I'm not Sydney Tempo. And this is Tough Zails on WBZ News Radio ten thirty.
Try that one again. You have been doing a radio show for nine years. You should be able to open up our shows by now?
Why you always do the open?
Why don't you ask mikey V that's the DJ here you can open explain her why after nine years she should be able to open up your own show.
Hopefully muscle memory or seeing it. But who knows that you guys are doing different ways? I don't know.
Okay, I can do it for you, can you? Yeah, go for it? There we go. Yeah, you're going. We're waiting. No, we've opened up. Ready, we're here. Here we go.
This is Tough as Nails with Cidney Stumpo and Samantha Tempo right here in WBZ.
There you go, And how do I open up?
You tell us how you open up?
I don't remember. My brain is so dead right now.
Next question is and who we're with?
All right? And next question? So we typically open welcome. This is City Stumpo Toughest Nails on WBZ and we are here tonight with Sammy and.
Lukens and Mike e V from H and kis fun.
Wait, okay, so what.
Does H one H two stand for? Because it's like.
That's com've originally started.
You know, if two people talk at the same time, it's a very horrible listening experience. I just want you to know when you're listening to Radio ahead.
H one two we stand for housewan house too, to help developers get into more projects, get in the housewan house too.
And so we didn't talk about that the first time.
Well we should, okay, but for us, let's just touch upon what is going on in the economy right now. Terris come and go and they're coming, they landed, this, staying and there. We don't know right So a lot of our listeners have been asking, how come Sinny's not touching upon real estate, the economy? Terrorists We were going, we were interest rates going blah blah blah, right, like everybody has an opinion, and then I got to listen
to everybody's opinions. You know what everybody's opinions mean. I'm going to say this one time and one time only. What I know is I don't know how's that. I'm not predicting any calls right now. I'm not predicting I've made a lot of calls in the real estate market on Bloomberg Radio, on Yahoo Finance, and on the Globe and the Herald over my thirty seven year career. I'm not making calls right now. What I say, you say thirty eight years again, I'm going to throw my penny you.
She likes to make me older and older. I don't know why that makes her older and older. But what I do know is this, when stock markets crashed, historically, we as real estate people go behind it. The difference is the stock market's been high up until all this, right, the last couple of weeks of craziness, and then once the market drops, we drop behind it. This is the first time that real estate slowed down and the market
was still at all time highs. Right. But if you watch the market right now, it's just so volatile that if you take the public stock like Toll Brothers and bringing all the public companies right, they were down, down, down, down down, and then they got a little but they went up. I don't know where they stand right now, so I might want to look that up. Can you
look up right now for me? Right now? We're told Brothers closed on Friday or on the overnight, So that gave you good indication for a bit that they rose again because if they're thinking interest rate is going to come down, right I don't know if any of this is all making sense to my listeners right now. Maybe it is, maybe it isn't. We will do a show on it completely, but right now we're going to stay focused with Mikey and Luke and talking about their business.
And again, what I know is what I don't know right now. I'm sitting in the same cheer as everybody else waiting to see where this market ends up going.
Yep.
But I do know this, guys. We have two years before midterms hit, and there's no way any presence ego, I don't care who the president is wants to go down as a flop. That's just not especially this president right so I would think he's going to pick up momentum, figure this all out, and we're going to be smooth sailing set in twenty twenty three. Samu Ary twenty four was gonna get bad, in twenty five, was gonna be a really tough year going into twenty six. I'm standing
behind that and that one. I'm not coming off of that one. Was a prediction I made twenty two or twenty three. I forget.
You actually thought internace would go up this year?
What's that You.
Thought interstrates would go up in twenty twenty five?
No? No, I said interstrates were going up in twenty three.
Also in twenty five, they were gonna go up this year before you thought two or three more times before they went down.
Yeah, that was actually twenty four. I said twenty five they'd have to level. They'd have to level now.
I'd have twenty five.
No, absolutely not. You might want to go back and listen. That is not true. So will interest rates go up? Will they stay the same? I don't know. Again, Powells's own entity. I have no idea what he's going to do. Presidents can't control where interest rates go and where they are. Can they keep rising? Sure? Can the Federate drop the rate tomorrow? Sure? We don't know. So everybody just I say this, don't panic, don't sell out your stocks, and
just go to sleep at night. Because if you're old enough, you've been to these economies before. If you're young, then you're young enough to weather it out. So if people just don't panic, stop panicing. The stock market for if you all stop panicking, you all going to sell mode when you have more sellers than your selling down there, you go just going to keep deflating the market. So anyways, let's get off of that. I hope I answered my listeners this question that they text me, email me, and
send me all these things talk to me. We left off weird. Does anybody remember where we left off with you? To U?
I think we're walking through an actual deal and what we would lend on a fix and flip type product in our product that we have for new developers, that is really advantageous for somebody who's getting into the game.
Okay, we can go there, but I do have a question for Looke where you see all of these banks right now getting nervous? Are you guys getting nervous in lending? Things have changed since we met and had a conversation a week ago. You realize that, right, Oh yeah, we're going back to back two weekends in a row now and we it's a whole different conversation though. Now things changed in one.
Week, Things were changing by the hour the day. Now then it's really there. So yeah, there's there's certainly reason to be nervous about what's going on. But where we hang our hat is that and probably are vesting in this industry in general is people always need a place to live. So we're lucky in our industry to be diversified across three million dollar houses to three hundred thousand dollar houses, and Americans will always need a roof over
their head. So we look at it, and you know, times like this being super super particular about not being over leveraged in any particular subcategory of of our real estate lending.
So you guys have sat down as a team and have discussed this.
Yeah, we know where our exposures are. So we've looked at things and said, Okay, you know, are we over leveraged in a certain you know subcategory like a high end luxury or do we have too many you know, rental grade, you know, workforce level housing products? Where do we have too much? And where do we think is going to get impacted first? So where do we want to kind of hit the brakes or have a little bit of pause as we put more money out your how old look thirty four?
Okay? And Sammy you're thirty eight thirty seven? Okay?
How old are you?
Mom, so I've been The sad part of that question is that I've been developing and building longer than all three of you have been alive. And that's really scary, right, really scary.
Well, are you scared?
No, okay, I'm not scared at all.
People scared and nervous are two different.
No, No, not scared. I'm not nervous, And I'll tell you why. Once you've been through these twice in your life. There's a difference between my age and your age. Right, you already know what's coming. We're going to go through some bad times and then when to come back up like we always do. It's just amount of time. The question is do I have the time at this time in my life to weather out four bad years? Right?
Because usually it's four bad years and then we go seven eight years good years, and then it's back to the three four bad years. You learn the cycles. This is all cycles. And I knew that we had a bullsh market since twenty twelve. We've been in high gear, high gear since twenty twelve. All right, every hold, I thought we're going to break. I'm Sidney Stumble and you're listening to one crazy toughest Nails tonight on WBC and
welcome back to Toughest Nails on WBZ. And I'm Sidney Stumble And you're here with Sammy, you're here with Luke, and you're here with Mikey. Let's not waste time on openings and closings because we got so much to talk about. With that being said, No, I'm not nervous and I'm not scared. What I am is weathered. Okay, I'm weathered. I'm used to this. Do I like it at this
stage of the game. No, Because if I had to wait, like I said, another four years to come out of this, that's going to be an issue for me because you got to take people's ages into consideration. Right. So I'm on the back let's say three of my career. Okay, So if I'm on the back three of my career, then the next three four years are kind of important, right, So you can't make at some point sayre going to stop, like doesn't go You're not going to stop, Okay.
You're more afraid that you're going to forget everything and if you don't use it, you lose it. You're not going anywhere.
I can't retire.
I think you've been saying in the back nine since I've been ten.
I've been on the back nine since since you've been.
Like, for someone that doesn't solf, you really know how to keep saying.
Right some of the factory. But for me right now I have to worry about. You're in your prime of making money. Your best years are ahead of you. Do you understand, Yeah, your best years are coming forward, but my best years are behind me. Maybe it's say it's it's Sammy. You can keep saying that, but that is the truth. Okay, But why do you want to battle me on some not battling battle? Because I think it's some part of it.
This excites you, this economy, Yeah, because you're like, yeah, enough, I'm going to do No. I know your brain's going places where, like you're setting you yourself up for when we get back to the high again. Like, I know that's where your brain's going.
So you think she's looking for the opportunity.
Thousand percent on what you call the bottom scrapper. Of course, I'm not going to get scared to buy. This is when you buy. Everybody buys when everything's high and then all of a sudden things drop. Everybody goes, oh, it looks like a bunch of deal with headlights.
Yeah, we saw that at the end of like the COVID real estate boom where people were still paying crazy prices and then hold on a second real estate isn't selling, you know, without any inspections or any contingencies.
Like, yeah, that was all crazy. Sammy saw me go in in twenty eleven. It was bad and literally walk into this person's house and say, Okay, I'm going to pay you two million dollars right now. I'm going to hand you a check for two million right now. You can cash it when we go to perch and sale, but that's when I'm paying you. We put the steal together in one hour in that house in Brookline. Nobody was stroking checks for two million dollars in two thousand.
It was a ten or eleven, Sammi, since your memory is so good on my age, I.
Know the house you're talking about. I want to say eleven.
Okay, deal's done. When I paid that much money, people was like, people like, wait, what is she crazy? Is she crazy? When that hit the listing right because.
They thought that was too much money at the time.
Six months later, across the street went for two point five. Then six months after that, I paid three points something you sow fast.
It moved first too eight? What was it to Cabot? Was too eight?
Not talking about that one.
That was the next one after that, No, the one closest to where you live now, that Cabot, not this Cabot.
The next one was right yeah, And then people said, are you crazy again? I'm always a crazy one. It always seems to work out right. But that's not the point. The point was, no one was stroking checks like that. Everybody was on breaks on. No, I wasn't breaking on. Then that started that whole erie of me redeveloping and pulling insane numbers that had never been pulled before. That's the fun, that's right. You're taking a risk every day.
We're gimbling every day out there, no doubt. When you're putting your money on the streets, you're gambling.
So you put it under in twenty twelve, we closed January ninth, twenty thirteen, okay, million, But.
I put an under agreement when and we closed.
When January ninth, twenty thirteen, okay.
So we went to Historical for four months, probably right, But they had the money.
I think some of that is a difference, though, between nervous and scared. There is definitely a line, like scared is oh no, and taking my money off the streets and I don't want to do anything. Nervous is you're paying attention and you're you know, you care, and you're feeling something. Hey there's something going on and I'm not just being oblivious to it. That's when when is that?
Really?
What nervous is? Nervous is when you can't sleep at night. Nervous is when your stomach's tossing and turning, And nervous is when you're sweating, going oh scratchy, had going oh god, should have I underwrote that deal? Oh boy? When you're questioning everything you're doing, that's nervous. I just closed checking account. Scared means I'm closing the checking account.
Yeah, I'm with you. There, I'm with you. Unscared, which I don't think people should be here. Certainly we're not scared in this environment. Nervous for me is more of just, you know, trying to be extra careful and thinking about more scenarios, not to the level of anxiety where I'm not sleeping or paying attention but like I think of it all the way back to like a big test in school or before a big sports game or a
date or something like that. Like you get nervous, and that's like there's a good thing about being nervous too, So that opportunity that you're seeing maybe some of that nervousness can be you know, weaponized as a good thing where you're thinking, oh, hey, yeah, you weren't nervous writing a check for two million dollars for that house. You felt one percent confident when when you did that, I did, Well, you're that's incredible. But that's like, that's not the average investor in real.
Estate because remember we're in a lot of we're in thirty eight states right now we're talking. We can't talk about what's going on every state that's a safe state. We're especially the areas that I belie, Right, it's a pretty recession proof that I've proven that to be the truth. Where builders have gone down Need and Wellesley Weston.
You're a pretty recession proof your brand, not everybody.
Else's, Okay, explain that.
There are people that will wait for a house that you would that you would build in a certain area over just going to buy somebody else's house just because they need a house.
Your brand holds weight.
Like we have a client right now that lives in new and he bought like the house that they bought was kind of like an okay, spack house. They've been waiting three years before their house is officially done on Woodland Road conservation planning, just because they wanted that house.
Yeah, and so we put this house on an agreement three years ago and would just get into the closing table in two weeks. Yeah, but I just got we had it's just because there was so much going on. I had so much to build that I just couldn't get to it right away. So I had five going on this street. I mean, I've built the last two streets in Brookline.
But I don't know any other builder that would a client would wait that long Coorehouse.
That's your point.
And I think part of that's like write it in the book someday, like Cindy Stumpo doesn't get nervous when there's opportunities there. That's where you're making your living. That's that's a great I think a great accolade to have.
No, it's it's teaching you guys. What I've already been through the pain, so you don't have to go through the pain. If I could just take my brain. And I know your generation uses the word mindset, it's not a word I use. I don't use the word mindset. It's just not a word I use. That's generational. Never heard that when I was growing up, and I still didn't hear It's I got into social audio and then social media, like, okay, mindset, I said, And what's the other word. I don't like?
Manifest?
Yeah, I don't manifest because if we can manifest, I want to be twenty five again, and I'm going to be five ten and I'm going to have I don't know, I'll look like whatever and I'll be the super duper model and I won't build. How's that? And then I'll beat you holders.
Do you know that are sitting on product and you're not.
Yeah, we're not sitting at any product.
Everything is so how many builders do you know that pre cell houses? Not many? Not ten plus million known ones.
No, that's a great point, though. Does your appetite change to be a little bit more like flexible with a pre sale buyer in a market like this where maybe there's.
A little you know what, here's the difference for me and any other builder. I'm never greedy. I'm not saving your life. I can't remove a bleoblastome out of your brain. I can't cure your children of the worst cancers. I'm just a builder, developer. I don't think I'm missed a magic man. Okay, I don't think I'm God out there. So you always put deals together. Some deals make you short amounts, some are better profits, some are larger. But I don't look at one deal. You gotta look at
your bottom line at the end of the year, right. So, yes, they are builders that are greedy and they think like they're God, and you know, then they go and they buy the Ferrari and the Lambo and Amelie and the ap And for three years prior to building, I was in the high end automobile industry with my ex husband, and I would see these buildings come in and say, hey, Joe, I want that Lambeau. Here's ten thousand. I got a closing in thirty days. This was before I became I
was twenty. I'm like, they're already spending the money before they even go to the closing table. What idiots. Yeah, but that's the mindset. And I'll use the word and I hate it because I'm make everybody happy. But of the ego male builder the ego of a female builder, we don't really know because we don't have a lot to compare out there. My ego is no ego. I'm going to work to have helped my ex husband support our family. It was a big difference, not because I
hadn't want to palm my chest. It was going to take two of us to give my kids life the lifestyle that I want them to have.
We see exactly what you're talking about happen all the time from Hey, we've got like the flashy, hot new developer who's spending the money before they get it and then oh man, something doesn't work out and they don't get the number that they thought they were going to get buy or fell through and they're just committed to staying at that big number we have. We have to sell it at three million and then.
Then get qush.
They spend the money or they know it's there and then they don't get it.
You know, a breakout is a win too right?
What's that?
You know what breakouts a wind too? Right? Breakout. Hold that I thought I'm sitting stumpy listening Toughest Nails on WBZ News Radio ten thirty. Will be right back and welcome back to Toughest Nails on WBZ. And I'm here with Sammy, I'm here with Luke, and I'm here with Mikey. Wow, you remember everybody's after being up till four o'clock in the morning with China, And again I'm on phones with different vendors over there. Not that we buy a lot
of things for our homes. We buy other materials that we need to make, things like furniture and drapes and things that I do for my clients above and beyond my buildouts. Right, LUs, we got Cindy the Doll coming outs, you know, get the you know they got Bob the Builder. We got Cyndy the Builder coming out.
Yes, yes, yes, yes, that's the real thing.
Yes, yeah, really real thing. We get like signed, yes, absolutely amazing. She looks like me twenty years ago. Yeah, she's really kind of cute. I like her. She just when you pull the strings, she swears a lot, he yells.
She video records the guy putting no longer.
But who were you particularly yelling at in that string pol too, like there's got to be somebody.
Well, did you watch my stories the other day all the time? Did you see me with the guys when they're flipping out in the truck because they can get the stone?
My networking group is like, can we come hang out with your mom because she's a riot?
Pulled up that job site and the test he was flying like you couldn't believe everybody's swearing. I'm like, oh, and the electricians going, I need you over here. You always need me for everybody needs me for two seconds, right, there's no two seconds. First of all, they ache a lot. I gotta walk right, so that's not two seconds number one. And then I hit them screaming in the truck. I'm like, what is going on? My son's laughing. He thinks it's a big joke, and it's like, what what the F? Guys?
What the a F? And the guy My guys are right, like the stone was put in the back of the whole truck, so we had to put the lift and try to get it in. The stone is exterior stone, all Indian limestone, and they're all flipping out right and the you know inside guys, they don't want to come out and help the outside guys, right because they're not the biggest tougher. Rugged, like we got any more testy around here. We had like nine guys, right, and we
had to pull the lift. In the end, I'm like, you know what you have, I'm right, and everything a lot of a lot off was going on, right, and I had to agree. And then I felt after the poor truck driver packed the truck up, right, I'm just the delivery dude. I'm like, I know, but I'm so sorry. Just whatever it was just but yeah, that but that's the stuff that goes on behind the scenes all day.
So I try on my social media to give you the wheel crap, not the Okay, let's let's look at the pretty reveals and it just all of a sudden, Oh, this magical, beautiful bathroom use changes. Yeah, okay, like you know, let's say she TV and yeah, okay, that's not the real world anyways.
Building houses is easy, right, Yeah, I'm going to.
Drop that the hot tack on it. This amount of time, just amount of time before I go down, just at of time. But okay, so we were saying.
What basically, if a guy is stuck in a project. Sometimes they go from the higher number. They're better off just getting out of the project.
You have to you have to because what they all start to do. And this is what you all need to be careful, because I've seen it so many times. Here comes Cindy. She's got one sitting right now, I go and buy another deal, which is fine. Banks are still going to work with me. Now I got another second one sitting. But the problem is the second build out. I used a lot of this construction money to pay the interest on the first one. Okay, Now the bank extends me again for a third one. Now I get
two sitting. Now I'm using construction money to pay the interest on the first one and the second one. Okay, finally the first one dumps off, we get rid of it. Boom, I get my money, I get okay. Now I'm okay. Now we're just sitting on one. I got the other one in the construction. They will keep doing that, and event actually that game will get them every time.
But what I don't understand is they do that. But then I hear builders say all the time that they would rather not deal with the consumer and pre sell the house and not to me.
Because you have the stress of either you have the stress of either waiting for the buyer or dealing with the buyer. My choice always been for thirty seven years, I will take the buyer and I will deal with the stress of the buyer because I can.
But it makes you look good to somebody like them if they presold it and then keep wanting to lend to them. So why don't they want to do that?
You can because they can't the money.
But what I'm saying why there are a lot of builders that refuse to pre sell. You want to wait to complete.
I disagree with that. I think a lot of that has to do with that. A builder doesn't know how to estimate. So if you really want to look at the bigger picture, he's afraid if he gets into a deal with you pre construction, he can't make those numbers. He's stuck in that number because these builders don't know how to estimate. The biggest part of a project is what sammy estimating. If you don't know how to estimate, the problem is since COVID we could estimate in a
week later the numbers were changing. So I can honestly say I have not brought a project under budget. Since COVID, I'm over in every budget everyone I never was. I was always under budget. Everything I ever built was always under budget and looked like the hero. No, no, haven't it. No, can't do it because the price are changing on us daily out here, so it's impossible. You used to get a let of concretes going up in January. First you got this maybe in August. So now you get a
let of concretes going up in a week. You know, that's just what it's been like. So again supplied to me and the whole nine yets.
There's an interesting alignment though from what Sam was saying, like between the established, really successful developer, who will I think more frequently than not go to that pre sale listing because they're not afraid of of where they're putting
that number at. They've estimated close enough, or they know where their cost is and they can put it up there in that pre sale versus the last experienced waiting to get onto the market to see like okay, like I can't really you know, lower my price or sorry, I can't raise my price once I'm setting it there. Uh So it's a lot easier to go the other direction. So if these guys are putting it out early, they feel like maybe they're leaving money on the table if they're not super.
Again, if you're there to get rich off of one sale, get out of the business right now, okay, especially here, especially anywhere. If you're in it for the one time too. If you're here to build a business and again, and you guys want to build these brands, it's called building a business. Your parents and grandparents build businesses, okay, or they work for somebody and when they put their time in. If you had told my grandfather he was building a brand.
So I'm never going to talk that way either. I set out to be a really good business woman. What does that mean? You take care of your clients, No tail light warranties when you call with the not when you don't see my tail light anymore, and we take your money at a closing table and you don't see us again. This company ce Stumple Development. I can sit here proudly and say we have never been sued by an end user, a subcontractor, or a vendor in all these decades.
Into one of your houses. They forget what it was like to live anywhere else. Because they don't do anything in their house. They call us to do it all.
And anybody else say that that you can think.
Of everybody has a loss.
Nobody can say that. Nobody can say that. But that's working. Literally, your phone is never off. I get clients that call me that will literally say to me, I can't turn my clicker on. I'm like my shower on. No, because they're going through these smarts they put these smart homes in. Right, have you tried changing the batteries? I don't think it's a battery. I'm coming over the battery. If this battery works,
I'm going to beat you up. Right, change the battery, and then we'll say to me, I knew it's the battery, but I just wanted you to come over so I could see your face and want to go have a cigarette together. I'm like, but it just called me and asked me if I wanted to come over.
The best has always had to lock the Pella doors. They're like, I don't know how to do this. I'm like, you turn and then you lock.
The bolt.
You have to pull the handle up on that.
We teach them at all the time.
So to put a bow on it, today's craziness going on in market doesn't impact your willingness to work with a pre sale buyer. You've always done it, and you'll always do it.
I'll always work with a priest. I don't care. And again, I have built some of the best relationships in my career by becoming pre selling those homes. And Samuel tell Ray when he first started to dating, it was the first like summer after that winter, I go, we have to I have five parties I have to hit tonight and goes, we're hitting five parties and then I go, yes, he said, who's are they go? They're all my clients. We're gonna hit five parties tonight in the matter of
this time. That yeah, I can't show up to one and not the others. Well, how do we do this? We're just going to keep moving an hour thirty minutes. If I don't show up at a and I show up to yours, but I don't show up to your party, well why were you there? That's why I stopped going to games with back in the day. When in my thirties, I stopped going to games because I would go with one wife, one Celtic's wife, or one red SOX wife and then the otherwise were like, why did you go
with her? So I just don't go. I don't exports anyways. But everyone's while I feel bad for the new wife they came in has no friends yet on the team, and I'd go, that was a bad move, right, So now you're pissed on. But it's I have built incredible friendships, insane incredible friendships with every one of my clients, but some of them just you know, we just look, I live next door literally to I don't know, seven neighbors. Like it's ridiculous, Like K lives next door to seven of their.
Neighbors, seven of their clients. About you bill houses.
Seven clients that I bill for, thank you? Right, not just neighbors, but you know what I'm talking about, And they don't complain to me. And we're all sitting at a gas fire pit in the summertime. Pay you with one thousand percent thousand percent. But that's the stuff that you guys need to take you as you're lending. You need to know who your builder is, what's his personality,
what's her personality? And are they they groove with the Sidney stumble brain or they groove with a brain that you are not aligning with right all that I thought, I'm Sidney Stumble going to break this WBZ News Radio ten thirty. Welcome back to Toughest Nails on WBZ News Radio ten thirty. And I'm Cindy with Sammy and we're here with Luke and Mikey. V had just run into a studio kiss went away and jump out real fast, and in his places you.
Got Josh Cohen. I'm the co founder and one of the partners here at H one H tw.
Okay, Josh, nice to meet you for having us. I'm glad you ran in and gave us your last fifteen minutes of the evening.
He's coming apro He just made him move closer like Mikey did to him the first.
See, Luke, now you're doing Mikey does. See how you learn fastspital life. Right. So let me ask you guys a question. Your lenders. We don't like to use the word hard money lenders when it comes to you guys, right, you can use that. We're not Josh, you like, what's what do you like? I like?
Private lenders? You know?
We okay take that seriously and we're not just you know, uncle Johnny with.
A bag of cash, Okay, and that would be Uncle Vinnie. Sure, that would be actually no thumbs Vinnie. Yeah, okay, But so I like that private lending sounds better, right, let's change that to private lending when we talk, it's much more classic. Okay, okay, had my lending. We just think of guys getting their legs broken when they don't pay on the streets. Right, It's just how it was back then. But so, what is what's going on with your philosophy
in your business right now? With what's going on changing up a little bit, staying course the way you stay in course.
Yeah, So we touched on a little bit earlier. But for us, it's just that diversification of what we're lending on. So knowing that we have these different changes going on in the market, not having too much exposure in one basket compared to another. Hey, we don't want ninety percent of our fund to be invested in high end luxury and we don't want ninety percent of it to be invested in apartments in Springfield. We want to have a good balance between what our products are going and also
where they're going in the country. Is we do some stuff in other states and other regions of the US where those areas might get impacted differently than you know, the greater Boston market is a lot different than Jacksonville, Florida when economies start to change. So knowing what our exposures are in certain areas has become much more paramount in every loan that we underwrite. Hey, are we cross checking that in you know what region? Is just going
into what you know, subcategory of houses. This is a luxury is at entry level? Is it? You know, crazy? You know dream home stuff that you're building, Like, where are we going? We don't do a ton of the stuff that you guys do, as you know, our money's too expensive.
No, I you might too expensive, and I might eat your portfolio pretty goddamn fast too.
Yeah, you'd be a big part of it. Pretty cool.
And then now the eggs are in all in one basket, right, and that's not good for you guys.
Yeah, So that's that's part. I think that's the biggest additional attention that we're putting on just to our regular practices is being really diligent on making sure we're not too much in one space.
So where the market gets like this is it harder to raise Like raising money was very simple when people are getting zero zero point two five percent in the bank, right, and then interest rates went up. People making money in their banks.
In their head, no one's talking.
What's that.
Everyone's shaking their head on radio. No one's talking.
They're shaking. Okay, that's all right, you can shake your head. So they're shaking their heads in the studio. Thank you, Samith the STUMPO. So you can say yes, yes, yes, okay. But my question is when everybody's getting nothing on their money, they'll give their money because they need to make money, right, You got to live up interest. You got a little money, right, Yeah.
So the phone rings a lot during times like this where oh man, the S and P is not doing so great. Oh man, you know I'm not getting what I need out of my regular depositories or might my low risk investment stuff. People are saying this, I'd rather put it into a different asset insert.
So raising money for funds right now is easier the same or.
Harder, significantly easier.
So what will they do. They'll take loss in the S and P five hundred and put in or they're just using other money.
I think Most of the investors that we talk to look at the stability of real estate especially, and you can break it down geographically and say, hey, if we're doing projects in this area, and we've got this data that tells you, you know, even in the worst of times, this is what the exposure is. And with a senior debt position on these projects there, you know, there's no
just thing as a risk free investment. But there's a lot more security in the stability of knowing, hey, I can put my money and get this return in real estate versus rolling the dice and who knows what you're going to see on the ticker on your phone every two seconds in the most recent couple of days.
So raising money can be easy right now. Yep, that's a good thing for your fun, right definitely, really good thing. Yeah, okay, And in our business, there is never enough money. You understand that we never have enough money. It's just one of those businesses that you just need more money, more money, more money. That's saying more money, more money, because the more money you have, the more money you can make by lending it out.
Yeah, but there's a catch to that too, So we're actually not answering a lot of the calls that we're getting right now because there's only so much we want to deploy in a certain amount of times. So if we go and take on, you know, if you and all your friends call us tomorrow and said, hey, Luke and Josh, we've got one hundred million dollars we want to write and.
Get off the you know, I don't have a place to put it.
Well, if I take it now, I'm saying yes to e. Okay, maybe I'm getting my tolerances have to expand because I'll be sitting on the money if I don't. And if I'm telling you I'm taking your money, then you're going to expect a return from it as soon as you send it to me. It's costing me money every day.
But that's not actually true. I mean, you do set these funds up where you say, look at you're gonna depart, or you set the fund that look when we're ready. You're saying, okay, Cindya, I'm gonna put a half a million dollars into your fun and we want you to wire at the minute. We know that, but we need you committed. Are you commit one way to do We've done it and this way you're not paying any interest.
Yeah, the covinar call is always the most attractive version for us, where we can say, hey, I want you to commit to this number and you have forty eight hours to get it to me when I tell you I need it, and we'll do all the paperwork. And maybe that's one way to set it up. The more attractive check sizes that we will go after for some of these call it like institutional level or kind of maybe like mid grade, you know, family office back type
of dollars. They want to write you a check upfront right away for a minimum deployment, and then they want to say, okay, every month we're going to tack on X amount, or they want to schedule. So when you're going after these bigger dollar sizes, a lot of these folks are looking for that really solidified commitment to getting
that money off because that's their job. If you're talking to a family office, that's a guy at an office that's managing wealth and they say, hey, thirty percent of this family's wealth has to go into real estate, and they just got a bunch of stuff back last month. They're sitting on twenty million dollars. He's got forty five days to get twenty million dollars off his plate. So
that's give and take. Okay, hey, I can take that, but you're going to have to give it to me for less out of the gate, and then I'll play catch up. And there's there's a lot of risk and management of how those you know funds get deployed in what it is.
And look, you is your business brain again, I'll use brain and mindset to make every happy, but is your business brain? Want to grow that fund every year? You want growth? Right?
Sustainable growthough, I just I don't want to take on more than we can choose. That's why I'm saying, well, it's great when the capital calls get easier, it's better for me. Or I can go to our existing structures that work really, really well. We have phenomenal partners right now that we work with and say, hey, you know, look at the inbox and I'll forward am emails or
all forum you know conversations I'm having. I got guys offering us money for dirt cheap compared to what you know we're paying out a return for you, So can you work with me on this next? You know two months worth of deal flow, so I don't have to consider shopping anywhere else. I want to stay where I'm mount. We like what we've got going on, you know, Can we negotiate some so.
You have no problem having the same brain that I had. I was a turtle. Do you know what the turtle is?
No teach me?
So okay, here's the hill right. No one can see me do this. I'm holding a piece of paper. This I climb. My whole career, I couldn't look like an EKG machine like this. Builders looked like an EKG machine five, six, seven years. They got homes in the Attucket, they got
homes in Newton Brookline. They're buying their fancy watches, their boats, and then both they're bankrupt and they got nothing, and then back up seven years later after they cleaned up their credit, back up and running again, making the same mistake over and over again. And I watched it for decades. They come back out five to seven years later and they do it the same way again. It's like they don't learn from their mistakes. But me, you and I learned from your mistakes and say I don't want to
do it. You did because you fail. So you were riding high at one point, But what's the sense of riding high and then five years later you're bankrupt and you're moving your kids out of the home and you're renting something and now you've destroyed your family, and then you're riding back up again, you know, five years later. But what if your kids are at that age where
it's that age from ten to fifteen, which's really important ages. Right, there's certain ages of your children that they need all that stability in the world, and that's you know, you can move around, you can do that. Then they get to about eight or nine, ten years old and net
ten to like seventeen, they got to be settled. Those like, to me, the most important years, right that it's realized, like you go a with about them their friends of this, and that I've watched so many builders go up and down. I like the way you're talking. I've done everything the turtle. Now. Of course there were guys that were absolutely making so much more money than me, but then they're broke. So yes you had the run, Yes you made more money,
but then you're rupt. I don't want to live that way.
We have a saying that I picked up from a previous boss of mine and mentor who's a ton of respect for. It's never too high and never too low, and we always are trying to stay that steady, slow up into the right path. And then this same guy gave us another one that just absolutely killed me. When I heard it was, hey, you know at that point where this fund was really growing and we were taking off, it was, hey, you know, we're really happy with where we are now, but what got us here isn't going
to get us where we're going. And I hated that.
Well, that thought I was going to break. I'm Sindy Snupoint. You listen at Toughest Nails and WBZ and welcome back to Toughest Nails on WBZ News Radio Tentor and No, I'm Cindy, and I'm here with Sammy, and I'm here with Luke, and I'm here with Josh. Okay, let me ask you a question. People that need to borrow right now, people that want to build, pick some flip to ground up building you do, right?
Yeah?
Okay, all right? How they reach you?
They can get us if you're on Instagram H one H two capital. If you want to go to me directly, that's Luke Hanscomb and the website H one h T capital dot com is all going to drive you right back.
Say that really slowly, like when you call my phone, Say your number slowly because I really hate when I have to listen to it four times.
H one H one h twocapital dot com bingo or at H one h two capital on Instagram.
Okay, thank you, Luke, thank you, Josh, Sammy. Once again, I love you everybody. Have a great, safe weekend and we'll see you next week. This is Cindy Stumbo tough his nails on WBZ