Coffeez with Joe Shalaby - Getting Deep with Tom Davis | Coffeez for Closers with Joe Shalaby Ep. 42

Starting point is 00:00:00 What's up everybody? Welcome to another episode of coffees for closers where success is served daily. Today we have a special guest with over 20 years of experience in the mortgage industry. He manages wholesale, non-delegated, and correspondent non-QM non-agency channels for all of Deep Haven, a lender, a top lender in non-agency non-QM lending, known for developing exceptional sales teams and driving national growth. He's a top producing sales executive in mortgage banking. Get ready for insights on growth strategies from one of the industry's leaders. Please welcome. Tom Davis, chief sales officer at Deep Haven Mortgage.

Starting point is 00:00:47 Thank you for having me, Joe. Welcome, Tom. Appreciate it. Nice to be in California. Yeah, nice to be in, yeah, isn't it, isn't it beautiful? I took a little drive down to Carlsbad this morning. The ride was gorgeous. The ocean was beautiful.

Starting point is 00:01:02 Beautiful. The Malins, this is God's country out here. It really is. I actually, I love Carlsbad. I actually have a second home there. But you know, you're in Florida. It's not too bad there. It's great. I have the Bahamas, 50 miles away from me. It's like from here to Carlsbad. The Bahamas are 50 miles for me. That's my second home. Yeah, that's awesome. That's awesome. So Tom, I like to start all our podcasts the same way. So what is your morning routine? Yeah, for me is first thing I do, I wake up early every single day. And, you know, I have a plan. I look at the plan the day before.

Starting point is 00:01:36 I look at my calendar. And I work that plan, right? It's all about driving revenue, driving success, helping my team achieve their goals or financial goals. And I get the work, usually around like five, six in the morning. I get started. Check some emails. And then from there, I'll hit the gym. So it's important to get in shape and, you know, you know, work out.

Starting point is 00:01:58 So I do about four to five times a week I hit the gym, get back to the home. or in the office and I go to work all day until about 8 o'clock at night. I'm always on seven days a week. You know, in order to be successful, highly successful, it takes effort, right? If you want average, average success is a 40-hour week. I like to work 80 hours a week. So more effort, more success, no effort, no results, right? So it's all about the hustle.

Starting point is 00:02:24 You know, in your office, you have those signs everywhere in here. I love it. I live by a lot of those mottos and quotes that you guys have here. and, you know, I love the win. So in order to win, you got to work at it, right? You know, it takes hard work. Yeah, yeah. You're grinding all the time, and I love it.

Starting point is 00:02:38 Never stop grinding. I love it. We have the same mentality, you know. We both resonate with each other, so I'm stoked that we had that mutual introduction. And Tyler knew that, you know, we would hit it off once he met me. So he's been talking about you for a long time. Now, what year did you start in the mortgage industry? Pretty much I started pretty much right out of college.

Starting point is 00:03:00 and I have a degree in finance and management. And I did some retail for a little while. And then a buddy of mine was a wholesale account executive. And this was early 2000s. And I asked him how much he was making. And he told me, he was a producer, not top producer, but I told him, this fax me as W2 and his current pay stub. And so at the time my wife was pregnant,

Starting point is 00:03:30 And after he faxed to me, I said, look, I told my wife, I'm going to fly back to Fort Lauderdot. The time I was living in Ohio for a couple years. And so I flew back to Fort Lauderdale, interviewed with the managing director of this wholesale shop. And he hired me on the spot. So he said, come back, start whenever you can. So I flew back down. My wife was pregnant. She followed me a couple months later.

Starting point is 00:03:57 and the first couple months was, you know, very interesting because my son was actually born in a hurricane and my wife was pregnant and we went back to Florida in a hurricane hit, you know, two months after that. And, you know, yeah, so that's kind of how I got into wholesale and the mortgage pretty much right out of college. I can't believe you had the intuition to realize that you wanted to validate that person's income. That's what we did.

Starting point is 00:04:26 made the move. Yeah. I wish I was that wise. Yeah. And I said, look, I said, if this guy's making X, right, I'm going to make two X. So I was in the wholesale space for, let's call it four or five years. And then the financial crisis happened. But right out the gate, you know, my wife had a baby, right?

Starting point is 00:04:45 We just moved back to Florida. And I only, in order to be successful, I had to put into work. I was making more phone calls than anybody, being more strategic on who the brokers I was going after. And within that first year, I became a top rep in the company, five years, you know, top rep. And, you know, and then the financial crisis happened. And for me, I was very fortunate because while a lot of the products, non-agency products and products overall went away, I ended up getting a job at JP Morgan Chase in a small division there called the Rural Housing Division and crushed it for eight years at Chase doing USDA loans. So I became an industry expert,

Starting point is 00:05:25 lot more USDA loans than anybody in the United States. And as you know, the riches are in the niches. So that was a nice niche for eight years when the market was kind of slow and all these products kind of went away. I had a product that people needed. It was 100% financing, no money down. And I just been very fortunate in my career to, in up markets, I've do extremely well. But in down markets is where I really excel because in down markets, you have to hustle everyone else to drive the production, right? And so, and I've been able to make some great moves, you know, in Dow Marks, including my last one I did, you know, two and a half years ago, uh, when I landed at Deep Haven. That was a phenomenal career move for me. That's awesome. You know, one thing I'm

Starting point is 00:06:08 really impressed about with you, Tom, is, is your, your, your grit. Now, what inspires you to have such, such a hustle mentality? Yeah. So everyone's a little bit different, right? So, you know, We all have a story. My story, you know, my name's Tom Davis. You would think that, you know, I was born in the United States. I was actually born in Cuba. And so my father was in the U.S. government. He was actually born in San Francisco. He met my mother in Cuba. And we came to the United States. And, you know, growing up, my mom worked a couple jobs and really worked hard. And it was the worst feeling to see my mom. She's an angel. I love my mom. She's like my hero, right? She's an angel. And I saw. hard you worked and I really I really you know that it was a bad feeling right and so that's what has driven me at an early age I started working when I was 13 years old mowing lawns and being very entrepreneurial spirited at a young age and I didn't I never wanted to have that feeling of of not having and seeing my mom work and so my mother is who's really driven me and I started at a young age really hustling every day whether it was mowing lawns

Starting point is 00:07:20 selling candy, doing whatever, right? And so that's always carried. I always wanted more and wanted to achieve more and just wanted to be the best self of, you know, the best Tom Davis that I could be. So at what age did you realize you're an entrepreneur? I would say at 13 years old. I had 20 lawns and I bought a friend of mine had like 15 lawns.

Starting point is 00:07:43 And so I bought his lawn. So then I had 30 lawns. And I was making all this cash. And I didn't know what to do at the age of, 13, 14 years old. And so, you know, one of the, in middle school, I actually had a teacher. It was a math teacher. His name was Alan Gaborwitz. I forgot the guy's name last name, but he was a, a, a wealth, like a financial advisors for all the teachers in the county. And so this wealth, this teacher who was a wealth advisor, asked everybody after class, who wants to be a millionaire, right?

Starting point is 00:08:23 And the guys and the girls who raised their hand, there was only a couple folks that raised their hand. They stayed after class. And so he started teaching us about mutual funds in sixth grade. And so a week later, he came to my house, he met my mom and dad, and he got me started investing in mutual funds in sixth grade. And since sixth grade, I started investing money,

Starting point is 00:08:45 and that's one of the reasons why I got into finance at an early age. And with money, there's three things that make money grow, right? There's time, interest, and how much you put into the vehicle or the fund, right? The investment. The number one thing that makes money grow is time. So I've been very fortunate to have time. And, you know, time's a very important asset that we have. And, you know, throughout today, you know, one of the things that I do is when I look at my calendar

Starting point is 00:09:12 and I have white space, if I have the white space, you know, I fill it up, right? because it's valuable. And just like you people manage their money or manage, you know, a lot of different things, like people should really manage their time better because, you know, you can be more efficient and be more strategic about how you utilize that time. Everyone says time is money, right? That's right. That's right.

Starting point is 00:09:33 So one thing that you're known for in the mortgage industry is like you are the figurehead for the non-QM space. Like, when, what year did that start? Yeah. So, I mean, I love non-agency pre-financial crisis. and I've always been a niche guy. And, you know, as conventional government, to me, is not really exciting.

Starting point is 00:09:50 It's kind of boring. And in non-QM, it's more common sense underwriting, manual underwriting. And back in 2012, after Dodd-Frank was passed, an ATR was passed, there was a company, it was a pioneer in the non-QM space,

Starting point is 00:10:06 was Deep Haven, where I work today as the chief sales officer. And they introduced non-QM. They brought liquidity to the space. They brought, created the products that we see in the marketplace today. And so I really, I was going to conferences around the nation. And what I really was intrigued by how they were creating the market.

Starting point is 00:10:27 They were providing liquidity. So early on, I wanted to be a part of it. And about three years ago, I went all in. All we do is non-QM. We're one of the largest buyers, investors in that space. And, you know, it's a great space because we serve entrepreneurial-spirited borrowers. Non-chem is meant for self-employed. There's 18 million self-employed people in the United States that account for 33 million businesses, right?

Starting point is 00:10:54 There's a lot of migrants in the United States. We have it a mass migration. When those folks come to the United States, they work very hard. A lot of them start businesses as soon as they get here, right? Yeah. And so that's about 14% of our population, was not even born in the United States. There's high net worth, high income borrowers. investors, if you look at last year, 26% of purchase transactions in the United States were investor

Starting point is 00:11:22 transactions. Those are very entrepreneurial-spirited, you know, investors that want to invest in real estate. And so I just love the product because you're serving entrepreneurial-spirited borrowers. And, you know, I love it. You know, that's, that's, you know, to me, that's my passion is, is the non-QM space. And then at what point did you start, like, being, the spokesperson on all the panels and just kind of being the figurehead. Yeah, I mean, I eat and breathe and, you know, not in QM, right? That's all I do. I do.

Starting point is 00:11:54 And for me, like, if you go to conferences or you go to people's shops, no one goes into those shops or no one wants to hear about conventional or government loans. It's all manual at U.S. Right. So for me, you know, like, if you look at the mortgage space two years ago, the mortgage space was a $4.4 trillion market. Yeah. And originations this year will finish around like $1.6 trillion or $1.8 trillion.

Starting point is 00:12:19 Wow, almost like a third less, huh? Yeah, like 60% down almost, right? From 4.4 to 1.6, 1. This year is 1.8. So about three years ago, a little over two and a half years ago, I came to Deep Haven, the reason why, because I knew that purchase money was where it's going to, where that was the place to be. but refi business was going to be almost non-existent. And I knew that originators needed products to compete to retain talent.

Starting point is 00:12:50 I knew they needed products to serve other referral sources that they never thought of, right? Because two years ago, three years ago, 75% of the business was refis. It was just easy to manufacture, easy to kind of generate loans. So today is like, you know, if you look at originator account in the United States, It went from like 150,000, 160,000 to like 80,000. You know, we've lost like 60, 70,000 originators in the last two years. Yeah. The originators that are in the market today are the folks like you and me, very hard work

Starting point is 00:13:23 and entrepreneurial-spirited. They're here to work through it. And they are embracing non-to-em in a major way. I mean, we're seeing, look, last month was a period of time, existing home sales, last month were the second worst in the last 10 years. So the second worst month over the last 10 years, and we just came off an all-time company record for production, and the second worst purchase month in the last 10 years.

Starting point is 00:13:55 And the reason why is because borrowers are adopting these products, and they're leveraging them to tap into new referral sources. They're leveraging them to go after the top realtors in the United States. And so, you know, we're teaching our customers, our partners, how to leverage these products, how to source these loans, how to be more tactical and strategic. We talked about time. So if you look at realtors in the United States, right, the top 5% of realtors, they account for 90 or realtor teams.

Starting point is 00:14:24 They account for 90% of the listings. Top 5% account for 90% of the listings. So the bottom 10% of the, excuse me, the remaining 90, 95% of realtors in the, and the, the remaining 90, 95% of realtors in the United States only have 10% of the listings. So if you're an originator, right, and you're in the mortgage space and you're calling on realtors, like, you should be contacting the top 5% to have 90% of the listing. So, you know, if you look at production and people that aren't producing, they're spending a lot of time calling original or realtors that don't have listings. So what we do is we train our clients. Go after the top 5%. Be more strategic and tactical

Starting point is 00:15:04 and use these products as an end to go into those realtors and show them how you could put more borrowers in the homes. Show them how that realtor can maybe leverage these products because realtors, a lot of them own investment properties. So when you teach them about a program, like an investor program, DSCR, they're going to want to leverage that product on their own. And they're all entrepreneurs. They're all self-employed.

Starting point is 00:15:29 Right, they're all 1099 self-employed. And guess what? Guess who the realtor works with? more self-employed people title insurance appraisers contractors builders you name it roofers plumbers more self-employed people so then now once they adopt it now they you know you start getting this you know this um uh adoption so that we you know year over year non QM is almost going to 2x almost two and a half X in a market where the market's down like significantly you know it's it's going to two and a half X over last year's number. So, uh, yeah, yeah, super bullish. That means that,

Starting point is 00:16:08 uh, that means that entrepreneurs are making more money. Absolutely. Which is amazing. That's great to hear. Um, whereas the regular, you know, non-farm payrolls are, they're declining. Yeah. And entrepreneurs, it's self-employed people. They're well healed. They usually have higher net worth. Uh, if you're dealing with investors, look, you know, investors, once again, 26% of the market is investor transactions. Um, it, in the investor space, right, we have existing inventory right now on the market about a million units, right? And we have a five to million, five million to seven million under supply housing or homes in the United States. So there's a supply demand imbalance. Right. So, you know, one way originators could really take advantage of the market and differentiate themselves outside

Starting point is 00:16:55 of the non-QM space is by helping bring housing stock to the market. Now, how do you do that? New construction. So new construction is now 30% of purchase transactions today. 30%. Two years ago is only 15%. Right? Because existing homes are not on the market. No one wants to tell because of those lower rates, right? So if you could provide construction solutions for a home or a community or, you know, of multiple homes, that's how you bring housing stock to the market. Also, you have a lot of homes out there that are not habitable today. And so what do you do there? You could rehab them and bring them to the market. So if you have those, they're called residential transition loans.

Starting point is 00:17:34 I'm actually here for a big conference. I'm on a panel talking about residential transition loans and non-QM. And so the fix and flip, bridge, ground up construction, if you have those products and you have non-QM products, it gives you a competitive advantage. You could serve all borrowers, not just the agency borrowers that are in that small box. Yeah, there's a much bigger box in the non-QM space. Absolutely. Huge opportunity in the space. Let me ask you this.

Starting point is 00:18:00 You know, you're seeing a ton of success right now in the non-QM space and in the mortgage space in general. Like, what are you foreseeing in the future? We talked about non-QM possibly doubling. What else do you foresee? Yeah, I think you're going to see non-QM continue to grow in a major way over the last next 10 years. You're seeing what happened in Q1 of last year, that accident with some of these regional banks. The way a home builder finance is being done, that's changed. bank credit is at a 20-year low.

Starting point is 00:18:30 So banks have pulled back on a lot of these portfolio products, construction products, multi-family loans, commercial loans. So you're seeing bank pull back on that. And we expect that to continue to happen over the next 10 years, maybe 15 years. And the reason why is because there's regulatory pieces that are coming out, such as Baselangame that require banks to have higher capital ratios. So banks are actually pulling back and private credit is coming in. That's where we kind of fill that void.

Starting point is 00:19:02 And so, you know, I think we're in our gig economy is super strong, very entrepreneurial-spirited country. That's the like the engine behind our country, right? It always has been. And so I think the agencies have pulled back on certain products, you know, on second homes and investor homes. They kind of pull backs. And so, you know, non-com is going to continue to grow. and we're forecasting it to be a sizable part of the market over the next five to ten years. That's awesome.

Starting point is 00:19:32 And that gives the people a lot of hope because a lot of people are going all in on the non-QM business right now. Now, is there a specific skill or mindset that one must have right now to be successful in the mortgage industry or in any entrepreneurial industry? There's a couple things, right? So number one, hustle is you have to have the hustle. I call it the hustle muscle, your heart, right? So you got to have the hustle muscle, right? So the heart, you got to wake up, outwork everyone. In this market, in every market, it doesn't matter if it's up or down or just horrible

Starting point is 00:20:05 market. There's opportunity in every market. It's either you win or someone else wins. Either you take someone else's their share or they take yours. I know me. I don't like when anybody takes anything from me, my family, my sales team. I'm sure you feel the same way, right? Yeah.

Starting point is 00:20:23 So you got to have the hustle, right? outwork everyone. And then from there, you know, the other piece is be an advisor to your referral partners, an advisor to your clients. You have to be, you know, help them not just by offering, you know, service, but pick up the phone and become a product knowledge expert. Help them structure loans, help them put deals together that maybe they don't have the expertise. So having product knowledge and having product expertise, that's what really sets you apart. It's like any other profession. I mean, I'm sure you have you, you've worked with attorneys and you go to see a doctor, right? If you're going to have a surgery or you're going to put a financial plan together,

Starting point is 00:21:07 are you going to go to the person that's new to the industry or new to that space? Are you going to go to the expert? You're going to go to the expert. Same with the loan originator, right? If the realtor calls it or a borrower calls that originator and that originator doesn't know their product, right and doesn't know how to structure the deal and they feel that they can sense it do you think that realtor is going to call them back no they're going to go to the expert just like a financial advisor or a doctor or surgeon right you're going to that's that might be their paycheck for the month we're going to trust the advisor who they know they could trust to get that loan closed or whatever it might be right so um know your product's inside and out treat your customer like you want to be

Starting point is 00:21:49 treated, put them first every day and mean it, and outwork, out hustle everyone. That's how you win big, and that's how you become highly successful. That's right. That's right. I totally agree with everything you just said. Now, after all the success you've had in the mortgage space, you know, you don't really need to grind this much. How do you continue to find that motivation to wake up and out hustle everybody? You know what? For me, it's a lot of different things, but, you know, my family and my kids, you know, I work every day for my family and my kids. And so they motivate me, you know, in different aspects. My daughter, you know, motivates me and goes to the gym with me. She, she has that grind as me. My son has that grind. My son's actually just graduated going into college.

Starting point is 00:22:29 He's going into finance. So it's like a family kind of DNA that we have, which is a super, you know, I'm super fortunate, you know, to have that, right? And to have my family, the support there. But, you know, for me, my team at work, man, they go all in all day, you know, seven days a week. they push hard you know I'm there for them you know they don't work for me I work for them right and and so you know you know my team I would say and just I hate losing hate it yeah so I wake up every day I want to win I want to win big right and so I'm I'm always looking at ways uh the win and push the ball forward and and grow uh and once again I don't care if we're in the down market or the up market I'm always just going to keep pushing That's right.

Starting point is 00:23:16 And, you know, the hustle, you know, brings the results into success in any market, right? So Deep Haven's known for having a lot of top talent. How are you, and you're the chief sales officer of the entire organization. So how are you continuing to foster talent at Deep Haven? Yeah, so look, we're growing. Like I said, we're hiring all across the entire platform in operations and sales. You know, in the last two years, even though the market has been down. let's call it 60% right we've grown our customer base 4x 5x in a down market right there's

Starting point is 00:23:54 you know there's maybe 24,000 brokers out there there's thousands of mortgage bankers out there there's 90,000 plus originators so we're just scraping the surface so there's plenty of opportunity you know you do a great job on social media you have a lot of followers you know people don't can't buy from you if they don't know who you are right So you do, you're really well, you do a really great job, phenomenal job at getting out there. People know who you are, right? So that's what I try to do with non-QM. I want everyone to know who we are.

Starting point is 00:24:24 I want everyone in the United States. I don't, even overseas, I'd like the people to know who we are, right? And so we're just pushing to grow the brand and grow, create awareness. And so, you know, we're looking to hire and add the right people with that hustle and drive. And so, you know, it's, you know, there's plenty of opportunity out there. So we're just going to continue to go out there and grab it. Love it. Now, what do you think the key factors are for the success of deep-pave-vent

Starting point is 00:24:51 to quadruple over the last couple years? Well, I would say it's not just the last couple years. So what makes us unique is we have expertise, knowledge, and focus. We've been doing this for a little over 12 years. So we're not new to the space. We were the pioneers. and we have within the platform, we have a parent that manages close to $50 billion, actually over $50 billion in assets.

Starting point is 00:25:20 They're the largest owner of single family homes. Also in that ecosystem, we own a servicing platform. They own a servicing platform. There's another business that focuses on construction, renovation, fix and flip, bridge. So, you know, all the components, everything's done in house. and all the components to our platform are in-house. We don't use third parties. And so I think what makes us unique is our capital structure with our parent.

Starting point is 00:25:47 We have a diversified exit execution. We have the ability to securitize. We've done over 20, 24 securitizations. But we also have the ability to whole loan portfolio loans in the funds that our parent manages or funds that our parents' funds or funds that they manage for, for, you know, investors, right? So having, you know, the ability to securitize and the whole loan portfolio loans, that, that actually gives you a diversified exit, exit strategy because securitizations in that market, if it becomes suboptimal, like when rates rose and we saw spreads widen in the

Starting point is 00:26:28 mortgage space, securitization became suboptimal. So the whole loan, that strategy, the other strategy that we have, actually, you know, we had better execution than the market. And a lot of folks don't have that, that additional execution, right? So that's why a lot of folks actually sell us their closed loans because we have a diversified exit strategy. That's awesome. Actually, a lot of people don't realize, you know, that most non-QM business is sold to deep haven. Yeah. They don't know, you know, like, we have like 50 non-QM lenders that were approved with, but at the end of the day, they're all just selling them back to you guys. Yeah, I would say there's a handful of investors in the in the non-QM space like a deep haven only a handful that really kind of

Starting point is 00:27:08 aggregate the majority of non-QM out there so so yeah so we're we're we're fortunate and in the that on the correspondent side that that's you know we've been doing that since day one at deep haven that's where we first started yeah is in the correspondent side so we have 10 years of of that experience doing that so now is there any advantages of going with some of these smaller guys their overlays seem to be a little bit more lax than deep havens directly? Yeah, I would say, you know, if you're going with a smaller guy that's inexperienced, you know, we've seen a lot of companies that offer products and get themselves in trouble or aggregate products and go out of business.

Starting point is 00:27:54 Like over the last three years, we've seen some of the largest non-com lenders. You know, they bought a whole bunch of loans. The market moved against them, and they were sitting on loans at 5% coupon, and the rates were at 8, and they had to sell them at a discount. They were sitting on, you know, 500 million, a billion, you know, and so they lost a ton of money, and it put some of these guys out of business, right? So having the expertise, and, and if you, you know, if you go back just over the last five years, I think liquidity and having a reliable, dependable, stable liquidity is extremely important. So, you know, having the capital market horsepower that we have, you know, gives us, you know, competitive advantage in longstanding, you know, power into the future. So, right? So, you know, we're looking to grow the AUM and grow our business and we, over the next 10 years. This is not a short, you know, term play for us. The investors and our parent like the assets that we manufacture. And so, you know, we're in a good spot. Now, how important do you think it is, now piggybacking off of that, how important do you think it is for Deep Haven to continue to take big risks like that? Risk as acquiring these type of assets, these non-QM assets, because you guys take pretty big risk.

Starting point is 00:29:18 Well, I would say if you look at the asset, it's not really a risk, right? the average LTV is like a 72 LTV, FICO's are 740, and DTIs are in the low 30s. These are well-heeled borrowers. They have skin in the game, 30% down or 30% equity. These guys, when they,

Starting point is 00:29:43 when COVID happened, non-QM folks didn't go into default because they don't want to lose 30% of their equity on these. Some of these non-QM products are like 10% down, 15% down. Yeah, I mean, it all depends. I think, you know, there's, look, the overall, when I have those characteristics that I told you, the 72LTV, that's industry-wide for 9QM, for all production across the United States over the last year, last two years. So, you know, and look, the investors getting paid for those for those loans. They're a little bit higher yield than the agency.

Starting point is 00:30:18 But when COVID happened, those those loans performed, there's a couple white papers actually written about, you know, the, the, uh, the, uh, the, the, the, the, the, the, the, the, the, the, the, the, the, uh, the, the, the, uh, the, the, the, the, uh, the, the, so, so, so non-QM now is becoming much more acceptable on a national, you know, disadvantage. And you're not surviving in this environment. There's no way you could. The guys aren't doing non-QM, you know what I tell them? I say, look, I'm looking at my lock report today over the last six months. And I'm looking at the lock report. And all these lenders or brokers that are in your backyard, that are in other states, are doing loans in your backyard. And they're taking your market chair because you don't want to adopt these products. And your loan officers at our competitive

Starting point is 00:31:15 disadvantage because you can't serve self-employed. You can't serve self-employed. You can't serve investors. It's like if you go to a lot of folks' websites, they have FHA, VA, USDA, Fannie Freddie, but they should have a tab on their site that says self-employed solutions, investor solutions. There's more investors in the United States than there's veterans. There's more self-employed people in the United States than there's veterans. Yeah, way more. And the VA program is one of the best programs out there. So, you know, you should be focused. Why not serve self-employed people? Why not serve investors? 26% on the market is investors last year, right? So if you're an originator out there, what I would do is look at your production for the last year and see if you're at 26%.

Starting point is 00:32:00 If you're not at 26% and you're below 26%. That means you're under-indexing the national average. in California, California has the highest investor concentration. It's close to 30, 31% per core logic. So if you're 31% of your production is not investor transactions, that means someone's eating your lunch and taking your business. And so, you know, so you got to look at that stuff, right? And so you got to serve, you know, those borrowers that are out there. Now, circling back to your children because I was very impressed about you discussing

Starting point is 00:32:36 with your kids and how they're in gracing i told them to watch today i sent them yes so hopefully they're they're on i i love that you know that you've instilled in them that same grip mindset that you have yeah now what what how did you do that because we're in a society of abundance and you and i have been fortunate enough to you know be blessed and bestowed in many gifts from this industry now one of the issues we all face as parents is uh making sure that our kids continue to grind like us. Yeah. Right?

Starting point is 00:33:10 And we don't hand them everything and they're not spoiled. And I really noticed that, you know, you're raising your kids well. And you saw, you know, I tried to bring my kids to come grand. Awesome. Yeah. You know, your son yesterday walking around the office and doing videos. I mean, that was like phenomenal. Yeah, yeah.

Starting point is 00:33:25 So I try to have them grind as much as possible. But, you know, for the parents out there listening, like, how are you instilling that same sense of grit that you have in your kids? Yeah. For me, you know, first is education for the, right? Education's important. Then we talked about the hustle. So, you know, at an early age, my kids, you know, I got them into school, obviously,

Starting point is 00:33:46 but, you know, and they played sports. So, yeah, I think that was good for a competition and just, you know. But early on, I put them into extracurricular learning, like, learning, like mathematics and reading. And that really has helped them excel, you know, throughout, you know, middle school, high school and not going into college. My son's going into college. So I think, you know, that extra you know, discipline, you know, they, they, that, that's, that'll help them in life. And for, for me, they, they see me work. They see how hard I work. I, I always tell them, you know, my story and,

Starting point is 00:34:22 you know, what it takes and how hard it is. And it's a grind, you know, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's tough, right? Life's not easy, right? So you got to go out there. If you want something, you got to go out there and get it. Like, dad's not going to give it to you. You got to go out there and get it. I'll support you. I'm behind your back. I always will be there. So you just got to encourage them. And it's not like, you got to do it as much as possible, right? And so for me, I'm always, you know, trying to give, you know, my kids love, give them advice. And, you know, you know, as a parent, don't look back, you know, after they're, when they, when they, when they leave the house and say, I wish I would have did this a little bit differently. Like, you know, start doing the stuff.

Starting point is 00:35:02 today and like love those love your kids you know right and and just show them what it's what it's going to take to be successful in life right that would you know so that's you know it's it's a day day in and day out thing with the kids it sure is now piggyback around that like what's the best piece of advice that you have ever received best piece of advice so we talked about uh when i was younger the financial advice right um with the the teacher about you know getting involved in mutual funds and that was great you know i actually as soon as my kids were born i started them in mutual funds early on really yeah yeah yeah every both kids and so outside of that you know i've had some mentors in life and you know uh very highly highly highly successful uh you know high net worth

Starting point is 00:35:53 mentors and you know um you know we all they're all the kind of similar they they hustle and they work hard And, you know, one quote, a good buddy of mine, you know, he says, wake up broke. If you wake up broke, you'll never be broke. Hustle as if you're broke every day and you'll never be broke. So, you know, he'll send me a text, you know, once a month. How do you feel this morning out? Four in the morning? I'm like, broke.

Starting point is 00:36:18 And I'm like, it's time to go. I'm going to go hard today. So outside of that, you know, I think I, yeah, I'm fortunate. Like I told you, my mom's an angel. Every day she calls me. I talk to her. You know, and I, you know, I kind of do that with my kids and talk to my kids. And, you know, she always gives me advice, you know, and she always, whether it's sometimes it's good advice, sometimes it's not.

Starting point is 00:36:42 But she says, look, it comes from my heart. And, you know, you know, if I'm wrong, just, you know, let me know. But she's, she's awesome. So she's your greatest mentor. She's awesome. Yeah, great, greatest. Yeah, I was actually going to ask you, what's your favorite quote? I think you mentioned that the other day.

Starting point is 00:37:01 I have a couple. Dress Sharp, B. Sharp. That's a good one, quote, slogan. Success is my responsibility, duty, and obligation, right? Success is my obligation to my family, right? Like, if I'm not successful and it has to be my responsibility, you know, to provide for them, right? And, you know, I take that quote and those slogans, Dress Sharp, B, sharp for the sales team. You know, you got to be, you got to be, you know, you got to look good. You got to

Starting point is 00:37:34 know your products. You got, you got, you got to, you know, serve your customers better than everyone else. So those are a couple that I live by. Love it. Now, if you were 20, how would you build wealth? If I was 20, I would buy a ton of real estate, right? Real estate and I would put more money into the, the market and just, you know, I would compound my, my, my money a lot. I bought, you know, that's the way I would do. I'd buy a ton of real estate. I wish I could have bought more real estate in my, you know, when I was younger. But I bought some, but, you know, I think real estate's the way to go because it's a great hedge against of inflation and rents are to continue to go up.

Starting point is 00:38:16 And there's a supply demand imbalance. Like housing for the next 10 years, like appreciation is going to go up 4 to 5% a year. And you're going to have rent growth. So real estate. And then, you know, stock market. too and bonds and all asset classes. I would, instead of wasting or spending my money on stupid stuff, I'd invest it in assets. Yeah, see, the young folks listening to this need to hear that. Absolutely, yeah. Go read a, definitely if you're young and, you know, read a couple books out there

Starting point is 00:38:47 that, that, and work on your financial literacy and read about, you know, investing in real estate, read about, you know, investing in the stock market and do it over long periods of time. now with the advent of AI and all the different things that are kind of against education do you still think college is important yeah i think college is important for you know um i think it's an important it's important yeah absolutely yeah i mean for if you're my son has is getting a degree in finance like finance like is a degree of money yeah right so it depends on what you're going to school or what you want to do in life but i think you could be highly successful and not have a college degree either absolutely yeah I know plenty of people that, that, you know, super, super highly successful.

Starting point is 00:39:33 They haven't, you know, gone to college. But I think, I think, you know, college is good for the right person, right? Yeah, like the liberal arts majors in communications or something, those are going to have, you know, like, why go to college. I think, I think, you know, it's good, you know, in your career as you grow and you want to, you know, build a business or you want to build, you know, just your career, like surround yourself with mentors and lean on. on them and ask them for the advice to look you know you're highly successful i'd like to learn from you is it okay if you could be my mentor right and and and lean on them for advice and career advice and you know business advice so you know i've been very fortunate throughout my you know my life to have mentors as well so and mentorship is essential for me like finding a good i have many

Starting point is 00:40:24 mentors. And I always seek mentorship. It's imperative that one seeks a good mentor and just confides in him. Absolutely. Let me ask you this. What's the most painful thing you've ever been told? Most painful thing. That's a good question. The most painful thing. Probably a passing of my father. That was painful. I was at the gym at like 5 a.m. and I got a call from someone and like, hey, your father is not, you know, he's, he's, I think I need to call the ambulance. He had already passed away. But luckily for me, like two weeks before he passed away, he actually came and visited me for a couple weeks. So it was, you know, it was a, I don't know, an act of God that he came and visited me for two weeks before he passed away. It's hard,

Starting point is 00:41:18 when you lose, you know, someone that you love, right? Lost my 90-year-old grandmother. about 10 months ago. She was...

Coffeez with Joe Shalaby - Getting Deep with Tom Davis | Coffeez for Closers with Joe Shalaby Ep. 42

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