperform
you.

Mordecai Rosenberg (49:05):
Yeah, I think that makes that makes a
lot of sense. You know, we'rethe market today. It's no secret
that it's a challenging market.
You know, and, man, if you haveare starting to originate today,
you know, or even if you searchoriginated over the last couple
of years, I guess, you know,it's been challenging. What are

(49:27):
you? If you're starting today,theoretically, what do you do? I
mean, interest rates, you know,I mean, I've been in the
industries for about 20 years.
And the truth is that theybasically, interest rates have
basically been going down forthe last 20 years. Yeah. And we,

(49:49):
you know, when I started, wewere refinancing 8% loans down
to six. Then it was six down tofour and then four down to three
and three down to two, right,but now people have been
refunded, you know, have beenput 2% financing on their deals
over the last few years, anyonewho could, right and now you

(50:09):
have interest rates that are upin the sixes, sevens, eights,
like depending on the product.
What do you do? If you're ifyou're starting out? Where do
you where do you think you wouldI mean, even as even as a
seasoned originator? How do youthink about opportunities to
just kind of go on vacation for12 months, and just hope that
things come back by the time youreturn? Or like, I mean, how do

(50:32):
you think about even findingopportunities?

Eric Rosenstock (50:35):
So believe it or not, I would say that I'm a
lot busier now than Ihistorically have been? I think
that many more people want tosee different possible, you
know, analysis that I could drawup for their properties and just
outcomes, different outcomes. Alot of is performed underwriting
because they're currentlysitting on a bridge, or they

(50:55):
have some time or whatever itis. But part of the reason why I
think that we're actually in apretty busy time right now is
because you have to remember,especially with the banks drying
up, Fannie Mae, Freddie Mac andHUD serve as long term liquidity
to the marketplace. Andtherefore, times like this,

(51:16):
they're the continuous liquiditysource and not the banks. And
honestly, a lot of people nowall of a sudden are going back
to Fannie Mae and Freddie Mac,and FHA, for financing. Right.
Now, I agree with you that it'sdefinitely tough to sell in a
higher interest rateenvironment. On the other hand,
what do you have 30% year overyear price appreciation on

(51:38):
specific assets, you know, MSAdependent, I think that all of a
sudden, then, right, thecalculus of that justification,
so to speak of the refinance,becomes totally different than
than the historicalconversation, where all of a
sudden, it's like, you might besitting at a 2 handle. But at

(51:59):
the end of the day, if I couldrefinance, you would have five
and a half interest rate. Andyou could pull out $40 million.
And with that 40 million bucks,you could redeploy that equity
for a call it 12% cash on cashyield. Right? Well, that's a no
brainer, right. So I think thebigger question really is right

(52:21):
now, like, what does the nextshort term look like? Right, for
the multifamily marketplace,where I think we're coming off
of a historical high from atransaction volume perspective,
right. We've also achievedridiculous organic rent growth,
the price appreciation and therent growth. To an extent

(52:43):
there's a little bit of adisconnect. Right? So in short,
though, if you put all this penand paper together, I think that
this creates a more complexprospecting situation than ever
before, which again, why Ibelieve the more sophisticated

(53:03):
producers are going to be theones that are coming out
winning, because sophistication,you can't fake that you have to
really, really understand yourproduct. And you have to
understand really mean, forgetabout just product market by
market, like I was sayingbefore, where if I go to Mobile,
Alabama, and then if I'munderwriting a deal in Dallas,
Texas, you know, totallydifferent markets where things

(53:26):
are going to be drasticallydifferent. You can't just think,
let me take this historicalteach woven rent rule and put it
into a model and figure out whatproceeds we could get. Right?
The real question is like,what's my execution time? By the
time I rate lock? Could I get at now waiver? Where's my rental
I'm trying to project where myrental was going to be by that
time. Because every day inmarket like Dallas every day, I

(53:51):
sit on a rental that rental isworth more and more and more.

Mordecai Rosenberg (53:56):
Yeah. I think the the other thing is,
where, people tend to look at asituation just in the here and
now. Right? So you're like,Okay, well, look, I'm got two
and a half percent financing, 2%financing. And so I'm not going
to refinance to, you know, fiveor 6%. But to your point about

(54:18):
the equity, right there, thefact that they haven't cashed
out does not mean that theydon't have equity, now that's
earning a return. Right. Solike, so basically, they're
choosing to maintain theirequity in this asset and earn
whatever return that is, youknow, $40 million. Right. So
now, you have $40 millionadditional equity, that's now

(54:39):
making that same return. Well,if you had $10 million of
equity, and that was a 5% cashon cash return, and now there's
$40 million of equity. Well, nowyour return on equity is now one
and a half percent or whateverthe other math equals out to. So
so you think your return isactually less than what you

(54:59):
think? Get this right. And now,let's kind of project this out
over the next five years or 10years. Okay, so you make this
return over the next, you know,over the next three years, four
years, right? And then you'regoing to have to repeat and then
you'll you'll have to refinanceor sell. Right? So where do we
think the market is going to beat that time? Do you think

(55:21):
you're gonna get $40 million ofequity? Or do you think it's
possible, you might have $20million in equity at that time.
We're in such a weird period oftime where, like, we're all
feeling this pressure, becauseinterest rates are up and, you
know, multifamily owners arefeeling pressure, and yet
there's no blood in the streets,right cap rates, like cap rates

(55:45):
have been hit. But in a way theyhaven't been because nothing's
transacted. It's and no onereally knows where Cap rates
are. But if you've been in theindustry for, you know, for I
guess, you know, I mean, you sawit in in, 2008-9 I mean, I guess
probably in around COVID, for aperiod you saw it, but like, you
know, there are times wherethere's just no buyer. Yeah,

(56:10):
that's and there could be ready,even Fannie Mae and Freddie Mac
and FHA, right, those are allwell and good, as long as
there's a buyer, but I remembertimes where there was no buyer
for an FHA loan or Ginnie Mae atany at any trust. They were just
frozen out. Right. So I thinkprobably giving people the

(56:31):
reframing what their actualreturn on equity is now, if they
have additional, and alsothinking about, you know, let's
look at two alternatives, right,one, five years where you stay
the course. And who knows whereCap rates are at that time, we
have, you know, we all thinkthere's a recession coming. But
it's not here yet. And the costof the recession is not going to

(56:54):
be for any of the reasons wethink it is, you know, it's not
you never see recessions don'tusually come because of this
straight, narrow path that youprojected out. It's usually
something that you neverexpected. Yeah. And all of a
sudden, all the liquidity isyanked from the capital markets.
Right, that starts it. So Ithink kind of getting a more

(57:16):
long term perspective, maybethat's one approach to
conversations. What do youthink?

Eric Rosenstock (57:21):
Yeah, I mean, I completely agree, I, again, I
think that's an important, youknow, sale pitch, if you will,
from, you know, sellingfinancing from Fannie Mae,
Freddie Mac, and HUD, which is,you could structure in a way
that you have flexibility aswell as that downside protection
from long term perspective,right. And I think it actually

(57:44):
gives you an advantage rightnow, with the banks, again, with
the banks not playing ball. It'sthe banks being in the
headlines. But frankly, it's,you know, it's the market to
market losses and Treasurypositions that these banks have,
which those losses are huge. Soagain, that's serving as an
advantage to being able to doand what we do well, right. And

(58:07):
I agree with you. I mean, theshort synopsis of what's soon to
come, is a little bit ofconfusion, just because, again,
two years ago, no one would haveever seen insurance premiums
going in specific markets wherethey've gone tax assessments
going where they've gone. Sothere's so much more question

(58:28):
marks on a performa than we'veever had before, where
historically, we knew plus orminus where rent is going to go
where insurance is going to goover taxes, we're going to go we
understood what jobs are cominginto the marketplace in that
area, like we understood it plusor minus, we always left some
room for error. But now we thinkthat plus or minus has gotten so

(58:53):
wide, that it's going to beinteresting, it will be
interesting. I think thatthere's a lot of floating rate,
you know, debt out there, that'sgoing to get interesting how
that's going to be treated. Ithink rate caps are expiring
pretty soon. You know, thepremiums on those are
exceedingly expensive. What thisis, this is a Lifetime movie.

(59:15):
It's good. It keeps meentertained day in day out.

Mordecai Rosenberg (59:18):
I like it.
Well, Eric, thank you so muchfor for your time. It's it's you
know, I like to joke with withyou and give you a tough time.
But you know, occasionally but Ireally I'm very proud of, I'm
incredibly impressed with whatyou've achieved. And and I'm
proud to have to have seen it.

(59:39):
Keep it keep it up. You're doingan awesome job.

Eric Rosenstock (59:41):
Thank you.
Mordecai. Keep up the good workon the podcast. All right.
Howard Stern has a little bit ofcompetition over here.

Mordecai Rosenberg (59:48):
Well there if I if I manifested it, then
it'll come.

Eric Rosenstock (59:52):
There you go.
All right, so much for havingme.

Mordecai Rosenberg (59:56):
Take care.
Thanks.