The I Love CVille Show With Jerry Miller! - Ricardo Cruz Duran & John Ornelas Joined Keith Smith & Jerry Miller On “Real Talk With Keith Smith!"

Episode Date: January 22, 2024

Ricardo Cruz Duran, Hispanic Segment Mortgage Supervisor at UVA Community Credit Union, and Restaurateur Johnny Ornelas joined Keith Smith & Jerry Miller on “Real Talk With Keith Smith” powered by YES Realty Partners and Yonna Smith! “Real Talk” airs every Monday, Wednesday and Friday from 10:15 am – 11 am on The I Love CVille Network! “Real Talk With Keith Smith” is presented by Charlottesville Settlement Company, LLC, El Mariachi Mexican Bar & Grill, Fincham & Associates, Inc., Free Enterprise Forum, Intrastate Service Co, Pearl Certification and YES Realty Partners.

Good morning, guys. My name is Jerry Miller, and thank you kindly for joining us here on Real Talk with Keith Smith. We're live in downtown Charlottesville, guys, in the I Love Seville studio on a show that airs across every social media platform. Today's program is absolutely dynamic, where you, the viewer and listener, can shape the discussion of the show. We're going to champion the Hispanic community today. We're going to spotlight real estate. We're going to spotlight small business, food and beverage, restaurants. We're going to talk inventory. We're going to talk trends and where markets are going. We'll have crystal balls. Are they cloudy from time to

time? Sure. But for the most part, the real talk with Keith Smith, crystal ball has proven to be correct. He's got five years of track record to prove that. Judah Wickhauer is our director. If you can go to the studio camera and then four-shot Judah and welcome a talented panel on a chilly Monday. Ricardo Cruz-Duran is in the house. Johnny Rinalis is in the house. And of course, our star, Keith Smith. Gentlemen, good Monday morning. Good morning. Morning, gentlemen. Morning. It's burr. That's all I've got to add to that. But I want to kick off with my dear friend Johnny here. You're a super success in the restaurant space, and El Mariachi's is kicking

tail. But talk to us a little bit. Give us an update since our last chat about your new venture on Main Street. Mexicali. Mexicali. Mexicali. Mexicali. That's all right. We'll get it one day.

One of these days. I can barely speak English, my friend. Yeah. No, Mexicali is going well. We're just a little bit of a delay. But we've been moving forward. We've been kicked out of the kitchen for a little bit. So let's put a little damper on that.

The fun of construction. The fun of construction and finding. Oh, yeah. Well, that's funny. Jerry and I talk about, not funny, but it's unfortunate. But we talk about this, you know, new construction versus renovation all the time. And, you know, whenever you're going to do a renovation, which is what you're doing, you never really know what you're going to find until you find it.

It's always done. It's hard to piece it back in, especially walking into a space that you know nothing about. You look at it, but looking doesn't do a whole lot. Well, I'm excited. Me too. Everyone's excited. I'm excited for you to get in that kitchen and start playing around. Everything else is done. The bar is done. Really? I'm excited. Me too. Everyone's excited. I'm excited for you to get in that kitchen and start playing around. Everything else is done.

The bar is done. Really? I'm excited about that. We got liquor on the shelves. Did you get an ABC license? Oh, yeah. We got liquor on the shelves. We're just waiting on the final health department.

I have to make a note of that. Yeah. So, yeah. I just got to get back in the kitchen and make you some good food. I'm in. Mejikali, the old world of beer spot. Everyone in this community is extremely excited for the grand opening. Viewers and listeners, it will happen.

They are working on, and I think this is safe to say, repairing some of the lacking of TLC with the previous tenant. Johnny's bringing everything up to speed. We will keep you updated on all things Mejicali on today's program. But we have to get Ricardo Cruz-Duran in the mix. Yes, sir. Thank you. Introduce yourself to the viewers and listeners. Well, my name is Ricardo Cruz-Duran. Some people may know me as Ricky. Other people may know me as Ricardo. Other people as Antonio is my second name. I go all over, but I am a mortgage professional with UVA Community Credit

Union, and I also manage the Hispanic segment of the entire footprint of UVA Credit Union. And I'm also the incoming vice president for the NAREP Central Virginia chapter. NAREP stands for National Association of Hispanic Real Estate Professionals. I love it. I love it. I love it. How long have you been in the game, Ricardo? Not too long, but I've been here since, in UVA Credit Union, doing mortgages since 2017. So that's long enough.

You've been on both sides of the, as I call the unicorn years, right? Which are, you know, the 0% interest or damn close to 0% interest and all that stuff. So when you started in 17, the interest rate was probably in the fours, I would imagine. Yeah, yeah, it was slightly over four. And then... So I'm excited to jump in, right. Because I'm also on the NARAP board. And thank you for allowing me to be be part be part of it. But talk a little bit about that, because, you know, the chat that I want to have initially was what is it? Right. What are we trying to do? What are we trying to achieve? Because, you know, we get to Johnny here in a minute.

We're going to talk about that the Hispanic community by far is creating more businesses, employing more people, but we have to house them. So let's talk about that a little bit. Yeah, well, NAREP, the National Association of Hispanic Real Estate Professionals, is really just a house, right? I think about it like a house is where professionals can come, real estate professionals, and drive their business. If they're starting the business, they can grow it with NARB. It's a place where you can network, meet a lot of people, a lot of professionals, not only locally, right? We have very good local professionals, but we also have nationwide professionals all over the United States, thousands of people that you can get into and ask any question you'd like. So it's just about networking, growing your business, real estate professionals.

That's in a gist. And you do not have to be Hispanic to join. Correct. Obviously. Yep, yep, yep. So we want to get that out. Right. Just anybody interested in tapping into the Hispanic market, then you can join.

Yes, sir. So I'm looking at from NAROP's report, this is 2022 numbers, right? We haven't got to 23 numbers out here. But in the state of Virginia, 53% of Hispanics or Latinos, and correct me if I'm saying something wrong, gentlemen, I want to make sure I'm doing this right. 53.5% are homeowners. So they're the largest growing percentage of homeowners. So why is that? Why is the Hispanic market or the Hispanic family so vested in becoming homeowners? Jump in, guys. You know, I think it's progress. You know, Latinos tend to create a path and first of all is working and then ownership probably of businesses,

which a lot of us has done. But also it's back to family. So you have to have, you know, a base for your families. And you push a lot towards, you know, we lived when we were here in, when we moved to Charlottesville, you're talking about having 10, 12 people with you in your home. You know, I live with half of the Guadalajara staffing in that house. Yeah, it's nice, but after a while

it gets old. I wouldn't know nothing about that. I'm the oldest of five. Particularly at a certain age. Your goal after that is ownership. I mean, you want to have your own house to be able to do your own things. And you want to be able to have a house so your children feel like they're in a safe space as well. It's all about family. So you want to build that bubble.

Me and my wife call it bubble you know you're going to create that bubble where you can your kids and your family members are safe and are content so it's it's a big thing about our culture you know you want you want your kids are always first so you want to create something for them. So ownership starts that base off. Yeah, I mean, that's a good question. And it's easy to answer from a perspective of experience. Where I come from, El Salvador, and many of you know that I grew up in El Salvador in a very small, not even a city, not even a town. It was just like a village, right? And we grew up in a house that was not even brick walls. It was not, you know how they build those walls with mud sometimes?

Well, it wasn't even that. It was even lower than that, where even a wind could, if it was a strong wind, it could knock it down, right? It was that bad. And the flooring, it wasn't like hardwood floors or here like laminate flooring. It was just like when it rained, it was mud, right? So really, I come from the lowest point, but in my mind growing up, my parents, they always did everything they could to, like Johnny said, to have their kids in the best way they could, right?

And so from that perspective and just from experience, my parents would always fight very hard to bring the meat. But sometimes there was no meat. Sometimes it was just beans, right? Beans or even rice or not even that. Sometimes you would just eat an onion with salt on it, right? And that was the lunch. So from that perspective, now that you have that understanding, it wasn't just me and my family. Think about millions, thousands of families living like that

in their country. What would you do if you were in that situation and you knew of a place that you could succeed, you knew of a place that you could go to and grow, right? You knew of a place you could go to and have your kids living the best life they could without any worries. Well, that was my parents and that was the parents of many families. Well, and that's really the situation here. And you asked, why are Hispanics growing that number? Why Hispanics? Why anybody else? Right? And it's because of that. We come from that very low place and we come from the very low perspective that we can only see forward.

We can't go any lower. So thank you. Thank you, Ricardo, for sharing that. That is heartfelt. And I got a little chills up my back. Yes, sir. This gentleman that you and I follow, he happens to be Irish, called Brian Buffini, and he talks about what's called the immigrant edge. And, you know, I'm looking at the percentage of some slides from different investment firms talking about the percentage of Hispanics

that open up businesses. It's huge on it. But it's because of this immigrant edge, right? And, you know, we're talking Hispanics, but it's not exclusive to Hispanics, right? My wife is an immigrant. My wife is from Austria, and she's probably the most American person I've ever met in my life. And I talk about this all the time around 4th of July on the show one of the things that we religiously do is we go to the naturalization ceremony at um Monticello and if you ever really kind of get down about being an American go there because what they do what the judge does is he

asks folks to tell their story just like like you did, right? And the story of where you started and how you got here, and inevitably they always talk about paying it forward to their family and to their friends and helping them. So thank you for sharing

that story. But I didn't get to the point you asked, which is how do you grow that? Like, why are Hispanics growing that? And the thing is, right, the first thing in their minds is, I want to make money, right? So people are moving here because of money, because they want to be successful in life, their economies. If economy is growing for them, then everything else will be fine. And that's the very first point. People see, or Hispanics, not just people, but Hispanics see home ownership as the way, the entrance to becoming economically good. It's funny you should say that. I'm looking at a slide from SoFi, and it starts where startup money for Hispanics businesses come from.

And it talks about business owners with households under 50,000 and business owners with households over 125,000. The one that's under 50, 56% of what they use to start their business is their own cash, their personal savings. On the 125, that number drops to 30, but 30% of it is the equity they have in their home. So home ownership is so important to grow, and that's the reason I was excited about having you two guys in, because home ownership and you can build your wealth, you can start building your businesses, but that's a huge, now you've got to jump from $50,000 to $125,000, but home ownership is important if you wish to start a business.

Chuck Lehman, welcome to the program. Thank you for watching the show. We appreciate you, Chuck. Josh Duran is loving what they're hearing right now. This question for you, Johnny. Give us the flip book of your success in restaurants. There you go. Like how you first started. I know it's tied to family.

Yeah, the success to the restaurants has been tied, you know, fortunately. And again, like Ricardo said, you know, where you come from and what your family, going back to family again, we have an uncle and various family members that started the businesses, but in the same dream, you know. My parents worked in the fields in California. My uncle, he worked in, I think it was a fiberglass company in California as well. So that dream, for some reason, ended up in Charlottesville in Virginia. And, you know, I can't take all the credit, but family, you know, persistence has been what's

created what now, in reality reality I can take advantage of and move forward with it. You know my parents got a house, they started their businesses and off of that I can piggyback and grow even further without leaving anybody behind. You know it's not about, I feel a lot of times Latinos also lose themselves where, and Ricardo, you could probably agree to this, you know, instead of helping ourselves, we kind of leave people behind. And I think that's another path where we can help other Latinos grow. I've seen that.

You know, it's not leaving people behind. It's not just you being the person that succeeds. You have to pull everybody else with you. That's what our family has done. It just hasn't been one or two people that succeeded

and left everybody behind. Guadalajara is a large family base. You're talking about hundreds of people that came together to create the empire that it is now. We have branched off with Mariachi and now Mi Mexicali. It has been a group contribution to all this. What did you guys learn with the branch off to Mariachi?

I mean, El Mariachi, I mean, you're talking about one of the hottest, most popular restaurants in this area. You guys are crushing. Crush it, and you keep learning. You know, it's one of those things I don't think we ever stop. It's one of those things that you have to keep moving in business, in any business. You have to keep trying to improve. And it's just, I mean, the niche is there.

It's just trying to pinpoint in the sections that can improve and are improving. And that's what just gets you to moving forward. That's why it was an impulse for me to get into Mexicali, because I can see, you know, you learn from Guad, you learn from Mariachi, and you learn how you can try to adjust to succeed. So we've worked together quite closely, and there's two things that I think are the secret here.

Actually, three things. Two things. We'll start with the first two. Vision. And you're not really, this fear isn't there, right? And if you come from nothing, right, you know what nothing looks like. You know what it feels like. I've been there, done this, all that before.

But is the fear there? I get the impression the fear is there. It's just managed differently. Yes. How do you put that in perspective? It is managed differently. The fear is always there. It's just not crippling.

You guys don't have paralysis of analysis. You manage it. The fear is there, but you always have to try to figure out how you can get out of that fear. And what it's going to take to divert yourself from not letting the fear take you over as opposed to trying to succeed away from the fear. Yeah, I've got fear about Mexicali. It's there. Sleepless nights, it's there. Two, three o'clock in the morning, we're just talking about that. Brother, amen.

But you've got to get up and you've got to move forward. You can't let that fear take you over. I mean, it makes no sense. If you let that do it, then you're never going to succeed. If that fear took you over, we would have never got El Mariachi off the ground. And, you know, I will tell you, as, you know, I helped you through it, so I was not part of it, but I had a few sleepless nights on that if we were going to be really successful because it was something that was never done out there. There was never a sit-down restaurant out there of this kind of level,

this type of sophistication. And, man, it's rocking and rolling. Every time I go in there, I happily wait for a table with a big grin on my face. Ricardo, your thoughts on this? Yeah, no, absolutely. Fear is always present, right, of anything that we do. However, with Hispanics, fear is often relatively easy to get over because you know where you come from.

And you had fear then, but the fear that you have now, it's a type of fear than you had before. However, the easiest way to think about it is to have faith, right? If you have faith, you get over fear very simple, very easy. But it's easier when you have a professional in front of you that you trust, right, that looks like you. It's Hispanic. It's easier to trust somebody that knows where you come from. So that's how you get over the fear.

I would love to throw this to you. Getting into your line of work of financial services as a Hispanic, I mean, you talk about a barrier of entry, and then a barrier of entry getting into the finance space. That's, I would not imagine, an easy path or a path that did not include a lot of potential hurdles that you had to clear. Yeah, that's right. I mean, hurdles, we all have those. But from where I come from, it was really the first hurdle I needed to overcome

was learning English, right? That was, even to today, I have a very accent. I have a strong accent. Dude, yours is flawless, man. No, thank you, thank you. Yeah, so when I came, I didn't even know how to say or what hello meant. So that type of thing, you need to first learn English. That's the first hurdle. And then getting into financial

it required... It's almost a language by itself. Yeah, that's... Yeah, exactly. It's almost a language by itself. Yeah, exactly. It's a completely different language. But for me, I'm very thankful for UVA Credit Union because, man, they gave me an opportunity and I'm not going to easily give up that opportunity, you know? Because before working at UVA Credit Union,

I was working at a different financial institution. I'm not going to say a name, but it's a large bank. And, yeah, way different, way different than UVA Credit Union. And I felt like family when I got to UVA. And because I know where I come from, I'm always going to give it my best to get through to the next level. That's always my question to my supervisor or my manager. How do I get to the next level? What do I need to do?

Right? And it's just like anything in life. If you want to succeed, you've got to ask how to succeed, how to get to the next level. Because if you don't ask, you're never going to succeed. So while we're on that, thank you, Ricardo. Before we talk about everybody's favorite interest rates, what was your barriers, right? We know language, right? Some people say I have a language problem, so it's my Yankee accent.

But what were some of the barriers and how did you overcome it? I'm looking at another slide here. Over half of the Hispanic business owners said they experienced some sort of prejudice, right? Let's call it what it is. What was our barriers? And maybe if you don't want to talk about it, we can move on. But, you know, what were the barriers and how did you guys overcome them?

The biggest barrier, I believe, is language. And then after that is what you run into. Well, second of all, I would think is money. The Hispanics aren't, we don't have the education on how the U.S. works financially. You know money's there. You can keep it in your mattress all day long. But after that, you know, what are you going to do with it and how are you going to work with it? To that point, the slide I'm looking at, at the $50,000 and over, 80% of the money that took to start the business was either their cash or family members' cash.

When it goes to a house, that number drops substantially. But to your point, it's cash-driven. It's cash-driven. In the Latino community, you're used to the banking system is different, you know. So you don't keep your money in a bank. You keep it in a jar in the backyard. Yep. So getting here, that's one of the, I think anybody coming in is an adjustment that they

have to do. You have to trust the banking system because in most of our countries you don't trust the banking system. There is no trust in the banking system. I've been to banks in Mexico. I've been to banks in Peru. Different areas.

You kind of have to take a step back. You're like, why are they doing this? Why is it? Everything gets paid through the bank, but yet nobody wants to put their money in the bank. They just have a few dollars to keep the account open so they can pay their utilities and taxes and

all that through there. But then after that, it's like... Still in the mattress. Yep. That's it. So I think that's a big adjustment on trying to trust the banking system on how it works. Especially if you want to build the kind of wealth that comes through real estate ownership. Because you've got to have a track record of savings and a relationship with the bank to get the kind of lending from Ricardo to buy the kind of real estate you guys want to do to grow. And credit.

And credit. I mean, I want to highlight this. And he's a very humble man here. But I'm going to give my man some props over here, Johnny Arnalis. Not only a talented restaurateur, this guy's going into the real estate investment space. So that's another even more risk of a leap of faith and finances and fear. And you're managing that well because once you go from running a business where you can see with your own eyes, buying a house that you're living in, raising with your kids,

but now you're going into buying real estate where you're maybe not even walking in every single day, every week. Put that in perspective. Yeah, it's definitely different. But, you know, you get a trusted advisor like this brother from another mother next to me that will do the work for you and guide you through it. Don't tell people I work.

What's wrong with you? We look a lot alike, don't we? Yeah, I'm like, wow, okay. Like I said before, to succeed, you have to keep learning. And from Jerry and Keith, over the years, I've followed you guys for quite a while. You turn it on in the background and you listen, and you actually take the information in.

You might not take it all in, but you get the key words and stuff where you can ask questions. You're never afraid to ask a question, right? But Ricardo, talk a little bit about that, because I don't want to make this about me, but from your perspective, getting the trust of the people sitting in front of you is paramount. How do we do that and how do we get the trust of the Hispanic community to trust the banking system to do this? Because clearly the path forward is home ownership, right? And to grow your wealth and

then start your business up. How do you do this? Right. Yeah. I mean, coming from a banking system that nobody trusts, right? Like Johnny said, he hit it right on the nail. People don't trust financial systems in our country because there is a lot of corruption, right, in our countries. And so coming to the United States, all of a sudden you have a very trusted financial system that you don't know of. And on that, I don't know, you may have the figures there, Keith, but there is hundreds of thousands of people that are underbanked in the United States.

Explain that term. Central Virginia, underbanked. I mean, people that have banking accounts, and like Johnny said, they use it for cashing checks, having enough assets or cash in the bank to pay the bills, but no more than that. They have a bank account, but they don't use it, so they are underbanked. They don't know of all the solutions out there that a bank offers. And it's because of the same thing. I mean, most of the underbanked people are Hispanics.

A large number of those are Hispanics. And because they just don't trust, right? They come from a country, they couldn't find it. And here they have the opportunity. But how do you get over that hurdle is what Keith asked. How do you get people to start buying and trust? Well, first of all, you have to have a team that you build or you surround yourself that you trust, first of all, as a professional. Because in my example, if I want to help Hispanics, I want to make sure that I can close their loans, right?

I want to make sure that my team is capable of understanding the Hispanic situation because each situation is unique. So if my processing team and my underwriting team don't understand, then I can't bring Hispanic business to them because they don't understand how to close them. Your level of burden is that much more because if it falls apart, then they trust it even less. Yeah, so I want to make sure I have my team, that I build my team

that understands where the Hispanic is coming from and how their situation is different. And so now, UVA Credit Union, you have my processors and I have, we have an amazing processing team that understands. They can close them really quickly. And we have an amazing underwriting team that is in-house. And I love it because they truly understand where we come from. So that's the first step, right? Getting your team to understand where the Hispanics are coming from and how we can help them. The number two is having somebody that looks like them, right?

Hispanics will usually shop with people that look like them and that speak their own language. Because most of them don't speak English. Or a lot of them speak English, but they don't feel that comfortable speaking in English. So they want to speak Spanish. So that's the other step, is having a team that looks like them, that speaks their language. And then lastly, having a lot of marketing material, right, that will be tailored to them, to the way they do business, to the underbank community that will bring them in and let them know that we're here to help them. So that's how we would do that. And can I add another thing to your second comment there?

Having somebody that looks like them. And, you know, there's also another, there's a second barrier to that, Keith, that you have, you know, we can look like each other. But then there's that other percentage that also is like, well, he's already up there. Oh. And he's going to take advantage of me. Uh-huh. Because we ran into that before where it's like, you know, he's already – not to pick – this is Ricardo. He's already – oh, yeah.

He's just going to screw me over. Because he looks like me, but he's already been through the system. Yeah. And that's another percentage that also makes things more difficult. What about cultural differences from different countries? I don't think that's been more now. I think previously, yes, it was taken in more into effect. I think now, probably in the last 10 years, I've seen the shift over where culture is still kind of between different areas.

It might be a little bit, but I don't think it's a crucial point to where it's going to be a deal breaker. But there is that other percentage that's like, you know, he looks like me, but can I really trust him? Or is he too cocky now that he's not going to? Or who did he screw over because of the mentality? Or they just, rumors as well, maybe something he had a bad situation with family or this or that, and then the rumor gets rolling around in the community. I think how you stopped that is what Ricardo did to start.

I mean, you just blew my mind. I mean, you grew up with a dirt floor, literally with a dirt floor. And that is, as an American, even though I grew up in a tenement in Brooklyn with a five-story walk-up, to grasp that, I probably would never be able to grasp that. So thank you for sharing that. So the Hispanic buyer, Jerry and I have been talking about this to the point that we just don't

want to talk about it no more, which is inventory. I think a couple of years ago we actually even banned the word. How's the business going? That's what I was going to get to. How's your business doing? I'm very busy right now. Last week on Saturday, I was invited to do a first-time homebuyer seminar with a few realtor connections that I have in Richmond. And, man, that seminar was very busy. It was over 60 families. I was expecting 20 families, and I brought 20 folders with information. And they were gone in five minutes.

I mean, the business is very, very busy right now. We're getting calls all of the time. Sometimes I have to let them go into voicemail because I just can't get to them sometimes. And so that's what we're doing. We're building our team to be able to get to those people that we're losing right now because we couldn't answer the phone on time. But to that point, we have a lot of people shopping. Most of them are with the ITIN is just a number, it's an individual tax identification number that the IRS issues to people that don't have Social Security numbers. So those people are able to build credit with that ITIN number. It looks just like a social with nine digits.

And people can build credit. They can work with that number. They can report their income taxes on that number. They can do everything just like if you had a Social Security number. And so there's a lot of people that have that type of number, and most of our people that are looking right now are that kind of people with ITIN. So we have the conventional product that people are using to get into a home, and it's very affordable with only 5% down payment.

So it's a very good product. So when you're talking to your clients, how concerned or what is their feelings about interest rates? Or are they concerned about other things? Are they concerned about inventory? Or is it more about I'm focusing on monthly payment versus rent. How does that conversation work? For Hispanics, they really want to learn what the rate is. For some reason, they really, in their mind, is the higher the rate, the higher my monthly payment, which is accurate, which is very true. And so you will get Hispanics that are asking for the interest rate, but they're not going to discuss it too deeply with you because they trust. They trust that we're doing the right thing, and that's what we do.

So how do you keep your Hispanic buyer clients in the game when I'm looking at inventory that is beyond anemic? How do we do that? That's hard. Right now, very tough. I mean, there is a lot of people looking, so oftentimes they have to look elsewhere. That's very common. A lot of people want to buy close to their job here in Charlottesville,

but they can't find a place here in the 300,000 or 250,000. It's just impossible right now. So they have to look elsewhere. They have to go like Waynesboro, even sometimes even farther than that, Rockersville, or even Louisa. Louisa's big right now. I'm getting a lot of people with Louisa. Brother, amen. I looked at the 23 numbers. Louisa, you know, it wasn't the same volume as Albemarle County, but it's outperformed as far as the number of transactions every other jurisdiction within Carr. I think a lot of that is there's this 300, 350 new construction that's happening in these one-off lots around, because Louisa County still has on the books a development ordinance that allows you to cut up two-acre lots on a state road,

and that's what you're seeing a lot happening. But I'm curious to your explanation why you think Louisa is outperforming everything else. Well, just like I was saying, it's a more affordable place. Affordability. That's one. There's more inventory over there that's coming up. That's number two. And the other thing is that people also look at the amount of bills they're going to have.

And Hispanics, they want to pay as little bills as possible. Obviously, pay them on time and pay all the bills they need to pay. But the smallest the amount of bills they need to pay, the better. And in Louisa, most of the homes, or if not all of the homes, don't have a separate water bill, right? Or there's a huge number growing outside of HOAs. That's right. And so the amount of bills is causing them to realize that, yeah, you may be able to live in Louisa and still get to work on time and get used to it.

I'll throw this to Johnny Ornelas. Al Conseco has given you some props. Eddie Moreno has given you some props. How is the housing shortage or the lack of housing affordability impacting labor pool and as you build your more restaurant units because i see this man uh viewers and listeners watching the program johnny and his brother and his father some of the best operators in central virginia when it comes to restaurants bar none to operate restaurants you need labor. How do you see housing and labor going hand in hand? You know, I guess unfortunately I would say that a lot of the labor aren't homeowners.

You know, just the previous year I've been trying to help one of our employees, you know, get into that path of owning his own home to improve his way of life and also to keep him working for me. You know, there's always that interest. So I don't think housing is a big deal. Now, apartments, that's the other big, housing is a big deal. Now, apartments, that is a big deal. The cost of rents, I think, has a lot of effect on a lot of the workers, wait staff, kitchen staff. And we have had a slight influx of that, especially and actually out in Zion's Crossroads. It's a big that is a challenge out there. We got people driving from we've got two cooks driving from Waynesboro every day.

But they drive together. No, no. So and we've got a couple that are here from Charlottesville just because they haven't been able to find something yet out that way. So there is where if they were able to get into and be educated more about housing, purchasing a house, there would be a niche there for them. Also, we've thought about investing into a home out there for workers, but we haven't quite gotten there yet. But I think it is. It's a great idea.

It does affect staffing. It hasn't been a big thing right now. I know the rentals are higher in Charlottesville, but we've noticed that a lot of our employees just stick where they're at. They're not relocating just because their rent went up in their next re-signing of the lease because they know that around the area it's just more expensive. And they're seeing rents go up. And they're seeing rents go up. So there's no – and, you know, we try as much as we can. You know, a lot of our employees are very – they ask a lot of questions as well.

And if you give them the right answers and they put the trust in you that you're trying to guide them in the right path of what they should be doing. Do you think inventory is going to pick up, Ricardo? I think so, yeah. You think so? Why? Well, just now, look at it. I mean, there's a lot more listings happening. Just in my neighborhood, we had a couple of listings. You live in the area?

Yeah, in Charlottesville. Okay. And just a couple of listings happened in Sunset Drive of Charlottesville. And one of them listed last week on Monday, I believe, and it sold. It was under contract or pending within three hours of listing. So that's where we're going back to. Yeah, that's my idea of the inventory. I'm going to let you finish because you and I differ on that.

Well, I think a lot of people are going to be putting more inventory. Not the amount that we expect, the amount that we're looking for because we're way, way down. But I think so. The spring market is coming and it's going to hit up. A lot of people are getting out of their monthly payments.

Even though they got a low interest rate, a lot of people are suffering with those payments because of the inflation. So to your point, I track a week over week, right? So the good news is, is during pretty much November and December, it was an anemic 12, 15 units. We're now in the 30s. But the spring market sprung January 1, in my opinion.

So I'm just looking right now, seven days going back today, we had 39 units on uh two weeks ago on the same monday we had 35 so we're right now kind of in this high 30s low 40s but the pendings two weeks ago seven and a summer thing was 30 we're now at 60. so the pendings the ones that went on the contract doubled and we're kind of staying flat at the number of units. We're double what we were in November and December, which was zero. And I've kind of been predicting this. As interest rates are dropping, you will start seeing stuff coming on,

but the buyers are going to come in big time. Are you seeing that? Yes, I have a lot of buyers that are waiting. For example, in December I had a lot of people pre-qualified, but they decided to wait because in their mind they're seeing the news, right? They're looking at the interest rates going down. It's going to be even lower. And so they're waiting to lock into a low interest rate. I mean, we'll see what happens.

How low do you think the rates are going to get? And that's a good question for an economist, right? Because I'm not an economist, but in my opinion, just very humble opinion, it's probably going to be probably not this year, but by the end of 2025 in the four and four and a half percent yeah i think we're closer to five based on everything but you're 100 right it's going in that direction i think the follow-up question that is okay we're below six so as of right now i'm looking at 6.6 for a 30-year conforming right gotta have have perfect credit, yada, yada, yada. Will that 3940 units per week jump

if we go below six? Will that help people come on the market, bring houses on the market? And this is the talk show. Whatever's on your mind. I don't know the answer to that until I see it.

It's an honest answer. And same question for Johnny. I mean, you're a businessman. You get an interest rate that is generational, if not historically low. Would you part with that home or choose to take that home, keep that rate, run it out, and get something else? Yeah, see, I think that's where we're going to run into an issue. I think that if the interest rates go down, maybe if you're thinking of selling, yeah, you'll sell, but then

with inventory the way it is, are you going to be able to find something else? Unless you're planning on using it as a rental and then moving into somewhere else or moving away to the beach area and then live off your rentals. But the problem is that I don't think it's just specific to Virginia.

So I think anywhere you go, you're going to have an issue in inventory. So I don't think I would part with my home. As long as you financially can handle it. As long as you financially can handle it. You might look into refinancing it, dumping some more money into your home to get that if you're having issues with your monthly payment. But I wouldn't part away with it, not the way inventory is.

We've been talking about this for a while. I've been doing this for three and a half decades. There's this it factor that we've never had before, which is that 2%, that 3%, and the amount of equity that everybody has. And the other thing that is happening is there's a generational thing that has just switched, where boomers have outsold or outbought millennials and Gen Zs.

And you're going to see that happening, I think, more when the numbers come out for 2023. That's 2022 numbers. So there's's this the boomer is just staying and I've been thinking about this I'm part of the problem because when I was building houses we built houses with primary master suites on the first floor for decades and decades and I'm one of them I live in a home with a primary on them I have no reason to move other than Mrs. Smith wants to move. And that will be the reason we're going to move. But, but I don't need to move. Everything I need is on my first level. I can age in place. They'll cart me off to whatever. Um, and, and I'm done. And that product type is out in a big way.

So all these different factors, I just don't see inventory creeping up. And plus the localities are not going to let more stuff get built. I don't think interest is the big deal breaker right now. I agree. I think it's inventory. Holly Foster says, I cannot wait for Mr. Ornelas' new restaurant.

I get carryout at El Mariachi on my way back from Charlottesville to Shore Pump. I love his food, and I have many other Mexican options near me, and I choose to go to El Mariachi. That's Holly Foster, who lives in Henrico. Wow, thank you. Giving you some props right now. Vanessa Parkhill is watching in Earleysville.

I'll get to Vanessa's comment, which I think is very, very good. Immigrants show their tolerance to risk when they choose to leave their home to seek the opportunity for a better life. Entrepreneurship is not for everyone. It's hard. Immigrants are often well-suited to be entrepreneurs because they have already taken a huge risk and proven their determination by taking that first step to come here. Very well said.

Absolutely. I 1,000% agree with that. Evelyn, is it Fuscus watching the program and giving you voice and props right now. This is a question for Johnny. Are you concerned at all about labor in a business that needs labor to perform? Unfortunately, like we said, we have to keep learning and you have to move on. So this is definitely going to be a different swap out for me because we, yeah, we are concerned about labor, but our Mexicali is

going to be run a little bit differently as far as labor wise. You know, we're going to have to move with how the system is flowing now in many restaurants where you order off QR code, you know, and you have, you know, you have staff that brings food to you and everything, but you kind of have to veer off the waitstaff template that a lot of the restaurants have now. Love it. Just to be able to adjust for that labor shortage at the time, although right now I have kind of seen a little shift, and maybe it's the cold weather, but we've had people knocking on the door right and left.

And actually I've seen e-mails. Looking for jobs. Looking for jobs. I've seen e-mails, messages out to Mexicali as well where, you know, they're getting one or two a day where it's like looking for work, looking for work. Now, granted, you know, I wouldn't want to be outside working in 11-degree weather in the morning. But, and I'm going to say this because you won't. A lot of it is you guys. They know. They know if they're going to work for you

and your family, they're going to get taken care of. But you've got, you're going to do something different because you've got to go, we walked the stage the other day. Tell me a little bit about what you guys are going to do on the stage. Well, you know, you're going to be out there. No, no, no, no, no. You want to stay in business, right?

You do not want to do that. Trust me, trust me. No, I mean, we are, you know. I business, right? You do not want to do that. Trust me. No, I mean, we are, you know. I don't even like myself when I sing in the bathroom. I mean, it's a phenomenal setup. Yeah, you know, we're planning on having a lot of live music there, you know, some DJs, some karaoke. You know, if we can get enough mezcal into Mr. Keith over here, I think we can get him up on stage. That's not going to happen. But, no, it's going to be a different atmosphere there at Mexicali.

You know, River's been working hard with our bar program, and hopefully I can get back into the kitchen to work into this. Back to an authentic but modified menu for you know hidden a little bit of Latino inspired multi you know Peruvian Venezuela and Argentinian you know you you you have to be a little diverse there and you have to bring everybody with you and so everybody can enjoy so it's not going to be classic, but it's going to have its own little kick to it that we can provide. Ricardo, since I was just talking about inventory, new on them,

just from that conversation of three just moved from new and depending. We are now three less in new in the last seven days and three more in pending in the last 10 minutes. I mean, absolutely bananas right there. Any refinance business picking up? I have a couple. Not too many. Not too many, to be honest.

Not the way we're used to. But, yeah. Well, I think the rate kind of. Yeah, I mean, the rates are. People are in the 2% even lower. Yeah, yeah. Well, I think the rate kind of. Yeah, I mean, the rates are. People are in the 2% even lower. Yeah, absolutely. This question has come in. Does he see home equity lines of credit happening?

Yes, we do have a department for home equity. It's not something I do. But, yes, we're seeing a lot of those. Because they're taking their equity out of their homes that they've bought and either starting businesses or acquiring new properties because the equity is built so much over the last several years. So back to this, how we can help the Hispanic community. I know we've talked a little bit about it, but anything else that comes to mind, Ricardo, that we can do as real estate professionals? Well, as real estate professionals, the very first thing I would encourage you guys to do is go to narep.org, that's N-A-H-R-E-P.com, not.org, I'm sorry,.org, slash membership.

Get your membership for as minimum as $49 for the smallest one or the platinum membership at $199. And you're going to start to get notifications in your email with premium opportunities for you to

become and get into Hispanic market. That's the very first thing. Get involved. I mean, as you know, the Hispanic market is growing. Right now it's hovering over 50 percent, and in the next 20 years it's expected to go up to 70 percent. Do you prefer to stay on the sidelines, or do you prefer to get a little bit of the 70%? In my opinion, I would do my best to get part of the 70%. And so, yeah, so that's the recommendation. Be part of this. It's a nonprofit that we're looking to help Hispanics continue growing their homeownership percentages

and, you know, get into multi-generational homes. Yes, sir. Yeah, so if you're a real estate agent watching this, and I'm a member, I get these wonderful emails every day. It's just great to read and to learn and be an advocate. But, you know, let's face it, to your point, the Hispanic community is and will be the largest buying pool out there. Yeah, I agree. And get educated about how to help these folks.

Here's an interesting question from Jennifer for Johnny. Which local jurisdiction has been the easiest for restaurant openings? Great question. Because what do you got? You guys got Albemarle, Charlottesville, and Louisa now. I'd probably say Louisa. Yeah. Hands down. Hands down. Louisa. Yeah. Hands down.

Hands down. Louisa. I mean, yeah. It's just, it's basically you turn stuff in. Oh, okay, here you go. I think we, like, had zero right now. Even signage, anything. We did not have any issues out there.

But Louisa County has, for decades, always been pro-business and pro-growth, particularly in Zion's Crossroads. I mean, they got it right over three decades ago, bringing water to there, and they planned for it. And if you take a look at the documents that they put together 30 years ago, what you're looking at is what they were thinking. So, you know, they're absolutely great to work with. Multiple people asking when are we going to see Mejia Cali open. Why don't you give them an update if they're just tuning in now. I don't actually have an update at this moment, you know. Unfortunately.

I wish I did. It's out of his hands right now. It's out of my hands right now. I think it's a matter of how much Smith does as far as the coaching. So time will tell. We'll let you know for sure. Everyone's very, very, very, very excited. That's the opposite of Louisa County.

How about some closing thoughts, viewers, for the viewers and listeners? Ricardo, on anything that's on your mind. Yeah, so I think 2022 is going to be more of a start to get a sense of back to normal, in my opinion. And the reason, and to understand what that means, is you really have to think back, right, to what happened in the past four years. 2020 and 2021, if you remember, office workers were relocated, right? So some businesses started to discover that working online, working from home was actually a benefit

in some cases. In other cases, it was not a benefit. I was talking to Johnny before the show, and he said that in his business, it was a benefit because people were ordering online, so he didn't suffer as much as other businesses. But you also had some shutdowns. You had restaurants shutting down. You had other type of businesses shutting down because people were afraid, right? People were afraid to go in public. And we all know that I was afraid to go in public and get COVID-19.

The other thing that happened in the banking industry was the consumer spending, right? People that were used to going out and buying products, buying services, they no longer were able to do that because they were afraid to go out. So instead, from home, they went online and they started ordering products, right? So the consumer spending shifted and you saw that shift on there. That was 2020, 2021. And then you see the second wave, which was 2022 and 2023, which you started to see supply chain problems. There was a few product shortages, like there was a few computer chips that were not being delivered on time. And so you started to see inflation rocket like crazy all over. And then you had the Fed coming into the mix, right? The Fed looking to improve the inflation or get the inflation down by increasing the rates. So the 10-year threshold started to go up.

And we ended the year 2023 as close to 5 as we possibly could get. Even some economists were saying that we were going to go into a recession, which I'm so glad it didn't happen. And in 2024,

in my opinion, we do expect the rates to cut the rates down, right? The Fed to start cutting the rates down. And I think they're going to proceed aggressively over the course of this year, heading into 2025. And then hopefully in 2026, we'll be at the 4% and 5% interest rates. So that's my wrap up. There you go. There's your outline for the next two years. Thank you, sir. Very nicely done. Same for you, Johnny. Anywhere you want to go.

I think our path to moving forward, especially with NAREP and stuff, is just getting the right information. You know, I think the hardest part about this is, like we talked about, was a trust to having the community trust the banking system, trust the system, and getting educated on how it all functions. I've known many people that I've told them, hey, you've got to talk to these people. You plan on buying a home. They go in, they're like, well, you know, they said I had to do this, and it's going to take about a year. I was like, yeah, I was in those same shoes a few years ago.

It takes some work. So I think, you know, aside from inventory, I think we can move forward if the community gets working on a path to ownership having the right information having these guys right here get the information to them you know we could this the system could grow and um and it's just information it's not going to hurt you well on that line so thank you for throwing the segue a softball at me um once a month we're going to keep on focusing on this. Yeah, this is great. Bringing experts in on it that can speak from firsthand. But we're a little over, so we're going to bid adieu.

And thank you, gentlemen, for coming in. Thank you. And keep a track on for next month on dates and times. Johnny Ornalis is fantastic. Keith Smith's fantastic. Ricardo Cruz-Geran. Judah Wickauer behind the camera. Real Talk with Keith Smith, archived at realtalkwithkeithsmith.com.

Thank you kindly for joining us on a Monday. The I Love CMO Show, guys, is up at 1230. So long, everybody, and take care. Very well.