The Chris Voss Show - The Chris Voss Show Podcast – Exploring Real Estate Innovations with Israel Lopez of Certain Lending

Starting point is 00:00:00 You wanted the best. You've got the best podcast. The hottest podcast in the world. The Chris Voss Show. The preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready. Get ready. Strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times, because you're about to go on a monster education rollercoaster with your brain. Now, here's your host, Chris Voss. Hi, folks. It's Voss here from thechrisvossshow.com. There you go, ladies and gentlemen. Welcome to the big show. As soon as you hear that, you of course know.

Starting point is 00:00:45 16 years, 2,000 episodes, we bring you the Chris Voss Show. With all the brilliant people that share all their wonderful stories of life, their journeys of life, and help you achieve more in life through all the things that they teach and learn on the show. Today we'll be talking with another gentleman about what's going on in the markets for mortgages, home loans, homes, real estate, etc. But before that, refer the show to your family, friends, and relatives. Go to goodreads.com, 4chatschrissvoss, linkedin.com, 4chatschrissvoss, chrissvoss1, the TikTokity, and all those crazy places on the internet. Today, we have Israel Lopez on the show with us today.

Starting point is 00:01:23 We're going to be talking to him about his experience and what he does at a company called Certain Lending. Israel is a seasoned loan officer with a deep focus on construction, new construction that is, with a wealth of experience in the real estate market and a true passion for helping clients achieve their investment goals. He has earned a well-deserved reputation as a trusted advisor and strategic partner. Before joining Certain, he was a general contractor and a successful property flipper in the Seattle market. He continues to be an active real estate investor and a keen eye for spotting opportunities and structuring deals that maximize returns. Over the past four years, he's closed over 600 transactions, totaling an impressive $300 million. Whether you're a seasoned investor or first-time buyer, you're about to hear from someone who truly understands the ins and outs of real estate lending.

Starting point is 00:02:14 Welcome to the show, Israel. How are you? Doing great. Thank you for having me, Chris. It's a pleasure. a lot of what you just ended with as far as the production i couldn't have ever achieved that without where i come from and i think that for a lot of folks shapes what you end up going out doing in life whether that's going out building big businesses or going around limiting beliefs so i think it's important to highlight that. And that's, I'll start off there. When growing up, I was raised by a single mother, entrepreneur. She actually had a Mexican grocery store in Washington. It was part of a chain of grocery stores that my grandfather actually started when he immigrated

Starting point is 00:03:03 from Mexico. He and his brother started three chains. At the end of the day, she kept one of them. The store was as old as I was at the time, 20 years. So I actually grew up in the business working with a lot of clients. Anybody who came in the door, whether that was for Mexican medicine all the way up to they needed a grill for example i was always helping them i was always strategizing solution strategizing

Starting point is 00:03:32 solutions and helping them in whatever it was that they needed and truly it's when i look back i'm very grateful that i was able to work in that store for literally my entire childhood and teenage years because without that, who knows where I would be. There were plenty of times growing up where my life could have gone sideways. I grew up with my older uncle who was a gang member, had no father figure in my life, and drugs and substance abuse were commonly around. And at the end of the day, what kept me on my path was the business. When I wasn't working in the business, helping my mom pay the bills and produce revenue for us to keep the lights on, I was working on my school work. I actually wanted to go to college and I did and pursue medicine. But it was in my last year in college, actually my last quarter, that I decided that medicine was always going to be a stepping stone into real estate.

Starting point is 00:04:32 So then I actually took a total U-turn and went straight into real estate. So my first year, we were doing a lot of fix and flips and ground up construction for a lot of predominantly high volume fix and flippers and new construction builders. And then quickly I realized that when you're a general contractor, you're essentially an adult babysitter. You're babysitting grownups, making sure that they get to the job. So I realized that managing 20 projects like that was definitely taking it all then i went and became a real estate agent still in the path of real estate and that was i liked it but it wasn't as fast-paced i was i realized that i was a fat

Starting point is 00:05:17 i like to see results quickly so in the traditional real estate agent space, you get lucky if you get a client come back to you in the same year. They usually come back. Someone typically buys a home between five to seven years apart. So you typically don't see the same client for another five or seven years. Now, when I went into the lending space, specifically working with real estate investors, I was working with individuals that were coming back for loans six to 12 times a year. Let's talk about not having to prospect for more clients and handle new relationships. I was, in essence, just building stronger bonds with clients who then became friends,

Starting point is 00:05:58 business partners, and ultimately family. And that's where I realized that I found my niche and my passion for real estate, where I can help other individuals take on projects, whether that's fix and flips, new construction, or even help them grow their wealth by holding long-term rentals. And that's essentially where I am today. So I manage a team of six individuals, six loan officers, including myself. And our number one goal is not sales. It's relationships first, understanding where you're trying to get to, and then ultimately the financing and the loans are just a tool to get us there.

Starting point is 00:06:39 But it's the friendships and the goals that we tackle on first. There you go. So give us a.com for the website that you are at so people can find you or in any other places you want them to look at you on the internet absolutely so you can find us at www.certainlending.com and you can if you want to reach out to me reach out to me on instagram it's israel underscore lopez underscore exhibit That's the best place to find me. And so certainlending.com, what do you guys do there? What different services do you offer? So we mainly focus on serving real estate investors in the one to ten unit space,

Starting point is 00:07:20 meaning investors looking to buy a single family home, a small multifamily where that's two to four units, and then five to 10 unit apartments. Anything in the one to 10 unit space, we can help investors flip properties, build new construction from the ground up. And then lastly, we have non-traditional 30-year loans where we don't ask for any tax returns for any of our programs, where it doesn't even matter if you filed your taxes. We're more of an asset-based lender where we can take a property from a beat-up shape all the way into a 30-year loan without ever having the red tape that the large banks ask for. I know a lot of people, some of them even ask for your unborn children, right? Yeah.

Starting point is 00:07:59 We're more of an investor-minded lender at the end of the day. There you go. You guys offer several services. Are they applicable to certain states? What states are you business in? We do business nationwide, except for a few states. So we're not present in the Dakotas, North South Dakota, Alaska, Hawaii is case by case. And that's pretty much it.

Starting point is 00:08:26 Otherwise, we have a national footprint. There you go. Construction, flip or fix and flip, bridge loans, rental properties, rental portfolio, short-term rental, bank statement loans, pretty much the whole kit and caboodle there. With CERN Lending, you've been doing this now for how many years? I've been with the company for just about five years now. So part of the original 14 individuals. At heart, we're a fintech company, so we always have a software engineering team. And our goal is to make a splash in the hard money space.

Starting point is 00:08:59 It's a little bit disorganized, I would say, and our goal is to streamline it so that when clients come, we're able to give them the same reliable service and execution at scale nationwide. There you go. What do you find fulfills you most about the job? What do you like the most that really brings you fulfillment and enjoyment? It's really being able to create the bonds within the individuals that i'm working with that was mentioning it earlier where they're no longer clients where to the extent that i can be fully transparent with them and i'm not selling them a solution i provide i'm at the end

Starting point is 00:09:39 of the day in some ways a financial advisor telling them what they should do because i'm never going to tell them to go with my product if i know or programs if I know it's actually truly not the appropriate solution if I know there's another lender or avenue that they should go about that's what I'm pointing them to because at the end of the day I know that they will come back and refer individuals if you keep their best interests at heart and that's the most fulfilling part that I have found that I no longer have to prospect. I no longer have to go dialing a bunch of clients. It's more that my own sphere has my back and has helped me grow just by doing good business.

Starting point is 00:10:16 There you go. There you go. That can really help. So we talked about how you were raised and a lot of your parents, I guess, entrepreneurism kind of translated onto you. Is that correct? That's right. If there's kind of three characteristics growing up, it's being able to work with people.

Starting point is 00:10:36 That's a big one. Being able to negotiate, understand people's pain points, and at the end of the day, find a solution for them. And then lastly, it's just the grit and consistency. It's a big one. There's really no secret sauce to business. It's all about who's willing to do things consistently over a long period of time. Because when you're working 10, 12 hour days to build a business and a brand, it can become a lonely road and daunting. And the people that reap the benefits are the individuals that stick it out for long enough.

Starting point is 00:11:13 It's all about sticking it out there and building your own business and your own client base in the mortgage business. Is that pretty hard these days? What do you find is out there in the marketplace going on? i've definitely seen a lot of individuals actually leave not only the mortgage space but also the real estate agent space in the last couple years as rates have increased there's been less business meaning less buyers out of the market simply because they can't afford homes now it's definitely tougher to get business but at the end of the day it's changes from a loan officer that is just a paper pusher versus more solution-based and same thing with

Starting point is 00:11:54 real estate agents are you just opening a door or are you actually providing real solutions no matter what they look like and then when you become a become a modern advisor that's actually looking for solutions and not just selling the best rates, you're here to stay. Definitely. Most definitely. So what do you see real estate, what do you see what's going on right now? In fact, the Fed just today announced that it looks like they have inflation under control and rate cuts are coming. What's the horizon show for what you see in the real estate market and housing prices coming up? So let's start with rates. In the last month, we've seen rates actually come down.

Starting point is 00:12:36 And the Fed hasn't actually reduced the federal funds rate yet. So what we've actually seen is that the secondary markets where a lot of these loans end up going to or get sold, they've actually already started pricing some of the federal funds recuts in advance of them dropping rates. So as of now, we actually have better rates than we did a month ago. So mainstream news hasn't actually caught on where we have a short window of opportunity where you can get better rates

Starting point is 00:13:12 improve your ability to buy a home and compared to a month ago now let's talk about what happens in q4 of this year when the Fed comes out and reduces rates. So there's one of two things that I forecast is going to happen. The secondary markets have already priced in anywhere between or quarter to half a percent rates will actually stay flat now if if they come out and say you know what we're dropping rates even further that's actually a bad sign because that means that in that they've actually overcorrected. And they might drop rates even further, meaning they're trying to re-stimulate the economy.

Starting point is 00:14:12 Yeah. So those are the two. In my personal opinion, I actually want rates to remain flat because they've already come down. Isn't it, though, really important for them to come down a bit more so that there's so many people with low interest rates that are sitting on their house not selling because they just can't give up that rate? I mean, it's such a great rate they got, you know? Yeah, most individuals, I can't remember the statistic, but I think it's like over 70% of the people that have mortgages outstanding are at a 5% rate or lower.

Starting point is 00:14:46 Yeah. And it's what we call the lock-in effect with rates. They don't want to sell because they can't actually afford to buy a new home. Yeah. Because rates are higher. And people don't want to sell because they're married to their low rate. Yeah. They'd actually rather go get a home equity line of credit and convert the equity into cash to go buy new property.

Starting point is 00:15:11 But you're right. The rates definitely need to come down, which we're expecting in 2025 for them further to come down. But I don't expect it to be a full 1% or 2% drop in one full hit because that would actually be detrimental. Inflation would go bonkers. So they have to outpace it and make sure that it's a drip so that way they can control it rather than just open the faucet entirely. Oh, yeah. Totally.

Starting point is 00:15:39 Totally. The market changes. Is there anything new on the market that you see changing? Are Airbnb rentals still popular? You talk, you work with a lot of rental properties. Are rentals still going pretty strong? and they're actually one of few areas that still cash flow if we look at the data over time price to rent ratios have actually been decreasing for the last 20 years meaning if you're a rental property investor your expected cash flow uh for rental properties that you're buying has actually decreased over time meaning it's harder to become a landlord wow But the Midwest and the Southeast are still good states to buy in for cash flow. However, most real estate investors who have made long-term generational wealth

Starting point is 00:16:33 are actually investing in appreciating states. So a lot of the coastal states, West Coast is a big one, for example, where cash flow is actually not easy to find. Meaning you have to get creative because the prices are much higher than the rents. So you have to start thinking about, okay, do we do Airbnbs?

Starting point is 00:16:54 Do we do medium-term rentals such as traveling nurses and sober living? And then do you start doing the PadSplit model? So for those of you that are not familiar, PadSplit is a company that's essentially brought organization to the rent by the room space. So now you're starting to see people buy real estate and rent rooms by the room, kind of like college houses, right? Think about when you were in college, you go stuff a house with five to 10 people and you all make the monthly rent payment, right? A lot of investors are also going to that strategy. And then the newest one that I think is pretty neat is investors are buying houses with yards and the money is in the backyards. When you're in markets where there isn't much inventory left, such as, I'll name a few, San Diego, Los Angeles, San Francisco Bay Area, Portland, Seattle, the entire West Coast, where there isn't anywhere to go but build in the backyards or use the backyards to generate more income.

Starting point is 00:17:59 I have clients that are actually parking RVs and renting backyards as RV space to create more income. Wow. And the biggest trend and biggest hack I see right now are ADUs. It's the ability to build a mother-in-law unit, a detached unit in your backyard. And Seattle is actually one of the leading territories when it comes to ADUs to the extent that you can actually, from one residential lot, condo-ize and create two tax ID numbers from one residential lot,

Starting point is 00:18:38 to now give you the ability to build a detached unit, a detached mother-in-law, and sell or refinance each structure separately. Oh, wow. What that allows you to do is go in and build a mother-in-law for $300,000. Uh-huh. And that retail value on the conservative end is $600,000, and in top neighborhoods is $1 million.

Starting point is 00:19:03 So are people just subdividing their own lot then? Is that what they're doing? It's not a subdivision, but it's Seattle's kind of way of hacking the ability of, because when we think of subdividing, a lot of times you're taking a big lot and chopping it up into smaller pieces according to the zoning ordinances.

Starting point is 00:19:26 But with condoizing, what you're doing is okay the lot's not these residential lots aren't big enough to subdivide so the only other option kind of hack that seattle's come about is that okay now we're going to allow you to condoize create separate tax id numbers it's almost the same thing it's condoizing but now you're creating a little hoa the dues are like 15 to 50 you're keeping it very light just to take care of the common elements and now you're able to introduce a new construction program or product which is new realistic new inventory into the market at an affordable price point because a single family in Seattle, even though these ADUs are selling for a million dollars,

Starting point is 00:20:09 a single family is easily one and a half to two million dollars. So a million dollar ADU is still better than buying a brand new home. This is crazy, man. You're just separating your own lots, building a thing on there. But imagine people are taking more and more care of their parents. They're taking more care of kids. I guess kids are living with you. I mean, if your kids are going to stay home living with you,

Starting point is 00:20:33 you might as well put them outside and put them into a mother-in-law home. Be like, go live out there. I don't want to have to live with you. I lived with you for 18 years. You know, you can just do that. Oh, absolutely. And then the interesting piece is that what Seattle's been doing for the last five years, the entire state is following suit.

Starting point is 00:20:55 So meaning you're going to be able to build mother-in-laws and condo-ize Portland, California, with its own version of it called SB9 is falling suit as well. You're going to start seeing these ADU mother-in-laws coming out of the ground, left and right, in areas where there's a lot of density and not enough housing.

Starting point is 00:21:18 There you go. I guess that's where we're at now. Yeah, pretty crazy. It's amazing. And if you have an oversized lot in an area where there's not enough housing, that's how you make your wealth. That's crazy, man. You just run it out. You don't necessarily have to run an easement, right?

Starting point is 00:21:40 You just put it, or are people running an easement for that? Technically, the driveway backs to the home i don't know do you have to give it an easement of some type where you're like hey you can at least walk back to your place from the driveway yeah a lot of the so a lot of the investors right now are actually focusing on alley and corner lots those make for the prime Those are actually prime real estate for that strategy. There's still what we call flag lots where there isn't an alley or a corner where they will put a driveway all the way through the back, and that's part of the common elements of the HOA.

Starting point is 00:22:16 You still want to take care of them. Sometimes where it's super dense around colleges, for example, yeah, there's no driveway. There's no way. So a lot of times there's just a little sidewalk to get to the back. And there's no parking other than street parking. That is crazy. I guess that makes sense.

Starting point is 00:22:36 I mean, that's kind of where we're at. We have a shortfall of, I think it's like, what, 7 million homes that we're short in America? I never thought we'd ever say that, but I guess we are. People got to come up with homes somehow, and somehow got to make them cheaper so that people can buy them. So craziness. Anything else we haven't talked about, Israel, that you do there at Certain Lending?

Starting point is 00:23:01 As far as what we do, not necessarily. I know we didn't really talk about the loan programs at all but for us yeah absolutely so a lot of the times why investors decide to choose us and some of the biggest names in the industry actually work with us today is because we have some of the most competitive rates in the marketplace for hard money hard money is expensive don't get me wrong we have some of the most competitive rates where local shops are a lot of times charging north of 12 percent where we're easily in the nines so that's a big difference as far as rates and then the other piece is that we introduce technology to everything that we do to make it easier and more streamlined and to top it off we don't ask for all the

Starting point is 00:23:55 conditions that banks ask for but we can go ahead and refinance and help real estate investors or aspiring investors buy real estate without ever looking at their tax returns. And you don't actually need conventional financing to become a real estate investor because conventional financing is actually not made for real estate investors. It's made for traditional homeowners. That's what it's meant for. It's not meant for you to own 120 properties or even 10 properties or past 10 properties. Typically, once with conventional financing, you have the limit to be able to buy 10 residential homes under your name, at which point you can no longer get any more mortgages. So you think about all these people

Starting point is 00:24:41 that have amassed large real estate portfolios they end up buying real estate through commercial programs i mean non-traditional financing options which is where we shine we come in we don't only just do hard money i think any hard money lender that only offers short-term high interest rate loans is actually setting up their clients for failure you should simultaneously have the ability to refinance them into 30-year loans in the event that they want to keep the properties. And or for whatever reason, the flip doesn't sell. You need to be able to provide them a solution on the back end.

Starting point is 00:25:15 And that's what we focus on, having a streamlined, vertically integrated product suite where it doesn't matter where you are in the life of the property. We can still help you. And that's where we truly shine. There you go. There you go. So as we go out, give people a pitch out. How can they onboard with you?

Starting point is 00:25:35 How can they reach out to you, talk to you, find more data from you, et cetera, et cetera? Yeah, you can go ahead and reach out to me. If you are looking to apply for a loan, just go on certain lending.com and sign up, enter in your information regarding a new property that you're thinking about applying for the quick. Our application is actually not an application. It's a quick five minute questionnaire from there within four business hours or

Starting point is 00:26:03 less. We'll be able to tell you if you qualify, we'll deliver a loan terms and an approval letter. So you're ready to go out and shop. There you go. That's pretty darn quick. And then we'll close in two weeks or less. Oh,

Starting point is 00:26:15 wow. Yeah. So we like to move quick because good deals fly off the shelf, especially in this markets. Oh yeah. And then as far as getting in touch with me you can feel free to give me a call at 206-785-9458 i'll say it again 206-785-9458 and then i'll leave everybody with one last nugget if you bought a house every 12 months to live in for yourself for the next five years,

Starting point is 00:26:46 that's five rental properties that you could own. And that would change your life and the ability to generate rental income and potentially even retire earlier. So legally, you can buy a home every 12 months. And if you just do that one thing, because at the end of the day, you need to live somewhere, you'll be set up and be farther ahead than if you wouldn't have done that there you go it's been fun to have you on the show we've learned a lot especially about these 80 us that's pretty crazy everything that goes on there thank you very much for coming on israel absolutely thank you for having me there you go and thanks for tuning in go to goodreads.com fortress chris voss linkedin.com fortress chris voss chris voss won the tiktok and all those crazy places on the internet thanks for There you go. And thanks to our audience for tuning in. Go to Goodreads.com, Fortress, Chris Voss, LinkedIn.com, Fortress, Chris Voss.

Starting point is 00:27:25 Chris Voss won the TikTok and all those crazy places on the internet. Thanks for tuning in. Be good to each other. Stay safe. We'll see you next time.

The Chris Voss Show - The Chris Voss Show Podcast – Exploring Real Estate Innovations with Israel Lopez of Certain Lending

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