On this episode of the Million Dollar Mortgage Experience, Jon Maddux, CEO of FundLoans, speaks with Brandon Voss, Director of Training & Operations at The Black Swan Group, about how you can use FBI negotiation techniques in your day-to-day business! Si
"Learn How To Negotiate Like An FBI Hostage Negotiator" With Jerry Brandon Voss, Secrets from Non-QM's Top Underwriting Manager, As Featured On FundLoans' Vlog "The Million Dollar Mortgage Experience.
Here's The Full Transcription
John Maddux: 00:00:01 On this episode I speak with Brandon Voss. Brandon is the director of training and operations at Black Swan Limited, a company founded by his father, Chris Voss. Chris is a former FBI, high stakes negotiator who, much like the movies, has had to negotiate with bank robbers, terrorists, and kidnappers in life or death situations. As you can imagine, there are many techniques that can also be used in business deals and negotiating with clients.
John Maddux: 00:00:27 Brandon and I speak about how to get people to respond quickly to your emails, how to make your borrowers feel safe enough to move forward, and why starting from a place of know is actually a good thing. Listen close as Brandon reveals proven hostage negotiation techniques to help you succeed in your day to day business.
Speaker 2: 00:00:45 Welcome to The Million Dollar Mortgage Experience podcast. Listen in as CEO, John Maddux of FundLoans reveals tips, secrets, and origination ideas to fill your pipeline with the million dollar opportunities.
John Maddux: 00:01:01 All right, Brandon, thanks for coming on the show. How are you doing today?
Brandon Voss: 00:01:05 I'm doing well. I'm doing well. I'm excited to be with you today. I think this is going to be a cool thing. But yeah, I'm happy to be here, man. I'm happy to talk about some of this stuff.
John Maddux: 00:01:15 That's great. So, your company is Black Swan. Tell us a little bit about what you guys are about.
Brandon Voss: 00:01:24 So we like to think of ourselves as a strategic business advisory firm that really focuses on negotiation and the negotiation that the foundation and where it comes from is from the hostage negotiation world.
John Maddux: 00:01:43 That's great. So I'm hostage negotiations, that's something you see on TV, in movies, typically. How does that relate, would you say, to business? Because I know it does, right? Because your dad, Chris, he's taught at Harvard and things like that, correct? As a professor?
Brandon Voss: 00:02:03 Yeah, he has. He's taught at Harvard, he's taught at Georgetown, he's taught at USC. And yeah, he's got a lot of experience both in the academic world and then in the business world, private sector and hostage negotiation world. So yeah, he's been all over.
John Maddux: 00:02:23 So how does that relate to business, would you say? You imagine like a scene from a movie, like a bunch of hostages, guys with guns and maybe masks, and they're holding some people and they want something, there are hostage negotiators. So how does that relate, you would say, to, like a business negotiation?
Brandon Voss: 00:02:43 Well, first, to address the movie aspect of it, as my father and his comrades like to put it, the one thing that they always get right in those movies is the equipment. And then as far as the communication goes, it's never anything like that. It's all drama and it's made for TV. But how it relates to the private sector, and what's the translation, first of all, coming from this idea of no compromise. We talk about in the book, my father never had the opportunity to go in and say, "You got four hostages. Give me two, you keep two and then everybody goes home. Win-win; we each got something we wanted. You have to build rapport very quickly, you've got to establish a relationship, you've got to establish boundaries, and then you've got to walk out with everything that you need or you fail.
Brandon Voss: 00:03:47 And so in business, how does that translate? Number one, people start to compromise themselves before they get to the table sometimes. If you're in negotiations, you're in communication at all and you start to think about what we're going to say going in, the thought of, "We can't ask them that, right? Because they're going to say this." And we start to compromise our position before we even get there. And so a big part of it is getting out of that mindset and going in with information gathering. Drop the value proposition, drop the data. As tough as that is, drop those things and go in, really, with the intention of navigating the information that you can only get when you're talking to the counterpart.
John Maddux: 00:04:32 That's an interesting side. I think of it like... When it relates to mortgages and when it relates to dealing with the borrower, we don't always know what's in their head. Like for instance, we may have a picture on our end of what they want or what's going to drive them to want to take this loan, but we don't always know... Like for instance, I've had loan officers tell me before, like, "Oh, they're not going to take that deal." But then I say like, "Hey, well, just pitch it to them. You don't know what they're going to say. Let them say no, don't be the one to say no for them."
John Maddux: 00:05:09 And then they'll pitch the deal and then come to find out their motivation was totally different than what they thought it was. It wasn't that maybe the interest rate's only slightly better. But what they didn't know, or the piece of information that we didn't have was that they have to get this loan out of someone else's name or they have some other event that's coming up where maybe that mortgage is due in a month and they got to pay the whole thing in full.
John Maddux: 00:05:38 So they're not really concerned about necessarily dropping their rates so much, it's just about... There's another motive. I'm sure there's something in... kind of can connect to what you guys do to find a motive or to find more information and really get the whole story. How does that resonate with what you guys do?
Brandon Voss: 00:05:57 Well, I think that's exactly it. There's information and so... Well, let me start like this. You know that there is no way for you to have complete information when you get to the table. So, if you come to the table, having decided on an outcome, knowing that there's holes in your information, what have you done to yourself? There's always other terms other than price that make up any given deal. And then what emotions are tied to what they're trying to do, what they want to accomplish, that's exactly... There's always things that they're dealing with that only they can see. And so how does that affect what you're trying to accomplish?
John Maddux: 00:06:47 Cool. Now, being the son of a hostage negotiator and FBI agent, you got to have a story, you got to you got to tell us. I don't know if there's any stories that normally tell, but is there anything you can share with our audience? I think that's... I'm sure there's something that's exciting that we'd love to hear. I know it's not like the movies, like you said, but certainly, I imagine there's got to be something that you share with us that has to do with the hostage negotiations, like a true story.
Brandon Voss: 00:07:17 Well-
John Maddux: 00:07:18 You don't have to [crosstalk 00:07:18] names or say names.
Brandon Voss: 00:07:20 ... cool is... And I think it's in regards to the Jeff Schilling case. And the Jeff Schilling case is in the book, and they have a splitting difference. And so they're trying to get across to the hostage taker that Jeffery, the person they're holding, is a real person, and don't hurt him, and it's happening to be taken place in an area that was a Muslim country and mothers are important in that country. And so in an effort to endear the hostage to the hostage taker and also show him as a human being, and then also use the media...
Brandon Voss: 00:08:06 These guys watch TV too, they read the papers, they hear what's happening. And in order to use and also use the media as a place of influence, they had Jeff's mother on TV, on the news, basically just saying, "Don't hurt my son. Please don't hurt my son." And they had a conversation with the hostage taker over it, and the hostage taker said, "His mother knows about this? You tell his mother he's okay." And being able to watch the newsfeed and see the mother on TV and know he was behind the scenes and knowing all that was going on, that was a cool thing.
John Maddux: 00:08:52 They showed their cards right there. Yeah? They were basically saying, in different words, that they're not going to kill them or they're not going to harm him necessarily. Right?
Brandon Voss: 00:09:02 That's it. That's it. They found that, interesting thing, if they could get the hostage taker to use the name of the hostage, of the person or people they had captive, the chances of them actually hurting those individuals dropped drastically.
John Maddux: 00:09:19 Oh wow. So when they actually asked the-
Brandon Voss: 00:09:21 [crosstalk 00:09:21]. I want to say by like 800%. It's something ridiculous.
John Maddux: 00:09:25 So would they ask the hostage taker to like... So what's the name of the... They intentionally do that, what's the name of the person you've got held there? They try to get them to say the name and stuff, is that a tactic?
Brandon Voss: 00:09:41 Well, there's a lot of different ways that they do it. And they talk about those things in the book, which is cool. There's a negotiation nine list for a reason. So many different ways to approach the circumstance, and your circumstance really dictates your strategy.
John Maddux: 00:09:57 So growing up, did you ever... As all teenagers do, they negotiate with their parents. Did you ever have... Was it difficult to ever negotiate with your dad on things? Like, "Can I stay out late?" Do you have any stories like that?
Brandon Voss: 00:10:10 Well, the one thing he likes to make note of is... In his job, they had to learn to talk through deadlines. And it's interesting, we can talk about how that relates to business moving forward, but this whole idea of talking through deadlines and making sure that hostages didn't get killed on deadline and what that took. And when I had a curfew, when I moved in and started living with him in my senior year of high school in the DC area and I had a curfew, he was always impressed at the way that I would try to talk through the deadline of my curfew and based on the way... where I was located at the time. I knew if I could have him on the phone, and I was close, I wasn't actually there. Things were probably going to be okay, as opposed to me losing the car keys for three months or something like that.
John Maddux: 00:11:06 That's cool. I could see where that would relate to say like a borrower, they're expecting to close on a certain time. And I think the worst thing that mortgage brokers can do is to not communicate and just to go dark or silent. And then obviously, you think the worst; you think the worst is happening, like, "Oh, my loan's never going to close." And so being able to be on the phone with them at that time when they're supposed to be closing, even though you're not closing, it probably softens the blow, because that happens quite a bit in this business. I don't know if you've ever bought a house or not, but there's some times when things get delayed and it's out of your control.
Brandon Voss: 00:11:46 Yeah. Well, those things happen. And it's interesting that this relates back to the hostage thing too. And when he was dealing with a family and his team was dealing with a family, they'd have check-in days. And even if they were calling just to tell them that there was no new update, just to get them on the phone and it took 15 seconds, "Hey, reaching out, daily call, no new news today." Just having that interaction on a daily basis, and what they did for the family emotionally and being able to keep themselves in control during the process, I think that relates very specifically. All the emotions that are involved, and even talk about people going dark, and depending on negotiate or type or where they're at or what side of the table you're sitting on, how people react to silence. And so people imagine the worst. Especially when emotions are high, they have a tendency to imagine the worst.
John Maddux: 00:12:45 That's right. One thing that I heard from your dad from his speaking to Google was something about yes as a commitment and no as protection. And to start with no, can you tell us about that?
Brandon Voss: 00:13:02 Sure. Yeah. First of all, you never say yes to one thing. There's always multiple questions in your mind. And when people say yes, they're not always sure what they're saying yes to. And then simple example we talk about in the book, when people make phone calls and they call someone up and they say, "Do you have a few minutes?" Or, "Can we talk?" And you're looking for the yes answer. "Yes, I do have a few minutes." And really, what's going on in that moment is, the person you're reaching out to, they actually have to answer four questions in their mind in order to say yes to that.
John Maddux: 00:13:42 That's true. Good point.
Brandon Voss: 00:13:44 The fist question is, "Do I actually have a few minutes?" If I do have a few minutes, do I want to talk to you? If I do have a few minutes and I want to talk to you, do I want to talk about what you want to talk about? And then if I have all those three of those things reign true, how do I get off the phone? Because we all know people where they call us up and they say, "Do you have a few minutes?" And it's 45. It's at least a half an hour.
John Maddux: 00:14:20 It's never a few minutes. Right.
Brandon Voss: 00:14:22 Yeah. And so we don't realize our intention is not... That from our end, that's not what we intend. But that doesn't matter because that's what's being interpreted on the other side. That's what's ringing in their head. And so when you go in and you change simple questions where you're looking for a yes to looking for no, it shuts that other voice in their head that's going, it shuts that voice. There's something about the ability to say no to something that just makes people... because it also... It protects your own autonomy.
John Maddux: 00:15:00 It's kind of empowering.
Brandon Voss: 00:15:03 Yeah, that's a good way to put it. It's empowering. When people can say no, when they can turn things down, they protect their autonomy and it's empowering. Yes.
John Maddux: 00:15:10 So no is a good way to start a conversation. I know that's part of the book too. It's, no is not the end of the conversation, no is how to start a conversation kind of thing. Right?
Brandon Voss: 00:15:22 Well that's part of it. That's part of it, right? It's-
John Maddux: 00:15:26 I think I took a leap from what we were talking about into a whole nother thing. So let's back up a little bit, because I want to unpack that other thing you just said about... So give us a specific way to make a phone call using that technique that you just... Like, how do you start a conversation?
Brandon Voss: 00:15:43 Oh, it would be simply... A simple change would be, is now a bad time?
John Maddux: 00:15:49 That's a lot better, because they can say, "Oh no, no, no, no. Not a bad time to talk. I can talk." It's almost like doing a takeaway psychologically?
Brandon Voss: 00:15:59 Well, it depends on what you're aiming at. We talk about creating emotional moments in negotiation. And so when you're talking about taking something away, what exactly are you looking to take away? Are you trying to take away a negative feeling, or are you trying to take away the little voice, or are you trying to take away the heightened emotion?
John Maddux: 00:16:19 Let me take away all the-
Brandon Voss: 00:16:21 What are you aiming at?
John Maddux: 00:16:22 ... take away all the uncertainty about... You said there's four things that they had to decide. So you're taking away all of that, you're making it easy for them to say that they can talk when... Let me give you an example; one of the things that I would do as loan officer when I would send out an email is I always teach... And I always this because it works, is I always like to end the email with the question mark, and I like it to be short and sweet. And sometimes I like to say something that gives them a chance to say no.
John Maddux: 00:16:55 So let me give you that example. So I owned a website called theafterforeclosure.com, and people would go into that website, they'd fill out a form saying, "Hey, I want to I want to buy a house, After Foreclosure." And one of the things that I'd do is when I get that email from them, I'd reply back and I'd say, "Are you locked?" Like, I'd ask them like, "Thanks for doing the inquiry. Looks like we might be able to help you." Like, just a real quick three sentences.
John Maddux: 00:17:21 And then the last thing I would say was, "Are you presently locked in a lease?" And when I say that takeaway, is like... I know you could maybe unpack that better, but what I felt like was a way for them to say, "No, I'm not locked in the lease." Because if you say, "Are you locked in a lease?" You're almost saying like, "Oh, you may..." It's more like a disqualifier. Like, maybe you're not... It's an easy way for someone to say, "Yes, I am qualified because I'm not locked in a lease." You know what I mean? Does that make sense?
Brandon Voss: 00:17:51 Yeah, it does. It does. And one thing, one great point about email that I think you mentioned, especially in this day and age, there's so much communication through email, and more negotiation takes place through email them we probably wish would or actually should in the long run. But that said, keeping things short. Less is more in an email. Everyone's probably been guilty of writing a long email, but you would be hard pressed to find somebody that really liked reading a long email. Everybody's written one, but find somebody who likes reading it.
Brandon Voss: 00:18:27 And then getting right to the point. And so I like that, because you're... You are looking for a no. The thing there is that, that's your intention. And so this whole idea of, again, empathy and creating emotional moments, your intention of the question is felt by the other side. But then understanding how they interpret that feeling is where you got to navigate the situation. It's dangerous when we start to assume things based on what we think to be true.
John Maddux: 00:19:04 So, by saying, "Is now a bad time to talk," what does that do to the mind? You were talking about emotional empathy; what does that do to the mind when you say, "Is now a bad time to talk?"
Brandon Voss: 00:19:20 It's interesting. In this day and age, it's great that we have all these brain studies and all this technology; we can actually like stick rods in people's brains and measure what's happening when they see pictures or when they say things while they're talking. And so we know that dopamine and serotonin are naturally occurring chemicals in the body, and we talk about ways to actually affect those chemical dumps through your communication, whether it'd be your tone of voice or managing that emotion.
Brandon Voss: 00:19:52 And so I think when someone is looking to say no, if you're going to break it down from that side, there's probably some sort of a serotonin dump, a mood regulating drug. It's being dumped in because they can turn you down. The sense that they're turning something down. [crosstalk 00:20:13].
John Maddux: 00:20:12 You just gave them power.
Brandon Voss: 00:20:14 They're not tied to anything when they say no, no matter what it is they're saying no to. And it's just how you frame your question.
John Maddux: 00:20:22 That's very interesting. I love the way that that works. So after you say, "Is now a bad time," and they said, "No," is there a follow up to that, or you just get right into it? What do you usually teach?
Brandon Voss: 00:20:35 Well, if you're scripting it out, depending on how you're looking at things and what your prep time is, all that comes into consideration, how much time we actually have. But the next step would probably be to stay to timeframe. It's impossible to take 15 minutes out of your day, but then also be conscious of... especially if you're on the phone, have a timer next to you and make sure that you keep that 15 minute mark and at 13:58, you're interrupting the conversation no matter what they say. "Hey, I want to make sure we keep this to 15 minutes. We got about a minute left." Last point, agree to meet again and then get them off the phone.
Brandon Voss: 00:21:18 Because at the very least... We also talk about impressions in negotiation, and so we all have heard how important first impressions are. Well, what's more important than the first impression? It's the last impression. [inaudible 00:21:32] you don't want to talk about movies. On Broadway and in the movie business, they've known for a long time. You give them a big finish, they'll forgive you for anything. Right? So-
John Maddux: 00:21:40 Correct.
Brandon Voss: 00:21:41 ... understanding how last impressions affect people, managing the end of your conversation so that at the very least they walk away and go, "You know what, when I talk to them, they never waste my time."
John Maddux: 00:21:54 That's cool.
Brandon Voss: 00:21:54 I get daily updates from them, even if they got no new news. And then if they got something important they got to talk about, it's never going to take more than 20 minutes.
John Maddux: 00:22:02 Right. Well, someone's long winded and they're sitting there blabbing on the phone, you better believe the next time they see your number and your name coming on their phone, they're not going to answer it. Right?
Brandon Voss: 00:22:13 There's already an emotion, there's already some chemical dump going in and maybe it's adrenaline, maybe it's dopamine, who knows? But there's a... Manage your last impression.
John Maddux: 00:22:23 Yeah. I have a quick story on... When the crash happened and I didn't really know what to do with my life because I've been in the mortgage business for so long, I picked up my music again and I started working on songwriting and stuff like that. And so I had a manager at the time, and we would go and take meetings because I was trying to get a publishing deal, which is what songwriters do to make a living. So, one of the things that he taught me was, when you go to these meetings, the first thing you do is before it's time for them to say bye or for them to shoe you out, he said, "Stand up and thank them for the meeting and start pretending like you're going to walk out," because something about that...
John Maddux: 00:23:10 And I didn't really get the psychology at the time back then, but it made sense because they'd all be going, "No, no, sit back down. We want to talk more." And so they would kind of like... I think it has to do with this whole no thing that you're talking about. Is that something-
Brandon Voss: 00:23:24 Yeah, it's a big part of it. That specific walk away at the table, that creates an emotional moment. And how do you manage it? And one of the things I like about your description is, he's not slamming his hands down on the table and going, "You're unreasonable. We can't agree to terms." But kindly thank them for the meeting. If you get Chris on here, have him tell you the story about his friend, Ned Colletti, and that name may ring some bells in some people's minds, but he's got a famous story doing basically the same thing and completely changing the interaction because he thanked them kindly and started quietly packing up his stuff and slowly heading for the door. And wait [inaudible 00:24:09] wait. We're still talking here. How do you manage that moment?
John Maddux: 00:24:15 Right. That's interesting. So I wanted to continue talking about how no is not the end of the conversation. Like in the mortgage business, you're talking to someone on the phone about a loan and you're giving them a pitch, you're pitching them like, "Okay, so here's what your payment's going to be. Here's this, here's that." And if they said no, that's not necessarily the end of the conversation. You go, "Okay, all right. Well, thanks for your time. Bye." In this situation, you don't do the walk away thing. But how would no be a start of a conversation? Because I know that Chris has talked about that in the past.
Brandon Voss: 00:24:55 Right. Right. Again, going back to the whole, right, we're hit with no when we're trying to push value and don't get frustrated by that; stay in the fight. This is just the beginning. Your first no is just their first trail to your next yes. Right?
John Maddux: 00:25:14 Right.
Brandon Voss: 00:25:15 All those things. And you got to be fixed skin. Essentially, that's what that boils down to. Boil that down to, plain and simply, you got to be thick skinned. And really, we kind of turn that on its head a little bit because we're looking for a no, we're trying to make them say no. It's not about getting a rejection and figuring out how to bounce back, it's leaning the conversation to make them say no. So going back to our example before, is now bad time? Is it going to ruin your day if I soak up the next 15 minutes?
John Maddux: 00:25:54 Got you.
Brandon Voss: 00:25:55 Two nos in a row, bang, bang. And now you've got them locked in for 15 minutes. And so at this point, you've probably got their full and undivided attention for maybe 15 seconds. And so, are you going to waste that on accidentally running over and talking for two minutes, or you're going to throw a something like a label at them like we talk about in the book?
John Maddux: 00:26:20 Tell us about that.
Brandon Voss: 00:26:21 Open up the flood gate with someone... And one of the real estate courses I know my father is doing referred to as opening up the flood gates of truth telling. So what are you going to do with your 15 seconds? You're going to open the flood gates, or you're going to risk talking about something that they have no interest in?
John Maddux: 00:26:39 Hmm. So what do you do? I think maybe getting... I think hostage negotiations, from what I understand, is... I understand very little about it, but what I understand is you got to try to get personal. I think in hostage negotiations and sales, you want to get personal in some ways. Do you use that 15 seconds to get personal? Like to ask them to talk about something that they like to trigger some of those dopamines or those emotions?
Brandon Voss: 00:27:12 Rapport building is a quintessential part of communication as long as human beings are involved, and there's just no way around that. We talk about negotiator type, I don't want to go too far down a rabbit hole here, but talking about negotiator type, which just really boils down to fight, flight or make friends. And so what's the process for rapport building with each one of those times? Because it's going to be a little bit different. Everyone knows relationships are important, everyone values them at a different level.
Brandon Voss: 00:27:52 Again, understanding your counterpart, and a lot of that's going to come from them doing the talking. And I think if consider yourself in sales or in a negotiation capacity of any type, we're not learning when we're the ones that are doing the talking. And so how do you make yourself smarter in every interaction? And not every deal is made. We say negotiation is about making deals, but if you didn't make a deal, did you still negotiate?
John Maddux: 00:28:26 Yeah.
Brandon Voss: 00:28:26 Did you get smarter along the way? And that's part of closing the deals that nobody else can close, because you discovered the information nobody else can find.
John Maddux: 00:28:34 That's good. So, you're not going to... Once they say no, it's not going to ruin my day.
Brandon Voss: 00:28:41 Yeah.
John Maddux: 00:28:42 Great. And if you've never talked to a person before, you're not going to go and just say, like, "Hey, how's your family?" You won't do that, it's awkward. So I think, I guess, the next thing is you are stating what your purpose of your call is, or if you already know what that purpose is, then you just get into it. But I like when you're talking about if you're talking, you're not learning. And the whole goal in negotiation is you want to learn as much as you can about that other side and what their motive and their goals are in order for you to formulate a strategic and a smart way of getting to that finish line. Is that right?
Brandon Voss: 00:29:21 Yeah. Yeah. That's it. That's exactly it. And even just to add more to what you said, because that's a huge part of it, when we make the mistake of assuming that we're talking to the entire decision making party. And that said, you always got to be aware. It doesn't matter what level of negotiation you're at, there's always people that are not at the table that whoever you're talking to uses to make decisions; whether it's a wife or board of directors or another high level executive or whoever, there's other people away from the table that helps them manage their decisions. And so how are you effecting those conversations as well? Those conversations as well, that's always something you got to consider.
John Maddux: 00:30:13 That's good. That's good. So, I know you have a story about the words, "that's right." Some kind of football story and how the words, "that's right." If you can get them to say, that's right, there's a power to that. Will you tell us about that?
Brandon Voss: 00:30:33 Yeah. There is a lot of power to it. And the best comparison, especially in this day and age, that I can make is a political one. And again, we're not going down a rabbit hole, but-
John Maddux: 00:30:46 Sure. There's a negotiation happening right now as we all know, at the government shutdown.
Brandon Voss: 00:30:52 Exactly right. But that said, when you see... It doesn't matter who you support, what it is, you're still a human being. When you're watching TV and you see a politician you support and they say something that you agree with, you look at the TV and you go, "That's right. That's right."
John Maddux: 00:31:11 Absolutely.
Brandon Voss: 00:31:12 And so think about what emotion has taken place at that time and how much you whole heartedly agree with what this person is saying. And so how do you create that emotional moment in negotiation? You get them to say, that's right, what are you getting to say, that's right, to? And then of course, circumstance defined strategy. So going to your football story, I was being moved from a lineman to linebacker, never played linebacker before. And it's a completely different position.
Brandon Voss: 00:31:51 As a lineman, for those of you who are not familiar with American football, you're right on top of where the football is, which is where the line is, the imaginary line that divides the offense in defenses, the guys that have their hands on the ground; those are linemen. And then the guy standing right behind them on the defensive side, those are linebackers. And the responsibilities are very different. And one of the big differences is linemen hit each other. You come out of your stance and you hit the man in front of you, that's what you do.
Brandon Voss: 00:32:26 Linebackers don't do that; their job is to get to the ball. If there's people in the way, you're not necessarily supposed to make contact with them. There's a swim move, there's a root move, there's all these things that you learn that your coaches teach you in practice. But don't get caught up in contact, because you got to make a tackle, you got to make a play. And so when I moved to linebacker, my first thought was, when someone was trying to hit me, if I got out of the way, I was the chicken, because there's also a sense of pride on the line of scrimmage between that battle of men, as it were.
John Maddux: 00:33:11 Sure.
Brandon Voss: 00:33:11 It does come down to pride, and you're going to get beat up or you're not. And I had taken [inaudible 00:33:18] added to the linebacker, where if someone was trying to block me, I didn't want to get out of the way, I wanted to knock them down. I want to knock them down. I want them to know that if you're going to tangle with me, it's going to hurt every time.
John Maddux: 00:33:32 Sure.
Brandon Voss: 00:33:33 And so it's much more of a subconscious thing as I'm playing the position, because we'd be in a game and I'd knock down four, five people, and someone else would make a tackle and I wouldn't even make the play, but I would because havoc. And the coach was trying to tell me, "Don't do that. Dodge the blocks." And my father was telling me the same thing. And knowing me and knowing the circumstances, he wanted to best right out of me. And he pulled me aside and said, "When someone's trying to hit you, you don't want to get out of the way because it makes you feel like less of a man. It hurts your pride and your ego if someone's trying to hit you and you try to get out of their way and try to dodge them as if-"
John Maddux: 00:34:16 You're like backing down or something. Right?
Brandon Voss: 00:34:19 Exactly. Because you're backing down. And I looked at him, and I said, "That's right." And so what's interesting about this from my point of view was the very next game that we played, and unfortunately, it happened to be a game I got hurt in that year, but the first linemen I dodged, we locked eyes, and it was full intention; this is going to happen. This is a battle. It's about to be a train wreck. And I hit him with a nice little swim move. We ended up talking about it after the game, and he fell flat on his face and in the middle of the field, and I made the tackle in the hole.
Brandon Voss: 00:35:01 And the first thought in my mind was, "You wuss!" In my head, that's what told myself-
John Maddux: 00:35:09 You dodged the opportunity to-
Brandon Voss: 00:35:14 [crosstalk 00:35:14] because internally, I was something. I had to fight that. And so it completely changed my behavior once that was brought out into the light. And he [inaudible 00:35:21] to what we refer to as the summary. And so how do you change behavior of a counterpart you're dealing with and if you're a broker and you're trying to get a borrower, how do you change their behavior by summarizing what they see so succinctly that all they can say is, "That's right." Like, "You got it."
John Maddux: 00:35:40 That's good.
Brandon Voss: 00:35:40 "You totally understand me. I trust you more now, because I can feel that you understand what I'm seeing."
John Maddux: 00:35:48 So that's good. There's a good point there. If you understand what the borrower wants and what they want to accomplish and then you reiterate that, or you say that back to them, there's a power in that, because they really, truly feel that you understand them and you know... then they can trust you, because then they know, "Okay, wow, he knows what's in my head." Or, "She knows what's in my head." So that they can move forward and accomplish that. I guess they probably can then have less stress about the deal, less fear, I guess.
Brandon Voss: 00:36:29 And it's not even just in this business, it's a human nature concept. But people trust and feel more comfortable around those they feel understood by.
John Maddux: 00:36:41 Interesting.
Brandon Voss: 00:36:42 That's why people who smoke make friends, people who go to the bar and make friends, that's why people do business with each other; they trust those they feel understood by.
John Maddux: 00:36:56 That's a good point, a very good point. I know you guys also talk about emotional intelligence. Can you share about that?
Brandon Voss: 00:37:06 Sure. The whole EQ versus IQ argument and which is more important and which is more closely ties into success. And there's more and more studies coming out these days that shows EQ is much more closely tied to success [inaudible 00:37:24] guys like Richard Branson and the Tony Robbins are so popular. And guys like Samuel Jackson is in all movies and shows, because they're easy to get along with, people like guys like Mark Walberg. We'll throw him in every movie. This emotional intelligence thing being being tied to success.
Brandon Voss: 00:37:45 And IQ is defined at a young age. You're 10, 11, 12 years old, that's your IQ. It's never going to change. No matter what you do, it's pretty much a set marker. EQ is something you can continue to improve until your late 80s.
John Maddux: 00:38:04 What is it? I mean-
Brandon Voss: 00:38:05 There's guys out there, there's some married guys, I'm a recently married guy myself, we can continue to get smarter. The arguments with the wife might actually get easier as time goes on as we forget this emotional intelligence thing. But yeah, it's an action. I think that's what's really missing and what we don't understand. And that's why we related so close to what we call tactical empathy. It's an actionable item. And so how do we put the words together to take action?
John Maddux: 00:38:35 Interesting. So, it's something that you can learn, you can evolve, you can get better at. It's something that really relates to how much effort you want to put into it to get back. Is that right?
Brandon Voss: 00:38:51 It is. It is. Not to be confused with sympathy. And I think that's where sometimes we get tripped up. And emotional intelligence, there's a two part definition of it; the first part is simply being aware of your own emotions and being able to keep them under control. And the second part of that is being very acutely aware of your counterpart's emotions and then being able to influence those emotions. Being able to recognize them, see that they are there, understand their existence, and then influence how those things affect their decision making.
Brandon Voss: 00:39:29 So it doesn't include agreement, it doesn't include feeling it's yourself. What it really boils down to is acknowledgement. And that's, I think, where we stand out in a lot of ways is we help people actually put the words together. What do the phrases look like? Why do we have this negotiation nine list and these other tools, and then how do you put them together?
John Maddux: 00:40:00 That's good. And I could see where listening is a big part of that. Listening and listening with intent, not just listening. There's two different ways of listening, you can... Because some people listen just so they can say the next thing, versus listening and trying to understand what someone... where they're coming from. And I think a lot of problems can be fixed by taking even one minute or 15 seconds to really listen.
Brandon Voss: 00:40:28 Yeah. That's it. Stephen Covey is really put it out in the world in a big way in just what he described as, seek first to understand before being understood. And that's a great way to look at it. I think what we feel in a lot of holes is that, how do you do that? What does it look like? What's the sequencing? What's the process? And to even add more to it, seek first to understand in order to be understood.
John Maddux: 00:41:07 That's good.
Brandon Voss: 00:41:09 In order for them to then see your point of view. That's what we talk about in the book, this whole idea of forced empathy, when you want them to see what you're looking at. And then is how you sequence it out. I think it's not so much that it... It's not that it doesn't have its place, it's where does it go? And the thing is, it can't go first.
John Maddux: 00:41:31 Interesting.
Brandon Voss: 00:41:32 What's great that is if you do everything else right, you can discover those black swans, you build that trust and rapport quickly because you display the understanding, that they don't even need to hear your side to agree to what you want. It's amazing what those emotions then create. It eliminates that need [inaudible 00:41:51]. Like, Hey, let's do business.
John Maddux: 00:41:52 Right. It goes back to what you were saying like, people want to do business with people they trust, people want to do business with people that they have something in common with. Like the smoking thing, you're right, you always see people packed together, whether it's they're into football or whether they're into... Whatever it is that they like to hang out. And so having that connection... I think that with sales too.
John Maddux: 00:42:13 It reminds me of a book I read a long time ago. I remember early on, when I first got into sales, my first loan officer job, I went to Barnes & Noble. I don't know if anyone remembers that store, but I went to Barnes & Nobles, and there was a self help books section, and I saw this book. And that it's a bunch of different books, but one that stood out was... the title was, How to Get Anyone to Do Anything. And I looked at that book and I was like, "Whoa, that seems kind of powerful. That seems cool." So I read a couple things like, "Okay, I'll buy that book."
John Maddux: 00:42:46 And I just never forget when I went to the checkout, and I had, I think, two books, this elderly lady looks at the book and she reads it, and then she looks up at me and then she looks back down at the book, reads it again, looks back up. She looks at me and she goes, "You be very careful with this book, young man." And I just remember the book had all kinds things about that.
John Maddux: 00:43:13 One of the questions that I wanted to ask you is like, if you learn the ability to negotiate and you learn all these tricks, do you ever feel like you have kind of like a superpower? Is there a moment when you realize, "Wow." And not to... you want to be a manipulator. That could backfire and become the opposite of what you're trying to accomplish. But there is something to it that I think is rewarding, knowing that you can somewhat... It's almost like a chess player; you know what's going to happen if you do things right. Is there something to that?
Brandon Voss: 00:43:48 Yeah. There's so many elements to that question that I feel like I could come at that from. And so please help me redirect if I get too far off topic here, because-
John Maddux: 00:43:59 Sure.
Brandon Voss: 00:43:59 ... I just got to bounce around it, because I think that's a great question. But first of all, I think one of the problems with negotiation, or what scares people is the undertone that one side is going to get taken advantage of. And then also, there's this thought of, in negotiation, there's a silver bullet. If I say the exact right thing, it'd be like I sprinkled fairy dust on them and they just agree to what I wanted, and that whole thing. And at the end of day, people make deals because they feel like it.
Brandon Voss: 00:44:34 And they feel like it because they're under tremendous amounts of pressure from you or what they're feeling on their side or the threat of loss or whatever it is. All those negative things. Or they feel like doing it because they got trust and rapport and they feel understood. And so the skills are designed to create a collaborative environment where both sides make a lot of money, we're making good agreements. We don't want agreements that end up hurting me this side. And so what does that look like?
Brandon Voss: 00:45:14 I think when you go in with the intention of navigating and understanding, then it changes your perspective a little bit as far as trying to pitch value or show them the way, because there's all kinds of buyers that are out there anyway. The buyers [inaudible 00:45:34] statistics; up to 70% of their mind is made up before we even speak. And so nobody's close rate is 70%.
John Maddux: 00:45:45 Sure.
Brandon Voss: 00:45:45 Think about that, it's like, well, if we're on the phone and we want to assume they have an open mind and 70% made up, why don't we close at 70%? And so the misconception, again, that they do have an open mind. When they've got a 70% mine made up, then it's just whether or not they made up their mind about you or they've made up their mind about something else and they're just wasting your time. So there's a lot of elements, and it's just how you approach the conversation from trying to understand.
Brandon Voss: 00:46:15 And also what that does for you is you don't got to do a lot of work. It alleviates your side if you go in with the intention of, we're going to see what they have to say and then we're going to agree to meet again. In the first couple of stages in negotiation, that takes a tremendous amount of pressure off of you. I know that was long winded. I kind of-
John Maddux: 00:46:37 That was goo.
Brandon Voss: 00:46:38 ... jumped way all over the place, but... Does that add to the conversation or? Is it ridiculous to say that that added to the conversation at least the little?
John Maddux: 00:46:49 Right, right. There's so many ways and there's so many books. One of the things that people say is, the power of yes... So when we first started talking about this no thing, it's like, well, what about yes, you want them to get them to say yes, yes, yes, so then they say yes to the deal? So it's like, where do you cross from no to yes. I know there's probably a tactic in there somewhere.
Brandon Voss: 00:47:19 I don't like to refer to necessarily as training wheels, but that's one way to look at it. And so how do you start... How do you start the momentum to get a good no question started or get a good label started where you're not necessarily going for that yes, that close ended. One of the ones we talk about in the book is, have you given up on? And when we talk about that in the context of, through email, you haven't heard from somebody in a while you don't know what's going on with the deal. Have you given up on X? Put in the subject line and shoot it out there.
John Maddux: 00:47:57 That's good.
Brandon Voss: 00:47:58 So the other thing about the emotional moment we just created there is nobody likes to give up.
John Maddux: 00:48:04 Yeah, it's true.
Brandon Voss: 00:48:05 To be [inaudible 00:48:05] and that's human nature. And so structure it in there and that sort of way. And then of course, putting the subject line, nothing in the email body. We know human nature is people scan their subject lines when they read their email.
John Maddux: 00:48:18 Yeah.
Brandon Voss: 00:48:19 [inaudible 00:48:19] mentally the levels of importance, and then some people get responded to and not everybody does right away. And so understanding that as well, right in the subject line, front center, and now you're sparking a new conversation.
John Maddux: 00:48:34 That's a great tool because I've never heard anyone tell me what should I put in the subject line. That is a great... That, I'm going to add to my... End to an email with the question mark because I always like to do that if I want a response. And I like to keep it really short, but also to put that in the subject line. That's huge. Now, imagine that works. Have you ever seen... Do you have any statistics or do you have anything where like you've talked to someone and given a couple of tips like this, business wise, and they're like, "Wow man, that changed the responses." Anything like that?
Brandon Voss: 00:49:12 Well, a couple of things. One more just to add to emails. And in your emails, how does this sound? That's a bad way to end an email.
John Maddux: 00:49:22 You don't want to use that.
Brandon Voss: 00:49:24 But yeah, it's... I'm sorry, what was the original question? Because now I've lost my thought.
John Maddux: 00:49:30 No, no. So, don't end with, how does this sound?
Brandon Voss: 00:49:34 No, how does this sound? Yeah. Then with that, use that-
John Maddux: 00:49:37 End with that? Got you. I was thinking you were saying don't end with that. I was like, "Whoa. We end with that a lot." That's good. [crosstalk 00:49:45]. How does it sound?
Brandon Voss: 00:49:45 I took on a little tangent there before I answered your original question there [inaudible 00:49:51].
John Maddux: 00:49:51 No, no. I was saying, do you have any examples of people who've come back to you and said, after you've given them these tips... What has been the percentage of response rate going up or the... Because I know, there's a lot of people out there that are doing a lot of marketing and they're not getting a response. So if you do these things, if you add that subject line thing or if you end a sentence, a short sentence, like, how does that sound? What has been the response from your clients? Because you do business to business, right? You're teaching people. So what have they said to you about like, "Wow, that's changed my business," or "That's improved my responses from my clients." What do they say?
Brandon Voss: 00:50:39 Yeah. So a couple of different things. So the longest that we know of as a response time to a no oriented question through email with the subject line is 24 hours, and it happened to my dad and it's because the receiver was on the other side of the world, a way different time zone. And other than that, what we're hearing from our fan base, from our subscribers, from people that come to our one day seminars and the people we coach, never more than two hours. pretty typical, you're going to get a response in under 20 minutes.
John Maddux: 00:51:20 That's huge.
Brandon Voss: 00:51:21 The other part of that too is... And that's specific to the [inaudible 00:51:24] question. How does this sound? This is a different thing. We're talking a little bit different context as opposed to no message body at all, and you're just using the subject line. And so along with that, you got to be ready for your followup. So we've all heard the phrase, the strategy you're using is designed to give you the result that you have. Damn, I'm probably really butchering that cliche, but [inaudible 00:51:50] you got to change your strategy. You want to change your result, you got to change your strategy, the whole-
John Maddux: 00:51:54 Right. You don't want to be insane.
Brandon Voss: 00:51:56 ... against the wall and expecting a change is not going to happen. And we're expecting it not to hurt if that's not going to change. So changing your approach... And so when they re-engage you after the no answer question, you've got to have some follow up ready to go, you've got to have what we like to refer to as calibrated questions, you're probably going to want to have some pocket labels that you're ready to hit them with because you got a strategy on where you want to end that conversation and what you're trying to get out of them.
Brandon Voss: 00:52:25 Funny story with in regards to when Tall was helping us write the book and... And he's a great writer, man. I tell you, great guy, extremely intelligent. One of the cool things he figured, he had to read every negotiation book that was ever written when he was going to work with us. But he's got a sister dealing with a boss or dealing with a... She's self employed and dealing with a client and having problems and not getting engagement. Things are falling apart, she doesn't know what to do.
Brandon Voss: 00:52:59 So we talked to him. He lays it out for us, we talk to him about this know oriented strategy and then specific calibrated questions. They have a swallow up. He explains it to his sister and [inaudible 00:53:11]. She's like, "I haven't spoken to this guy. He's not going to respond. There's no way. It doesn't matter." Just takes them for granted and just... She takes a little no oriented question piece, doesn't prepare any of her calibrated questions, sends the email and the guy calls her six minutes later.
John Maddux: 00:53:28 Wow.
Brandon Voss: 00:53:28 Calls her phone direct.
John Maddux: 00:53:29 She didn't know what to say.
Brandon Voss: 00:53:31 [crosstalk 00:53:31]. We say in preparation, you fall to your highest level of prep. If you don't rise to the occasion, you fall to your highest level of prep. So in that moment, she didn't rise to the occasion, she fell back to the same exact behavior that she's been doing that caused this in the first place. She didn't get to where she wanted to go.
John Maddux: 00:53:51 Interesting.
Brandon Voss: 00:53:51 She got the engagement. And then it's just a matter of, what strategy do you use to move forward?
John Maddux: 00:53:57 Right, right. You got to be ready for that, because it's going to work.
Brandon Voss: 00:54:01 Yeah. It's cool. And it's fun to have tall and different people. And I wish we had more time. There's so many stories from different fans and things. And then it makes you smarter. Right?
John Maddux: 00:54:12 Yeah.
Brandon Voss: 00:54:13 Speaking of books, there's a book... And I'm looking, because I got it behind me here, The Talent Code by Daniel Coyle. And he talks about-
John Maddux: 00:54:20 The Talent Code?
Brandon Voss: 00:54:21 ... learning and what it takes. And you got screw things up in order to learn it fast.
John Maddux: 00:54:26 Right, right. Yeah. So the last question I want to ask you is something I like to ask people. You said when you screw something up, you learn fast, so what is your favorite failure? What is something you can share with us that's been like a failure you've learned from, but it's a good failure? May have been a bad failure, but something that stands out that you could really share with us that might relate.
Brandon Voss: 00:54:50 I think it'd be fun to refer to a father-son, parent-child thing. And a failure over and over that I think all... If you've ever had parents or you've ever had a guardian or someone that's looked after you and you were a kid growing up in that household and you never asked the question, "Mom, can I? Dad, can I? Grandma, can I? Auntie, can I?" And it's a yes thing. We want to get a yes. There's something that we want from them. And that puts a lot of stress on them, because it's like, "Well, what are you thinking, you little-"
John Maddux: 00:55:31 Leave me alone. Go back to your homework.
Brandon Voss: 00:55:34 What's really going on in this kid's head? Your parent knows you're up to no good. And I did that too with my dad. And he talks about... When we teach together, he loves to talk about that. And he says... I'd always shut him down. Before he even finished, I'd be like, "No, no." Before he even got a chance to ask me what it was. But then, once I was able to say no to them, then five minutes later... All parents do that. "No. Right." They know their kids are going to ask them something they don't want. But then a couple of minutes later, you find yourself going, "What was it? What were you asking me? What was that thing... The other day, you asked me..." Even if it's a couple days. Their thought process and what that does, and even hearing him talk about it as a parent and seeing it as, it's true to human nature, I think parents do it all the time.
John Maddux: 00:56:27 I do it all the time. [crosstalk 00:56:28]. I have twins that are 13 and-
Brandon Voss: 00:56:30 Keen with other people in a stressful negotiation environment.
John Maddux: 00:56:35 Right. So what's the answer?
Brandon Voss: 00:56:40 Well, the answer is getting people to say no. It makes them feel protected. They're going right there [crosstalk 00:56:45] original idea. And then it makes it easier for them to trust you, because you're not trying to pin them down to anything. It's another small building block towards rapport, you're crossing several bridges at the same time.
John Maddux: 00:57:00 Is there something in real estate?
Brandon Voss: 00:57:02 [inaudible 00:57:02] owe me anything. I'm sorry, go ahead. What was that?
John Maddux: 00:57:07 Sorry to cut you off, is there something in real estate that is relatable to the know? Like a question that you've seen common that to get someone in like... maybe it could relate in mortgages or it could relate in real estate. Like what's a good opening question that you'd want them to get to say no to? I say like, "Are you locked in a lease?" That's what my question is like, are you locked in a lease and you can't buy a house?
Brandon Voss: 00:57:31 That's a good question. And please forgive me, I didn't shed any light on that earlier. I do like that question. It gets right to the point. And again, you're aiming for that no and you're trying to keep your communication short in that regard. So that's not a bad one. And I think emotionally, especially when it comes to residential real estate, commercial real estate, even applies to a certain degree because it can be so big and how people are tied to the business. But especially in residential, it's... people are making... they're moving their lives around. There's a direct connection to how they live their life, especially in regards to a home. They're either renting it out or they're living in it or it's somewhere they go in the summer or it's getting foreclosed on and now they've got to pick up and move their life somewhere else.
John Maddux: 00:58:23 Sure.
Brandon Voss: 00:58:24 There's a direct connection to the basic Maslow's hierarchy of needs when it comes to shelter that are affected in human beings, so being able to manage that. And so easy ways to use a no oriented question is, I said, is it ridiculous? Right?
John Maddux: 00:58:43 Sure.
Brandon Voss: 00:58:43 That's the one we like. Is it ridiculous? Would it be out of line? Would I be wasting your time? Would you disagree?
John Maddux: 00:58:52 I'm writing these down. These are good things. So what about like, [crosstalk 00:58:56]is your payment low enough?
Brandon Voss: 00:58:57 We're going to book two weeks and we talk about them in our training, but those are just a few.
John Maddux: 00:59:02 Yeah. I can think of something like, is your payment low enough? Is your mortgage payment low enough? No, it's not low enough.
Brandon Voss: 00:59:09 [inaudible 00:59:09].
John Maddux: 00:59:14 Like, do you have enough money? Like, no, I don't have enough. Most people want a little bit more money. Or, do you have a vacation? Other things that people need to spend money on. They want to remodel their kitchen, they want to pay for their kids' schools, for college, they want to pay for a wedding, they want to pay for... There's all kinds of events that you could work that no around. I think that's good.
Brandon Voss: 00:59:39 That's it, man. Yeah.
John Maddux: 00:59:42 That's cool. Well, I appreciate you coming on, Brandon. This has been really good. Where can my followers and viewers find you and find more information?
Brandon Voss: 00:59:51 All right. So a couple things; first, our website is blackswanltd.com. So black, like the color, swan, like the bird, with one n, LTD, like limited, dot com. And then also, if you want to sign up, we got a weekly blog, comes out Tuesday mornings, and it's designed to drop in your inbox about 9:00 AM your local time, wherever you're at in the world. And if you text the words FBI empathy, all capital letters to 28228, you can text it to that and it'll prompt her for an automatic signup.
Brandon Voss: 01:00:38 I've heard some people have had some issues with the iPhone, just kind of heads up there. And you can also sign up on our website, we got a little box on the right there. But those are the two best ways. And our newsletter has a lot of updates on what the company's doing, any marketing that we put out, or sessions we're doing, it hits our blog before it even hits the website.
John Maddux: 01:00:59 Very cool. All right, Brandon, appreciate you coming on. Thanks so much.
Brandon Voss: 01:01:03 I had a blast, man. This was cool. Thank you for the time.
Speaker 2: 01:01:06 Thank you for listening to our podcast. If you guys are looking for more content like this, we have a FundLoan's YouTube channel where we give away more tips, secrets, and origination ideas. You can also email us at firstname.lastname@example.org. And if you've made it this far, I think it's safe to say you like our content, so please subscribe, share, and send us your scenarios. Let's fund loans together.
On this episode, Jon Maddux spends some time with FundLoans Underwriting Manager, Jerry Tubbs. Since making the switch from Loan Officer to Underwriter, Jerry has quickly moved up the ranks, managing large networks of underwriters as well as personally u
"Mind-Bending Mortgage Lending" With Jerry Tubbs, Secrets from Non-QM's Top Underwriting Manager, As Featured On FundLoans' Vlog "The Million Dollar Mortgage Experience.
Here's The Full Transcription
Jon Maddux: 00:00 On this episode, I get to spend some time with our underwriting manager, Jerry Tubbs. You might be familiar with his voice from our intro. He's underwritten thousands of loans in his career and has seen almost every scenario you can imagine. We discussed topics from catching mortgage fraud, to how you can package a loan to almost guarantee an approval. Just, kidding, but definitely his advice will give you the highest chance to get your loan approved. Listen close as we hear about the craziest loan Jerry has ever underwritten, to finding creative ways to originate million dollar Non-QM loans.
Jerry Tubbs: 00:32 Welcome to the Million Dollar Mortgage Experience podcast. Listen in as CEO, Jon Maddux of FundLoans reveals tips, secrets, and origination ideas to fill your pipeline with million dollar opportunities.
Jon Maddux: 00:48 Welcome to the show, Jerry. Thanks for coming on.
Jerry Tubbs: 00:51 My pleasure.
Jon Maddux: 00:52 So all of our viewers, most of them are mortgage brokers, they're people that want to learn a little bit about Non-QM. This is a chance for them to really lift up the curtain and look under the hood, and just to kind of see what's behind a loan. When someone is looking at a Non-QM file, and I think we talked about this before we started the cameras, is for an underwriter, maybe it's in my mind, it's like they get a present. They get this present, they got to unwrap it and see what's in there, because you never know what's going to be in that file. It could be a big $3 million loan, it could be a smaller loan, it could be something crazy, but I know as an originator, how many different scenarios I've seen in 21 plus years. As an underwriter, I mean, you get to see every little detail about this person. So you get to look in their, you see their dirty laundry, you see everything about them. Tell us just real quick about how you got your start in underwriting.
Jerry Tubbs: 01:52 I actually started out in sales. I was originating loans, and kids started coming along and I made the decision that I might want at the end of the night, rather than being in a real estate office at 8:30 at night, I might want to be home playing with my kid.
Jon Maddux: 02:11 It's a good life choice.
Jerry Tubbs: 02:13 I took an opportunity to stay involved in the mortgage business doing that way. I had a really good track record as an originator, getting loans done. Went three years without a denial, so I was doing a lot of underwriting at the application.
Jon Maddux: 02:28 You were actually your own underwriter.
Jerry Tubbs: 02:30 I was, I was. It was a natural transition for me. One of the things that really benefited me and kind of skyrocketed my career was being able to take that ability to structure loans like an originator and not forget how to do that when I got into underwriting.
Jon Maddux: 02:47 Interesting.
Jerry Tubbs: 02:47 So being able to leverage loan structure as an underwriter and figure out how to make things work, verus how to make them not work has kind of helped me make my mark in the underwriting world. So pretty soon I'm being asked to manage underwriters and contribute in bigger ways because of that ability.
Jon Maddux: 03:06 That's very cool. So in your office, you have on your wall it says, "Mind-bending mortgage lending." What does that mean to you?
Jerry Tubbs: 03:14 For me it's a reminder that again, I'm trying to figure out how to make the business work for customers, not how to remind them how it doesn't work, and in the space-
Jon Maddux: 03:28 Coming from a place of yes, sort of.
Jerry Tubbs: 03:29 Yeah. The really cool thing that makes it fun for me to come to work every day is I'm not doing commoditized loans, I'm not doing Fannie, Freddie, and just reminding people how they don't fit into this cookie cutter that those agencies have created. I'm in a space where when people, when it makes sense that people have the money, and the wherewithal, and the desire to be homeowners or change their financial situation, that we've got products that accommodate them even if they don't fit into this cookie cutter that the agencies have created. So that's fun for me.
Jon Maddux: 04:08 Because you get to use a little more creativity in the process and it's not just anyone can do it. It's kind of like I think, and I almost look at it from a songwriter standpoint or from a musician standpoint. There's the people out there that can read music and then there's the people that can either play by ear or they can play by just kind of making it up. They can sit down in a piano and just kind of make up something, but it sounds good, right? Or they can go pick up a book and read, read exactly Bach or whatever the piece is and they learn how to do it. But often people who can read music have a tough time playing by ear or just making stuff up.
Jerry Tubbs: 04:49 Or coming up with something new like you're saying.
Jon Maddux: 04:49 There's some creativity I think that fits in certain people. It sounds like you're not just the kind of person that can just read music or make sure something fits in the box, but you can say, "Well, maybe this makes sense if I do these two different things or look at it from a different perspective." Is that?
Jerry Tubbs: 05:08 I would say, and in music, I'm a remedial reader. I can read it eventually, but after a fast, but when I can play the radio that's in my head, you lock me in a room and 30 minutes later, if you need a jingle, you're going to have it.
Jon Maddux: 05:23 That's cool.
Jerry Tubbs: 05:24 And I feel the same way about underwriting. This is going to be this mishmash of assets, and income, and property, and credit, and you'll look at it and once you evaluate it, you have an opportunity to say, "I can make something out of this."
Jon Maddux: 05:39 That's cool.
Jerry Tubbs: 05:40 Whether this would fit in this product, or I can't do it there, but I could do it there, or if I tweak this or pay that off, and keep molding it until, or almost like turning a Rubik's Cube until those colors start to line up and you can cross the finish like with a solution.
Jon Maddux: 05:56 That's a cool way to look at it, yeah. I don't really like the word Non-QM just because it's like, what does that even mean, right? But I know we call it make sense lending or alt-doc, or non-prime, but it's not really not even non-prime, because a lot of these loans are good FICOs, good credit, maybe one little thing is off here or there because they're human, right? And they don't always pay attention to their credit. Some people are paying attention to their business, they're self-employed and they just, either the person they've hired to take care of their credit, or just something missed, or something got missed, and so their credit score is not always perfect, but what about this as what we call make sense lending? What do you see is kind of the reason why Non-QM is make sense lending?
Jerry Tubbs: 06:41 Well, I think one of the things is sometimes you'll find a disparity between someone's FICO score and their credit performance, and it was something I struggled with when FICOs were first introduced back in the '90s. They were really introduced to create some electronic convenience for what was a new fangle toy in the mortgage business back then, which was LP and DU. It was a lot easier to program one box to plug a FICO score in that to actually create a computer that would look at a credit report and decide whether someone was credit worthy, and one of the first things we ran into then, that I still run into today, is some people have different attitudes towards using credit, and especially with some of the wealth profiles that we see. We have people that have so much money at their disposal, they would never have to use credit. They would never have to borrow money, unless it was a convenience for them, whereas certainly never a necessity to borrow money, and those people traditionally that don't use a lot of credit are going to have a lower than normal credit score, and it has nothing to do with their ability to repay.
Jerry Tubbs: 07:48 You can look at a sheet full of account they had years ago that they paid on time. So you'll get people with lower credit scores, and by that I mean someone in the 600s instead of the 700s, let's say, and they've got 10 or 20 tradelines they haven't used in years, and every single creditor they've ever had contact with has been paid on time, but they're pulling a 640, and someone with two or three tradelines they've used recently might be in the 700s, and I would rather lend money to this person that doesn't need the credit, frankly.
Jon Maddux: 08:21 Yeah, right, and that's what you see sometimes in banks. It's like if you don't need the money, that's when it's the easiest to get it, right?
Jerry Tubbs: 08:27 Yeah.
Jon Maddux: 08:27 You got all this money in the bank, and you got no real need, but when you're like gosh, I need to borrow another few grand for whatever, they're like, "Nope, sorry, no, no, no."
Jerry Tubbs: 08:36 Yeah.
Jon Maddux: 08:38 So without divulging private information, you've been in this business a long time, I know you've probably got at least one interesting story that you can share about a crazy underwrite, a crazy borrower, a crazy profile, whatever it might be, just something interesting. What would you say?
Jerry Tubbs: 08:55 The one that comes to mind almost immediately, and to your point, there's hundreds. It's like making me pick my favorite child. One that comes to mind that was one of the trickiest ones, I was working for a big bank in New York, and a very well-known formed baseball player came in and.
Jon Maddux: 09:14 Like walked in?
Jerry Tubbs: 09:15 Yeah, actually physically walked into the-
Jon Maddux: 09:17 Came into the bank.
Jerry Tubbs: 09:18 To the branch, and when he explained the situation they were like, "We can't help you. We need you to talk to this guy." So got ushered up to my office. Anyway, when he left baseball he was on this extended contracts that continued to pay him years after he played, so he was still at the tail end of these multimillion dollar contracts, dropping money in his lap and hadn't picked up a bat or a glove in five years. Anyway, post baseball he had got successfully involved with some real estate developers, and they began buying up high-rise apartment buildings that were in disrepair, and they would form an LLC for each building, each individual address. They would take the building from a bombed-out hole, they would completely rehab it, they would fill it with Section 8 subsidized rentals, and then when this investment was upright, it was full of paying tenants, they would present that as a turnkey rental opportunity for an investor that didn't want to get their hands dirty with the rehab process and the rental process. The numbers were astounding. Each building could be acquired for 10, rehabbed for five, held for another five, and sold for 30.
Jon Maddux: 10:43 Wow.
Jerry Tubbs: 10:47 The reason I came to pass, to even talk to this gentlemen is he was looking for a mortgage for his own home.
Jon Maddux: 10:55 Gotcha.
Jerry Tubbs: 10:55 He was moving his family away from the city and out to where he had grown up, buying a beautiful home, going through the traditional mortgage process, and confronted with the type of things that the traditional mortgage process slaps in your face which is I need two years of tax returns on all of your businesses. At that time, the moment that I met him, he had 60 of these buildings in the pipeline. About 10 to 15 that were in the acquisition phase.
Jon Maddux: 11:24 Were these each LLCs or corporations?
Jerry Tubbs: 11:26 Every single building was a single LLC.
Jon Maddux: 11:29 Wow.
Jerry Tubbs: 11:29 He had 60 LLCs.
Jon Maddux: 11:32 So what's it like talked to you?
Jerry Tubbs: 11:34 It was presented as a full doc double year because that's the only type of things that that big nasty bank did.
Jon Maddux: 11:42 Yep.
Jerry Tubbs: 11:43 And he was-
Jon Maddux: 11:46 And this is probably back in the day when you had physical files at your desk, yeah?
Jerry Tubbs: 11:50 It was digital. This is only a few years ago, but the idea of a single underwriter tearing through all 60 for both years, coming up with cash flows for a situation where every building was on some different level of spectrum of completion to.
Jon Maddux: 12:10 Man.
Jerry Tubbs: 12:11 Just blocked the building yesterday, got it rehabbed but not rented, fully rented and on the market, or sold, but this process of grinding these buildings through this process. They got so good at it, it was like printing money. In the two or three times that I met to get some documents, ask some questions, clarify, this gentlemen brought in multimillion dollar settlement checks from buildings that successfully closed, and he's just depositing them into his checkings.
Jon Maddux: 12:44 He's like, "Here's another one."
Jerry Tubbs: 12:45 Absolutely. But anyway, the solution for us was to leverage the portfolio power and isolate balance of the LLC's cashflow. So we actually ended up cash flowing all these buildings but did it at okay, one level, added back the millions of dollars of depreciation on all these buildings to show that this man didn't lose $10 million last year.
Jon Maddux: 13:11 Like it says on his returns.
Jerry Tubbs: 13:13 Yeah, but he actually made 30 million and didn't pay taxes on any of it.
Jon Maddux: 13:19 It sounds like a good model.
Jerry Tubbs: 13:20 Yeah, presenting it the right way, understanding those cash flows, knowing what we could add back, what were the paper losses, knowing what we could do with those loans, be able to prove that he was an extraordinarily wealthy person, a very good risk for the loan, and we were able to get him closed on his new purchase on time, and the last time I spoke with him he was wildly happy and still very grateful.
Jon Maddux: 13:46 That's cool. Were you a fan too?
Jerry Tubbs: 13:49 Had never met the person or had followed his career, but at the tail end got him to actually autograph a couple baseballs for the guys on our acception desk that said, "Thanks for getting me home."
Jon Maddux: 14:06 That's cool, that's great. These kind of deals are obviously different and there's a make sense approach to them, but how does it differ, what's some of the main differential or different points that you could say between agency, government, and Non-QM? What were some standout things that really could differentiate it?
Jerry Tubbs: 14:29 I think one of the mission for Non-QM has turned out to be making it easier for self-employed to get money that they deserve.
Jon Maddux: 14:38 Right.
Jerry Tubbs: 14:40 Typically if you're starting a new business, even one that gets traction immediately, you've got to sit out two and a half to three years to have enough of a paper trail at the IRS to be able to walk into a traditional lender and say, "I can prove to you I make enough money to afford this house payment."
Jon Maddux: 14:57 Right.
Jerry Tubbs: 14:57 And using products that have flexibility like bank statement loans gives me the opportunity to catch those people once they're already successful but not make them sit through the two or three years it's going to take to develop an IRS worthy paper trail.
Jon Maddux: 15:13 Yeah.
Jerry Tubbs: 15:13 So we can get people that have an immediate need for the money, they have a great ability to repay, they're not a big mortgage risk, they just don't have the paperwork they need to satisfy those big bad agencies.
Jon Maddux: 15:28 Right, and I mean, you said it just right with self-employed borrowers. I mean, that's something that's a trending up, especially more recent there's a lot of people that are just starting new businesses. People that are going from being a W-2. They're going from a W-2 job to being a contract employee. So they get let go, or they say, "Well, we still want you but we're going to pay you 1099." Or they've been doing, like say they've been a doctor at Scripps for many years, and then now they're a doctor but they're on their own practice. So it's like you really are going to say this guy's risk is much different? I mean, I know going out on your own versus having people walk through your door from a big hospital is different, but they're still a similar profession, things like that, they've been doing it for a long time. It's always interesting to see how the guidelines of Fannie, Freddie and government just, it really doesn't take into consideration the make sense approach.
Jerry Tubbs: 16:24 Yeah. They're biased towards wage earners.
Jon Maddux: 16:26 Yeah.
Jerry Tubbs: 16:27 When you think about it, self-employed people are still the exception and not the rule.
Jon Maddux: 16:32 Right.
Jerry Tubbs: 16:35 I would bet it's an 80 20 type situation, where 80% of us, 90% of us are wage earners, it's that special 20 to 10% of folks that are out there doing their own things. The rules aren't really written for them, and so those exception type borrowers need exception type mentality. You have to think about those people aren't going to be living their life just so they can come in and make it easy to do a mortgage once every seven years when need one. They're living their life the way they need to. They're managing their cash flow for what makes sense for their business and their business strategy. It's my job I feel to take a look at that, stand back for a moment and go, "You make more money than I do. You deserve a loan." How do I tell your story in a way that takes advantage of what you've done that is exceptional, and present it in a way that makes people realize there's not a lot of risk in this borrower compared to the one that has two W-2s and a pay stub and [crosstalk 00:17:40].
Jon Maddux: 17:40 Yeah, because they could get fired tomorrow and lose their job.
Jerry Tubbs: 17:43 Yeah, and then they'll be self-employed anyway. Look at the world.
Jon Maddux: 17:47 For sure. Well, on that kind of thought, what can brokers do to better, how could they do a better job at getting the loan prepared to be seen by an underwriter like you?
Jerry Tubbs: 18:01 I honestly think you need to be a better storyteller. If you, and I would take the time to type up a paragraph of what does this guy do, how does he make his money, how much money does he typically make, how often does he make it? It's so many times I can't tell you where you'll have a very generic sounding business name that really doesn't tell you if this is a product, if it's a service, or if it's any other kind of operation, and those type of details help make sense, because then when I look at bank statements, it makes the deposits that are going in make sense, like oh, that's probably one of his business deposits because it's the right size, it's the right frequency. So telling the story, understanding, and I got to believe if you're an originator, I got to believe that showing that much interest in your borrower to find out how he makes a living, it's got to be a great rapport builder.
Jon Maddux: 19:10 Oh yeah.
Jerry Tubbs: 19:10 So there's a great reason to do it anyway.
Jon Maddux: 19:13 Sure, you have a great chance. People like to talk about themselves too. So if you're asking like, "Tell me how you make money." They want to just talk and you can take notes.
Jerry Tubbs: 19:20 I would assume you'd have trouble shutting them up.
Jon Maddux: 19:22 Right, yeah.
Jerry Tubbs: 19:24 But you're going to learn things that are going to help you present the loan to someone like me and help me understand, because I'm going to have the same questions from a different perspective, which is I need to know how this guy makes money.
Jon Maddux: 19:35 Yeah, and you're looking at bank statements, so you're seeing all kinds of deposits, and some of these deposits you're like, "Gosh, is this income? Is it not income? Is it just somebody is transferring money from here to there?" So yeah, to understand that right off the bat would help you from going down some bad rabbit holes and thinking things that aren't necessarily true, right?
Jerry Tubbs: 19:56 It reminds me of a situation I had. I had a borrower where there was a Schedule C borrower, I actually had tax returns in this, and it wasn't really obvious what he was doing. What was really obvious that he was making a lot of money, and the expense ratio was really almost unrealistically low. So low that it felt like, could these be fraudulent returns? I actually ended up calling the borrower just because I was curious, because it looked like it had something to do with precious metals, but it's not like he had a storefront or he's buying and selling precious metals. I couldn't quite make the connection. So I finally just broke down and said, "If I have permission, can I talk to your borrower and find out." So I called them up, got them on the phone. Turned out what he had discovered is that catalytic converters in cars have a small amount of recoverable platinum.
Jon Maddux: 20:49 Really?
Jerry Tubbs: 20:50 And he had a process that would recover that. So his day was spent going from auto junker to auto junker buying as many used catalytic converters as they would sell him. He would recover the platinum, and he was so good at it, and platinum was like, I don't know what it is per ounce, but back then it was.
Jon Maddux: 21:08 It's expensive, yeah.
Jerry Tubbs: 21:08 Yeah. Back then it was a $1,000 an ounce and he was recovering pounds of it every month from junkyard salvage.
Jon Maddux: 21:17 Jeez. I wonder if he's still doing it. I mean, there's probably only so many of those.
Jerry Tubbs: 21:20 He's probably retired by now. He was making a lot of bread when I knew him.
Jon Maddux: 21:23 Wow. That's a cool thing. So went and called the borrower and found out what, that that's kind of what was going on.
Jerry Tubbs: 21:28 Yeah. Tell me the story, and then it just made me jealous afterwards.
Jon Maddux: 21:32 So I mean, that makes me think like, I mean, and I know mortgage lending is not always exciting. Trust me, it's not the most exciting business, but there are times when you get to look and see some things, and you hear some scenarios that actually are exciting in a way, because this stuff is interesting. You actually could probably.
Jerry Tubbs: 21:51 I've been doing it for 30 years and for me it was Shark Tank before there was a Shark Tank.
Jon Maddux: 21:56 Oh, that's cool.
Jerry Tubbs: 21:57 Because I would learn how every, especially self-employed, how they found a niche and exploited it with their knowledge or their first to market, or whatever their advantage was, and yeah. I've seen, I've had the benefit of seeing a 1,000 different ways to make money.
Jon Maddux: 22:13 That's very cool.
Jerry Tubbs: 22:14 And it's all fascinating.
Jon Maddux: 22:15 That's very cool to see. You mentioned fraud a minute ago. It's been a long time since I've heard about or seen fraud in the mortgage business, thank god, but before the crash, before 2008 there was some fraud happening, like forgeries and different things. Using debt appraiser's licenses, I mean, I've heard of stories and stories, but recently we kind of came across something that could look like fraud. I know that someone did something. It seems like a loan officer would not risk their livelihood, their potential freedom, go to jail or anything like that. I think loan officers are probably less likely to do fraud these days, and maybe it's borrowers. What do you think? Do you think that's something that's kind of coming back? Do you think there's more fraud coming or, with these type of loans or?
Jerry Tubbs: 23:12 That's a great question. One of the points you made was I think most loan officers, and most people in the mortgage business have that mindset that you kind of, once you're in the business, you kind of decide well, I really like this.
Jon Maddux: 23:27 Yeah.
Jerry Tubbs: 23:27 And I had that feeling very early, it's like, "I like this. I'm good at it, I'm going to do this." And as soon as you have that much skin in the game, you are very conscious of I got to make sure that my behavior doesn't jeopardize this, because this is something I'd want to be able to do, and I wouldn't want to do something that would prohibit me from being able to ever do it again. So that mentality is always on my mind.
Jerry Tubbs: 23:53 Also, I think the longer you're in the business, your personal reputation means a lot. I mean, if you end up working with other companies that are because you're selling them loans, or appeasing to their other quality process, and if they don't trust you, it impedes your ability to do business with that. So I'm a big fan of, once you've decided this is a business for you and you want to stay in it, it's pretty easy to stay on the right side of what to do.
Jon Maddux: 24:21 Right.
Jerry Tubbs: 24:22 In terms of the fraud question, I've been doing this long enough to where I see an evolution in fraud, and believe it or not, in the '90s when I'm managing large underwriting groups where we were at at the time, credit report fraud was our biggest problem.
Jon Maddux: 24:41 Really.
Jerry Tubbs: 24:42 There was a 1,000 mom-and-pop credit bureaus, and it would be very easy if some account that was jeopardizing your loan approval showed up on a collection account, let's say.
Jon Maddux: 24:54 Sure.
Jerry Tubbs: 24:55 It would be really easy to call mom-and-pop credit bureau and say, "I'm not ordering another credit report from you again if you don't get that off of the guy's report because that's keeping us from closing." So there was some undo pressure you could apply. One of the things that solved that was when DU and LP came out and people were ordering credit on their own untouched by-
Jon Maddux: 25:15 Right, [crosstalk 00:25:16].
Jerry Tubbs: 25:16 An unscrupulous player.
Jon Maddux: 25:18 Once removed, yeah.
Jerry Tubbs: 25:19 Yeah. Then you knew this is the real credit data, blemishes and all, and what are we going to do with it? And with it came kind of some doc relief where at that point then, the agencies knowing they were getting good data could then start to create relief or yeah, if it's this balance, you don't have to pay it off, or if it's this old, you don't care, you know?
Jon Maddux: 25:38 Right, right.
Jerry Tubbs: 25:39 So it actually, it solved the problem. The next biggest thing we had was tax return fraud, and once the cooperation was set up with the IRS to get transcripts, it really took a lot of the tax return fraud away, and companies that do a good job of making sure they transcript that information protect themselves from a lot of exposure. So you got two big chunks that have been taken out of the industry in my lifetime.
Jon Maddux: 26:05 And also appraisal fraud is probably way low now because there's just, you have to have an AMC, you can't just order an appraisal from their appraiser. You can't just, hey, I need a 2.2 value, can you do that? No. Okay, the next guy.
Jerry Tubbs: 26:18 Yeah. There was a lot of pressure.
Jon Maddux: 26:18 That's how it was.
Jerry Tubbs: 26:20 And it sounded very much like the credit report pressure.
Jon Maddux: 26:23 With the credit, yeah.
Jerry Tubbs: 26:23 Where I'm never ordering an appraisal from you again if it doesn't come in at this.
Jon Maddux: 26:27 Right.
Jerry Tubbs: 26:27 So now that that pressure is gone, I do think appraisal values are a little more solid, and computerized tools help as well. AVMs have come along so far that.
Jon Maddux: 26:38 You can pull up Zillow and Redfin and go, "That says it's worth only a million three, but you're saying it's worth three million?" And then there's no comps. You can really, call bullshit-
Jerry Tubbs: 26:47 You could start to triangulate.
Jon Maddux: 26:47 Really quick, you know?
Jerry Tubbs: 26:47 Yeah. You could start to triangulate what your appraiser is saying, and what your realtor is saying, and what data is saying and start to, yeah, it's probably somewhere in here, and the only thing that we haven't really done in the appraisal world that we need to do, is we need to give appraisers the ability to create a value range rather than a value. Because then any given day, depending on how desperate of a buyer you are or how desperate a seller, that million dollar property might go for 980 and it might go for a million 20.
Jon Maddux: 27:21 That would be an interesting concept to do a range instead, yeah.
Jerry Tubbs: 27:25 Because then you could as a lender, you could decide hey, this is in the upper part of the range, but it's still within reason. Maybe I'll do it at 90 instead of 95. You could play with that range and get comfortable.
Jon Maddux: 27:37 Change the pricing a little bit too, you know?
Jerry Tubbs: 27:40 Yeah.
Jon Maddux: 27:40 Going to the red. You get into the red zone, you're adding a little bit to the range.
Jerry Tubbs: 27:42 Yeah, exactly. Make me interested again. So the last bastion for me is bank statements, and unfortunately it's one of the few pieces of information that we still ask borrowers to provide because we don't have easy direct access to get the information ourselves, and with the tools that are out there, it'd be pretty easy to turn that $1,000 deposit into a $10,000 deposit and make it look like.
Jon Maddux: 28:14 Just [crosstalk 00:28:14] zero.
Jerry Tubbs: 28:15 Yeah, and I think the reason we're possibly even talking about recently after this evolution of, while the other things we've chased out of the business, is bank statement loans are now a popular way to get financing, and it's an easy platform to if you're not getting the answer you want with your bank statements, a little Photoshop might change that answer.
Jon Maddux: 28:39 Right.
Jerry Tubbs: 28:39 There is something that I'm sure the industry is going to have to address, and frankly, there's a lot more technology out there too that could possibly address it than there's ever been. I see that window closing because bank statement loans are getting so popular, and people aren't going to stand to get ripped off using borrower provided information that's not quite on the up-and-up.
Jon Maddux: 29:06 Makes sense. So we've kind of talked about some of the things you like about borrowers and just being able to see kind of interesting stories, and hear interesting scenarios, but what would you say is your least favorite borrower or type of borrower even? Would it be like crazy income tax stuff, or would it be just maybe someone who is just spending too much money? Do you ever get kind of not judgemental, but at the end of the day you go like, "This guy doesn't deserve credit." "This girl doesn't deserve credit." Because of whatever. Do you ever get personal in there? I mean, I know I'm putting you on the spot, but.
Jerry Tubbs: 29:44 I don't really have, I can't say that I have a prejudice on how people make their money or how they spend it, and most borrowers are pretty, it's amazing how self-disciplined they are. It always has amazed me when, but even before I figure out what someone makes or doesn't make, they're pretty good about coming up with a monthly housing payment number that's comfortable for them, and sometimes a challenge for me is figuring out, "Why do you think that's a good payment for you?" But then when I get all the facts in it's like, "Oh, a big chunk of your income is tax free, so it feels like you make more." Or, "You had this debt but you're not having to pay it, someone else is paying it." So there's different things at play where sometimes I don't get it initially, and then the longer I work with a borrower it's like, oh, I get it now. In terms of, I would say the only frustration I ever have with borrowers, and it's fairly rare, is occasionally you'll find a borrower that you've kind of created a roadmap on how to get them from where they are to the closing table, but you need this, this and that, and they've decided either from their personal frustration or lack of understanding about the business that I'm not giving you that.
Jon Maddux: 31:03 Yeah.
Jerry Tubbs: 31:04 So every once in a while it's like, you try to be patient with people, and I realize it could be frustrating for some borrowers because they don't go through the process very often, they don't understand it, but I would say if there's a borrower that ticks me off is the one that tells me what the documentation level is going to be rather than the other way around, but what are you going to do?
Jon Maddux: 31:24 You got enough stuff. Just tell me yes or no.
Jerry Tubbs: 31:26 Yeah, exactly.
Jon Maddux: 31:28 [crosstalk 00:31:28] Those people.
Jerry Tubbs: 31:28 It's like, "I don't think so." I think it's a little bit of the golden rule there.
Jon Maddux: 31:32 Yeah, and they always also ... But I gave you everything. You said that was it, and now you want more? And it's like, "Well, it's like conditions beget, put in conditions." It's like they just.
Jerry Tubbs: 31:44 Sometimes it raises another question that you didn't think to ask because oh, that's the answer. But that doesn't happen very frequently, but every once in a while you get someone that's just had enough and unfortunately they're giving up a few yards from the finish line. It's like, we got to get one more furlong down the track.
Jon Maddux: 32:05 So do you think these loans are risky?
Jerry Tubbs: 32:08 Well no. The type of loans that we're doing typically have really sexy LTVs.
Jon Maddux: 32:15 Yeah, they do. Skin, skin in the game.
Jerry Tubbs: 32:19 Yeah. When you have a borrower making that kind of investment either protecting an investment, equity they've already earned in a refi, or hard-earned money going down for a down payment. That's a big deal. That kind of skin in the game really helps predict what their behavior will be if they ever run into trouble, some life event that keeps them from being able to make the house payment. The hope is as a lender that you'll make the decision of whether or not you could truly afford the home anymore. Is this a temporary setback or is my income is going to be reduced for a while, this not the right house for me? And the hope is that you'll take the right kind of action and put the house in the market, grab the equity that you have and make a better life decision based on your new circumstances.
Jon Maddux: 33:06 Sure.
Jerry Tubbs: 33:06 Versus dropping the keys in the mail or not making your payments, or those sort of thing. Doing the larger down payment loans, you can see a lot of people that their intent is to make those payments, preserve their credit and enjoy that equity, and I love working with people with that kind of motivation all day.
Jon Maddux: 33:28 Yeah, that's true. I was thinking about, I've been seeing lately people talk about there's another crash coming, there's a big downturn, it's due, it's inevitable, and I always think about it like, I like to look ahead and try to look around the bend, but it's never easy to, you don't have a crystal ball, but knowing what we know about how tight mortgage lending has got, has been, and how all these laws are in place to protect us from getting crazy appraisals, to protect us from having fraud, to protect us from really, and then the inventory being small and builders not going crazy and overbuilding again like they did back in '05, '06. So what would you ... What are your thoughts about a crash? Do you think it's going to be centralized? I mean, I've heard corporate debt is going to be something that we got to watch out for, that's going to be a bubble that's going to pop, but as far as just residential real estate, what are your thoughts on that being that we've been so tight?
Jerry Tubbs: 34:38 This is going to go into a second hour, you realize. I'll give you my very short synopsis on what I feel the crash was, and it really gets back to if you go back to Econ 101 in entry level college course, supply and demand.
Jon Maddux: 34:57 Yeah.
Jerry Tubbs: 34:58 Traditionally in the mortgage space, housing there's a relationship between housing prices and median income, and that relationship narrows and broadens based on a couple variables, one would be interest rates. So even at the median income, median household income, if the interest rates get lower, you could support more house price with the same amount of household income, and if there's only so much real estate inventory out there, there could be a tendency, we can buy a house, the rates are really low, and you get some more bidders out there, and supply and demand, there's more buyers than sellers and it'll drive the price up.
Jon Maddux: 35:42 Right.
Jerry Tubbs: 35:42 Similarly, when rates increase, that gap narrows because this median household income can only support so much median house price. So that relationship's been in there for all the times that we've tracked both of those numbers, but it goes through times where it's not quite parallel. My view of what the crash did was because of some of the products, it removed the median household income cap.
Jon Maddux: 36:16 Like ARMs or interest-only, or neg-ams, is that kind of thing?
Jerry Tubbs: 36:19 That plus I could tell you any number for my income because you're not going to-
Jon Maddux: 36:23 Oh yeah, so you took that thing out and threw it out the window, the median household income.
Jerry Tubbs: 36:25 So now, so temporarily for a couple years my median household income is infinity.
Jon Maddux: 36:33 Right. That just makes unlimited demand.
Jerry Tubbs: 36:37 Unlimited buyers.
Jon Maddux: 36:38 Yeah.
Jerry Tubbs: 36:39 So now I have everyone in world could buy a piece of property if they wish to.
Jon Maddux: 36:44 Right.
Jerry Tubbs: 36:44 And many of them wished to.
Jon Maddux: 36:45 Right, many of them did.
Jerry Tubbs: 36:47 And when you have a 100 buyers chasing a property instead of 10 buyers or one buyer, the price just skyrockets.
Jon Maddux: 36:54 Right.
Jerry Tubbs: 36:55 I can tell you that that's happened a couple different times. It's happened in the '70s, where the spread, the traditional spread between house price and median income got 20% worse than its historic norms, but then prices froze and median income rose to get back to that traditional, and then the market could legitimately go up again. So something has to give, the prices have to plateau until income approaches, or income has to go up so fast that allows prices to go up again. In the '80s and late '90s, or early '90s, late '80s, it happened again, that it was like a upper 20s, and then it had to, the market had to close that gap.
Jerry Tubbs: 37:46 Well, during the height of the crisis, I said in a meeting where we could demonstrate that that traditional gap had stretched to 45%. The predictions were it was going to go to 55, where it actually did, but this is a year before the crash. We're seeing that bubble, and then historically we knew that bubble would have to close 90% of that gap. At that point the only way it could give, you just couldn't get household income to creep up that fast. So the only thing that had to give was, you actually had to have value decline. So which we hadn't had in the other bubbles, in the other bubbles you had plateaus, in this you had.
Jon Maddux: 38:30 Crash.
Jerry Tubbs: 38:30 It had to actually tank.
Jon Maddux: 38:32 Interesting.
Jerry Tubbs: 38:33 So it gave back, the market gave back, or had to give back 50% of the 55% bubble had to be given back before the market could ride itself. Getting back to your primary question. What could we have done differently to prevent that bubble? The thing that we did wrong in my opinion is that we continued to add fuel to the fire by doing those stated income or no income loans at extremely high LTVs.
Jon Maddux: 39:03 Yeah. Because the skin in the game wasn't there.
Jerry Tubbs: 39:06 Yeah. If we could've dialed back the LTV as the bubble grew, people could still speculate on housing, but they'd have to do it with their own money.
Jon Maddux: 39:15 Right.
Jerry Tubbs: 39:16 And then the losses wouldn't have been lender losses, they would've been-
Jon Maddux: 39:18 There would've been less demand because less people had their own cash.
Jerry Tubbs: 39:21 Yeah, and fewer people would, it would've eliminated some of the speculators, the highly leverage speculators. It would've been speculators that could afford to speculate with their own cash.
Jon Maddux: 39:32 Right, right.
Jerry Tubbs: 39:33 And then the losses that were taking place, again, going back to borrower repayment behavior, the losses that were taking place would've been losses out of people's cash not out of lender's vaults. So the thing we're doing differently today that encourages me is that even though we're doing creative products, we're doing them with people that have large equity stakes in the property. So even if they are speculating on a particular investment property or even a homeowner, but they're speculating with their money, they're not speculating with money I have in the vault.
Jon Maddux: 40:04 Right. People would play a lot differently in Vegas if they had their own money versus someone else's money.
Jerry Tubbs: 40:10 Yeah, that's a great point.
Jon Maddux: 40:12 That's why all the people.
Jerry Tubbs: 40:13 Yeah, if you get $10 of free play, you're like, "Woo."
Jon Maddux: 40:15 You're like, "Hey, give me some money." Bet it on black or bet it on red, I'm like, "No, I'll do it when I go to Vegas." You can bet your own money.
Jerry Tubbs: 40:22 Yeah. So that's my short opinion of what made prices go crazy is you took the cap off a median income, and I still think you could've controlled it if you hadn't accommodated it with extremely high LTVs on that type of product.
Jon Maddux: 40:38 So you think we're going to be okay.
Jerry Tubbs: 40:40 The skin in the game makes me feel like if people are going to take loss is because of a price correction, it's going to be out of their equity not out of their loan amount.
Jon Maddux: 40:49 Interesting. Yeah, yeah, that's good. So last question for you, Jerry. If you were to say, "To hell with underwriting. I'm going to go back to being a mortgage broker." What would you do today to try to find this kind of borrowers? How would you, would you buy leads, would you call up some referral sources? How would you go about getting these type of loans?
Jerry Tubbs: 41:15 I believe where the business may be going would be taking like an inbound marketing approach where you become a resource for people's questions. So long before they even think about buying a piece of real estate, they start to think about what does it even take to do that, and you create an area where people can navigate in and read, watch videos, type of things that you're doing, educate the self-educate, and then create a forum where as people get more and more educated, and they realize, "I think I'm ready based on these tools and the things I'm reading. I probably could afford a house." And create a launching pad to where when they're ready to get pre-qualified, it's easier for them to do in maybe an automated way.
Jon Maddux: 42:06 So maybe you'd build a website and create a little place for people to read, get educated, and then once they're ready they can do a little application online. So you'd kind of do some online marketing, I see that. Is there any type of other ways you would get it? That's creative and I think that would work.
Jerry Tubbs: 42:24 And I'm a big fan of pre-approvals.
Jon Maddux: 42:29 Yeah. For buyers, right?
Jerry Tubbs: 42:33 Yeah, using a platform like that of finding out how much, the toughest thing about buying a piece of real estate is figuring out how to finance it.
Jon Maddux: 42:42 Yeah.
Jerry Tubbs: 42:43 If you reverse that process and figure out your financing first, then go find a real estate agent.
Jon Maddux: 42:48 Right.
Jerry Tubbs: 42:49 [crosstalk 00:42:49].
Jon Maddux: 42:49 Usually it goes the other way around, though. Most people are like, "Oh, let's go house hunting this weekend." But they don't do the hard work upfront.
Jerry Tubbs: 42:56 Yeah. And it's really not that hard work. We make it easy, a lot of companies make it easy for you to come in, bring a handful of credit documents and figure out based on today's rates and these programs, you could afford this, and that number, then that's the time to go out and test the market and figure out what can I get for that kind of money. Is it something I want to put up with? What could I do to change those numbers?
Jon Maddux: 43:22 That's cool.
Jerry Tubbs: 43:22 So to me, being an information base for people that want to get involved and getting them involved before they fall in love with the house, let's fall in love with your financing first, and then leverage that into, you'll know what part of the market to be looking in and know what you can have.
Jon Maddux: 43:39 Awesome. Jerry, thanks so much. It's been very informative and I appreciate you coming on.
Jerry Tubbs: 43:43 My pleasure.
Jon Maddux: 43:45 Thank you for listening to our podcast. If you guys are looking for more content like this, we have a FundLoans YouTube channel where we give away more tips, secrets, and origination ideas. You can also email us at email@example.com, and if you've made it this far, I think it's safe to say you like our content. So please subscribe, share, and send us your scenarios. Let's FundLoans together.
On this episode, Jon Maddux speaks with Productivity Coach and Top-Producing Realtor, Tina King. Tina has over 26 years of experience selling Real Estate and is known for her ability to drastically increase production on an individual and company basis.
"Million Dollar Results" With Tina King, As Featured On FundLoans' Vlog "The Million Dollar Mortgage Experience"
Here's The Transcription
Speaker 1: 00:00 On this episode, Jon Maddux speaks with productivity coach and top producing realtor Tina King. Tina has over 26 years of experience selling real estate and is known for her ability to drastically increase production on an individual and company basis.
Speaker 1: 00:18 Listen closely as the two speak about how you can hack your schedule, get attention on LinkedIn and much, much more.
Speaker 2: 00:26 Welcome to the Million Dollar Mortgage Experience Podcast. Listen in as CEO, Jon Maddux of Fund Loans reveals and tips, secrets and origination ideas, and fill your pipeline with the million dollar opportunity.
Jon Maddux: 00:40 Welcome to the show. I'm here with Tina King. How are you doing today, Tina?
Tina King: 00:46 I'm great. How are you?
Jon Maddux: 00:47 Doing great. It's fun... the sun's finally out so it's made a...
Tina King: 00:50 Its been a little toasty the last couple of days for sure.
Jon Maddux: 00:52 It has, and we've needed it. I know we needed a rain here in California, but sun is also needed, so that's good.
Tina King: 00:58 It was getting a little on the depressed side there for a minute.
Jon Maddux: 01:00 It does. It affects your mood, right?
Tina King: 01:01 It does.
Jon Maddux: 01:03 Being in cloudy days all the time.
Tina King: 01:04 Yeah.
Jon Maddux: 01:05 Does that affect... I know as a coach... I mean it affects people's mood. So moods affect sales, right? Tell us about how that might correlate.
Tina King: 01:14 My first rule is you can't be moody, get over yourself, right?
Jon Maddux: 01:18 Yeah.
Tina King: 01:19 Cloudy or raining or whatever we're going through. We have to keep going. We don't keep moving through it.
Jon Maddux: 01:25 Yeah. It kind of comes back to you actually taking charge of your own reality or your own life. Right?
Tina King: 01:33 One of my mentors said, whether it be a cloudy day or pressure or things aren't working right, you just press harder.
Jon Maddux: 01:40 Right.
Tina King: 01:40 You press through it. That's what I teach.
Jon Maddux: 01:43 That's good.
Tina King: 01:44 It's hard, but it's doable.
Jon Maddux: 01:46 Tell us a little bit about yourself.
Tina King: 01:48 Okay. So do you want to know the business side of me or the personal side of me?
Jon Maddux: 01:52 Let's hear a little about the business side.
Tina King: 01:56 [inaudible 00:01:56] almost 27 years now in the business. I started out in Arizona. Keller Williams came to town, and we all joined them. We were with a company called Realty Executives at the time. I was in alignment with another top producer there, and I was fairly new at the time, so I was his buyer's agent.
Jon Maddux: 02:11 Okay.
Tina King: 02:12 We all went over to Keller Williams. I was anti-education and anti-coaching at the time.
Jon Maddux: 02:20 You were?
Tina King: 02:20 Yeah. I wasn't into it. It wasn't for me. I just wanted to go, go, go. I'm super type A.
Jon Maddux: 02:24 Yeah.
Tina King: 02:26 So then what happened was, I was very successful and doing really well. Keller has a big educational model, right?
Jon Maddux: 02:33 Yeah.
Tina King: 02:34 I started kind of paying attention and cause people were passing me up in production, and I started paying attention to that, and I thought to myself, maybe I should look into this. So I started getting into it and learning the systems and the models and how to run a true business versus just seat on my pants. And it literally lit my business on fire.
Jon Maddux: 02:52 Wow.
Tina King: 02:53 Then I started building my own team after a certain time. I've aligned myself with other professionals throughout the years, as business partners. I'm kind of a team player, so I really like to do things with other people versus just the loan ranger person that a lot of people like to be. To me, together we're more successful. So that always worked out well for me.
Tina King: 03:12 Anyway, I became like a productivity coach with them. That's fast forward quite a few years, and we created that model, around some other people across the nation that were trying some things out. And I sat down with my, at the time, team leader at the Keller Williams office, and we put our heads together on that. We created this model, and we just tried it. And within a year, the company dollar just went through the roof. We increased it by, I don't remember what the percentage was, but it was pretty high. Then The National, Keller Williams took notice and made it part of their model and then some other great folks at maps coaching took it to a whole nother level, and it just went crazy from there. So I'm pretty proud of that.
Jon Maddux: 03:55 Yeah.
Tina King: 03:56 Is My name on a plaque somewhere because of it? No, it's okay. I was part of that chain that needed to happen to create that model, and we made it very successful. I'm pretty excited about that. That was really good lift in my career. It catapulted me into more of the management, more coaching. Took me out of sales at that point.
Tina King: 04:17 I did that for almost 10 years with different companies throughout, coaching and leading regional management, management, growing companies. My favorite is turnarounds, when there's a company in trouble.
Jon Maddux: 04:32 Yep.
Tina King: 04:33 My favorite is turnarounds and there's one specific one that was not doing well here in San Diego, doing well in other parts of the country. We are literally number 41 out of 41...
Jon Maddux: 04:43 Wow.
Tina King: 04:44 ... Offices in the nation. I got in the seat and took it from a negative million in revenue to eight and a half million in revenue in the first year.
Jon Maddux: 04:50 Awesome.
Tina King: 04:51 So there's different ways that I was able to accomplish that coming from a strong Keller Williams background. That was really helpful for me.
Jon Maddux: 04:57 That's awesome. Is that the only time you've done that? Where you've taken a company from negative to positive or have you gone around and done that with other companies?
Tina King: 05:07 I've done a start up. Not a start up, but a start up in a row in a region from another company is very successful in Las Vegas and they were doing pretty well in Orange County and then they decided they wanted San Diego.
Tina King: 05:18 I started San Diego from the ground up, finding the offices, the leasing, the recruiting. I was also a branch manager, got it to a certain level of success and then they handed the baton to someone else, which is fine.
Jon Maddux: 05:31 Yeah.
Tina King: 05:32 Then that took me back into the market of sales at that moment. But I was okay with that. I did get it to a level of success, probably not where they want it, but I did get it to a place where now somebody else could take it to the next level.
Jon Maddux: 05:45 That's cool. There's certain strengths people have, right? Like some people are starters, and some people are growers, and some people are managers, and some people can sustain something great.
Tina King: 05:57 That's boring.
Jon Maddux: 05:58 Yeah. That's boring for some people. Some people might love it, but for someone like you, I can see where your drive, and your ambition is what drives you to grow things, right?
Tina King: 06:08 The challenge. Right?
Jon Maddux: 06:09 Yeah. And turn things around right. From a negative point.
Tina King: 06:12 Its totally a challenge. I love that part of it. It is hard on me, but I think it would be boring if it wasn't.
Jon Maddux: 06:18 Yeah.
Tina King: 06:18 Yeah.
Jon Maddux: 06:19 That's cool. So you sold a lot of homes. You've worked with a ton of realtors, like you said. What would you say is kind of like a theme across a bunch of salespeople? What is a theme of something that's actually changed their business? Is there, I wouldn't say like a secret, but is there something that really makes a difference kind of across, hundreds of people that you've done? Is it a mindset? Is it just working harder? Is there something that's kind of a theme to the success?
Tina King: 06:51 The goal is to not work harder of course. Some people think it is, they want to go forward like a ball, and they think it'll just all work out and everything's breaking around them.
Jon Maddux: 07:00 Right?
Tina King: 07:00 They'll have some success, but they'll end up burning out. And so really, the educational piece that I learned, obviously the proper training, right?
Jon Maddux: 07:10 Right.
Tina King: 07:11 There's a level of people out there, or a class of people in our industries that will get stuck in the training side. Like, the perpetual student.
Jon Maddux: 07:20 Right?
Tina King: 07:21 Why they get stuck there, I don't really know. They may not have the success level that others will take. I believe in taking a sip of education and going out and trying it and failing.
Jon Maddux: 07:31 Yeah. You gotta fail. Yeah.
Tina King: 07:33 There'll be some success in that as well. But failure is part of it, right? Failing Forward by John Maxwell. It's a great book. The common theme for Change and for them to get it, is the education piece. Making sure they're trained. Now you've got some top producers and then you've got a whole nother level below that. Right? So it's a different mentality. You've got great mindset for the most part, on the top end because they've already done the education piece, they've got the confidence level, they've got the success under their belt, they've got the performance habits, they've got those things.
Jon Maddux: 08:03 Right.
Tina King: 08:03 Where they need work, is just consistency and leverage. Like we talked earlier before we went online about get the housekeeper, buy your groceries online, plan your family vacations, don't mow over your family because divorce happens.
Tina King: 08:19 So there's some balancing act that we have to do at the top. Right. And I also believe education doesn't stop for the top producer.
Jon Maddux: 08:27 Continued.
Tina King: 08:27 Yeah. Your mid level folks in San Diego, I would say your people doing six to maybe 20 transactions, somewhere in that range, those folks are in need of some assistance, they are in need of some education around business, P and L, setting up a real business and making sure that they're doing and putting in systems in place and maybe hiring their first assistant. So there's a level there that we want to look at. We call them tiers. I'm actually a coach at this time with an organization called Club Wealth.
Jon Maddux: 08:59 Okay.
Tina King: 08:59 We do everything in tiers. I'm in tier three now with my business partner, Siri Raul. We're in Tier three coaching. What that is, is a certain level of transactions. A tier four coach is our coach. So they've been there where we were in there, they're above us. So there's different needs at each level. Our level now is recruiting. So at a tier three level, 75 plus transactions.
Jon Maddux: 09:24 How important is it to get a personal assistant? Let's say you're just a high producing loan officer, or even you're just a mid level producing loan officer, do you think that by hiring yourself an assistant, even though you maybe can't afford it yet or you can't... you don't maybe have a full time job for them yet? Is that a smart thing to do?
Tina King: 09:44 Yes.
Jon Maddux: 09:45 Tell us why.
Tina King: 09:46 Why? Because you need that time leverage, and you need to clear your mind, so you can do the dollar productive activities.
Jon Maddux: 09:51 Right.
Tina King: 09:52 I'm kind of a handy person. So just a quick example of my life, I had some ring flood lights I wanted to put up. I could do it pretty easy, but if they sat in the box for six months, I hired an electrician, paid him $125, and I stood there and watched him do it while I was, setting up a listing appointment.
Jon Maddux: 10:10 Right.
Tina King: 10:13 You got to make those kinds of decisions and it may mean more time with your family, right?
Jon Maddux: 10:17 Yeah. Which is priceless.
Tina King: 10:19 Right? It is priceless. So by me not doing the grocery shopping for an hour, hour and a half, whatever that is, I can be home with them, having a nice meal or whatever. So you gotta think that through and yes, spend a little money because you're going to make a lot more. Just cut out all the fat of life.
Jon Maddux: 10:37 It's important.
Tina King: 10:38 Yeah.
Jon Maddux: 10:38 That's good. Some of us it takes that extra push like, okay, do it. Go get an assistant or hire somebody because like you said, a lot of us are hands on people. We do... I'll just do it myself. But then if we do that and we continue to do that, we never have a chance to grow or to scale or leverage. Like you said, that's very good advice.
Tina King: 11:00 Well, I just want you to know I learned that the hard way because I'm the one who wants to fix it all. Do it all, be it all, right. I'm not for the attention of it, but just that's how I'm wired.
Jon Maddux: 11:07 Right. You are a doer.
Tina King: 11:07 It's been really hard. My business partner, Siri Raul... actually me being a coach and helping others with that has been great. But I need a coach too. And so I have one plus Siri, my business partner, she's more systems focused. We probably have one of the best set up business organizations for a small organization than I've seen in some of even the largest companies I've run.
Tina King: 11:27 I've run some of the largest companies in the nation and I'm telling you, I have a realtor that I'm aligned with now and this goes for the mortgage process with teams or whatever. Make sure you have systems in place for the business side to leverage your time as well.
Johnny: 11:42 Technology.
Tina King: 11:43 Yeah. Technology, whether it be a really robust CRM or an automatic drip systems, just that simple kind of stuff that many people don't even know. Your sphere of influence, how do you stay in touch with the people that you've already done business with?
Tina King: 11:57 Depending on whether you're on the broker side or wherever you're at. So yeah. You have to have those systems or you're not going to do it, you're going to just think about it. It's just gonna take up way too much mind share for you.
Jon Maddux: 12:06 Right. The last podcast we did Johnny was I'm with someone who really preached that you should get a coach. So if you're in the mortgage business and you're a mortgage broker, he was like, you need a coach. He's like, that's one of my biggest pieces of advice is get a coach. What do you know? We have a coach here sitting here.
Johnny: 12:28 Yeah.
Jon Maddux: 12:29 So...
Tina King: 12:29 Right on hire me. I'm just kidding.
Jon Maddux: 12:32 Tell us why. He told us a little bit why, I'd love to hear from a coach's perspective. Why is it worth the money to hire a coach?
Tina King: 12:41 Well, firstly before we go there, a coach, what kind of coach?
Jon Maddux: 12:47 Right. Well, business sales coach.
Tina King: 12:49 I think the mistake is, it's not a one size fits all. And so you can go to, and I'm not going to name company names, but there's a coaching organization that's pretty big and basically all they're going to say to you is how many calls did you make? How many this? how many of that? What are you going to do differently next week?
Jon Maddux: 13:05 Right.
Tina King: 13:06 And that's as far as it goes. Maybe that's the type of coach somebody needs. There're other coaches that will dig into the systems. So I believe that you elevate from one style of coach to another at the lower level of production, excuse me, of salespeople, whether it be in mortgage or in real estate, I would say you need that accountability coach.
Tina King: 13:28 You need somebody who's going to kick you in the butt and just to put it all together for you on the other question you asked me. For all levels, consistency is what helps people get to the next place.
Jon Maddux: 13:39 Consistency.
Tina King: 13:39 Consistency in the right activities, right? So it's very simple. So that coach may be that person to instill that in them and help them build the right habits. The next level might be that mid range where now we're teaching or coaching, excuse me, and teaching, because coaches do teach, the systems and the leverage and how to hire properly and those kinds of things. So you have to find that kind of coach for the level that you're at and the level you want to get to. So that to me is very important cause people will say, coaching didn't work for me. Well what did they do? Well, they just told me to make calls. Okay, well I make my calls already. Okay, well then that wasn't the right coach or maybe the right coaching organization.
Jon Maddux: 14:17 Sure.
Tina King: 14:17 Yeah.
Jon Maddux: 14:18 That's good.
Tina King: 14:18 Yeah.
Jon Maddux: 14:19 I mean you think even like the top, top people that you can think of, like Tony Robbins has a coach. So coaches even have coaches, right. Cause you believe in that, you believe that's gonna help you do what you need to do. I think for a lot of people out there that might be like, oh, I don't need a coach. Right. They blow it off. But we're not here selling anything. I'm not trying to push anyone's coaching.
Tina King: 14:43 No.
Jon Maddux: 14:44 I've personally had a coach maybe once in my life. I don't have one right now, but it's certainly something I'm thinking about doing. I'm thinking of getting myself an assistant. So if you guys know anyone that's a great assistant, please send them my way. But also a coach, like someone that can really get me to the next level, because we all can improve. The Sky's the limit. I think that's great advice.
Tina King: 15:08 Your coach needs to also, show you what a great assistant is. Someone could walk in here and you're like, I love that person. They are so awesome. They're like me. Don't hire them. Right.
Jon Maddux: 15:21 Because you need someone not like you. Right.
Tina King: 15:23 Right.
Jon Maddux: 15:23 Yeah.
Tina King: 15:23 There's some assessments out there like the DiSC, that are helpful for those kinds of things. And they can teach you, if they know their stuff, what you need to look for in that hiring process.
Jon Maddux: 15:35 Or an assistant. That's good. That's really good. So let's talk about... I mean I think our viewers really interested in referrals. Where do we do jumbo loans? We're trying to find jumbo loans out there.
Jon Maddux: 15:49 People buy leads, people go obviously go to the regular low hanging fruit, like go find their local agent and try to get referrals from them. What is some cool places that you've seen agents get referrals from or mortgage people getting referrals.
Tina King: 16:05 It doesn't matter the business. Okay. So the first line I was going to say out of my mouth was, I'm never too busy for your referrals.
Jon Maddux: 16:11 Right. That's a good line. I've seen that on people's signatures, right?
Tina King: 16:15 Right.
Jon Maddux: 16:15 Is that a Brian Buffini thing?
Tina King: 16:17 It is Brian Buffini but it works. It's not the only... that's just the tip of the iceberg or what needs to be done.
Jon Maddux: 16:23 Right.
Tina King: 16:24 So in building a referral business, it's a longer growth to do that.
Jon Maddux: 16:30 Right.
Tina King: 16:30 Everybody wants the now business.
Jon Maddux: 16:33 The now loans.
Tina King: 16:34 So there are many top producers that I've coached that have no clue about how to get referrals. Some just come to them just because they've been in the business and they've helped the generations of the family and it just happens. But they are not taking a proactive approach towards their database that they have a gold mine in already. It's a huge mistake and they're spending $150,000 a year on leads or more.
Jon Maddux: 16:57 And they're not paying attention to their existing databases. Is that what you're saying?
Tina King: 17:00 Right. So they're just taking the quick stuff that comes to them. Right?
Jon Maddux: 17:02 Sure.
Tina King: 17:03 And that is across the board for mortgage folks. That's across the board. It's a mentality of it, right? I believe in both and on that, I believe in having a database of, enriching relationships.
Jon Maddux: 17:15 Right.
Tina King: 17:15 So if it's mortgage, you're out there building relationships with agents. So how do we do that? So we need a backup to that, right? How do I even penetrate that market? Like do I go stand with caravan at the back wall and hope to get eye contact with somebody? Maybe that's part of it, right? You got to get out there.
Jon Maddux: 17:34 You have to do a lot of things.
Tina King: 17:36 So relationship building, something like you're doing, providing value to your industry, is going to bring people to you because they see that you have... you're bringing them value.
Tina King: 17:48 So items of value, what is that for a mortgage person to give to the industry.
Jon Maddux: 17:53 Right.
Tina King: 17:54 It might be just a rates video that they do or video is pretty big right now. It might be something like, but it has to be, I said the word earlier, consistent.
Jon Maddux: 18:02 Yeah, you can just do one video on Instagram and be like, I didn't really work for me. I didn't get any. I got a couple of likes and...
Tina King: 18:08 Exactly.
Jon Maddux: 18:08 Nobody called me and you're like, well nobody called you because you only did one.
Tina King: 18:12 Yeah.
Jon Maddux: 18:12 Yeah.
Tina King: 18:12 So that's ground level. You have to build that.
Jon Maddux: 18:15 Right.
Tina King: 18:15 And start getting the value out there and getting some attention. So if you don't already have success under your belt, you're really going to have to double down on that. Okay. Success will help you grow relationships because people were heads are starting to turn, right.
Jon Maddux: 18:29 You want to work with people that are successful.
Tina King: 18:30 We're huge on Yelp.
Jon Maddux: 18:31 Yeah.
Tina King: 18:32 We get three to five transactions a month on Yelp. Some people are anti Yelp, but we have amazing reviews. So reviews are another aspect that you want to point your target at and really work on getting some reviews built up. I used to just basically throw my reviews away back in the day because there wasn't really a platform. I'm super old everybody.
Jon Maddux: 18:52 You don't look old.
Tina King: 18:54 But I am. So back then it was like it didn't really... I'll put it on my letterhead and send it out on my monthly mailing.
Jon Maddux: 19:02 Frame it, put it up.
Tina King: 19:03 I really didn't know what to do with it. But now there's all these platforms that are available that you can...
Jon Maddux: 19:09 LinkedIn, Yelp, Google Reviews.
Tina King: 19:12 Exactly. And there's a way to find clients and build relationships on Linkedin. Just looking for commonalities in LinkedIn. That's how we do it as realtors, or some do, not very many, but we do, you go on LinkedIn, you find commonality, whether it be a hobby or whether it be something to do with the business or you're into boating, whatever that might be.
Jon Maddux: 19:32 How do you get someone's attention on LinkedIn though, because I'll be honest with you, I have LinkedIn and a lot of "friends" on LinkedIn, but I get hit up on LinkedIn every single day, 10, 20 emails a day.
Jon Maddux: 19:47 And most of them I would a glance at, I don't even give them more than two seconds because there's so much content that they put in there, like they put links and they put hi... It looks like a copy paste message. Right?
Tina King: 20:01 Well there's your problem right there.
Jon Maddux: 20:02 So how would you...I mean I know how I would.
Tina King: 20:05 Not your problem.
Jon Maddux: 20:05 Yeah their problem.
Tina King: 20:05 Right. Their problem. Somebody else did it.
Jon Maddux: 20:08 I know how to reach someone on LinkedIn or at least I know how to improve my odds of reaching someone on LinkedIn. I would love to hear a coach's perspective on that.
Tina King: 20:18 Okay. A proven method is again, backing up to find something in your searches of commonality. Okay.
Jon Maddux: 20:26 You have to do a little work before you...
Tina King: 20:28 You have to do some work ahead of time.
Jon Maddux: 20:29 Copy, Paste, send. Right?
Tina King: 20:30 Actually, I've actually taught a class on this. So you have to do some work and then you design the message accordingly.
Jon Maddux: 20:37 So it's work, right?
Tina King: 20:37 It's consistency on there to.
Jon Maddux: 20:40 It's work and consistency. What I see is a lot of laziness. People just copy pasting and playing the numbers game, right? Somebody's going to respond...
Tina King: 20:51 Maybe.
Jon Maddux: 20:52 Maybe.
Tina King: 20:52 I don't.
Jon Maddux: 20:53 But they don't. The ones that you want to get don't respond.
Tina King: 20:57 Right.
Jon Maddux: 20:57 They just pass you over. Right. When actually there could be something there that could be beneficial and add value.
Tina King: 21:04 Right.
Jon Maddux: 21:05 If they could catch my attention, and I read it and made sense for me to engage. Right.
Tina King: 21:10 I'd be like, this is just an example cause I used to ride a Harley years ago.
Jon Maddux: 21:14 Cool.
Tina King: 21:14 This is just a quick example, right? So I put it out there. Find people who are in the industry. If I were looking for that, right?
Jon Maddux: 21:22 Yeah.
Tina King: 21:23 Other realtors, if I was in mortgage, and I would have a picture of my Harley and I would send that out in a personal message to them, I would connect and see if they will connect with me and say, let's go on a day ride sometime.
Jon Maddux: 21:33 Yes.
Tina King: 21:34 You know, I live in Encinitas or whatever. Right? So, if they don't respond, they don't respond. But it's still not that one hit. It's next time you go back with congratulations or happy birthday or some way of shaping a connection. And you have to not just one person, you have to do a good handful because there's going to be a percentage that they just don't respond no matter what you do.
Jon Maddux: 21:56 Your busy.
Tina King: 21:57 But if you get one or two or three that you never had before and now it results in a huge transaction or two or just building a great relationship and now they... it's not really about them. It's about who they know. Right.
Jon Maddux: 22:08 Yeah.
Tina King: 22:08 Who are they going to refer to you. Right.
Jon Maddux: 22:09 Who is in their circle.
Tina King: 22:11 I had a realtor come to me the other day, and we were looking at her to join the company. We have a small brokerage that we've started as well as our amazing team that we have. She came to us the other day, and she said, you know what, I have a database of people, this is the mentality thing for even mortgage folks. I have a database of people, but I don't think they have very much money and Dah, Dah, Dah, Dah. I go, you know what? It's who they know.
Jon Maddux: 22:34 Yeah.
Tina King: 22:35 Right.
Jon Maddux: 22:35 Right.
Tina King: 22:35 Brian Buffini I think tells a story or used to on stage about a janitor, that he befriended and built a relationship and then ended up referring a ton of people to him. Right.
Jon Maddux: 22:47 You never know. And you can't judge a book by its cover.
Tina King: 22:50 There's no judgment.
Jon Maddux: 22:50 Yeah.
Tina King: 22:51 There's no judgment. There's just connection and there's no boundaries to that. You just connect.
Jon Maddux: 22:56 You never know what's going to happen.
Tina King: 22:56 Yeah.
Jon Maddux: 22:58 And you can't judge a book by its cover. We've had times when we've gone into brokers offices and, you might have a person sitting there in a small little desk, and they're not the boss, they're not the manager, they're just so, loan officer and its so easy to walk by them. Maybe they're wearing shorts and a hat and you just don't think that they're doing much business.
Tina King: 23:18 Or vans.
Jon Maddux: 23:18 Yeah. But then you go and talk to them and then they have like five loans on their desk, and they're the exact... so you got to... I think you're right. You can't just judge a book by its cover, and you've got to reach out with commonality and just... right. It's more of consistency.
Tina King: 23:39 Its a process. So it is a long game.
Jon Maddux: 23:41 Yeah.
Tina King: 23:41 Okay. However, it needs to be happening while you're hitting the now business.
Jon Maddux: 23:46 Right.
Tina King: 23:47 So to me it's a both and balance. If you're so focused on buying leads and trying to get your 3% or whatever your conversion rates are, not really sure, but you are going to get what comes at you, and a lot of times it's people you don't even want to work with, right?
Jon Maddux: 24:03 Had a couple of those.
Tina King: 24:05 So let's build a business is going to be fun, over time, and you're going to take and pick from those people, from the now business and go, I want to repeat those people five times.
Tina King: 24:16 So now you put them in your attention database, and you're going to stay in touch with them and there're items of value or videos that you send out to them or a newsletter, something that keeps in front of them that continues to bring value to those people long after the transactions' over.
Tina King: 24:32 The majority of realtors and probably I would say mortgage folks, next right? What was her name again? They don't mean to, they're busy. Next thing is happening. However, that's where systems come into play again. We've got to have some systems in place to help you with those things. And so it might take some investment of money, investment of time. Most type A people like myself don't want to deal with that, so hire somebody to do it.
Jon Maddux: 24:56 Yeah you can.
Tina King: 24:56 But do it.
Jon Maddux: 24:57 You can hire someone who's really good at paying attention to detail and going after and finding the commonalities that you have between people. That would be a great job for someone that could be an assistant and could look on LinkedIn for, oh you like Harley's, so go find me. All the real estate agents are all the mortgage people that also like Harley's and go on Facebook and then you give me a list and then you can go. It makes sense.
Tina King: 25:23 The next assignment for your Business Development Manager if you have one here. Absolutely.
Jon Maddux: 25:29 Yeah.
Tina King: 25:29 So there you go.
Jon Maddux: 25:29 It's really like... I think that it takes a little bit of brain power, a little bit of thinking, a little bit of planning, a little bit of energy and effort and...
Tina King: 25:37 It's not rocket science. It's actually pretty easy. However, it's hard to get to it, right?
Jon Maddux: 25:43 People are people You've got to find out what makes them tick.
Tina King: 25:48 And that's why I go back to the coaching.
Tina King: 25:50 Each individual's different, each level that they're at is different. And so we have to find out what that is and what we need to correct. Everybody has something broken.
Jon Maddux: 26:01 What do you do when you have... so some of our viewers probably have loan officers that worked for them.
Tina King: 26:06 Right.
Jon Maddux: 26:07 What do you do when you have loan officers that are just not productive?
Tina King: 26:10 Okay. Well in the beginning there needs to be an expectation set. So it might be a 90 day, or a 120 day ride.
Jon Maddux: 26:17 Right?
Tina King: 26:18 Right. So you're already set up for that and you onboard them properly, which most companies struggle with an onboarding process, that everyone that I've run, right. We're perfecting ours. So you've got to have a really good onboarding. You've got to wow them just as much as they need to wow you. They're actually your client as well.
Jon Maddux: 26:38 Right.
Tina King: 26:38 They're helping feed your family, too. So, you need to wow them with whatever it is your models about. Makes sure that they're following the steps that they need to do and following instruction. So they've got that ride for 90 days. So you have investment upfront.
Jon Maddux: 26:52 Yup.
Tina King: 26:52 Yup. Right. And a lot of companies don't want to do that kind of investment because they're like, well, what if they don't work out? Well, what if they do?
Jon Maddux: 27:01 Right. You got to put your best foot forward and at least if you're hiring them, you got to hope that they're going to do good. Right?
Tina King: 27:07 Right. And that goes back to the personality assessments as well. You might want to plug into like a DiSC format or something to...
Jon Maddux: 27:15 What if you are like six months or eight months in and you didn't do all those things and now you've got some unproductive loan officers.
Tina King: 27:21 They're unproductive. Okay. What I've always done with agents is, I literally put them on like a 60 day, like performance improvement, almost like a corporate, but I don't try to be...
Jon Maddux: 27:30 A PIP.
Tina King: 27:30 A PIP.
Jon Maddux: 27:31 Performance Improvement Plan.
Tina King: 27:32 That's right. I've never been on one myself, but I haven't put a few people on them. So like a PIP.
Jon Maddux: 27:38 How do you do that where its positive? I think a lot of people get a PIP and then they're like, they want to get rid of me.
Tina King: 27:46 I want to call it a positive...
Jon Maddux: 27:47 Improvement Plan.
Tina King: 27:48 Yes.
Jon Maddux: 27:48 Okay.
Tina King: 27:49 That's what I want to call it. And that's what I call it. And so it is a positive, and you create it. It's a coaching experience for 90 days. Right. So they have to go back to square one, and they have to go baby steps again, and you give them that recharge.
Tina King: 28:04 If they don't do it then, you got to release them to the marketplace because you are probably doing them a favor anyway. Right.
Jon Maddux: 28:10 That's true.
Tina King: 28:10 At that point, you know there's going to be investment. Let's hope you get it right out the gate, but it doesn't always happen.
Jon Maddux: 28:15 Yeah.
Tina King: 28:16 Right.
Jon Maddux: 28:16 So I watched this show called Billions and there's a person... Do you ever watch that show Billions?
Tina King: 28:21 No, I have not.
Jon Maddux: 28:21 So there's a person on there who... I forget her name, but she works for this hedge fund, and she's a coach, but she works for the company, and she's kind of like HR, but she's really a powerful coach, and it's so impactful what she does for the... it's a hedge funds, so they are all traders.
Tina King: 28:42 Right.
Jon Maddux: 28:43 Whatever she does, her coaching just completely changes their performance. I could see where that works. Does that resonate at all. Do you think companies should hire a coach that works at their offices?
Tina King: 28:56 What is that book?
Jon Maddux: 28:56 I don't know.
Tina King: 28:59 There's a book that's all about that.
Jon Maddux: 29:00 Yeah.
Tina King: 29:01 I can't think of it right now. One of my mentors says that, that book reminds her of me. I read... I can't think of... I'll think of it hopefully in a moment, but yes.
Jon Maddux: 29:11 Someone that works at your office...
Tina King: 29:13 In the company
Jon Maddux: 29:14 In the company, and they are like the go-to, like someone's bummed out that day, go see Julia or whatever.
Tina King: 29:19 That's the idea around the productivity coaching program at Keller Williams. It was just a hyper focus approach on, that's all I did. I didn't sell.
Jon Maddux: 29:26 You go see Julia she just gets you fired up, and then send you out.
Tina King: 29:31 Right. So we fire him up sometimes where a cheerleader, right.
Jon Maddux: 29:34 Yeah.
Tina King: 29:35 Sometimes we've delivered bad news. Sometimes where we... it's tough love. So depends on the person and the situation.
Jon Maddux: 29:43 Right.
Tina King: 29:43 So yes, I think that's key. You will have better retention, and you'll have higher productivity.
Jon Maddux: 29:49 Interesting.
Tina King: 29:50 That's how I took a company from negative million to eight and a half million in revenue in their first year. It is a tough love.
Jon Maddux: 29:55 Where you that person in the company?
Tina King: 29:58 I was the be all in all. I was the... and I hired a recruiter. So that took that off of me, and I had a broker. So I didn't have to worry about that. I had to grow and retain people. And take care of my staff. Nobody else in the past eight years had any success. It was losing money hand over fist. And I went in there, and I asked the CEO, what do you want to see from me?
Jon Maddux: 30:20 What did he say?
Tina King: 30:21 He said, "I want to see the same, up over 7 million." And I'm like, great. He didn't give me a timeline, and I did it in a year, did eight and a half. It was the worst position I ever had. But the best. Okay.
Jon Maddux: 30:35 You made a huge impact.
Tina King: 30:37 Well they tried to micromanage me. They we're based out of San Francisco and I was here in San Diego. They basically tried to micromanage me. That's another thing you need to be aware of. There are people that are self starters that know their stuff.
Tina King: 30:49 Now, I didn't know their model, it is very high tech based real estate in coming leads. I just came off of Keller Williams, it is a whole different world.
Jon Maddux: 30:57 Sure.
Tina King: 30:57 However, I took that torch and brought it in and instilled the culture. Culture is also important, and I think a coach can help with in your organization or if you have a coach, or you're the CEO of a company, you need to bring good culture to the company.
Jon Maddux: 31:11 Culture is huge.
Tina King: 31:12 So we can talk about that if you want to. I mean, we could probably talk for four hours.
Jon Maddux: 31:16 There's so many good things to talk about.
Tina King: 31:18 Totally, right. Just some simple ingredients though that I think are key.
Jon Maddux: 31:22 Yeah, that's good. That's really good. You've worked with a lot of successful realtors. What would you say, if you were a mortgage broker right now, and you know, rates are good. Non-QM is a new side of the business, it's what we're doing.
Jon Maddux: 31:43 You know the rates are gonna go back down. Sorry. You know the rates are going to go back up at some point. What would you do to go out and make new referral sources? Like how would you get it? Would you go after... because everyone goes after realtors, right? So there's probably some good ways to go after a realtor, and some bad ways to go after a realtor.Tell us about what you think would be the best way to approach.
Tina King: 32:03 It depends, if they have a success track record that's going to get the door open much quicker. If they flat out don't know these realtors, they're trying to touch a lot of mortgage officers out there, lead with rate. I don't know that's always the best, we signed up...
Jon Maddux: 32:21 Then you can lose tomorrow if the next person has a lower rate. So it's a little hard to...
Tina King: 32:27 And that's how some of the consumer shop, right?
Jon Maddux: 32:30 Yeah.
Tina King: 32:30 When we're working with them on the real estate side, we're going, oh no, we have no idea who this loan company is. There are somewhere online. Oh my gosh. There are a number. So we kept treating number one people like people, right?
Jon Maddux: 32:42 Right.
Tina King: 32:42 So take the whole number of question out of it.
Tina King: 32:44 So we've had a loan officer that we were using best rates ever. I mean even when the rates were higher, but horrendous customer service.
Jon Maddux: 32:55 Yeah.
Tina King: 32:56 Our name is on that.
Jon Maddux: 32:57 Yeah.
Tina King: 32:58 Right. So the customer is the buyer, mortgage person is taking care of the loan.
Jon Maddux: 33:04 Yeah.
Tina King: 33:05 They totally derail the whole thing. The mud gets slung at us. Up goes bad Yelp review, about us. So you got to build that trust first.
Jon Maddux: 33:16 You do.
Tina King: 33:17 Hopefully you have some success track record that'll get you in that door.
Jon Maddux: 33:21 Right.
Tina King: 33:21 So how do you do that? So again, let's back up to, you got to bring value, right? You got to bring value. Maybe you're sending a video for tips for realtors. Maybe you're some way to pierce that door to get in that door with that realtor. It's not going to be the rate sheet.
Jon Maddux: 33:36 Yeah.
Tina King: 33:37 Okay. They ought to make sure that you're going to take good care of their clients. Period. End of story.
Jon Maddux: 33:41 They have to trust you like you said. I think a lot of that comes from just relationship building.
Tina King: 33:45 It is, and it takes time. Again, all of this takes time, and most of us don't have the patience for it and you need to be consistent with it.
Jon Maddux: 33:54 It kind of goes back to doing what you said where it's like, it takes time. So you need to allow yourself to have time by shopping online, by having an assistant take care of the light bulbs or having the electrician do that. Or you know what I mean? Like you need to value your time so that... I think so many of us, someone told me one time, busy is a choice. We all are busy, right? We're all doing things. We all can, can make our lives busy and eat up our time by little things like that.
Jon Maddux: 34:27 We choose to do, the choice thing. If we just value our time and keep it sacred and let all these little busy things like grocery shopping and doing our bills and checking her Facebook, all these little things that we think are so important. If we move those over, and take the time that we need to invest into ourselves and into our business, I think we'll find a...
Tina King: 34:53 So let me give you a tip on how to accomplish that.
Jon Maddux: 34:54 Yeah.
Tina King: 34:56 Anybody can do this. What we do with you in coaching is, we want to create... and there's nothing perfect about a schedule, but let's create a perfect schedule. And you can literally just take a spreadsheet put Monday, Monday, Tuesday, Tuesday, Wednesday, Wednesday, Thursday, Thursday, Friday, Friday, Saturday, Saturday, Sunday, Sunday.
Tina King: 35:11 Why am I doing two? Well, one is going to be, what do I feel my perfect, if I really carved everything out, got that assistant and leveraged my grocery shopping and all those things, what would my perfect day look like?
Tina King: 35:23 There better be at least three hours of prospecting and following up in there, right?
Jon Maddux: 35:27 There has to be.
Tina King: 35:28 Then there's gotta be some appointment time, and those important dollar productive things need to be in that block of time, and you color code them, right? And then the next day and you do it and you do it for the whole week, and then family time and family time at night, whatever that's going to be for you.
Tina King: 35:42 Then the next day you literally are journaling what you are actually doing because we're all creatures of habit. And what you're talking about is that busy work, those are all habits that you already have.
Jon Maddux: 35:51 Right? Really your subconscious doing it.
Tina King: 35:53 Right.
Jon Maddux: 35:54 Your not even aware that you're doing.
Tina King: 35:55 Do you go and get a juice every day.
Jon Maddux: 35:56 No, that was the first in months.
Tina King: 35:59 Back that out. Edit that out.
Tina King: 36:00 However, some people may go right to Starbucks or whatever. Right. So they could go there and not even realize they went there because that's what they do. Or brushing your teeth, right?
Jon Maddux: 36:08 Yeah.
Tina King: 36:09 So this busy stuff is the same thing. It's just how we've trained our mind. So this schedule, and you must look at it every day, it can't be on your iPad or your computer or your iPhone. It has to be in front of you. And you literally have to adhere to journaling that for at least two weeks.
Jon Maddux: 36:24 You can compare it?
Tina King: 36:26 You got to compare it. You can put it on the computer, but you want to print it every day, and you can have your color code. So you can see how far are you off just by just looking at color. So if you've got green for prospecting and follow up, but you're not seeing any green on that next day or the next year and the next day, and that's every day on your perfect schedule, you got a problem man, we got to figure this out, right?
Jon Maddux: 36:45 Yeah.
Tina King: 36:46 No wonder you don't have any money, right?
Jon Maddux: 36:47 Right.
Tina King: 36:48 So what is your activities that are going to bring your results, right?
Jon Maddux: 36:52 Right.
Tina King: 36:52 So over time, we don't want a business like this. And I know you know people that are on that roller coaster. We want to build an exponential growth business, right? So exponential growth and exponential is your results. So, and it's not a perfect line, just like an airplane flying across the country. It doesn't go perfectly straight across the country to Florida.
Tina King: 37:08 It makes course correction all along the way. What we don't want to happen is we don't want you to get off into flying off into some other country.
Jon Maddux: 37:17 Cuba or Mexico.
Tina King: 37:18 And get shot down, right? That's what your schedule is. It's designed to help keep you between some kind of lines and keep you more consistent.
Jon Maddux: 37:25 It kind of makes you aware what you're actually doing.
Tina King: 37:28 Makes you super aware. And because we're not, right?
Jon Maddux: 37:31 Right.
Tina King: 37:31 I'm guilty of it too. I keep falling back into my old habits sometimes. And guess what, if you're not getting your workouts in, this is a great way to get that started. If you can at least nail that, you can accomplish the rest of it.
Tina King: 37:43 So if you say, I'm going to take a walk with my dog every day at 7:00 AM and you haven't done it for like three years, and your dog is like 20 pounds overweight and so are you, try it, get out there. And you'll be surprised. You'll start to see those results.
Tina King: 37:57 Here's why people give up. They don't see the results.
Jon Maddux: 38:01 Yes, that's true.
Tina King: 38:02 Right? Subconsciously, they just go right back into their old habits. So having it visually in front of you, following the steps and having someone look at it, I don't care if it's your wife or your manager.
Jon Maddux: 38:13 That goes back to having a coach. Because, I think why people give up is because they don't have a coach.
Tina King: 38:19 True.
Jon Maddux: 38:19 Right. They give up because they don't see results. But if you had a coach...
Tina King: 38:23 Blame it on the coach.
Jon Maddux: 38:26 I think if you were like maybe a month in, you haven't seen results, but then the coach is like, look, it doesn't take a month. It takes two or three months.
Tina King: 38:34 Just that reminder.
Jon Maddux: 38:35 And you're like, you're right. You're right.
Tina King: 38:37 Exactly.
Jon Maddux: 38:37 Then you just keep going, then you will start seeing results. But I think that's a huge point. That's amazing that like you got to be patient, and you got to wait.
Tina King: 38:48 You've got to write it out because nobody really knows. You could tell me what you're doing, and I'll be like, okay, you might want to try this. That's not good enough. It has to be literally looked at, examined and followed.
Tina King: 39:00 That's just a tip that I think anybody can do.
Jon Maddux: 39:02 I think you'd be surprised if we went back and looked and saw. We wrote down what we thought we were going to do and then you go back, and you look and see what you actually did. Like it'd be a shocker.
Tina King: 39:12 Just do it for two weeks without really judging it. I think that any organization can do that right now without a coach and have a little mastermind group shaped. Like the brokers out there with their teams, I think they could do a little mastermind group around that and make it fun. And just make it a process.
Jon Maddux: 39:30 How do you make it fun?
Tina King: 39:31 I think it'd just be fun for everybody to collectively get together and share how bad they're messing up and then hold each other accountable. Maybe they have accountability buddy, or it's just the group. There's just different little things you can do to help tweak productivity. But one of it is teamwork, helping your fellow teammate do better.
Jon Maddux: 39:51 Right.
Tina King: 39:52 So that creates bonds. And they might even be looking at one schedule and say, oh my gosh, I didn't know you'd like to surf. Dude, I've been sitting next to you for two years. He's like, well, let's go surfing some time.
Jon Maddux: 40:03 Yeah. That's cool.
Tina King: 40:04 It's on my perfect schedule at 6:30 AM every day. Wow. It's on mine at seven. I can make an exception. Let's go. Right.
Jon Maddux: 40:10 I like that.
Tina King: 40:10 So now they're out there surfing and there masterminding about business.
Jon Maddux: 40:14 We call those board meetings.
Tina King: 40:16 Yeah, those are board meetings. I've never been on one of those boards. It was one of my items that I wanted to do and I moved here back in 2005 and I still haven't done it, so I need to get out there.
Jon Maddux: 40:24 Yeah. The weather's getting warmer.
Tina King: 40:27 The water is cold [inaudible 00:40:28]
Tina King: 40:28 I used to do triathlon out there. I used to see shadows.
Jon Maddux: 40:36 This happened here in San Diego recently.
Tina King: 40:37 Exactly.
Jon Maddux: 40:38 So scary. You never know.
Tina King: 40:40 Dress like a fish. You might become somebody's meal.
Jon Maddux: 40:45 Yes. You don't want that.
Jon Maddux: 40:47 What do you think is a good way for a mortgage broker to stand out from the crowd?
Tina King: 40:55 Success leaves clues, right? Getting some success, being with potentially... I'm not so much about brand, but brand might come into play in some instances. Having those reviews. Having some evidence, you have to have some evidence.
Jon Maddux: 41:13 Right.
Tina King: 41:14 And if you're new, get on the coattails of someone who has that.
Jon Maddux: 41:18 That's smart.
Tina King: 41:19 Its super smart.
Jon Maddux: 41:20 Yeah.
Tina King: 41:21 I've got to tell you the general public, after being in management and coaching for 10 years of my sales career out of 26 27 years, I came out the gate just over a year and a half ago and aligned myself with somebody I actually mentored back in 2005 and she was doing 50 transactions a year on her own just by herself and absolutely getting sick over the whole thing. I came along and now we're going to be closing well over a hundred this year. I've only been with her since, actually May of last year.
Tina King: 41:48 So that's what I'm saying about... I didn't jump on her coattails cause I needed leads. Mine was very different, because I was trying to decompress from the big corporate world, but I still have the passion to grow people, and so she helps me to feed me with that.
Tina King: 42:05 So find what works for you and what you're looking for and go out and get it. Now we have agents come to us wanting leads and I call it like, crap.
Jon Maddux: 42:13 Give me some drugs.
Tina King: 42:15 Running [inaudible 00:42:16] it was much like that. So it was all leads, right? And so anyway, that's a whole nother story. You attract that though. So you're leading with, hey I've got leads. Don't do that. Lead with what your success is. Lead with what that is, and that'll attract the right people into your life. That includes realtors to work with you. So if you're not successful yet, get with somebody who is.
Jon Maddux: 42:40 That's smart.
Tina King: 42:40 Right? Makes sure that you're getting that out there. The video... I keep going back to this. You got to keep just putting them...
Jon Maddux: 42:46 You gotta put it out there.
Tina King: 42:48 Our industry is saturated.
Jon Maddux: 42:51 Yeah.
Tina King: 42:52 Everybody's got a real estate license, everybody's doing mortgages.
Jon Maddux: 42:55 Aunt Jackie's got a real estate license, so she's just going to handle it for us. Whatever you're like.
Tina King: 43:01 Yeah. And so same for mortgage, right? So, I really think that the way to stand out is get a couple successes and let everybody know about it. It's just like when we're farming in a neighborhood, I do kind of like an inside out farming method where I'm not just beating them with a bunch of propaganda.
Tina King: 43:18 I have a success and then I tout that success as much as possible.
Jon Maddux: 43:23 Sure.
Tina King: 43:24 I make phone calls in the neighborhood. I let them know we sold that house for more than anybody has since 1969, sold in two days. They don't know that other houses are selling in two days.
Jon Maddux: 43:34 Right.
Tina King: 43:35 I am going out there..
Jon Maddux: 43:35 But they are not hearing it. You got to hear it from somebody.
Tina King: 43:37 Nobody is telling the story. Tell your story.
Jon Maddux: 43:41 Right.
Tina King: 43:42 It takes time though. Have that patience. You might have to or want to buy some leads as well too. You should always have that infill stuff going on, but don't put all your eggs in any one basket. You have to build different pillars in your business.
Jon Maddux: 43:54 That's good. I love it. What I usually ask my viewers... the last question is what's your favorite failure? And the reason I asked that is that we all have to have failures to be successful. It's like, the Thomas Edison, how many times did he fail making the light bulb? It wasn't, failure to him. It was that many times that he found out a way not to make a light bulb.
Jon Maddux: 44:17 What would be something that you think is like your favorite failure or something that you learned a cool lesson from?
Tina King: 44:23 There are so many, and I know you've probably heard that before because I believe anybody who's successful has failed several times.
Jon Maddux: 44:31 You have to have.
Tina King: 44:33 I am not sure if I can call it a failure, but when I went into the seat at Zip Realty, it was an unknown model to me is real estate. But it was an unknown model, they were beating me up. You'd go to the board meetings and it was more about all the things you didn't do versus the great things that you did do. So it was like constant, like stomach ache.
Jon Maddux: 44:52 You don't want to go there.
Tina King: 44:53 It was a horrible culture. I had people in my face every day screaming at me, realtors angry over whatever. It took me awhile, but I also turned that around and that was the greatest success and it was probably the best thing I ever on my resume to be honest over all the things I've ever done.
Jon Maddux: 45:10 Its turning things around.
Tina King: 45:12 I left there on a high note, they didn't excuse me or anything like that. I literally said, listen, I got to get back to my mojo because this model's not really speaks to me even though I did a lot of great things here. Thank you so much. Got to go. They didn't want me to leave of course.
Tina King: 45:27 It was that, and then a personal one, I moved here. I was making well over $250,000 a year in Arizona, which is, goes a lot further than $250,000 a year. I moved here and literally went bankrupt in five months.
Jon Maddux: 45:46 Wow.
Tina King: 45:47 But I met my life love, and I have a beautiful daughter, which I would have never even experienced that. I've had the opportunity to meet so many amazing people, but I got to tell you, it was living H-E-double toothpicks in the beginning. And I'm like, why did I do that? I lost everything.
Jon Maddux: 46:05 Wow.
Tina King: 46:07 I came over here without a plan. I just, one day after 41 years in Arizona said, I'm leaving. And I left. I didn't tell anybody. I didn't tell my parents. I didn't tell anybody.
Jon Maddux: 46:16 It would have felt like a failure at the time, I imagine.
Tina King: 46:19 It was a huge failure.
Jon Maddux: 46:20 Then you turned it around.
Tina King: 46:21 I was starving. I was working for Brian Buffini, nothing against him, but the salary was very low and I was like, I'm following my passion. What am I not doing right.
Jon Maddux: 46:32 Right.
Tina King: 46:33 So, of course he always welcomed me back for everyone to come back. But I had to go after the first year because I wasn't financially making it. I was dying. And so, I went and I created that productivity coaching program.
Tina King: 46:45 So when times are tough and Gary Keller says this, the seeds of failure are planted in the times of success and then, the seeds of success are planted in the times of failure. Did I say that right? I now need lunch. Did I say it right?
Jon Maddux: 47:03 No, I mean that goes a long way. The last a guest we had was, Hard Times Create Strong Men.
Tina King: 47:11 Yeah.
Jon Maddux: 47:12 Or strong people.
Tina King: 47:13 Honor the struggle.
Jon Maddux: 47:14 Yup.
Tina King: 47:16 Also in structure there is freedom. So, get your systems in place you guys and make sure you're getting the assistance you need. You can't do it all. Your type A, you think you can. you can't do it all.
Jon Maddux: 47:27 Can't do it all, and you're definitely not using leverage or scaling if you're just doing it all yourself.
Tina King: 47:33 You won't scale. You'll burnout. I burned out once in my real estate career. I basically just gave up. I'm like, I was selling so much real estate and I had a team and it was very... that was another failure, I would say. It was not a good thing to walk into my team and puke negativity all over them.
Jon Maddux: 47:49 No. It's never.
Tina King: 47:50 I'll never forget that. And so, I recreated myself all... we've all recruited. If you're not recreating yourself, you're dying. Like you gotta constantly evolve. So, that's what I would say. That's my strongest advice, get that in order. Get that perfect...
Jon Maddux: 48:04 Get an assistance, get a coach.
Tina King: 48:05 Yeah.
Jon Maddux: 48:05 I'm going to do it.
Tina King: 48:06 The right coach.
Jon Maddux: 48:07 The right coach.
Tina King: 48:08 You might have to not kiss a few toes to get that coach, but do your research.
Jon Maddux: 48:13 Well, thankfully, like you said, Yelp and there's reviews out there. You can ask people, you could probably post something and say, "Hey, I need a coach, does anyone have any good referrals?" And then go with a referral, not just the person that pops up with the ad.
Tina King: 48:25 Go with the referral. Check it out and build a relationship with all those people.
Jon Maddux: 48:28 Right
Tina King: 48:29 Stay in touch.
Jon Maddux: 48:30 That's right.
Tina King: 48:30 Okay.
Jon Maddux: 48:31 That's very good.
Tina King: 48:31 Thanks guys.
Jon Maddux: 48:32 Thank you for coming on.
Tina King: 48:33 All right. Thank you for having me.
Jon Maddux: 48:33 Thanks for watching. Please like, share and subscribe. See you on the next one.
Jon Maddux: 48:37 Thank you for listening to our podcast. If you guys are looking for more content like this, we have a fund loads YouTube Channel, where we give away more tips, secrets and origination ideas. You can also email us at firstname.lastname@example.org.
Jon Maddux: 48:51 If you've made it this far, I think it's safe to say you like our content, so please subscribe, share, and send us your scenarios. Let's fund loans together.
On this episode, Jon Maddux speaks with award-winning Entrepreneur, Author, and Real Estate Investor—Stefan Aarnio. The two speak about how Stefan used $1,200 to build a multimillion-dollar portfolio, the #1 rule in negotiations, best practices for su
"Respect The Grind" With Stefan Aarnio, As Featured On FundLoans' Vlog "The Million Dollar Mortgage Experience.
Here's The Transcription
Jon Tilghman: 00:00 This episode of the Million Dollar Mortgage Experience is brought to you by our new Insignia product line, jumbo mortgages for A-paper borrowers. Contact us today at email@example.com for product details.
Jon Tilghman: 00:14 On this episode, Jon Maddux speaks with award winning entrepreneur, author, and real estate investor Stefan Aarnio. The two speak about how Stefan used only $1,200 to build a multimillion dollar portfolio, the number one rule in negotiations, best practices for successful mortgage brokers, and most importantly, why you need to respect the grind.
Jon Tilghman: 00:40 Now before we get to this episode, I want to let you know that FundLoans is giving away several copies of Stefan's new book Hard Times Create Strong Men. To enter this giveaway, head over to this episode's video on our FundLoans YouTube channel and leave a comment. At the end of June, our marketing team will pick a few lucky winners. Now onto the show.
Intro: 01:01 Welcome to the Million Dollar Mortgage Experience podcast. Listen in as CEO Jon Maddux of FundLoans, reveals tips, secrets, and origination ideas to fill your pipeline with million dollar opportunity.
Jon: 01:18 Welcome to the Million Dollar Mortgage Experience podcast. I'm here with Stefan. How's it going Stefan?
Stefan: 01:24 Very good. How are you?
Jon: 01:25 Doing great. Thanks for joining us today. So, talk to us about your respect the grind. I love that.
Stefan: 01:35 Thanks dude. Yeah, well respect the grind is a saying I've been saying ... I'm a real estate coach and investor and I had a student some years ago and he was saying, "Oh Stefan, this isn't working. I'm making my calls and my offers and I'm just not getting anywhere and I don't think this whole thing works." I said, "Jason, you just got to respect the grind. It's going to take you ten years and ten thousand hours to be a master, and why do you think that you can cut the line and get ahead of everyone who's been working at this for so long?" So it's a saying to respect the process and respect that journey towards mastery. That's what it's really about.
Jon: 02:11 That's great man. Yeah, it's true, and so many people think that things can just fall into their lap. And then just come so easily, when the truth is, it's the overnight success 10 years in the making, kind of thing, right? I mean, it takes a lot of effort, a lot of work to get to success. And then kind of like, I think Gary Vee says, "If you want to be in the 1%, you got to be willing to do 99% more than the rest of the groups." So I agree, the grind is very essential. And you talk about, I think in your book or on your podcast and your sites, that you became a multimillionaire and you started with $1,200. Tell us about how you became a multimillionaire. Was it mostly real estate related? Really what drove that?
Stefan: 03:01 Yeah. My first million dollars was real estate joint ventures. So I worked for a private equity company. I learned to raise money. And after leaving that company, I went on to the real estate game and I did 12 joint ventures my first year with a coach. So I did one deal in my first year in real estate. Second year I did one deal with development. Third year I did 12 deals, investor deals with a coach, and then the next year I did 24, 30. At one point we're up to 50. And my, I guess notoriety and brand from doing that, won me Rich Dad International Hall of Fame.
Jon: 03:37 Oh cool.
Stefan: 03:38 Which is a pretty big award. Rich Dad is the biggest personal finance brand in the world, over 40 million people own that book, so big recognition. And yeah, first million dollars was real estate joint ventures, which was buying, fixing, selling properties. I had some private partners who were multimillionaires and I would get some fees up front for doing the deal and we'd also split the profits or whatever kind of iteration that was. And that was how I built the base of what I'm doing now.
Jon: 04:08 That's great. So do you do more of the buy and hold strategies, is that your strategy, or do you do both flipping and holding?
Stefan: 04:16 So I've got a buy and hold portfolio, several million dollars there. And then I had a company that was doing a big flipping pipeline. I'm just reorganizing that. I think we're going to come out with a company that's going to do a hundred deals a year. I'm building that with some of my students right now. And then, I'm doing wholesales every now and then, contracts come in, you maybe don't want to do the deal yourself, but you know who does, so you assign and sell the contract to somebody else and make three, five, 10, 20. I have a student who just made $25,000 a couple of days ago on a wholesale in Ottawa, Canada. And then I have another student actually in Ottawa as well. He was doing a $20,000 wholesale. So, that's something anybody can do from any city at any time, where you get a contract or a deal and you sell it, assign it to somebody else, and that's a great way to make money in real estate too.
Jon: 05:08 Interesting. So yeah, it's like you're the one that finds the deal and you're able to pass that on or sell that or monetize that ability. So it sounds like you're teaching secrets on ways for people to do that. Yeah?
Stefan: 05:23 Yeah. So my company's called Black Card University and Black Card is a five year program where anybody can join, and if they join they can qualify. I mean we don't just really let anybody in. And over five years you become a self made millionaire in real estate, through doing flips, raising capital, learning to sell, learning to negotiate. We're actually doing our negotiation classes this weekend. And I'm a firm believer that anybody can be a millionaire in five years, if they put in the work and if they actually do the things they're supposed to do. Anybody can do it. Real estate's non-discriminatory, money is non-discriminatory. The real question is just are you going to do your push ups and your sit ups? And the things required to win.
Jon: 06:07 Yeah, absolutely. I don't know who said it, maybe it was you, but it was like you can read a book about pushups, but that's not going to help you, just got to get on your hands and knees and just go for it and do it and get your hands dirty. So that's absolutely something that we preach here. We just did a recent podcast on how I became a millionaire at 30 and it was in five years. And really, really kind of reminiscent of what you're saying here and there's any way that ...
Jon: 06:35 So one of the things that we do obviously, is we're mortgage wholesale lender, and what we'd like to teach our mortgage brokers is unique ways on how they can find referrals, how they can find jumbo loans, what they have to do to go out and grow their business and grow their sphere of influence and their network. What kind of helped you as you were starting out to get a sphere of influence and have a good network that you could get referrals from. Was there anything specific or it's just knocking on doors, just putting in the work? Was there anything that was extra kind of helpful and beneficial in that regard?
Stefan: 07:17 So something I have my students do when I'm coaching them in real estate investing, and I think this applies to any business is if I was in the mortgage business, I'd been doing 50 calls a day, every day to just people I knew. And I think you've got to get really good at selling, get really good on the phone, because deals in any business come from networking, marketing or negotiating. And so I teach my students in real estate investing, 50 calls a week to people in real estate plus 10 offers in the market. If I was a mortgage broker, I'd do a minimum 50 calls a day. So that's my mentality around it. My sales guys in my office do up to a hundred calls a day, sometimes more.
Jon: 07:57 Yep.
Stefan: 07:57 And a absolute minimum of 50, you got to be dialing the phone like crazy. Now, I think the best way to get businesses to build a brand. And so, I built a brand through coaching, or not through coaching, but blogging. I was blogging everything I was doing. So I was documenting. This is in 2011, 2012, 2013, I would start blogging. And every day I put out a blog. I blogged for 120 days, an 800 to a thousand word article on whatever I was doing or whatever I was reading. And people really liked the blog. They were like man, this is a good blog. And after about 120 days I had speaking engagements, I had people asking me to come to their clubs and talk. I had all sorts of opportunity falling in my lap because I was putting out a lot of value in the marketplace. So we're putting out value, value was coming back in. And then I ended up making that into a book called Money People Deal, which has now sold over 20,000 copies of that book, which is crazy.
Jon: 08:54 That's awesome.
Stefan: 08:55 Within a year I raised $5 million from my own deals and really kicked off my career by blogging, training, and now I have a pretty nice education company that has grown out of those same blogs man. Those blogs turned into a book and we're printing and selling that book every day. So really I think the best way is to get the cat to come to you. So get what the cat wants. Maybe it's some catnip, maybe it's some cat food. The cats in the investor market, they want information. The cats in the mortgage market who want homes, they want information. So become a dealer of information, become a person who builds value in his information, educate the market, and then you're going to have the most leads of anybody.
Jon: 09:41 That's awesome. Definitely good advice there, man. So talk to us about negotiations. I know you have something that's called the 10 commandments of negotiations. What is one commandment that you always see that's unsuccessful? What's an unsuccessful way to negotiate? We'll start with that and then we can kind of talk about what's actually worked.
Stefan: 10:03 Well, I think a lot of times it comes down to the ego getting out of control. The first commandment of negotiations is get what you want and get out. So if you go into a negotiation knowing what you want and you're very specific about it, you say "This is what I want." It's really simple to be a negotiator when you try to help them and you tell the truth. And so, those are the two things, try to help and tell the truth. The first commandment of negotiations, get what you want to get out. When you get that thing, time to get out, time to just say, "Hey, okay good." Deal, shake on it and move on. What people do all the time is they end up, what's the word? They end up going too far. They end up going for things...
Jon: 10:46 Talk their way out of it and they oversell and they continue to, yeah, no, I know some people like that. Yeah, it's definitely...
Stefan: 10:54 Yeah. A lot of deals, exactly, they keep talking or something happens past the point where the deal's made and you've got to get what you want and get out. I was originally going to call the book that, Get What You Want and Get Out. It's called The 10 Commandments of Negotiation, but at the end of the day, I think that's the base of negotiating if you just do that. Get what you want and get out, life is good.
Jon: 11:18 That's good. Yeah. Don't oversell. Just once you get the yes, move on. Move to the next thing. So that's good advice too. So tell me a little bit about your daily hustle. What does a normal day look like for you? When do you get up, what do you do? What's important to really maximize the daily hustle?
Stefan: 11:42 Well, my daily hustle has changed a lot over the years. When I was in real estate, I'd get up at 5:00 AM and I'd do the whole 5:00 AM routine. When I started traveling and speaking, that really smashed my daily hustle because you get on a plane at 4:00 AM or you get up at 4:00 AM for a plane. And so it depends man. I do my life in theme days and so on Thursday I'll do my podcast and my content. Monday's my coaching day, I coach my students on Monday. Tuesday is usually open, Wednesday's open and then Friday I try to keep that open.
Stefan: 12:19 So I've got different theme days and I put flags on different days and say this day we're only doing this and this day we're only doing that. And that's a more of an entrepreneurial thing. I think that maybe being a mortgage salesman, if you're being a mortgage salesman everyday can kind of be the same. When you start running a multi seven or eight figure enterprise, I think it's more, theme days become a bigger thing. Because switching between departments is really difficult, to switch from management to sales, to marketing, to branding to fulfillment. Those switches are very hard on this psyche and that's why I do theme days.
Jon: 12:58 That's good. Very cool. But if you can remember back to the days when you were really trying to get, when you were more of an agent. What would you say really made the difference in the hustle? Was it was the 50 calls, was there anything else that you can share with our audience about how your hustle?
Stefan: 13:18 Totally dude. The biggest thing is get a coach.
Jon: 13:20 Really?
Stefan: 13:20 Just get a mother fucking coach.
Jon: 13:22 So if you don't have a coach, you say go get a coach. That's one of the main things.
Stefan: 13:26 Go get the coach you can't afford, hire the exact best guy. Hire the champion. Go find the guy at whatever it is you do, who is the undisputed champion and pay him whatever it costs to get you to his level.
Jon: 13:40 That's awesome.
Stefan: 13:42 That's the easiest way. Now here's the thing, I charge investors, to work with me direct is usually between 63 and $75,000 for the year. But guess what? If I can make you 300 or $400,000, it's worth it right?
Jon: 13:58 Yeah. Yeah. That's like free.
Stefan: 14:00 And I used to be cheap about it when I was younger. I'd be like, "Oh, I don't want to spend the money." Well I just paid a guy a hundred grand to build out a program for us to make me $1.6 million. So you've got to think like a business owner, think in annual terms. Don't think in monthly and just say, "Hey man, who's the best? Who's the best at this thing I'm trying to do." If you're a mortgage broker, find the best mortgage broker in the world and you can either go work for him for free and be his bitch for a year or two. Or if you don't want to do that, call him up and say, "Hey man, I want to learn your game exact how you do it. What's that going to take?" And he might say, "I don't know, give me 10 grand." Or he might say, "I'll do it for free." Probably won't.
Jon: 14:41 We might just tell you to fuck off.
Stefan: 14:44 Well, not if you're paying.
Jon: 14:45 Yeah, that's true.
Stefan: 14:48 And that's the reality. People who are really good at stuff, their time is valuable. They don't want to hang out with you. They want to go home to their kids and play with their daughter and play their dog and go for a nice life. They don't want to deal with you and your shit.
Jon: 15:00 Unless you pay them.
Stefan: 15:02 If you call them up... Well then it makes sense for the sacrifice their very valuable time.
Jon: 15:07 Right.
Stefan: 15:08 And so what I'm saying to you in any industry is find the guy who's done it and pay him whatever it costs to do it like him. And once you make that investment once, you get that for the rest of your life. So I think you can really win at anything like that.
Jon: 15:27 And that just comes back to investing in yourself really. I mean it's like, you as a professional, if you decide that you want to be the best or you want to make more money in your industry, you've got to do what 99% of the people won't do and you got to go out and do it. I love that idea, to go out and find a great coach and get that coach. I mean if you don't do that, you're going to stay stagnant and be exactly where you were yesterday and the year before. You're never going to change, you're never going to improve. So invest in yourself. That's what I'm hearing hearing you say. Is that right?
Stefan: 16:02 Absolutely. Absolutely. You've got to invest in yourself.
Jon: 16:07 And willing to. You've got to take a risk. Right? And that's somewhat of a risk.
Stefan: 16:09 Well, dude. Here's an example, Russell Brunson, he's a nine figure entrepreneur. He spent 750 grand on himself. Some people go, "Oh my God, 750 grand," but if you're making $100 million gross, 750 grand, almost a million dollars, who gives a shit? Who cares? And I think people are sort of thinking in annual terms and go, "Okay, so if I spend let's say 50 grand on a coach, but I make 250 who cares?".
Jon: 16:37 Yeah.
Stefan: 16:37 Instead they go, "Oh my God, it's 50 grand. I can't do that right now." Well, you never will.
Jon: 16:40 Right.
Stefan: 16:41 And you never will have the money. You'll never be there. But it's always investing in the thing. Look at Elon Musk. Elon Musk is trying to go to fricking Mars. Well, he doesn't have the money for that. He doesn't know how to do that, but he's fucking doing it. Richard Branson started Virgin Air. Well, he just chartered a plane, the guy didn't have $100 million sitting around. He just started making that happen.
Jon: 17:04 Right.
Stefan: 17:04 And that's an entrepreneurial thing. You're never going to have the money. You're never going to have the resources. You're always outgunned, so you might as well just say fuck it and just start doing it.
Jon: 17:16 Right. I love it. I love that Richard Branson story too. I read his book, that guy's awesome. He's an animal, but he's smart.
Stefan: 17:23 I mean if you go back to Richard Branson, he went to the bank and he wanted like 300 grand or 900 grand to put TVs on his planes. And they said no, they rejected him for the loan. So he went back to Boeing or something. He said, "Hey, how much to build a new fleet of planes with TVs installed." Well, they threw it in for free. So he went to the bank and he said, "Hey, I want to replace my whole fleet." And they said, "Okay." And they gave him the loan.
Stefan: 17:48 It's just this outside the box thinking. They won't give you 300 grand or whatever for my TV, but let's just replace the whole fleet.
Jon: 17:53 Yeah. And not just taking no for an answer and if you hit a wall, there's a window, there's a door somewhere else. There's another way to get around it. You've got to be able to not just go pout in your room if you get a no. You've got to be able to be thicker skinned than that and just be creative and have a little bit of an optimistic mind so that you know that there's a way, right. If someone else is out there doing it, if someone else out there is selling 50 houses in a month or doing 50 loans in a month. Then It can be done. And you just have to have that mindset, that if someone else can do it, why can't you do it if you put in the work, right. You put in the time.
Stefan: 18:32 Exactly. That's what it's all about. It's all about finding that way and sometimes the way doesn't exist. Again, coming back to Elon Musk, he's going to Mars.
Jon: 18:44 Yeah.
Stefan: 18:44 Nobody's been to Mars.
Jon: 18:45 There's no roadmap.
Stefan: 18:46 Nobody's done it. The government hasn't done it. There's no recipe. I'm doing some things right now in my company that there's no recipe for. It's never been done before. And it's scary because there's this whole unknown to the whole thing. Nobody's ever done it, and it might be a total piece of crap or it could be the thing that changes the world and that's the essence of entrepreneurship. I know that people in this call are mortgage brokers and not necessarily entrepreneurs, but I think the goal with being a real estate agent or a mortgage broker or house flipper is to become an entrepreneur and get out of that and not stay there forever.
Jon: 19:23 Yeah. I think most mortgage brokers, they are in essence, entrepreneurs because they have to run their own business. They have to...
Stefan: 19:32 No, but they're not. No, no, no, no. They're not.
Jon: 19:33 They're self employed in some sense.
Stefan: 19:36 No, they're brokers. Now let me define entrepreneur. An entrepreneur has an actual product. Okay. Mortgage broker is brokering products. So he's a salesman.
Jon: 19:44 Right.
Stefan: 19:44 He's a salesman of a product. If he had, now if a mortgage broker said, "Okay, we're going to create our own fund and we're going to raise capital from investors, I'm going to create a big marketing system" and all sort of stuff. Maybe he can call himself an entrepreneur. But it's like a realtor, a guy who sells homes is not an entrepreneur. He can say he's like an entrepreneur. He might think like one. But a guy who creates something or makes a product or, that's a real entrepreneur versus just a salesman.
Jon: 20:14 Yep. Good point. And there's a difference. There's a true line between a self employed person and an entrepreneur. You can be self-employed and not be an entrepreneur all day long. To be an entrepreneur, you're right, you have to create something. You have to make something and yeah, it's more risk for sure. And that's kind of what I think my point was that a lot of people are self employed and responsible for their own business. Yeah. They go out, they pick a niche maybe of the business that they want to focus in. But most mortgage brokers, they do take kind of whatever comes their way and they market and they blast market and there's not as much of the niche, kind of...
Stefan: 21:01 Well, there's no production department in that business. There's no production. It's sales and marketing only. Sales, marketing, sales, marketing, sales, marketing. You never have to go to the factory and fix the widgets.
Jon: 21:15 Right.
Stefan: 21:15 It's like, "Oh shit, the widget machine's broken." That never happens to a mortgage broker. He's got 50 lenders or whatever.
Jon: 21:21 Right.
Stefan: 21:22 He calls them up. He says, "Hey man, do you want this deal? Yeah, you do." Okay. Paper it up, done. Next deal comes in. It's transactional. And I think that what was my statement was you got to transform and transformationally change into something more. I have an actual education company that I grew from the ground up and that was, that's a brutal process, man. It cost me $1 million to build this thing I've got right now.
Jon: 21:49 I believe it.
Stefan: 21:49 And I'm looking at it, I'm thinking like, "Oh my God." And then I'm investing another 300 grand into it right now just into infrastructure. I'm like, "Oh my God." So anyways, a broker of something would never invest like that in themselves. They would just say, "Well, I'm a broker. I'm just going to keep hustling and I'll work Saturday." But the difference between an entrepreneur, they're building something usually.
Jon: 22:09 Right.
Stefan: 22:09 Whereas a broker is just selling shit. And it could be selling candles out of the back of your trunk or it could be selling mortgages or it could be someone homes or whatever.
Jon: 22:19 Yeah.
Stefan: 22:19 But there's a huge difference there between those two animals.
Jon: 22:23 I love how you respect the word entrepreneur. I love that. It's something that we take for granted. So many people want to be entrepreneurs and they want to their name as founder, entrepreneur and it is, it's different than just being self employed and it's different than just being a salesperson or a marketing person. There's a whole world of things that are different about it. And yes, a mortgage broker could become an entrepreneur in their business and create something and do something. I challenge mortgage brokers to do that. I mean, I think that's, there's something to that you're pointing out that I think resonates with me is, yeah, I mean you need to separate yourself from just the run of the mill mortgage brokers out there.
Jon: 23:10 There's so many mortgage brokers that just sort of live their life on autopilot and just do whatever the market's doing. They ride the wave of the market versus saying, "No, I'm going to pick this niche or I'm going to pick this part of the market and just focus in crush it and not be someone that's blown by the wind in the market." I mean, because the truth is you can make a lot. I think the majority of the mortgage broker community make a lot of money when the rates are low and then they suffer. It's like feast or famine. They suffer when the rates are high.
Jon: 23:41 But I've always been one of those that just goes out and finds where different parts of the market where you can make money all the time, whether or not the rates are high or low and whatnot. So I do challenge our listeners to definitely look into that type of business. Become an entrepreneur if it's in you to do it. I mean, do you think anyone can be an entrepreneur? Or do you think it's something that has DNA attached to it? Just curious.
Stefan: 24:12 I think theoretically anyone could, but I don't think anyone will.
Jon: 24:16 Right.
Stefan: 24:17 It's like saying like men and women are equal. Well, in theory you could say that they are, but in reality it's not even close. And so the theory is anyone can be an entrepreneur, yes in theory anyone can. I think a lot of entrepreneurs like real ones are driven by pain. They they went through, maybe they were an immigrant or they had nothing like myself. I had nothing, I was desperate and I became an entrepreneur. Just started running as fast as I could. So I don't think people choose entrepreneurship. Usually entrepreneurs, they have a lot of pain, they've got dead parents, incompetent parents. They're addicted to risk, they have all sorts of, mental entrepreneur diseases are bipolar, ADD, ADHD, there's all sorts of depression, anxiety. There's all these things that go with being an entrepreneur.
Stefan: 25:09 I think entrepreneur is kind of like the new rock star. It's a cool thing. Guys like Gary V or Grant Cardon or Kyle Lopez make it super cool to be an entrepreneur. But I think it's the hardest thing. I think that's the hardest thing. I could've just stayed as a house flipper guy and had a super good life. I could've stayed as a joint venture guy who had a rental portfolio, had a super good life. When I went into the full blown entrepreneurship and building what I'm building right now, I'm like, "Oh my God, this is so much harder than it looks. It's so much more scary. It costs so much more money and I'm built for it." For me, it's the only game I play. But a lot of people see that they want it and it's a fantasy.
Stefan: 25:54 And if you're a fantasy person, I think you're better off to have a job. Because this is something that will take everything you have and more and more and more and more. And I'll go back to Elon Musk. I mean, the guy put 100 million into his companies or whatever it was, and it's taking more and more and more and more. And it will absolutely consume your life. Maybe consume you 99% chance of failure over 10 years. And a lot of entrepreneurs have children. They don't recommend that their children become entrepreneurs because it is mother fucking heart dude. And I'm riding the lion. And I hope others ride the lion. I train people in entrepreneurship, but I wouldn't just say to anybody, "Oh go do this." Because it's like going to war. You don't just tell your children to go to war. War is hard.
Jon: 26:39 Yeah. So true.
Stefan: 26:41 I don't think that it's something that is meant everybody at all.
Jon: 26:45 Man, that's good stuff. So I think one of your posts or maybe it's on your book, I think I saw it. Where how tough times create strong men and I'm sure I'm butchering that but the whole... Hard Times Create...
Stefan: 27:06 Hard Times Create Strong Men.
Jon: 27:09 Yes. I love it. It is absolutely true. One thing that my son, and he was at, I think it was at 12 years old when he said this or maybe 11 he said, because we were watching like gladiator or something like that. He said, "Dad, why is it that the sons of kings are always weak?" And I was just like "bingo man." He nailed it on the head. And I was like, "Because they got the kush life and then life's too easy." Right. They got servants, they got maids, they got things just handed to them. And I was like, "That's a very, very good point." And what you just said about entrepreneurs, they had pain, they had a hard time, they had something that drives them. Right. That's absolutely true.
Jon: 27:52 And I mean so what do you recommend if someone does have, how can you change a son of a king into a warrior? I mean, what do they have to do they have to go through hard times? I mean, or is there a way that they could get in their mind to say, "You know what, I'm going to fucking just, I'm going to figure this out." Because I think you're right, it naturally creates strong men if it's a hard time. But is there a way where you could tweak that or game the system and become strong, even if you've had a good life?
Stefan: 28:30 Well, it's hard times create strong men, strong men create good times, good times create weak men and weak men create hard times. That's the cycle of history. And it's about an eight year cycle. Each line of that poem is 20 years. And can anybody, or how do we make the prince strong? And the answer is I'm a high performance coach. I make people into millionaires over five years and people hire me to kick their ass so I kicked their ass. And it's one of those that I get two types of clients. I get the self-made starting out with nothing guy, hero's journey. I'm going to just conquer the world. Starting out with nothing kind of guy. And it's like the story of Oedipus. Every man has to kill his father and marry his mother. And so that's a big struggle. If you have a really good dad, like Donald Trump for example, his father was $100 million man. Well he had to step out of his father's shadow and become a billionaire.
Jon: 29:30 Right.
Stefan: 29:30 And Donald Trump had, I think four or five other siblings who are not billionaires. So those other men where as brothers didn't step out of the shadow of dad.
Jon: 29:39 Right.
Stefan: 29:41 And so that's a man's struggle against himself, is to kill his father and marry his mother, find a woman like his mother and straight up kill his father. Straight up kill his father in outproducing him or becoming different or more than his father was. That's the struggle of being a man. And so the tough thing, like going back to the movie gladiator with Commodus who followed Marcus Aurelius, the greatest emperor of Rome who ruled at the height, it's hard to follow that act. That's the best act. So his way of trying to beat his dad was create the games and the gladiators and Commodus was just an unprincipled man.
Stefan: 30:18 And Marcus Aurelius studied with the greatest men of his time and he was a great philosopher and we still read his book. Marcus Aurelius's meditations today. And I quote meditations over and over again in Hard Times Create Strong Men. I don't quote Commodus, the Prince of the King, he really sucked. So at the end of the day, but there are guys who win. For example, Alexander the Great, he inherited the greatest army in the world, the Macedonian army, and he conquered the whole world by 30.
Stefan: 30:50 Donald Trump is like an Alexander the Great, and if you go to his Trump Tower, he has got Alexander the Great art everywhere because he is the Alexander the Great. He inherited the best real estate company and he built, he got world domination out of that. He's the President of the United States. Officially on paper, he's the most powerful man in the world. Under the table, maybe there's more powerful people. But that's an Alexander the Great story where he inherited the greatest opportunity and made it even greater. So if you're a rich kid or if you're a son of a king, you got to look to Alexander the great or a guy like Donald Donald Trump who's building that Alexander the Great story.
Jon: 31:29 Absolutely. No matter what your opinion is of Donald Trump, you've got to admit that he has become the most famous person in the world. I mean the guy infamous or famous, however you like them or not. I mean the guy has done more than anyone else. I mean the guy lives off of media. He plays the media like a fiddle.
Stefan: 31:48 Well, and you know what? Fake news will never admit that. The fake news will never admit that. So that's why people are divided on him because there's fake news. And that's just simply it. I mean, the guy is, he's the real deal. He's a self made billionaire for God's sakes. The guy's the real deal in every way. So real that he shouldn't even be in politics. Because you look at all the other scumbags and lowlifes and degenerates and whores in politics. He's not like them at all.
Jon: 32:15 Right.
Stefan: 32:16 And it's amazing because fake news out there will actually beat the shit out of him every day. And he just keeps on winning. So good for you fake news.
Jon: 32:27 Absolutely. Do you think he'll win again in 2020. I know this definitely affects the mortgage business.
Stefan: 32:31 Yes, absolutely. A hundred a hundred million percent because there's a power vacuum on the other side of the table. The Democrats have no good leader. And there's a bunch of guys fighting for power over there.
Jon: 32:42 It's divided. Yep.
Stefan: 32:43 And Donald is more famous than ever. More powerful than ever. And he's doing great things. He's doing the country a great service. And he absolutely will get a second term. So some people say he's a time traveler. There's a book out there. What is it, the last president from the year 1800 that says he's the last president. But who knows, man. I mean I have my own thoughts in my book Hard Times Create Strong Men on that. But Donald Trump is certainly a strong man and he certainly is a fighting back against some of the bullshit out there.
Jon: 33:16 Definitely man. I agree. So I'm going to read your book, we're going to do a giveaway with our listeners and viewers. And we're going to get your book out there to our community and I appreciate you coming on. Is there anything you want to leave us with as far as I got from this. Get yourself a coach, pony up the money. Don't be a wimp and say I can't afford it. Get yourself a good coach, make 50 calls or more a day. Don't be someone that says you can't do it because you can. And be like Alexander the Great. Is there anything else that you think that we're missing that we could, that our community could thrive off of. You've got to hustle, get your book, because I'm sure that's going to help but, but any last words you want to leave us with?
Stefan: 34:02 Yeah. Get the book at a hardtimesstrongmen.com, that's hardtimesstrongmen.com and anybody can win if they put their mind to it but only so many choose to do that. And that's the real difference is you can choose to be a champion or you can choose to not. So respect the grind and go to hardtimesstrongmen.com.
Jon: 34:23 Well, thanks for coming on and like, share, and subscribe everybody and we'll see you on the next episode.
Jon: 34:29 Thank you for listening to our podcast. If you guys are looking for more content like this, we have a FundLoan's YouTube channel where we give away more tips, secrets and origination ideas. You can also email us at infoatfunloans.com and if you've made it this far, I think it's safe to say you like our content. So please subscribe, share and send us your scenarios. Let's fund loans together.