Good evening. And who am I here with you? Blondie? What's up?
You can't hear yourself?
I couldn't hear myself up?
Okay, you want to open up the show? You want me to open the show? You listened to Cindy Stump on top of his nails on WBZ. Who's radio ten thirty? And who's in the uh studio? What's your name?
Mike E V?
You sure?
Yeah?
People know you Mikey V.
From Kiss one on waight but today from A tween h two. So we're kind of doing a little curveball.
Okay, with one a curveball? So you are Mikey V from Kiss one?
Wait, yes, I do Afternoon Drive on Kissing my brother as the v Bros.
Okay, and Luke Canskimur, SVP of Lending at A twenty h two Capital.
Can you tell that he's a DJ's putting the mic, he's marking here, you know, take your hand and swim it into the mic in about five minutes? Okay, all right, Mikey tell me what's going on when you're not are what we'll call you DJ celebrity on Kiss one? Await, right, you're doing what real estate?
Yeah?
A lot of real estate, a lot of lending. I've gotten lending a long time ago. It's always in my like passion alongside radio and entertaining for sure.
So you love radio and you love real estate.
Yeah, I definitely love my job at kissing when I love entertaining and making people smile.
But what I've learned too well through that we're.
Affiliated w so only four studios down in the real world.
Okay and there hear my boss action.
No, but what I also learned at one point was you can build a huge network, you know, through doing things like being a radio personality, doing clouds, me out and about and actually that world. Being a radio DJ is what led me into lending ten.
Twelve years ago.
So that opened the doors.
Yeah, I was actually out.
So now being a DJ is more about networking, not just being a DJ, like when in my days, DJ's just that's what they did. They were just DJs, And I know, you remember like Sunny Joe.
White and all these guys. I mean, I don't know that personally, I know, but I know that. I mean they're legendary kiss on awake guys, they were.
But yeah, how it's like they walk down Newbury street and they would just get stopped like they were a celebrity.
It was like justin Bieber walking down.
Yeah, that's how it was.
And now I.
Think it's more of like a three to sixty and even more of a hustle to build that brand because people's attentions is grabbed from so many different places. Right, So, back then when Sunday Joe White was on Kissing to Wait, you know, the only way to get the word out about anything or to become like semi famous was through radio or TV. Now we have these iPhones, we have TikToker,
have Instagrams. Your attentions so different places. So it's a much harder job to build a brand like a guy like Sonny and Joe White.
Did because that was yeah, that was the only outlets. But then again, everybody wants to be famous on these podcasts, and how many really make it?
Yeah, well that's a funny thing, right. The barrier to entry for a podcast has become so low. It's very easy to go home and buy a USB cast phone, a roadcaster, you know the lingo already?
Look at you?
How do I not do? What do we really have here in the studio? Okay, Yeah, anybody can home is very make all the noise and the Yeah. I sit on the board of Chatter, which is a social audio. So they all have broadcasters. Yeah, and they're like, Cindy, we get a road caster and I'm like, nope, I'll just stay on my iPhone, thank you very much. So, okay, talk to me about what's going on in your sector of real estate right now?
Both you guys, what's your direct question?
Well, what is your company? What do you actually do? Explain to people? You're in the lending business, right, but some people don't even understand what that means. So you got to think about just a normal person listen to the show going, Okay, what does that mean?
What?
Yeah, I'll let look grab the lending side of it all.
Yeah, I'd say the easiest answer to that is that we're just a non traditional lender for real estate investment.
Okay, let's take it back. What does non traditional mean to you?
Non traditional meaning like, we are not a stuffy bank. We're not you know, the bad word.
What's the bad word? Hard money?
I don't know think that's a bad word.
That's the only word I've ever known.
That's the I told you it's.
Gonna he's gonna boof you in the back of the head if you don't move forward, because see the DJ, it's.
Tough to tell a guy a microphone here.
Yeah, what is this built for? Like the people that went to the tiny school.
Yeah, so lower hold on, maybe if we lowers cheer because Mike's all now seriously like, this is this thing. He knows how to work this mic.
We're good.
Now, you're good. You're comfortable.
I'm very comfortable.
So now you can deliver because you know.
Now let's get uncomfortable.
Let's get uncomfortable. Yes, he's a hard money guy, right, And that's a Boston with an R that I just pronounced because typically I would say hot, got it? I said, got it? How's this one? I said to one of my guys, gotta got a guy? He goes, what, I go, there's three people to conference stable, gotta got a guy. Is like, Cindney, what are you asking me?
Guy?
Gotta got a guy, got got a guy? And Mike McKay's and he goes, I think she's saying, you gotta got a guy? And the guy going, what do you bolt?
Say?
Wow? I said that sounds terrible, but that's why I should have a gutter guy. But I said, you got to got a guy, you know, because it's just like real fast, I got a phone. They needed to gut a guy. Go, hey, I got a guy. You got to got a guy. He's a huh. I'm sorry, I say so. I said hard yeah.
Yeah, well you're saying with a real r. So hard money.
Yes, hard money.
We don't shy away from that term.
You kind of get like it's actually a better term, because the term really was a worse word than that back in my day.
Right, street money or treat money ever.
Right, and then when you didn't pay, you got your legs broken at least, No hard money guys aren't doing that, right, they're keeping the book straight, and you don't pay, we'll full close on you. Will do it the legal weight.
Right, and and so will a bank by the way, too, like everybody closes when you don't pay the bills. Like the hard money stigma of oh wow, like those guys are going to break my legs if I don't pay, Like, yeah, okay, that travels.
How long has that lasted?
That hasn't been a thing. I mean since I've been in the industry, which you know, I'm not as seasoned as other people, but I've been here for at least ten years in the real estate space, and that's not then a thing in the last decade. So I don't know if I can't speak before that.
Well that we know about my generation was you're a little tough in the streets out there. Oh yeah, you heard hard money.
I ain't doing that well again, and Luke can talk about it too, But like the hard money and breaking your legs is one thing, but really what it means is we're evaluating the hard asset. So really the loan is based off of, hey, this asset doesn't have value and can we lend against it? Nothing to be with like hard knuckles or like a hard fight. The definition of hard money evaluating change asset lending and should be called over that's actually company.
But we do call you guys like breakers. We just call you guys like hard money, guys like oh because the guy.
Okay, I like, there's a reason for it.
Okay, you could explain the rationale behind hard money. And I'm gonna because our listeners that are listening to right are all demographics in thirty eighth stays, so a lot of people think hard money guys, are you know, make this much money? The points, the spreads, blah blah blah against traditional lending, And of course you guys are making more money and not making more money. Your spreads are higher and I don't know, we'll talk about that and
your points. But typically guys like me wed go in and borrow from guys like you for a short period time until they got their traditional banking in line and then take you guys out and put their traditional banking in place. Then there's some guys that will stay developers, builders, whatever, builders really will stay on for the whole one year or two years, however loan it's going to take them to build out, but they're going to pay more money.
But sometimes it's deals that banks can't close as fast as you guys can, or maybe there's a hiccup on his credit report or her credit report. Right, they gotta be politically correct. Yeah, so there's many reasons why you guys as it needed out here for a lot of builders.
Yeah, there's a use for it when it's the best fit, and there's plenty of examples of when you want to use it and when you shouldn't. We see it as kind of like a scale of somebody who's first getting into it might need somebody who's a little bit more flexible than a bank to start getting into real estate, so maybe a hard money is a good option there.
That person often leaves us for the bank after they've done four or five projects, and then you know, the bank starts slowing them down again, and the bank says, hey, you know, you've got too many deals out, You've got so much money. You know, with us, we want to hold off on your next one until you sell another one.
So then they come back, and that's like the beauty of the life cycle for us is when we come back around as a scaling tool, and that's a professional operator, somebody who's coming in and can really deliver on their products. So yeah, those I all that.
Thought were going off for break and we'll be right back. This is City Stumbo Toughest Nails on WBZ News Radio ten thirty and welcome back to Toughest Nails. I'm City Stumpo and you are Sammy Okay and.
Luke and mikey V.
And I just noticed something. You're across what how many stations behind?
So my show, my brother is on one hundred and twenty eight cities every single night in.
The country, one hundred and twenty eight cities.
Every single night. Yeah, So we do afternoon drive on Kiss one O eight, two to seven. Yeah, And then after that show is done, we have producers that then pulled that audio and then send into all all of our affiliates throughout the country. So then oh, Air, you know if you're in Roanoke, tull Sa Heart for Connecticut, Cleveland, Denver, Austin, anywhere you're.
Going in the country.
Got it. How did you two meet?
We met in a kind of a funny way. I had just kind of started a twenty two and I was out in a boat throwing a party. We have a friend who like sells boats, so like once a year he'll tell the story to his boss, like, oh, Mikey IV might buy this like two million dollar boat, which we all know I'm not buying a freaking two.
Million dollar boat. And then he'd be like, hey, Mikey, invite a.
Bunch of friends and some girls. Let's have a part in this boat for your like show off of the boat. So I had filled this boat with a big party, and Luke had bought a boat from this guy as well. So Luke had like pulled up in his bubble, Oh what's going on over there? And then we invited him on a joint.
Million dollars owned his boat.
He didn't know.
I had one of those boats that you drive up to a big boat, which is not the smartest coat to get you want you want to get into the other boat.
But then the second he said he was working at a much bigger lender, like a three billion dollar fund out of Cleveland, and uh, he said he did lending. And the second he said that, my brain like turned party mode, Mikey completely off and we talked shop on this boat while the craziest things. We talked shop for
like three hours on a boat. And then that kind of grew to we became there preferred mezzanine debt, did the bigger fund that he was working at, and then we did that for I don't know if that was six months or a year, but it got to the point where I was like, let's just team up, leave your big fund, and uh, let's start a thing from
the ground up. And actually around that time is when you gave me advice to get out of a certain space and lending, and we had the perfect opportunity to kind of dive into the space that you recommended that we got into.
How many years ago that you called me for advice?
I was like, that was two years ago? But how long ago?
Did?
I mean?
These years since COVID have like evaporated in my head, so I don't even know brain, Yes, like I don't even.
Know how long ago.
It's got to be around the same time.
Yeah, I think I think it was very similar. I remember, like I was working close with Luke.
You gave me that advice, and then remember in that same time frame, me and Luke are like, let's just start this and we have another partner, Josh, to start.
A ground up, to start charging a one nine hundred number. Call Cindy for advice.
That's it, we would call it. Goes.
You don't sleep as it is, you want to sleep even less?
Well, I'm up anyways, get everybody. It's like the craziest thing like those you know Instagram and Facebook, me whatever, right, and then her friends and Chad's friends and then my friend's kids like can you can you yep? Sure? Have you kid call me? Yep? Have you ky call me? Like I have all the answers. I kind of do have all the answers.
You have a lot of answers, and I think your times avery valiable, valuable. So people wanted that with you, But I think for you, it's about like, how much time do you have to give that when.
I retire again?
Right?
Because you don't want you should ask your daughter, is your mom ever going to retire? I feel like she just needs to be No, no, no, I'm never going to tie. You know, people were listening to radio. Can't see you hit she because you're saying you're retiring. It is a lie. It is I'm just gonna die with him.
No, it started with back nine. Now we're back three. Then it's gonna be back on the two, back three. We're not allowed to say she's sixty.
Then the competitors fifty nine forever, the competitors only age she does it. The competitors her friends like her age group, will say, is your mom ever going to retire? Because it can't go against your mom every time I'm speaking against your mom, right, And I remember being that age maybe younger, and going, oh my god, can this guy get out of the business already?
Yes?
So I felt that way too. Yeah, because he had a bigger name than I had. I was twenty three, twenty four to twenty five. He's in his forties.
You know.
I'm like, he's not going anywhere anything. I'm sure right.
I don't want to go anywhere that you can't go anywhere.
I don't want to go anywhere. Okay. So now you guys come together, You leave a bigger company, you take a risk to come here. I guess right, Yeah, I have a smaller company.
Yeah, I mean especially with our product now, I mean we came on. The product that we run our business on today didn't exist, so it was brand new.
Okay. So to people, you find the people people finding you, how is this all happening now?
As far as our current base, most of them are folks that I've been working with for the last several years, and a lot of word of mouth, a lot of oh hey, who'd you get your money from? On this one? How they treat you, how to go? And you know that snowball effect has been our biggest So.
For anybody that's listening right now and they need to borrow, they want to do a deal, like, cite them a deal, Cite how this goes down.
Yeah, it's we focus on one before residential, so we don't do anything departments.
I always tell people, dumb it right down right. The best thing you can do is take it right down. Somebody's mother's listening, father, whatever. We talk a lingo and we can get into our lingo and slowing those people. Right. So let's hypothically say I have a kid. I really know nothing about real estate, but they keep coming home at twenty one twenty two, Mom, dad, you gotta let me money. I can do this, I can do this, I can do this. And then parents are going, oh,
I don't know body like you know. I know you're twenty seven to twenty eight. They're listening right now, and other people listening break it down very slowly. We come to you. Sammy comes to you. She wants to buy a three family. Right, let's not even call plexus because even that can throw people up. Sure they want she wants to buy a two family, three family. She wants to buy a ground up. Do you do ground up? Do you do renovation lending? Only you do it all?
Yeah, So we have a ground up product, we have a fix and flip product, and we have just a traditional bridge product to get in quick and then replace.
Us with okay, you a bigger perfect So let's go the simple one that people understand fix and flip because they've been watching HGTV the it's easy do it right, Oh yes, we're so easy. Just look at the final reveal. Right, then you leave and the hot water comes out of the cold water and the cold water comes out of the hot water. Yeah, I've seen it all out there.
But so Sammy comes to you and let's keep numbers, like we Massachusetts numbers are really ridiculous, right, Like people hear mass numbers and they're like, well, you can buy Because I do a lot of social audio, yea, you can buy a house here Cindy and Mississippi for two undred fifty thousand dollars.
I'm like, well that's great, but posted the day, like the average like house pressure something is like eight hundred and something thousand.
I go, I wrote back, where, yeah, where there's a park Where there's a parking spot right now for sale in Boston for eight hundred thousand dollars literally a parking spot.
All right, So let's just choose numbers I've got. Let's just keep numbers simple, Okay, somebody's buying a fix and flip a two family here in Boston for one million dollars. Yep, Okay, what do they have to put down with you guys?
So their down payment will be anywhere from ten to twenty five percent. So base that off of how big the renovation is going to be and how their credit is.
Okay, So the better the credit, okay, the less they have to put down, better.
The credit, the less they have to put down, and the simpler the renovation, the less they would have to put down. Okay, good credit and easy renovation is going to get you that ten percent down number. And then hey, if you credit and wow, you know my renovation is let's say it's fifty percent of the purchase price. You're putting five hundred thousand dollars into this million dollar house. That's a big rento.
So that's an easy renovation to some of that knows, well, they look, just stay there with me, Stay there with me. So it's five to ten percent down on purchase price, right.
No, no, no, no, ten to twenty five I mean ten?
Oh, it's ten to twenty five percent on purchase price. I'm sorry, want to say five? Yeah, I'm used to my Okay.
You have five percent loans? I don't know.
Okay, so yeah, I can get this. But at the end of the day, so they're putting ten to twenty five percent down on the land, right yep, on the purchase, then they need to do the construction low money with you? Is that one hundred percent or eighty percent of construction you doing?
So we always will structure the loan amount off of the amount we think you're going to sell it for. So let's say, if you're going to buy that house for the million, you're going to put five hundred thousand into it, so you have a cost basis of one point five million. I'm going to ask you, what are
you going to sell this house for? So if they go and say, hey, I'm going to sell this house for two and a half million dollars, yeah, I'll look at it and say, okay, I don't want to lend you any more than seventy percent of that two.
Well, what makes you believe that they're going to pull that much money for the house. What makes sure they have got ay, have a million dollar profit in the deal.
Well, then that's that's the underwriting component of it. So this first initial easy conversation is what are your numbers and the I'm going to take that information and go verify it. Okay, we'll look at it and I'll know pretty quickly if it's in Greater Boston just buy the address. Oh you're crazy. You're not going to sell it for two and a half million dollars you know on that street. There's just no way or okay, yeah that makes sense. There's there's plenty of.
Two hours, so you have to keep your pulse on the market at all times one hundred percent.
And then on top of that, a third party appraise. There.
Praise is the ARV and a IV of it, So which is the after a pair of value? If somebody's listening, like what's worth of the A? And they also evaluate the current value of the product products We're not just we do our own underwriting, but also we always have a third party to go out and appraise it.
Okay. I that's why I say when it comes to appraisers, right like, I don't know, you got to use them. Yeah, that's what bangs depend on. But in my brain, I'm the appraiser. Like no, I would look at a deal in three seconds and go you're not writing it or you're writing it right. I'd be the worst person to have on your board because I'd be like, yeah, that ain't gonna work well.
And that's that same regard, Like I challenge you to look at it as that first time flipper because I look at that for that first time or somebody who's new to the space who you know, you want to really simplify it, that appraisal is a tool. Right. They're not as good as you. They haven't seen as many projects that you've seen and gone through that that process one hundred times over. They get that appraiser and they look at shoot, okay, maybe.
Now hold that I thought we're going to break. I'm Sindny stumbling and listen Toughest Nails on w BZ. They'll be right back and welcome back to Toughest Nails. I'm Cindy, and I'm here with Sammy, and I'm here.
With Luke and mikey V and mikey V.
I love that name, mikey VA.
It's probably going to be on his headstone, just like.
His nails. Yeah, we do the same thing over and over again.
My favorite mikey V thing is that his Instagram titles Oh yeah, Mikey v on Air and so many I'll be out at a property or meeting of lunch and think, oh, your your business partners with Mikey von Air, right.
Van here, that's actually true story.
I got a guy go ahead.
My ex girlfriend her parents thought my last name was von Air for a while, Van Air because people think it's von Air, but it's Mikey v on Air. But if you don't know me, like personally, you might read it quickly and be like von Air.
All right, so cool, pick up where we left off.
Uh yeah. So I was saying that that appraiser can be a really good tool for what they're doing if they know what they're doing. Sure, if it's somebody who's experienced. And for the most part, we use a select list of folks that we've worked with for years and have good, you know, understanding. I can call them and say, hey, you know, this is really what they're trying to do. Make sure we have the same picture of what these clippers are going.
Like a month ago and we battled it out and he really wanted me to do his job for him, and he kept telling me it was wrong, and I was like it was sold in twenty twenty, or reselling it it was built twenty twenty. He tried to debate me on that. I went all the way back to when the guy bought it. Historical permit was pulled COO to prove to him that he was wrong because he told me he couldn't use anything that was built in the last ten years.
Was he like trying to insist that it wasn't like a Sea one or C two CONVII condition told me he.
Couldn't get it a praised out for one seven five zero for a townhouse in Newton that was built twenty twenty.
I was that in praise. I called you. I'm always calling you no.
No, like he was a praising out the property for the buyer. And he kept telling me he could not find the compst that worked, he couldn't use anything new because he actually thought because public records at twenty eighteen that that's when the house was built. Twenty eighteen was when the developer bought it, got a two year delay historical and all that.
So why are you always doing everybody's homework for them?
Because otherwise he would have told me it wasn't going to praise.
Out At that point, she's a selling agent, right if that's going to praise out and the buyer can't get along always educating these.
The problem is he wasn't doing his work the right way. He was just going by basic facts.
And only with what sold end up doing for you.
It praised that finally shut up.
Okay, but it goes to show you want something done right, you gotta do your judge.
That's exactly right.
We live in that same world. We've dealt with plenty of different situations with the praisers that were, hey, you know you're missing a unit man, like this is a three unit conversion, and you disappraised this as too. You know, of course the arev's off because you've missed seven hundred thousand dollars. Like that happens. People make mistakes. If you're not paying attention, you will get screwed.
And I have an a praise that called me last night. Right, can you talk up? Okay, I can't tell you where the property is, but can you tell me what Woodland's what?
I like?
I love that question.
Okay, buddy, listen comments down here. Okay, you want information from me, but you always tell me where your property is okay. I think we got to hang up the phone right now. No, no, miss, we don't nobody. I'm not playing the game. So what do you want to know? Well, Papa, where's your property? Because I'll give you three mores, three more that are under agreement. They're going to close any day. They're going to help you. Like yeah, but I can't.
I'm like, all right, buddy, I gotta go click. And the reason it's like.
Some of them so rude, and the reason again it's their mind evers listening.
Why we're talking about appraises is because we're evaluating how much money we could give on a loan, how much HYH two could lend on a certain loan, and we're saying we base that off of the after pair of value. But yeah, so we do our own underwriting, and then the appraiser is just another third part that goes in there to verify her to look at certain things. But then Luke can explain more about we like to be. So again we're talking about a two family home that's
purchased for a million. They're doing five hundred thousand dollars of work and they're going to say they could sell at the end of this for we're just making up numbers here. But so we evaluate what we can lend based off of the value of the finished product, and we would give a certain amount towards the purchase and then the rest would become as an add value to that unit, which is in jaw systems.
Okay, So basically, if I was sitting in your shoes, I really wouldn't cure what their profit margin is. I'd care more that I've got enough down payment. The stroke is down. It's called a stroke, right, the stroke is down, and you can carry the juice. That's Boston terms for put the money down and pay the interest and pay the interest. Okay, as long as you have the mighty put down which takes you out of harmful ways, then you're secure. Yeah, so that's looking at twenty five thirty percent down.
Yeah, our side, we get super comfortable on that. But we still want to see profit in the project because if somebody at any time, yeah overnight, we all know anything there. If we look at if we do a deal because oh, well, the leverage makes sense on the loan, but there's really no profit in it for the developer, I'm not doing that deal and say no, to that every single time because they're not going to be motivated to finish it. And I don't want to go for
cs on property. We can. We have all the paperwork to allow us to do it. It sucks. Nobody wants to deal with that. The only people that win in the construction are the attorneys. And it's yeah, we're not building houses and flipping stuff. We don't want to own your property. We want you to he he knows.
I just bailed a guy out about a year and a half ago, huge huge deal and tell them like, dude, just get rid of it. I can't. I can't. I can't take a hit on the on the books, right. I'm like, okay, so you're gonna pay me all this money rebuild the whole house. We had to rebuild the whole foundation. What a Yeah. This builder that he'd let money to was just a pure idiot. We poured a whole new foundation.
So he stepped in for the lender. So you took over the project.
No, it was that thing was rough, plumped, rough, electrical, rough HVAC. Except none of it would have worked. The windows and doors were not put in properly. We ripped out everything right down the studs again, we did everything, had a poor new foundation, new slab. Now the house is great, but paid that and he made money. Sammy made the guy money was so good.
Fact do you have to go to go forward? And it sounds like you had to go all the way back.
Well, when you're talking about having to pour a new foundation over another foundation, take out a slab and put a new slab in, do the undergrounds over again. Yeah, you're talking about But.
The reality situation was so that lender needed to secure their money, right, so they had money.
Out that they were I think the problem with that lender was whoever he was sending out to look at completion of work performed. That person was screwing up, so.
He wasn't evaluating the draws. So they're lending money on.
They gave the disbursements, but they were giving the dispersements too fast and whoever they were sending out to look because you got to send somebody else to look and make sure the works performed number one and perform correctly number two. This is where he dropped the ball.
But the truth of that situation right, and so that lender got in that situation of the developer who was doing poor work and got stuck. Was able to replace that person with you. Sam was able to sell the house, and that person protected their money and got their money protected them.
There was no way without my brand on that develop that house.
Nothing on that street had ever sold at that price point.
So you guys bail them out. They owe you a big time for that. Yeah, good.
So too. And if you don't pay and you're a week behind, you break legs. We walk right off and I'm not coming back there.
And the buyer was best friends with the previous person that bought a house from here.
Ah, so I want to tell ship. But okay, so we've kind of explained to people right exactly how it works. Now let's talk about some other things here. Are you doing business differently since interest rates have gone up? Are you more careful right now? You're watching the market? There's a lot of what we call right now is uncertainty in the market. Is that making you nervous at all
on the lending end? Are you guys talking and saying like okay, caros are hitting up and like, you know, what are we gonna do?
Say the best part of the uncertainty that we have going on right now is that at least the uncertainty has been consistent. It's not like it's it's been uncertain now. And if we're probably getting close to two years of this, like oh man, interest rates are high. Oh no, this
is happening. Oh, lumbers up, lumbers down. This is like that's become the status quo, which is helpful to an extent when you have a level of predictability at least something to go off of, so you know where your thresholds are.
And I think you've seen the stock market's time to accept that uncertainty right now. And there's always a like in the last seventy days to the other uncertainty that's come into the program too. Right, So but again we need interest rates to drop, right, Yeah, interest.
Drop, Buyers get more excited, people spend more on property. You know that that system works really really well for that system. Yeah, that's that's a good formula for us.
Because the spreads are the same. The spreads are the same. You're going to make your same spread, all of us. We're all making our same spreads, right, So we just would really rather have a healthy real estate economy.
And I do think there would drop.
I don't think anybody should be waiting for him to be three and three and a half and a half percent agame. That's not happy, not realistic. I think I think it would settle it in the five, which I think that's acceptable, realistic number. The tough thing is everybody who has a three percent, a three percent loan on use never going to sell I rented out, never going to sell it.
Correct. All right, hold that thought. We're going to break on, Sindy stumboint you listen to Toughest Nails in WBZ and welcome back to Toughest Nails on WBZ. And I'm Cindy, and I'm here with Sammy and.
Luke Fumbho, thank you, and mikey v fum H two and kiss.
He's going to wear two hats. You wear one hat. I got to wear twelve hats, seven hates.
Just one hat for me. Now, Cindy, I want to tell you about our new product at H one H two that we're really excited about. We talked about it a little bit when we were mentioning the down payments for a first time flipper or a new flipper previously. Really, up until this past month, we've never offered loans to a first time flipper before, and if we did, it was always going to be at that twenty five percent
down margin for the first time. We've changed that project product dramatically now, so it is ten percent down if the credit score for the borrower is over seven to twenty and the renovation is thirty percent or less of the purchase price. So buying for a million, why do we do it? The data behind the credit scores has been really really accurate. So if we're looking at somebody who's saying, hey, you know, are they are they going
to pay us back? And the credit scores there, we like that if the credit that that seven twenty.
Are, so that seven twenty makes you feel that you've got stability.
With that client, Yeah, I think that's a credit Ye, we.
Should comfort level. They care about their credit, they don't want to blow their credit, and yeah.
They don't want to blow their credit. And then that margin of thirty percent of the purchase price being the maximum of the renovation shows us, Okay, hey, this project shouldn't be overwhelming for somebody who's newer into this space. So it did need some help or some guidance to get to the end of it. They're not going to get foreclosed on, and I'm not going to own that asset. I'm going to be able to introduce them to somebody. It says, hey, talk to this GC, He'll help you
through this thing. Because you don't have that far to go. You can get that.
I like this.
I like this.
So basically, you're helping new people, new men and women, young people whatever, get in the business without getting over their skis and going, oh my god, I took on a bigger project than I should have. So basically, what you're saying is this type of product's great for a lot of cosmetic work without having to get into the nitty gritty electrical h VAC, plumbing, blah blah blah. Maybe you fix a bathroom, kitchen, whatever, but you're not going so deep that you've got to change out all the
mass day codes and get overwhelmed. That's a great I like that. That's very smart.
Who thought that classic fix and flip? That was all Mikey's I like that.
That's your third hat. But that's great because there are guys that have to start somewhere and they got to learn the knowledge, and they learn the knowledge by taking the action right, and it came.
From the idea of you know, we're trying to grow and scale our business, and everybody who's worth lending to in the market today already has a lender. So the amount of times you can break somebody away and bring them over to you that's worth lending to is hard.
But what you can do that's not how I just got to lower your rates.
Well, believe it or not, it's not always about rate either, but.
We know sometimes a lot of times it's relationship.
But okay, we can build those relationships, right, we can.
Create that and start with them now and grow with them, help.
Me into it. And now they're growing, they're scaling, they're doing the projects that you know these bigger developers and flippers are, and they're they're riding along a side, you know, Stiles.
The key, the key to it is a guy can walk away from that and say, H twenty h two help me start my business. H twenty two game my first loan. When people feel that, and that's the truth, right, they feel more loyal to you. So the goal for that is to start building the next level of developers and have them be H twenty two focus and know that they can come to us through their money, and.
Look at I like the way you guys are thinking. Because loyalty is everything. Okay, So if you're loyal with them and you stay with them, especially if they get you a little bit of a trouble and vice for us, so you build together the right No matter how much you can advertise or put stuff up on Instagram, nothing beats will ever be Why I say to Samantha's word of mouth. Period, you can put everything you want on social media. If your reputation is not good, it ain't good.
It doesn't matter. So that's a great idea, and I like the built of that. Yeah, because what you're saying also is that it's hard to take clients away from other hard money guys. What are you saying?
It's hard to take them away when they have a good relationship. So we've recently tried to get some business from folks in a very similar situation. They did their first loan with another lender in Boston five years ago, and now we've got a better product than that lender does. We put it in front of them and showed them apples to apples. Hey, you're paying less with us, you're bringing less money. We win in every single spot. But the guys that ah, I just I can't bail on
my guy here. I'll do the next one with you, but we're too far into the process on this one for me to switch oka. But from moving forward we'll go. So we'll win that by product with our product eventually. But that's harder sale when you've got somebody who knows that the guy.
Stood up and I and I understand where that guy's come from. I think, what and being a development builder for thirty seven years, okay, you really want to keep pushing.
It's crazy. For thirty eight years and she's fifty nine.
Fifty nine, thirty eight years, it's seven years. Okay, I don't know, but whatever it is, it's been thirty seven years. She loves to push it. So when I start out, yes, I was loyal to the bank I was with, right because I knew the money would get there on time. That's the big one, the disbursements, right. And then when he sold the bank, he took me to another bank. I'm like, yeah, this is not going to work, doctor Lee like the bank that brought him out. That's a
long story. That's a great story, but it's a long story. Then he brought me over to Village, and I've been loyal to Village for the rest of my career. Right, So it was two banks that I've been loyal to. So I understand where the build is coming from. He's all about the dispersements. Is the money to get there on time? Are you going to come out there? Are
you gonna, you know, be complete the top ballbusters? Are you going to come out there and bend with them a bit and understand that the work is ninety percent He's got to feed these guys. See construction all money is a weird thing. It really is when you think about it. You pay us after we do the work, got it correct, and you only get your best numbers out there. I get my best numbers. I can. I can stroke checks every week, but I can stroke your check,
your check, but come down on your numbers. Right where if they that money's on the account. The other guy's waiting for his money. The plumber is waiting, The builder's waiting for his money. He's not going to get a better deal because he's floating. The plumbers floating they build her, right, they have their banks until you guys come out. So I would always say you have to be careful. But if you get to know your client and you know the work's gonna get done, he's running a little short,
then you push it out your help it. Don't make a habit of doing that. But if you know the guy is a stand up guy and he's got to make payroll, and you know he's ninety percent where you want him at, you know ninety five percent, we're talking about a five.
Percent yn't look at the asset right and you see, okay, you're selling this thing in two months, No problem, I got you. Don't worry about it.
If that's how relationship sense.
Look at something and say, hey, am I screwing you? Or you know, do I have an opportunity to help you out? And we're going to choose to help you out every time we can.
And that's just do what bank do, the opposite of what banks do. Especially learn from the eight nine, ten eleven crisis. If those banks just hung on with their builders, everybody would have made money. If they had just deferred that interest for two years three years. Remember those guys
were carrying that juice for two years. They needed another year, year and a half and they would have bailed out but instead you went in there in your full closed question them, question them, and that's what the bigger bank. That's why I'd rather be with somebody that's going to work with me.
And that's the main thing about H YH two I think is you're really dealing with three owners right now in two or three employees.
Do you have six people?
So really, when you make a phone call, you're calling an H YH two owner for the most part, and they can make decisions.
Then we can get it done and we can work with you. And we know every one of.
Our clients right now on a person a person basis, so we can work through loans and work through projects for people.
And that's why it should work. So that's a great plan. I like that plan because, like I said, you're building because you guys are young. Now, how what's the average age or somebody borrowing from you guys?
I would have to guess, because technically we can't I think, look at an age when we make some of these decisions or I'm not supposed to that. I guess disclosed yes, perhaps, but I would.
Say it's got to be I just want to know personally, like twenties, thirties, So that's that's the new guys out there. Now, what's about fifty old guys? If they come to you question, like why you have to come to me after you've been in the business for thirty years or twenty.
We've got a handful of them on our books, for sure. And that's everybody's story is different. And that might be somebody who used to build thirty houses a year and was a big scaling builder doing a bunch of stuff, and hey, you know, I'm on the backside of my career. I want to do two or three a year. I don't want to deal with the banks. You know, it's too complicated. I'll pay the pay the juice. So you do what I got to do to make it easy.
And that's totally fine. We have plenty of guys like that that do two or three projects and everything works out great. But you do have the gotcha's out there too, the guy who looks like the best thing ever on paper. I've built five hundred houses, you know, my credit seven fifty, I got all this money in the bank. And you're like, so why do you like that? If you all coming to me, if you called us to go ourrow and said hey, you know, like you would have a phenomenal
answer and reason for it. But the other ninety nine point nine percent of people that would make that phone call wouldn't.
No, they're playing right.
It's just you'd find it eventually, you'd go through it, and you know it might be the day before you close, but you see, oh wow, okay, you know there's fifteen people waiting to you know, take this thing over the day that our REFI closes on this, because that's always what that loan is. It's never a starting a new project. It's a mid construction refinance with a you know, a ton.
Of perfect told I thought we're going to break. I'm Citney Stumple and you listen to Toughest Nails and welcome back Toughest Nails on WBZ and I'm Sydney Stumpo and I'm here with Sammy and Sammy.
Come on, Luke all Mikey.
If you are buying or flipping houses, ground construction or fix and flips, we would love to be your your capital source H one h two capital. We would love to work with you, especially if you're a new time developer. Maybe you're electrician or a plumb when you're trying to get into the flipping space. We're here to help you out and we're pretty easy to hold them. The good thing is when you reach out to us, you will truly get an owner that lives right here in Boston.
It's ready to do a deal with you.
H H one h two Capital dot com is our website, pretty easy or on Instagram is always at H one h two Capital.
You go, folks, have a great, safe weekend. This is Cindy Stumple. We'll see next weekend. Toughest Nails on WBZ News Radio ten thirty and Trust Mikey