91 Foreclosures – The Ugly Question Sept.10, 2020
What are primary risks (listed from biggest to smallest)? How long does foreclosure take in judicial versus non-judicial states? In what scenario could there be a loss of principle?
Would you, or any other hard money lender you know, provide funding for a 2nd mortgage to acquire a subject to property (with a 1st)? If so, what would the deal metrics/LTV/LTC/exit plan, need to be for approval?
Carolina Capital is a hard money lender serving the needs of the “Real Estate Investor” and the “Small Builder” borrower who is striving to build wealth and generate income for themselves and their families. We offer “hard money rehab loans” and “Ground up Construction Loans” for investors only in NC, SC, GA, VA and TN (some areas of FL, as well).
As part of our business practices, we also serve as consultants for investors guiding them to network with other investors and educating them in locating and structuring transactions. Rarely, if ever, will you find a hard money lender willing to invest in your success like Carolina Capital Management.
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Bill Fairman (00:00):
I keep forgetting, we have this really cool intro thingy and I see it, it says live and then I start talking and anyway, hi! I’m Bill Fairman, Wendy sweet, Jonathan Davis, we are Carolina Capital Management, welcome to the show! Our website is CarolinaHardMoney.com. If you are a borrower or an investor, looking to borrow money, click on the borrower tab. If you are an investor looking for passive returns, new camera angle, then clicking on the investor tab. Don’t forget to like, share and subscribe to our channel, this is the Ugly Question segment.
Wendy Sweet (00:50):
I’ll tell you what’s ugly is the way we have these computer things set up and it’s like jutting in front of you guys. It looks like you have these strange contraptions. There you go, Jonathan, look over there.
Jonathan Davis (01:02):
Yeah. Bill got to try to get all fancy with all these angles.
Wendy Sweet (01:08):
Yeah, we’re all up in now.
Bill Fairman (01:08):
Wendy loves change, as you can tell.
Wendy Sweet (01:10):
Well, I do like change. I just like it to be my change.
Bill Fairman (01:16):
She wants to be the instigator.
Wendy Sweet (01:17):
That’s right, that’s right!
Bill Fairman (01:19):
Wendy Sweet (01:20):
Talking of instigation, I have to tell you what happened to me today. Y’all know that I have, well that not everybody else knows but on Easter morning, we couldn’t go to church so my kids and I were upset about that and we got to our cars and wrote in poster paint, Jesus lives, He is risen, my son wrote God is not dead on the back of his truck and that was Easter Easter morning and we drove through town honking and beeping and praising God and stuff It was awesome and just took about a week, you know, I thought I’ll take it down at about a week. Well, I can’t take it down because every time I turn around somebody’s honking or beeping or giving us the thumbs up and I had a guy stopped me in the Walmart parking lot, telling me about his wife having Alzheimer and asking me to pray for him so we prayed right there in the parking lot. Well, today I’m on the phone with the borrower and pull into the post office and a woman’s knocking on my window, you know, she didn’t know it was on the phone. I rolled down the window and she starts crying, her husband had recently died and she wanted prayer and was asking God to just take her right now because she missed him so much and my borrower’s listening to all this going on so I got out of the car and I prayed with her and while my barrower was on the phone listening to all of this and thinking they’re either gonna hang up cause I think I’m weird well, they’re going to appreciate very much. So, you know, thrilled about all this happening and then I turned around and I send an email to my group of mastermind investors and this mastermind is a faith-based mastermind. So, and I’m telling them what happened and how I was excited about it and how I feel bad because I have been walking around like Marta in a funk for the last couple of weeks and I can’t really put my finger on it but when I said funk, Siri misspelled it and it was the F word.
Wendy Sweet (03:21):
So, I cursed at all my friends by accident.
Jonathan Davis (03:28):
And not even like, it’s like you wish you had, you now, that’s the, like, it could’ve been me, that one?
Wendy Sweet (03:33):
That’s exactly right. So Siri is just foul mouth.
Jonathan Davis (03:38):
Or she thinks you are.
Wendy Sweet (03:41):
That’s right! So that’s my funny for today.
Bill Fairman (03:41):
Okay, so, you’re leaving us hanging.
Wendy Sweet (03:45):
So what happened?
Bill Fairman (03:45):
What did the borrower do?
Wendy Sweet (03:47):
Oh, the borrower, that was a great question cause I didn’t even think about that. So the borrower said, you know, I have the name Genesis in my company and people are always stopping me, asking me, cause he has Genesis and then he has one of the verses of Genesis on the bottom of his cars, people are always stopping me and asking me the same and I thought that was kind of cool.
Wendy Sweet (04:08):
Yeah, a little connection there.
Wendy Sweet (04:09):
Yeah. Really nifty. Plus, he’s borrowing money, we love that. Two weeks!
Bill Fairman (04:16):
You know, today’s Thursday, you know what that means?
Wendy Sweet (04:20):
It’s the day before Friday?
Bill Fairman (04:20):
We have jobs numbers that come out. So like a couple or the new unemployment, what do they call it when you’re applying for unemployment benefits for the first time.
Wendy Sweet (04:36):
Bill Fairman (04:36):
And yes, unemployment benefits.
Wendy Sweet (04:40):
Jonathan Davis (04:40):
Can you say that again though? So everyone can get it.
Bill Fairman (04:44):
So predicted was 840 something. I believe it came in at 800 and 70 something so they were pretty close. The continuing claims are uptake just a little bit slightly, not by much and then consumer prices are remaining pretty much the same but there are some numbers where people are buying stuff so there’s some still pent up demand, which is a good thing. Nationwide though, I saw an article about mortgage delinquencies. They have climbed to, the serious delinquencies have climbed up to 2.3%, which doesn’t sound like much, does it?
Jonathan Davis (05:31):
But that’s a lot of,
Wendy Sweet (05:33):
Bill Fairman (05:33):
But that’s a lot of, that’s nationwide mortgage loans, people are at least 90%.
Wendy Sweet (05:40):
And what makes it serious?
Jonathan Davis (05:40):
Bill Fairman (05:41):
90 days or more.
Jonathan Davis (05:42):
Yeah, 90 days or more.
Wendy Sweet (05:42):
Bill Fairman (05:43):
I thought this was kind of funny though, the CEO of CoreLogic, that’s who came out with the numbers on the serious delinquencies. He stated here, forbearance has been an important tool to help many homeowners through the financial stress due to the pandemic.
Wendy Sweet (06:00):
I’m not sure.
Bill Fairman (06:00):
I don’t think he understand what a forbearance is.
Jonathan Davis (06:03):
Everyone who’s seriously delinquent at three months or more, is probably selling who got a three-month forbearance and now they have the three months.
Wendy Sweet (06:10):
Jonathan Davis (06:10):
Wendy Sweet (06:10):
Bill Fairman (06:12):
And that’s the problem with a forbearance. Most people don’t understand that and we keep harping on this, is that when the forbearance is over with, you don’t just start over again.
Wendy Sweet (06:21):
Bill Fairman (06:22):
You have to pay all the money that you were forgiven all at once.
Wendy Sweet (06:25):
Yeah. And they didn’t pass anything in legislation saying that you couldn’t collect it all right then and they’d give you something
Bill Fairman (06:34):
No, you can’t do that. These loans are all securitized, they can’t change. You have to pull them out of securitization, which means you have to buy them back from wall street then you have to turn around and modify them and then you have to sell them again, now that they’re modified
Jonathan Davis (06:56):
You can even sell them as modified because if you sell them as modified without a track record, pay string, then they’re going to be scratching in and you’re not going to get any money for them so then you have to hold them for at least six months to create a pay string.
Bill Fairman (07:08):
Yeah, and that’s the problem. When you do sell them, they’re damaged, which means you have to sell them at a discount.
Wendy Sweet (07:13):
Bill Fairman (07:14):
After six months, you can sell them as re-performing and re-performing, I mean, is you know,
Bill Fairman (07:20):
But most of these lenders aren’t balance sheet lenders, they’re getting their money from wall street anyway. They don’t have six months to hang on to these loans.
Wendy Sweet (07:27):
Right, that’s exactly right. So what I see here too is that New York is at 6.7%.
Bill Fairman (07:33):
Well, you’ve got the hardest hit, the top three hardest hit.
Jonathan Davis (07:36):
Wendy Sweet (07:36):
And Las Vegas is 5.3. So they’re the bubble markets anyway.
Bill Fairman (07:39):
Let’s talk about this. What is, most of the industries really in Las Vegas, New York, Miami, Fort Lauderdale is traveling tourism and those are the hardest hit.
Wendy Sweet (07:54):
That’s right, those are the destinations.
Bill Fairman (07:54):
You’ve got restaurants in New York, you got Broadway, all this, you can’t, none of that stuff open separate outside.
Wendy Sweet (08:01):
Well they opened up 25% in the restaurants yesterday, that’s what I heard. 25 percent capacity.
Bill Fairman (08:05):
Yeah but they didn’t start until the 30th of September
Wendy Sweet (08:09):
Yeah, because COVID is going to turn off on the 30th.
Bill Fairman (08:14):
And you think the rent in Midtown Manhattan is low enough where 25% capacity is keep you in business.
Wendy Sweet (08:20):
Yeah, I wouldn’t want to own real estate in New York City right now, that’s for sure.
Bill Fairman (08:22):
Wendy Sweet (08:24):
But the rest of the state,
Jonathan Davis (08:27):
Not if I was relying on income for it.
Bill Fairman (08:31):
However, there’s some good news on the rental side of things. The national rental rate actually went up, It was months by a dollar.
Wendy Sweet (08:39):
Bill Fairman (08:41):
Which is surprising. You would think with the vacancies or people moving in with their parents again,
Wendy Sweet (08:49):
Yeah, basement dwellers.
Bill Fairman (08:49):
The rents would be going down.
Jonathan Davis (08:51):
Wendy Sweet (08:52):
Yeah, that’s good stuff. So let’s go back to you talked about the employment and the unemployment. So I’m trying to gather what you’re saying that there were not as many new unemployment claims or there were more,
Bill Fairman (09:11):
It’s actually up slightly from last week.
Wendy Sweet (09:15):
Okay, and I think that’s important to look at.
Bill Fairman (09:16):
It’s still below a million.
Bill Fairman (09:20):
Yeah. But there’s going to be fits and starts to all out.
Jonathan Davis (09:22):
Like, what is it out right now?
Bill Fairman (09:23):
It’s still a good trade
Jonathan Davis (09:25):
Like 8.7 million. Where is it? Do you know what the number is?
Bill Fairman (09:29):
Do you mean the total?
Jonathan Davis (09:30):
Of national unemployment? Yeah. It was under 10
Bill Fairman (09:32):
Yeah. It’s eight something.
Jonathan Davis (09:42):
I saw couple of weeks got it was like 7,
Bill Fairman (09:43):
Those only come out last Friday.
Jonathan Davis (09:43):
So 8.7. A couple of weeks ago I didn’t know if it changed. Yeah.
Bill Fairman (09:44):
Those numbers come out on Friday.
Jonathan Davis (09:47):
Bill Fairman (09:47):
This is the private sector stuff,
Jonathan Davis (09:48):
Wendy Sweet (09:49):
But I’ll tell ya, everywhere I go, I see now hiring signs everywhere.
Jonathan Davis (09:55):
It’s a shift. I mean, you know, it’s not that everyone’s not hiring or everyone’s stagnant. I mean, some things are doing well, some things are not, I mean, I was on LinkedIn this morning, reading an article they wrote about you know, in 2020, since the pandemic, promotions have been almost nonexistent, except for a few sectors and finance is one of them. You can still get a promotion or that they’re seeing promotions being handed tourism. No. Hospitality, no.
Wendy Sweet (10:25):
Well, I heard too in the Charlotte area, Wells Fargo just announced and if I remember correctly, a 20% layoff is up and coming before the end of the year.
Bill Fairman (10:40):
Where is it?
Wendy Sweet (10:41):
Bill Fairman (10:42):
Interesting. Well, they were kind of teetering anyway because of the couple of scandals they had. They made a poor decision buying, I guess, who was it at the time? Wacovia. And Wacovia made a poor decision buying first union because the subprime loans and stuff they had on the books, they go back awhile.
Jonathan Davis (11:09):
Wendy Sweet (11:10):
Bill Fairman (11:10):
So they’ve been kind of playing catch up ever since then and it didn’t help that they had employees that were opening up fake accounts, it’s going to be hard for them.
Jonathan Davis (11:18):
I remember that, yeah.
Wendy Sweet (11:20):
Yeah, it’s a past and they’ve moved forward. I would hope that they would have been able to recover from that. But, and it’s not just Wells Fargo. I think we’re going to see that in a lot of the banking ends because they also have increased their loan loss reserves as well, significantly.
Bill Fairman (11:37):
Well, they’re going to be hiring a lot of people on the asset management side.
Wendy Sweet (11:44):
Jonathan Davis (11:44):
Special assets and acquisition.
Wendy Sweet (11:45):
Jonathan Davis (11:47):
That’s what I like to call it.
Bill Fairman (11:48):
There’s usually more and more into the online stuff. So, you know, branches are probably going to be fewer and far between
Wendy Sweet (11:58):
Yeah. Which again will impact the commercial industry.
Bill Fairman (12:01):
And listen, that was, having a branch in every corner was an expensive endeavor for banks.
Wendy Sweet (12:10):
Yeah but it’s so convenient.
Bill Fairman (12:10):
Yeah, but so is this.
Jonathan Davis (12:15):
I mean, I walk into my local branch of my bank and I mean, more times than not when I walk in, I’m the only person there. You know, the only customer there. How long is this gonna last?
Wendy Sweet (12:26):
Yeah. It makes you, it certainly makes you wonder.
Bill Fairman (12:28):
Well that’s because when you put your mask on, people are running because they think you’re robbing the place.
Wendy Sweet (12:32):
Keep that gun in your pocket.
Jonathan Davis (12:33):
So I shouldn’t use the ski mask, is that what you’re saying?
Bill Fairman (12:37):
It’s typically frowned upon.
Wendy Sweet (12:39):
Yeah, just a little bit, just a little bit.
Bill Fairman (12:41):
All right. So, by the way,
Wendy Sweet (12:41):
You’re at the Ask an Ugly Question session today.
Bill Fairman (12:45):
Yes. If you have any questions, by the way, we have a little chat piece there on the side, love to have your questions as well. We’re going to start doing a few more case studies in our weekly presentations down the road. I’d like to talk about one real quick before we get into the questions. There’s a lot of we have need for affordable housing and there’s a trend right now of taking hospitality, hotels for example. Typically, they’re going to be, you know, your ranch motel style. I’m seeing this a lot in older resident ends, which we’re all suite hotels anyway and they’re going to convert those into housing. We have one right now that we’re looking at that was an old school, elementary school or high school or middle school, we don’t know exactly what it to be other than it was a school and it’s already been converted into a housing so it’s already apartments and we’re looking at the deal to finance the stabilization of an existing so we’ll let you know how that goes.
Wendy Sweet (14:00):
Can you say it was like 50% rented or 43%?
Bill Fairman (14:03):
Wendy Sweet (14:03):
Yeah, that’s pretty low.
Jonathan Davis (14:04):
No, it’s almost with 68 or 70%.
Bill Fairman (14:12):
Oh it is?
Jonathan Davis (14:12):
Yeah. There’s only, I think it was like 28% of vacancy. It’s not that bad.
Wendy Sweet (14:14):
Okay, that’s better than we thought.
Jonathan Davis (14:16):
But it’s, you know, it’s one of those cases where you have to come in, fix the management, increase the NOI an then do outfits on the property.
Bill Fairman (14:27):
Yeah. And you have to, before you can charge a little bit more for rent, you have to make it work. It’s urgent.
Jonathan Davis (14:32):
You have to do something.
Wendy Sweet (14:32):
Jonathan Davis (14:34):
Typically. Now, sometimes you can, if something’s port like, there’s situations where you can walk in and you know, the management, they’ve been paying the cable bill and the water for all the residents and not dividing that out well, that’s an instant increasing value that you can cut that, get that divided all the residents and then that increases your NOI, which then increases the value of the property.
Wendy Sweet (14:55):
Net operating income.
Jonathan Davis (14:57):
Net operating income.
Wendy Sweet (14:58):
You have to assume people don’t know everything.
Bill Fairman (15:00):
Well, and at the same time, it’s still affordable housing, and we’re not talking about going in there and making it luxury and taking out all the people that can’t afford it. The rents are already only.
Jonathan Davis (15:11):
Bill Fairman (15:12):
Yeah. They’re under 400. So in most cities and towns, it’s hard to find anything under a thousand dollars,
Jonathan Davis (15:21):
Oh, for sure. Yeah.
Bill Fairman (15:22):
So there’s still going to be in the affordable range but you still have to get your rents up in order to make it worth your while. Right?
Jonathan Davis (15:30):
Well, yeah. I mean, if you’re, again, you’re buying it at a certain capitalization rate and that’s what you’re going to get it appraised or sell it at is a capitalization rate and increase the value, you either have to be in a market that changes abruptly and the capitalization rate lowers or you increase the NOI, which then increases the value because you take the NOI divided by the cap rate.
Wendy Sweet (15:58):
That’s right. One of the things I think everybody needs to understand too, if you are going in and rehabbing a house or a multi-family, whether it’s a duplex or this, you know, 40 unit apartment complex, there are grants that you can get from the city and it’s an important that you find out what’s out there. One of my collective genius people Randy Lawrence sent over $30,000 in checks that he he’s received to help up upfit the property he’s working on.
Jonathan Davis (16:34):
Wendy Sweet (16:35):
Yeah, so there’s money out there. When he sent that off, somebody else responded. Yeah, I’m getting that kind of money too on stuff that I’m rehabbing. So I understand that, especially now, there’s money out there in the form of grants, not just loans but in the form of grants that can really help you do even more for the property.
Bill Fairman (16:57):
And by the way, if you’re thinking about becoming a real estate investor, this would be a good opportunity for you to bone up on government and the money that’s available for people to fix up properties and then hire yourself out as a liaison between the government and the real estate investors to help them get this money.
Wendy Sweet (17:23):
That’s a great point.
Bill Fairman (17:26):
You’ll learn more about what they’re doing and you’ll be first on their list.
Wendy Sweet (17:31):
Yeah. We actually have property that we took back, what? Three years ago. Contiguous lots that we’re selling and just got word this morning from the guy we’re selling it to that the city has approved his plan to put condos slash apartments on those four properties, you know, big units and he really, they said it very clearly in the approval letter that because he is setting aside was it 10% of the units?
Jonathan Davis (18:09):
It was somewhere around there. I think it was three.
Wendy Sweet (18:12):
Oh yea, three total units, but it’s 10% of the units because he’s setting them aside for affordable housing that they went ahead and approved it with ease. So even though people around them were complaining, you know, the storm water and that kind of thing but it makes a big difference if you’re out to help out the affordable housing, you will be helped out there’s money to be had.
Jonathan Davis (18:37):
I don’t know how accurate this is. I think a couple of months ago someone told me that there’s close to a hundred thousand people on the wait list for affordable housing in North Carolina. So, I mean, yeah, we need that affordable housing here.
Wendy Sweet (18:54):
Yeah. No doubt.
Bill Fairman (18:58):
The bottom line is we’re going to start showing you more and more deals in process along the way. I think that’ll be helpful to get to an idea of what we do, what other people are out there doing, we’ll get to before and after photos, give you an idea of what the investor ended up making themselves and that type of thing. All right. Question number one, you want to say it or you want me to?
Wendy Sweet (19:23):
Sure. What are the primary risks listed from biggest to smallest? How long does it take foreclosure and judicial and nonjudicial States and what scenario could there be a loss in principle?
Wendy Sweet (19:39):
All right. So let’s do question number one as the primary risk from biggest to smallest,
Jonathan Davis (19:43):
Biggest issue lose everything.
Wendy Sweet (19:44):
Yeah. Smallest is you make money, there you have it but reality is somewhere in between
Jonathan Davis (19:54):
Yeah. I mean, we all know that there’s inherent risk with every investment, whether you’re putting your money into a fund, whether you using your own money to buy a piece of property, no matter what you’re doing in investing there is always risk and it is the job of the person investing to do their due diligence and figure out if the level of risk is agreeable to the level of reward.
Wendy Sweet (20:22):
That’s right. And in fact, I’ve got a great story to share on that.
Jonathan Davis (20:25):
Wendy Sweet (20:25):
So back in, gosh, it had to be like in 2006 that this occurred but there was a lender who loaned money to a borrower and it was in Gastonia. The house was built, it was finished, it was beautiful, it was the day before put on the market and the contractor was checking all the islets in the stove to make sure it worked and he forgot to turn one of them all the way off. It caught on fire, a piece of paper burn the house to the ground, this is the day before it closes, burn the house to the ground. Here’s the due diligence that wasn’t done and it was in the appraisal, the house, the lot that the house was on was too small to rebuild. Two feet too small to rebuild.
Jonathan Davis (21:18):
Wendy Sweet (21:20):
And it was not grandfathered in so if a house burns down, everything changes. If it had burned to where the foundation was still there, like in, in decent shape, the wall, some of the walls were still up, they could have put it back up but it literally was nothing. So that was an $80,000 loss because now it’s a piece of ground and you can’t do anything with it
Bill Fairman (21:45):
Well, if they had insurance on it, at least they get paid the value but they don’t, you can’t insure the lot so they lost the money on the lot and if you can’t build on it, what’s a lot worth?
Wendy Sweet (21:57):
That’s exactly right. So what had happened was, is they actually got the loan part paid back but you know, how long that took with getting any interest?
Jonathan Davis (22:07):
Wendy Sweet (22:09):
No but it did take 12 months for it to happen to where they finally got your check on it. So that was kinda nasty.
Jonathan Davis (22:16):
Yeah. Wow. Yeah. So that’s extreme.
Bill Fairman (22:20):
Listen, it’s hard to judge the biggest risk because it depends on where you’re coming from. So this question is, is it the biggest risk for the borrower? Is it the biggest risk for the lender? I think the biggest risk for the borrower is paying too much for the property on the front end.
Jonathan Davis (22:39):
Bill Fairman (22:40):
Because as you all know, you make your money on the purchase and on the buy, not when you sell it. And you know, from the lenders perspective, the biggest risk is that the borrower walks away
Wendy Sweet (22:57):
Yeah. And you get stuck with the house.
Jonathan Davis (23:00):
Assuming the lender didn’t want the house.
Wendy Sweet (23:02):
That’s exactly right.
Jonathan Davis (23:05):
But, you know what, that’s rarely the case that they’re just going to walk away
Wendy Sweet (23:10):
And you usually put a pretty chuck of chains in it.
Bill Fairman (23:12):
From a lender’s perspective, the biggest risk is a change in the market and that’s why,
Wendy Sweet (23:20):
Which occurred in ’07 and ’08, right?
Bill Fairman (23:20):
That’s why most lenders, especially the private lenders, they prefer not to do ground up construction because it takes too long. They’d rather do the lipstick on a pig loan,
Wendy Sweet (23:33):
Jonathan Davis (23:33):
Those are hard to come by.
Wendy Sweet (23:34):
They sure are.
Bill Fairman (23:37):
Excuse me. The market now is calling for ground up construction but you really need, if you’re doing ground up construction, I still say you need to stay in the affordable.
Jonathan Davis (23:48):
Not luxury part, no.
Bill Fairman (23:49):
And one of the biggest mistakes I see people make is not paying attention to the highest and best use,
Wendy Sweet (24:01):
Of the property.
Bill Fairman (24:03):
Of the property they purchase because what’s the old saying? If everything is a nail, then your only tool is a hammer and then we have so many people that are single family fix and flip people that come to us, you know, I got this lot, I’m going to build a house when they could easily build four townhomes on their and triple their money.
Jonathan Davis (24:26):
Without changing the zoning or anything like that.
Bill Fairman (24:29):
It’s already available there, they’re just not looking at it. So finding out what the highest and best use of the land is before you start any project.
Wendy Sweet (24:37):
Yeah. In fact, I was on the phone yesterday with two brothers who have a beautiful duplex and like the hospital, you can throw a rock at it. It’s literally across the street in downtown Charlotte, right behind central Piedmont. It looked like the location is just intense, good, where all the houses around it are selling for a million but this is situated in such a way that the city of Charlotte wants them to build a higher rise project with condos upstairs and retail on the bottom, which was a great idea before the COVID hit and it’s more expensive to do that. So it kind of misses with the parking, for them to be able to do that as well, having enough room, it’s only like a fifth of an acre, it’s a really tiny lot or they have the choice to put condos in, just condos and letting the bottom floor be the parking area. Now the city of Charlotte doesn’t want them to do it that way because they want the retail, I guess, more taxes that they’re going to get out of it. So they’re kind of, you know, what do we do? You know, how are we going to do that? And, you know, I wish that I had the answers but my crystal ball broke too. So, you know, I’m getting them in touch with engineers and other developers who are developing down in that area, both retail and space for residential stuff cause there’s, I mean, it could go anyway.
Bill Fairman (26:12):
Yeah. The thing about it is, you know, the city wants that area to be more walkable, you know, kind of a destination stuff. The problem is if you’re the developer, the safest is always going to be residential and if you’re trying to sell these things, you’re going to have to sell that retail slash restaurant slash coffee shop to somebody who eventually will just lease it out a business over. I don’t,
Wendy Sweet (26:45):
They had another great idea that I had never heard this but I’m sure people do it elsewhere, I thought it was a great idea is to do the shell as condos, you know, as condos and sell each floor off to a different investor to finish it off. I thought that was a pretty cool idea.
Bill Fairman (27:02):
That’s a good way to do it.
Wendy Sweet (27:03):
Yeah that’s just a great out of the box.
Bill Fairman (27:03):
They all want to build at the same time, they already have parking issues.
Jonathan Davis (27:07):
Wendy Sweet (27:08):
That’s right. But I thought that was great outside of the box thinking on their part. So, but you were talking about highest and best people making a mistake. I mean, I am like number one at that, the highest and best. I bought a property that back in, you know, the pre 2007 off of park road in Charlotte, which was just exploding all the places around it and everybody around me was taking the houses, the little houses and basically blowing them up into, you know, three and 4,000 square foot houses. I decided that because I’m cheap, I was just going to rehab the one I had. So we rehab the one we have and the person that bought it from me and I made money off of it but the person that bought it from me tore it down and blew it up into a big house. So that’s a good story, don’t do what I did.
Bill Fairman (28:02):
Do what I say, none of that yours.
Wendy Sweet (28:02):
But yea, I was being cheap instead of doing what the highest invest was for that particular property so that was pretty smart.
Bill Fairman (28:12):
So how long does it take to do a foreclosure?
Jonathan Davis (28:16):
Yeah. Well, judicial versus non judicial are,
Wendy Sweet (28:18):
Forever! It takes forever! So let’s talk about the difference between judicial and non judicial.
Bill Fairman (28:24):
Here’s the attorney answer,
Wendy Sweet (28:25):
Bill Fairman (28:29):
There you go, it depends.
Wendy Sweet (28:29):
Well ,talk about the difference cause that’s, I think that’s important.
Bill Fairman (28:32):
Okay. So do you judicial foreclosure,
Wendy Sweet (28:33):
Here comes the joke.
Bill Fairman (28:33):
For example, North Carolina is a nonjudicial in South Carolina is judicial. In South Carolina, you have a mortgage in North Carolina, you have a deed of trust When you have a deed of trust, that just means that deed is being held by a trustee. Typically it’s the attorney that closed alone in the first place and they’re basically just holding it with the lender, saying that if these people fail to pay we’re going to work. We’re going to foreclose on this note or on this and that deed will then come to us when the foreclosure has finished and mortgage state,
Wendy Sweet (29:27):
Or non judicial.
Jonathan Davis (29:27):
Bill Fairman (29:27):
Wendy Sweet (29:27):
Bill Fairman (29:27):
The person that buys the house, whether they have a loan on it or not gets possession of the deed and what you have to do those States is that you have to sue to get the deed back. So the process is a little bit longer in the judicial states than it is the deed of trustee.
Jonathan Davis (29:52):
Especially now with trying to get court dates and,
Wendy Sweet (29:55):
Oh yeah. Oh my God. It’s going to be awful.
Bill Fairman (29:58):
Now lenders prefer nonjudicial States because it takes less time.
Jonathan Davis (30:05):
Yeah. What’s the typical timeframe, let’s say North Carolina. Four months?
Wendy Sweet (30:10):
It should be.
Jonathan Davis (30:13):
Yeah, you know, I mean, right around four to six months is.
Wendy Sweet (30:14):
I’ve seen it happen in four months.
Bill Fairman (30:19):
Again, it depends, there’s a roadblocks that can be thrown up in front of you.
Jonathan Davis (30:24):
Well, assuming there’s, yeah.
Bill Fairman (30:24):
The borrower can file for once, you know, chapter 13 and that’ll hold it and then they can turn around at the end of the time, they can turn around and file for seven and starting the process all over again.
Wendy Sweet (30:38):
Jonathan Davis (30:40):
Which brings up setting up properties. If you’re a lender, make sure that they are set up who you’re lending on in SPE, Special Purpose Entities, which are also, you know, bankruptcy, remote entities so you can basically have one asset in an entity and it’s way easier to move that asset out of bankruptcy.
Wendy Sweet (31:01):
That’s a great point. So who can do the SPE? Does an attorney have to draw that up for you?
Jonathan Davis (31:07):
No. So SPE is, so it’s just an LLC or corporation, whatever it is but the issue, or I guess,
Wendy Sweet (31:14):
And it stands for Special Purpose Entity.
Jonathan Davis (31:16):
Purpose Entity or SPV. Some people say special purpose vehicle. It’s just an entity that holds the asset and that’s all it does. It does nothing else.
Bill Fairman (31:25):
So this would be for the borrower to do,
Jonathan Davis (31:27):
Yeah, the borrower would have to set it up but as the lender, you can require that to be a condition of you lending.
Wendy Sweet (31:33):
I think that’s a great idea.
Bill Fairman (31:35):
They used to have people that would go ahead and sign the quick claim deed before they give you the money
Jonathan Davis (31:44):
Until they found until the judge ruled that,
Wendy Sweet (31:46):
It’s not working.
Bill Fairman (31:47):
I can tell you that judges will say, no, you can’t do this
Jonathan Davis (31:50):
Well, cause then you’re assuming that they’re going to fail before you give them a loan and then why would you give them the loan if you think they’re gonna fail?
Wendy Sweet (31:56):
That’s exactly right.
Bill Fairman (31:56):
And then they will also say that the only reason they signed it is because they needed the money.
Jonathan Davis (32:00):
Wendy Sweet (32:02):
They’re under the risk.
Jonathan Davis (32:02):
There you go.
Bill Fairman (32:04):
Now again, it depends. I’ve seen foreclosures take as little as two months. I’ve seen them take as long as a year. It just depends.
Wendy Sweet (32:13):
In North Carolina.
Jonathan Davis (32:14):
In North Carolina.
Bill Fairman (32:14):
Wendy Sweet (32:16):
In South Carolina, not so much.
Jonathan Davis (32:19):
Well, in South Carolina, I mean, it depends, again, like right now, if you’re waiting on court dates because you have to get a, you know, a sale date, you, you know, you could be, I mean, it could take up to a year in South Carolina. I mean, it could take two years in South Carolina if it’s contested and then if you go to the Northeast, it’s even more. So, I mean, I tell the story, I joined a firm, there was a property that we bought, the note on that was in foreclosure in Kings County, New York and then I left about four years later and that property was still in foreclosure in Kings County court.
Wendy Sweet (32:56):
We don’t lend in New York.
Jonathan Davis (32:57):
We do not lend in New York.
Wendy Sweet (32:58):
We don’t play there at all.
Bill Fairman (33:01):
California is difficult to foreclose.
Wendy Sweet (33:03):
Yeah. Because it’s crazy land. You know, I’m working on a house right now that’s a foreclosure and we just got,
Wendy Sweet (33:12):
In what capacity?
Wendy Sweet (33:12):
Jonathan Davis (33:14):
As the lender.
Wendy Sweet (33:15):
Yeah. We’re the lenders.
Bill Fairman (33:16):
Wendy Sweet (33:17):
And we actually were told we have a sale date on nine 15. So that one moved along pretty, pretty quickly.
Jonathan Davis (33:24):
I forget when we filed, it was before COVID.
Wendy Sweet (33:28):
Bill Fairman (33:29):
And it got delayed because of COVID.
Wendy Sweet (33:31):
Jonathan Davis (33:31):
And that one’s in North Carolina, so that one’s taken a little bit longer than it normally does.
Wendy Sweet (33:35):
But it’s coming. The sales coming up and we should be able to get all of our money back on that one.
Jonathan Davis (33:45):
Wendy Sweet (33:45):
Hoping and praying to get all of our money back on that loan.
Jonathan Davis (33:50):
Bring your checkbooks, bid on this house.
Wendy Sweet (33:52):
It’s in downtown Charlotte.
Jonathan Davis (33:53):
Wendy Sweet (33:53):
Tell all your friends! In fact, it’s supposedly rehabbed and we actually still have rehab money in the account for it. Don’t we?
Jonathan Davis (34:04):
I think so. I don’t know how much but we have some.
Wendy Sweet (34:05):
Yeah. Cause we never released the last part when they stopped paying. So we’ll get a little bit out of that, get it done, hopefully get it sold.
Bill Fairman (34:14):
So yeah, in North Carolina, we had one that lasted over a year before closure but did that turn out bad for the lender, as in us?
Jonathan Davis (34:25):
Which one are you talking about?
Bill Fairman (34:27):
Again in note because the borrower, as soon as we got possession of it, came up with the money to buy out. All the interest and everything for that whole year
Wendy Sweet (34:39):
Attorney fees, everything. Yeah. We made him pay everything that’s for sure, that was a good one.
Bill Fairman (34:43):
So that was kind of odd and unexpected
Wendy Sweet (34:48):
That was three or four years ago, probably longer than that, even that was. One of the things I think it’s important to know too is there’s due diligence that you want to do before you get to the sale day. So this one today that I’m talking about, you know, I have to know exactly what the loan amount is, what was our loss on it? Like what’s our uncollected interest and points? We want to know what that is.
Jonathan Davis (35:12):
Late fees, I mean everything goes in that.
Wendy Sweet (35:15):
Jonathan Davis (35:15):
Wendy Sweet (35:16):
Exactly. We want to know what all of that is and on top of that, luckily I’m a real estate agent, so I can pull comps too but we want to know exactly what it’s worth right now, too because we can kind of measure what interest are we willing to take a loss on? Or what points are we willing to take a loss on renewal fees to get it sold because we don’t want the house, right? We don’t want it back. We’d love to go to the courthouse steps and hand them a key and say, thank you very much. That’s the goal is that we don’t have to take care of it anymore but we want to figure out what that happy medium is, what we know we can get for it, the most we can get for it, the most somebody will pay for it in the shape that it’s in and it has a tenant in it If I remember correctly too.
Jonathan Davis (36:01):
I know it did. I’m not sure if they’re currently there.
Wendy Sweet (36:04):
Yeah but anyway,
Jonathan Davis (36:07):
When we started foreclosure, they were there.
Wendy Sweet (36:08):
Yeah. So you have to do your due diligence if you’re in a foreclosure. You need to do your due diligence on what you really need to get back out of it and what you can get, what you’d like to get are two different things, you got to remember that.
Jonathan Davis (36:23):
Gotcha. So and Wendy said running comps is an important thing so I’ll give you all a situation. You foreclose on a house and you rack up all the interest that’s due all the late fees, everything attorney fees and you come up with, let’s say $200,000, but you know, that property is not worth $200,000, right? But you set the bid price at $200,000, the house does not sale. Now you, you sell it and you sell it at a loss of whatever, you know, your bid amount would have been so let’s say you sell it for $120,000. You, since you set the bid amount of at 200,000 and you got it back, that means it’s sold for 200,000 or reverted back to the lender at 200,000. So if you had a personal guarantee, you can not pursue that borrower for a deficiency on the loan, even though you only sold it for one 20 and you were owed 200,000. So also think about the strategy of setting your bid amount when doing this. So that if you’re owed 200,000 but you know, the property’s only worth 120, then I would be careful where you set that so that if it does sell closer to that one 20, that if there is a deficiency on the loan, someone else buys that property and then there’s a deficiency and now you can pursue them.
Wendy Sweet (37:59):
Jonathan Davis (37:59):
If that’s a strategy you want to take,
Wendy Sweet (38:01):
You’d be surprised. That’s a good point.
Jonathan Davis (38:01):
I’m not saying you have to be, you have to think those things through.
Bill Fairman (38:06):
Yeah. Part of the problem with going after them for deficiency is they’re in foreclosure, they don’t have any thing anyway.
Jonathan Davis (38:14):
Wendy Sweet (38:15):
They better not.
Bill Fairman (38:15):
So you’re going to be be, it’s going to be a lot of work to get probably not much in return.
Wendy Sweet (38:23):
And that’s a lot of energy that you spent when you can use it for something more positive, right?
Jonathan Davis (38:30):
And I just remember this, I think it was in Texas. I foreclosed on a property in Texas.
Wendy Sweet (38:37):
Jonathan Davis (38:38):
No, it was before I was here, it was a separate and,
Wendy Sweet (38:40):
They were gonna say man they have a lot of foreclosures.
Jonathan Davis (38:40):
No, no, no, and I set the bid amount at what we were owed and guess what? We won. Like we got the property back and then we sold the property and we lost a ton of money and we’re like, well, now we need to pursue that borrower for deficiency because guess what? We, you know, we lost money on this, you can’t because we won the bid at that amount and that’s what the sale price looks like.
Wendy Sweet (39:12):
Wow, good point. Really. Really good point.
Bill Fairman (39:15):
See? This is how you learn.
Wendy Sweet (39:16):
Jonathan Davis (39:17):
Oh yeah. I learned on that one.
Wendy Sweet (39:18):
Hopefully it’s from other people’s mistakes, right?
Bill Fairman (39:20):
That’s right back to this. If you’re lending and you’re doing private lending, you’re typically lending on entities, not individuals. So if you do get before a judge, you’re not kicking somebody out of their house, you know, it’s a piece of property that’s for investment purposes and typically it’s vacant already. So the likelihood that you’re going to have a activist judge hold it up is pretty low so I wouldn’t worry too much about that side of things. Wow. We have been rambling on this one question so let’s go to the next one.
Jonathan Davis (39:55):
Bill Fairman (39:55):
Wendy Sweet (39:57):
I think we are.
Bill Fairman (39:58):
Wendy Sweet (39:58):
I bet they think we are.
Bill Fairman (39:59):
I think they wish we were. Would you or any other hard money lender that you know provide funding for a second mortgage to acquire a subject property with a first, already in place I’m assuming.
Wendy Sweet (40:15):
Subject to property with a first ARV request,
Bill Fairman (40:16):
Alright. Yeah. So, and if so,
Wendy Sweet (40:21):
Bill Fairman (40:21):
What’s the deal matrix?
Wendy Sweet (40:22):
Bill Fairman (40:25):
Yeah, there are cases where you could do a second that would make sense but if it were me, you’d have to be at, you know, 50% loan to value something like that.
Wendy Sweet (40:38):
It should be really low and I I’ll give you a great example. I’m in one right now with my personal self directed IRA, helping a friend out that’s in a house that was subject to and I lent him money, $30,000. I’ll even tell you how much it is. I lend him $30,000 out of my personal IRA, which brings it up to close to 85%, which I would never do for my company so why in the heck did I do it for myself? Because he’s a friend and I should have get your emotion out of what you’re doing, folks. Take it from people who do it. So anyway, now he is in the process of foreclosure and I’m going to lose all of my money. I won’t get any of it, I won’t get any of it. Now, you know, he’s saying, Oh, I’ll pay you back no matter what. I know better. He might even be watching but it’s, you can lose your money on a second mortgage very, very easily. Be so careful.
Bill Fairman (41:45):
Friends, relatives, you’re lending money to them, assume you’re not getting it back.
Jonathan Davis (41:49):
It’s not lending.
Wendy Sweet (41:52):
That’s exactly right.
Bill Fairman (41:52):
You’re going to keep the friendship. Anyway,
Jonathan Davis (41:58):
At least I think I do pretty well leaving emotion out of so I refused to lend to any family members or friends.
Wendy Sweet (42:04):
Yeah. And that’s a good way to be. So let’s pretend it is at 50% LTV and you’re doing a second, that brings it up to say 70%. So what would that look like? What’s the exit plan? These are great questions.
Jonathan Davis (42:20):
Well, again, you’re just making sure that there’s enough margin in there in case it does go into foreclosure that you’ve got something but you’re much better off if you’re going to do any seconds is to buy a non-performing second on an existing property because in most cases, you’re kind of the stone or the dirt in a gear in the process of somebody else had taken over the property. Although you have no standing essentially.
Wendy Sweet (42:56):
I have zero.
Bill Fairman (42:56):
But you could turn around and foreclosure yourself. The problem is you have to pay the first mortgage off so if you’re in a low enough LTV and you think it works, then you foreclose, you take over the first and then maybe you have some money, I don’t know, I don’t like seconds.
Jonathan Davis (43:16):
So, yeah, to answer the question, I mean, if it’s a subject two, I don’t know if you’re going to find any company, hard money or private lenders that will do this and when I say company, like people like us, like,
Wendy Sweet (43:31):
A non moment pause.
Jonathan Davis (43:31):
Someone who is not just like, that’s just what they do on the side with a little bit of their own money. That’s who you’re going to get probably to do something like this.
Wendy Sweet (43:42):
Jonathan Davis (43:42):
Wendy Sweet (43:42):
But not anymore, I’m done.
Jonathan Davis (43:49):
firstname.lastname@example.org. Just reach out to her.
Bill Fairman (43:53):
You’re lending money to a borrower who doesn’t even have control of the ferns. Legally, if you do a subject to loan, the first mortgage holder can foreclose force. All loans have a due on sales clause so if they sell this home to you subject to the current financing and the lender finds out about it, they can call the note due.
Wendy Sweet (44:21):
Well, unless you call the lender and tell them what you’re doing in this case, the lender knew. I mean, it wasn’t a secret and a lot of it. That’s a great point that you brought up because a lot of are very afraid to tell the lender what they’re doing, especially if the interest rate is a little bit higher, they’re not so excited about making sure the loans paid off and making a new loan because any new money that they would be doing would be at a lower interest rates. So if they’ve got, you know, a 6, 7% interest rate, they’re not going to be so high on getting it paid off anytime soon and they’re not going to fight you on that but you know, we, you and I did a subject to for that house in river Hills and we told the mortgage company exactly what we were doing, why we were paying it, you know, they were excited. Hey, we’re taking over this house, we were getting ready to put, you know, $60,000 into it.
Bill Fairman (45:14):
We actually had to get 90 days up on it too,
Wendy Sweet (45:18):
Yeah, that’s right and reinstate it for him, that’s right. Excuse me.
Bill Fairman (45:21):
We’re going to have to go through the foreclosure process.
Wendy Sweet (45:23):
That’s right. That’s exactly right. So they were really happy and in this case where I’m going to lose my money, potentially lose my money, I should say it that way.
Bill Fairman (45:33):
Wendy Sweet (45:36):
Well, you know, we were upfront and honest with them about that too. The LTV was high for them, the lender in first position and, you know, the interest rat’s high. They don’t want to give it up so they were happy to have me come in and lend the money that I did was getting it reinstated as well so you need to be honest, just tell them upfront what’s going on, you’d be surprised at how they’ll handle it.
Jonathan Davis (46:07):
What people, what we would do on a second or what I guess, I see other people do on seconds. Like I see a lot of funds that have an ancillary fund, like a mezzanine fund that they lynch with fund one that is, let’s say first lien, low risk, lower risk and then fund two comes in and fills in a gap and gives them a second that is filled with investors who have more of an appetite for risk but they also want a higher yield. So we see those things happening where someone will come in and give you a first but then also give you a second to get you where you need to go.
Wendy Sweet (46:45):
Yeah and that’s a safer place to be if you’re in control first.
Jonathan Davis (46:49):
Well if you’re in control in the first, well, you know, yeah, sure. I like that scenario.
Wendy Sweet (46:51):
Yeah, it might not be the second.
Bill Fairman (46:53):
Yeah. And if we had a first on a piece of property, we don’t have a problem adding a second two it because we’re in already in first position, assuming there’s enough loan to value to work with. So if you have a, let’s say the market has changed and you wanted to do additional work to the property to make it worth even more, then that’s something that we would look at.
Wendy Sweet (47:18):
Well, the other thing here too, though, they’re asking, you know, what is the exit plan? So if you’re in second position on a subject two, the only exit plan is a refinance the total property
Bill Fairman (47:29):
Or if you’re selling it.
Wendy Sweet (47:31):
Yeah. Or if they’re selling it, that’s right, that’s exactly right.
Bill Fairman (47:35):
So the exit strategy is both the sale of the property or the refinance of the property and getting paid out which is not really any different from any other exits.
Wendy Sweet (47:46):
Jonathan Davis (47:46):
Except that you’re just, you’re the, you’re the second handedly fail
Bill Fairman (47:50):
To see that one of those things take place.
Wendy Sweet (47:53):
That the property is really valued at what you think it’s valued at. That the loans are able to be had, you know, in that area too so there’s a lot of things that could a lot of things that could go wrong so it’s a scary place to be.
Bill Fairman (48:07):
Oh, by the way, next week, we are going to be in Clearwater beach, Florida on our Thursday and we’re going to do something a little bit different. We’re going to not have two shows on Thursday, we’re going to have one long show and we’re gonna be,
Wendy Sweet (48:25):
It’s okay, stop the excitement. Wait! I’m in!
Bill Fairman (48:31):
We’re going there because it’s collective genius and we have some of the smartest real estate investors in the country,
Wendy Sweet (48:36):
Collection of geniuses. That’s right.
Bill Fairman (48:39):
In one place.
Wendy Sweet (48:39):
And they’re going to talk again,
Bill Fairman (48:41):
We’re going to be broadcasting live from the event,
Wendy Sweet (48:43):
Doing investor tips.
Bill Fairman (48:43):
Somewhat poolside and we’re going to have a bunch of the folks come up and give you guys some free advice. Take it whether you want it or not!
Wendy Sweet (48:54):
Yeah, and it’ll be on everything. Single family, multifamily, commercial,
Bill Fairman (49:00):
Wendy Sweet (49:00):
Bill Fairman (49:00):
Fix and flip.
Jonathan Davis (49:00):
Yeah, fix and flip.
Bill Fairman (49:02):
Yeah. I mean, it runs the gambit se have a lot of authors there too.
Jonathan Davis (49:07):
There’s a lot of smart guys in that group.
Bill Fairman (49:10):
So in case you guys didn’t know, we make fix and flip loans here.
Wendy Sweet (49:15):
Yeah, and new construction.
Jonathan Davis (49:17):
Bill Fairman (49:17):
And we do multi-tenanted commercial stuff as well. If you’re interested in borrowing money, please go to CarolinaHardMoney.com, click on the borrower tab, we also,
Wendy Sweet (49:30):
Can lend you money.
Bill Fairman (49:30):
Would like investors.
Wendy Sweet (49:32):
We can take care of your foreclosures for you.
Bill Fairman (49:35):
If you’re an accredited investor, we have a fund, you can get that information at the investor tab. You can also get information on being what we call a one-off lender or a fractionalized lender. If you’re not accredited, we have room for you as well, we sell loans off out of our portfolio.
Jonathan Davis (49:54):
If you don’t know if you’re accredited, they just changed the rules on it too.
Wendy Sweet (49:58):
Did they? I didn’t know that.
Bill Fairman (50:00):
You still have the same dollar figures there but they’ve allowed, for example, if you have an education in the financial world, they’re allowing you to be accredited.
Wendy Sweet (50:10):
Work is an education.
Bill Fairman (50:10):
CPAs are allowed to be accredited.
Wendy Sweet (50:15):
Okay, financial advisors.
Jonathan Davis (50:16):
Wendy Sweet (50:16):
Bill Fairman (50:16):
Financial advisers, fund managers and see if for example, we wanted to invest in somebody else’s fun, they wouldn’t consider us sophisticated unless we had enough money to invest in somebody else’s fund but now apparently we’re sophisticated. T.
Wendy Sweet (50:37):
hat’s right, that’s right. So if you’re a bank teller, probably not. Okay. Gotcha.
Bill Fairman (50:42):
Wendy Sweet (50:42):
Jonathan Davis (50:43):
Well, you’re a real estate agent, you know?
Bill Fairman (50:44):
Well, they’re not,
Jonathan Davis (50:47):
It’s ambiguous, I know.
Bill Fairman (50:47):
It has nothing to do with real estate.
Wendy Sweet (50:50):
Finance, it has to do with finance.
Bill Fairman (50:51):
It has to do with finance.
Wendy Sweet (50:51):
What they know about finance?
Bill Fairman (50:52):
That’s why the CPAs are allowed.
Wendy Sweet (50:54):
Yeah, most real estate agents are.
Bill Fairman (50:54):
That’s financial advice.
Jonathan Davis (50:56):
Most financial people are poor than real estate people.
Wendy Sweet (51:00):
Yeah, you’re right. I’m just, yeah.
Bill Fairman (51:03):
All right. Send your cards and letters to Jonathan Davis.
Jonathan Davis (51:08):
That’s why I chose finance, I’m already poor.
Bill Fairman (51:09):
Wendy Sweet (51:09):
Bill Fairman (51:09):
It’s been a blast.
Wendy Sweet (51:16):
We’ll see you again in a few minutes, right?
Bill Fairman (51:18):
Don’t forget to subscribe, share,
Wendy Sweet (51:20):
It took so long!
Bill Fairman (51:20):
All that stuff. I think she wants out. All right. See you on the next broadcast.
Jonathan Davis (51:25):
Record your second mortgages. Record them.