016 - Language Barriers

Ever thought about the complexities of communicating with borrowers who don't speak your language? In our latest podcast, we take you on an enlightening journey through our experiences of overcoming language barriers using translation apps like Google Translate and Apple Translate. Additionally, we highlight the crucial role bilingual individuals play in facilitating conversations between lenders and investors.

But that's not all we have in store for you. We further delve into an insightful analysis of the current state of the secondary market for non-performing and performing loan pricing. Drawing upon our experiences, we shed light on the effects of pandemic-related forbearance programs, rising interest rates, and the surge in equity in the market. We also have a stimulating discussion on the growing interest in private mortgage origination and seller financing. Lastly, we impart our unique insights into portfolio management and the unexpected surprises that come with loans. So, tune in, and don't forget to bring your questions and topics for us to discuss in future episodes!

About the Host:
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!

Connect with the Host:
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American Note Buyers - https://anbfunds.com/
Monthly Broadcast - https://youtube.com/playlist?list=PLzc944w1xydt5aLDrrEPHJhdJeDkBjjD4

Transcript

Narrator: 0:02

Interested in real estate. How about wealth? Well, they go hand in hand, and here you'll learn all about it. Welcome to Be the Bank, a podcast where we discuss and debate the topics centered around real estate investing. Your host, justin Bogart, shares insights into investing in real estate to create real wealth and passive income for you and your family. He'll share stories of real estate investments done right, walk you through the process of owning a real estate note and, most importantly, educate you so you can Be the Bank. This is Be the Bank brought to you by American Notebuyers. Now here's your host, justin Bogart.

Justin Bogard: 0:46

Welcome to episode number 16 of season five of the Be the Bank podcast brought to you by American Notebuyers. Today we're actually going to be discussing a little bit on how to communicate with borrowers when they don't speak your common language. For example, I speak English and I need to talk to somebody that speaks Spanish. Well, how do you kind of get that translation across to where you can have a good conversation and find out what the needs and wants of the borrower are, or the issues that they have? And then we're also going to talk about current pricing in the performing and non-performing loan space as it pertains to the average every day note investor in our industry. Stay tuned. Hey, richard, welcome. How are you? Thank you, good news, sir. I've done pretty good. Summer is just about over. School is getting ready to start as early as next week as we're recording this broadcast. So it has really flown by this summer.

Richard Thornton: 1:51

Have you had any more of those magnificent rain and thunder and lightning storms that we had when I visited you last? That was kind of fun.

Justin Bogard: 2:01

You know the other—it's funny you asked that because the other night we did it was when I was sleeping and I remember waking up, you know, probably like three or four in the morning, I was obviously in a fog state of mind and I remember there was a bunch of like lightning going on outside and loud rain. But then when I woke up in the morning I thought it was a dream, because everything seemed like to be bright and sunny and no issue—no issue outside. So—but yeah, we did have a pretty bad thunderstorm roll through recently.

Richard Thornton: 2:30

I love those. You know we used to live in DC and for a fair amount of that time we lived in a golf course and so we could sit off the third hole and had a great view of sort of the east. We were slightly west looking to the east, and all the storms would come down from the east. So we'd get lawn chairs and put them out on the front porch and watch the storms come down the hillside and whatnot and see all that thunder and lightning. That was pretty fun, fun for little kids and everything else.

Justin Bogard: 3:07

Yeah, I always like watching the storm stuff. That's kind of cool. If those of you that would like to see the video stream of our podcast, we do this—we film this on our YouTube channel, the American Note Buyer's YouTube channel, so please check us out and subscribe there as well. So today, richard, I started mentioning about communicating with borrowers when they don't speak your language. I believe you speak a little bit of Spanish, but you don't have like a—like a secondary language that you speak fluently. Is that—is that correct? That is correct.

Justin Bogard: 3:37

So I'm not—I'm not sure what you do, but I tend to have quite a bit of Spanish—mainly Spanish—only speaking borrowers recently with some loans that we've bought, especially locally here in the Indianapolis area, and so I find that some of them actually can speak both Spanish and English and read it and write it very well, and some of them, just you know, are just barely—as much as I can speak.

Justin Bogard: 4:02

Spanish is about as much as they can speak English. So there's, like you know, some—it's almost like conflict there, to where I'm trying to ask them something or they're trying to ask me something and it's hard to get across. So at times in the past I've had like somebody that speaks—that's bilingual and would get on a phone call with me and I would say, okay, say this to the borrower, and then they would say it and they would listen to the borrowed response and they would say it back to me in English and we would get through a conversation that way. But I've been using text message a lot because a lot of people just like text messages, and so when I use the Google Translate app from Spanish to English or English to Spanish, I'm able to like copy and paste information in there to kind of get the point across, and it seems to work pretty well.

Richard Thornton: 4:47

So, yeah, I mean, it's a close approximation. Yeah, as you said that I just remembered—it's popped into my mind—a friend of mine a couple years ago. He works in the hotel industry and quite often works behind the front desk. Yeah, yeah, yeah, yeah, yeah, yeah, and he's worked at a very nice hotel in Mexico City and he said you'd be amazed at the number of Americans that come in there and just wanna put an O or an E on the end of the English word and think that it's Spanish, Like, just like. Can I have a Romero, you know? And he says it's just kind of laughable.

Richard Thornton: 5:29

You know what some of these people say sometimes and I think they're speaking sort of. They think it's pigeon Spanish, but it's nowhere even close. But anyway, Google Translate does a far better job in that and also, if you have a Mac, Apple Translate has a very good program. But I tend to use in our travels. I tend to use Google Translate quite a lot and actually got all around the countryside in Vietnam last time I went with Google Translate and cause a lot of people in Vietnam speak nothing but Vietnamese periods. Yeah.

Justin Bogard: 6:07

Yeah, it's amazing how it can take what you wanna say and put it in another language. Now there is, everybody has those specific regions within certain areas of like you know the United States how they talk a little bit different in New York or in Chicago, or you know maybe somewhere else, and you hear different tones and different words that they kind of change and stretch and move. So the Google Translate obviously won't catch all that. So sometimes I have a borrower that speaks mainly Spanish and they speak a different type of Spanish I don't know how to describe it. Maybe it's just a more different region, I guess and so when I put it in Google Translate, it just spits back the same thing to me, cause it's just like throwing up his hands, going like I don't know what this is, but they're using like the same letters.

Justin Bogard: 6:53

So I think when it comes to a text, they do short-handed text words as well in Spanish, to where the translator won't exactly know what it means, cause it's not going to read context right, it's just going to go straight character for character as far as what it does. So if you can get past that, the communication works well. But ultimately I think if you had a true translator that could speak you know the language fluently on both sides. I think that's ultimately the best way to go, but at least the Google Translate can, like you said, it can get you by and get you down the road pretty far.

Richard Thornton: 7:24

It can. You know, last time I was in New York is on the subway and this woman from, who seemingly was from New Jersey, was there with her small child and she, very level with the child, was, you know, bouncing all around the subway and she said, you know, he said careful, I don't want you to break your face. You know, and that was, you know, in typical New Jersey style, a nice way of saying I don't want you to get hurt, darling. I'm not sure how Google Translate would translate break your face, but anyway.

Justin Bogard: 7:57

That's fun. If anybody has any funny translator stories that they've used on some sort of translator app, we'd love for you to write in the comments. You know kind of what that was and we'll probably end up sharing that in our next episode. So we encourage you to do that and go to our American Notepad, our YouTube channel, under episode 16, and you can read your, you can put your comment in there in season five.

Richard Thornton: 8:17

Yeah, you can tell that we're in August here and in the vacation season, right, Because this topic is just not all that heavy, you know? I mean it's nice.

Justin Bogard: 8:30

But yes, speaking of vacations, I went on a fun little vacation not too long ago Actually a week ago from the time we were recording this and we went to Cedar Point, which is an amusement park in Sandusky, ohio. It's an actual point that comes off of Ohio into Lake Erie and it, you know, it points you like in the direction of Canada. Well, on this point they've built a giant amusement park, like, if you walk a loop around the amusement park, it's about a two mile loop. It's huge, wow, okay. And they have tons of roller coasters and they have a water park there too. Well, we went for the roller coasters. So, as me and my daughters, my dad, my sister and two of her kids went as well, and it was kind of fun, we stayed there for a couple of days and got to stay on a hotel like inside the park. So we just got to walk out like right to the gate from the hotel. So it was pretty fun. But, man, we were worn out, richard, when we were done.

Richard Thornton: 9:29

If I remember correctly, you're a real roller coaster, aficionado right.

Justin Bogard: 9:34

Well, I do like to ride them, and my daughters definitely like to ride them, which is great for us as a kind of a tight knit group. But I had my Apple watch on and my phone in my pocket so I could record all the steps and the mileage that it would calculate, and so I believe we averaged about maybe 20,000 steps per day.

Justin Bogard: 9:54

And it came out close to a little bit over nine miles that we were walking in one day. So we did that for two days and so, by the time the second day was done, we were all, just like you know, time out, throwing the towel, going. Man, our feet can't take it anymore. So, yeah, did you lose any weight? Oh yeah, oh yeah. We actually would buy the all day dining plan, past to where you'd wear wristband. You'd pay like I don't know what it was like 40 or $45 for the day and you could eat as many times as you want, as long as it was like 90 minutes apart. So if you're staying at the park for the entire duration, that's open. I mean, that's, that's like a 12 hour stretch, 13 hour stretch, right there. So you could you could eat several meals if you wanted to. Now, I was trying not to eat that much because all they had there was like not healthy stuff, you know, if you can imagine. So it was a lot of a lot of beef, a lot of, you know, greasy, greasy food. So anyways, it was a fun vacation. I like looking forward to doing it again next year, next summer, cool, cool. But that's not. That's another light topic for today.

Justin Bogard: 10:59

Let's get into a more serious note conversation topic today and that is the buzz that I'm hearing and I think that you're hearing as well, because we talked a little bit about this offline is really the pricing when it comes to buying non performing loans or performing loans in our environment. Today. We know that the interest rates have really jumped up, richard, over the past year quite a bit, and I think they're still hovering around 7% today, as, as we're recording this podcast today, and a lot of people continually ask me the questions like how does the mortgage rate, you know, affect pricing? How does it affect your industry as well? And I say it really doesn't affect it. But, richard, maybe what does affect our pricing is really who's holding all the paper and why are they holding on the paper and then, what are they willing to sell it for, for when they want to sell it? And I think that really sets the pricing for our industry as second hand, you know, secondary market note buyers. What do you think?

Richard Thornton: 12:00

Well, what I think is interesting is that the we're experiencing what I would call the tsunami. That wasn't. Everybody was saying, oh gee, we're going to get by this tsunami of non performing paper. Yeah, it didn't come out of the banks because of the pandemic and blah, blah, blah, blah, or it just hasn't happened. You know, there was too many forbearance programs, as a lot of us know. Last time around we did this, rates were high, equity was low. Now guess what? Prices have crept up a little bit, but when most of this stuff hit, the market rates were low and equity was high. So a lot of people were able to refinance and or sell their homes or get their forbearance or whatever. So maybe I'm missing something, but I'm not seeing any huge increase, uptick in non performing paper or even reperforming paper. I mean, yeah, a little bit maybe, but it's kind of like rising tide as opposed to a tsunami.

Justin Bogard: 13:05

Yeah, it's interesting you say that the way that you said that a few minutes ago about the rates were low and the equity was high, well, now the rates are high and the equity is still high. So it's like one part of the equation hasn't changed and the other part has just flipped, as has done the inverse of what it is. So I just think that the prices for the secondary market, which we buy for, aren't going to change a whole lot right now just because of what you just mentioned, and they're all yeah.

Richard Thornton: 13:35

I mean, the way I read it is that rates were low long enough for anybody who was in real pandemic problems to do whatever they needed to do, and so most of them did just that Either they wrote it out, they went out and got another job, they got forbearance or whatever. And yes, rates are higher now. So it is slowing down the new home buyer market and things like that, but it really hasn't impacted us that much in the secondary market and the private market.

Justin Bogard: 14:08

Yeah, so the pricing hasn't really done much to us as far as what we buy it for in the secondary market. It's kind of been the same for the last I don't know, I'd probably say four years at least but the amount of inventory, I think, is starting to change as far as origination inventory on the private mortgage excuse me, the private mortgage market, because I am seeing a lot more chatter on, you know, private Facebook groups, public Facebook groups about people that are kind of lightly experienced real estate investors that are starting to see like, hey, maybe I should originate a note, maybe I should sell my property on seller financing, and they're asking questions like how do people do this? If someone wants to buy this note, what are they looking to buy for? So it's interesting that I'm starting to see that a lot more now.

Richard Thornton: 14:55

Right.

Justin Bogard: 14:55

Are you seeing the same thing?

Richard Thornton: 14:57

Yeah, I am, and what I've I mean. If you think about it, that makes complete sense because even though rates are or not rates, I'm sorry prices are down a little bit from what we have had. We're still at historic highs. So maybe somebody could have gotten $150,000 for their house and now they can only get 130. I don't know what. We know pick a number, but it's still so much higher than they ever thought they were going to get and they're saying gosh, this is one of the best times for me to create a note, because I do have more equity, I can sell it for a higher price, I can get a bigger down payment. It's a safer transaction. I'd like to have the money, so let's do that. So it just makes a lot of sense that we'd start seeing increase in volume.

Justin Bogard: 15:48

Now the question is education. So how much education do we have out in the marketplace for novice seller finance years to make good decisions on having secure documentation, making the right decisions to protect the borrower and the lender itself, and for the secondary lender that may come in and end up buying this paper?

Richard Thornton: 16:11

Not enough. But you know what, probably quite soon we can go to chat GTP and say write me a seller finance note that covers all of the important factors. And it will do that.

Justin Bogard: 16:24

Have you done that? Have you typed in that exact phrase?

Richard Thornton: 16:27

I have not, but what I have done is something similar to that and on other subjects.

Justin Bogard: 16:35

Yeah.

Richard Thornton: 16:36

And I've been amazed at how good it is really. Every once in a while you hit a boner and you go oh, now that's just too general, but there's been several instances where I've done things like that and it's remarkable how good it is, especially if you can use chat GTP for as opposed to three and a half.

Justin Bogard: 16:57

Yeah, I've used it a couple of times to help write some marketing or sales things and it gets you where you need to go, like on the highway. You just got to pick the lane you want to be in, as far as, if you want to be more persuasive, you want to be more professional or funny or sarcastic, it's pretty interesting how it can change its tone pretty quickly on how you want the message to be delivered, but it doesn't give you the exact thing you want. It gets you like, I think, what you said 95%. There You're really close.

Richard Thornton: 17:26

Yeah, and I must admit, whoever the programmers are for all this, they've put a little bit of humor into it too, which I kind of like. So I'd say something like write me a mortgage note. And the response I get is well, certainly I'd be happy to write that for you. You get this note and you're going oh OK, that's fine.

Justin Bogard: 17:54

We have talked about that before JetGDP and it's kind of amazing how what it does, and I'm sure we're going to look back a year later from now and be like, oh my gosh, it's so different than what it was as we're talking today, as far as perfecting it and having it do a better job of understanding what you're trying to say and what you're trying to accomplish, but it's definitely something you should look into if you haven't done that already.

Richard Thornton: 18:19

Those of you that are listening to us here yeah, it's something that it's worth keeping ahead of and figuring out, because, on the one hand, a lot of people are saying it's going to eliminate a lot of jobs. I really think it is going to eliminate a lot of jobs, but I think the creation of the automobile put a lot of horse and bugger carriers and makers out of business too. So I think we will morph into something. This is going to be a huge morph, and it will affect our industry as well as everybody else's.

Justin Bogard: 18:55

I think in a short term it could replace a lot of jobs. But it's just like anything else that a computer does that ends up replacing somebody's job, there always has to be somebody that designs it and perfects it and understands it and programs it on the back end. So I think as many jobs that you end up losing short term, it creates longer term jobs on the back end of it as well and it just requires us as users up front just to be more educated as far as going after you know employment and getting just the proper education on understanding like this is a niche that you need to go after. Like we're always short on nurses and doctors right, and hospitals, so it's like there's always a need for people to go down that industry to, you know, fill those jobs for everybody.

Richard Thornton: 19:39

So yeah, I think it will morph. It's just morphing more quickly than we're used to in the past.

Justin Bogard: 19:45

I think so. Yeah, I think this day and age I think you're right Now do they have an app on your phone? Do you know that you can do it on your phone? So I've just used it on the desktop before.

Richard Thornton: 19:54

That's a good question. I know I'm sure you could use it. They don't have an app, or they may have an app. I don't think they do, but you can use it. I just use it through Google on my desktop, so you can certainly do that in your phone.

Justin Bogard: 20:06

Interesting. All right, have you had anything else interesting happen to you this past week or two that I haven't heard from you already?

Richard Thornton: 20:15

Not in the notes space, not really For those of you who were. I can't remember what program we did it on, but I was discussing last time that there are two warrants for my arrest.

Justin Bogard: 20:35

Oh yeah, Right now.

Richard Thornton: 20:37

And it's because I have a property in St Louis. They set two court dates for the recloser proceedings and since I hold the land contract, I'm technically the owner, or my company is, and I didn't make my court appearances because they were sent to their long address. They were sent to an old address. So I'm actually going to go to virtual court tomorrow and find out how to resolve all that. So I can. For those of you who are curious about all that, ia didn't even know that could happen, but I'm sure it can be resolved fairly easily.

Justin Bogard: 21:16

Yeah, I think so too.

Richard Thornton: 21:19

But at this point it's fairly humorous. It may cost me a little bit of money to unwind.

Justin Bogard: 21:24

Keep us posted, richard. Hopefully by those records the next one we'll have an answer.

Richard Thornton: 21:29

Oh, I may be sitting here in a suit that's got little stripes across it or something.

Justin Bogard: 21:33

An orange jumpsuit. I think they wear the black and white horizontal stripes anymore.

Richard Thornton: 21:40

No, I'm dating myself.

Justin Bogard: 21:42

There you go Right Another topic portfolio management. So just to kind of step into what it's like to be a portfolio manager.

Richard Thornton: 21:56

There, what's going on for the fund for you?

Justin Bogard: 21:58

The dynamics of a fund or just a large portfolio in general is quite humorous. You obviously hope to have everybody on the positive direction and everything going great because you know you're obviously making the most money you can. But you always have a few loans in a portfolio that you know aren't going the way that you want and may kind of drag some things down. But it's funny you have polar opposites, richard to where you have some loans that are just paying ahead and paying early and eager to get the loan matured and paid off, and you have other loans that get, you know, two or three months behind and they kind of drag a little bit. So those two kind of offset each other and everything else just kind of lands in the sweet spot in the middle to where they're. Just you know they're on time or they're just a little bit late and it's just really cool to see that in the portfolio in general.

Justin Bogard: 22:46

So it just goes to show when we talked about this before I think we talked about this on a special webinar we had to where it's much better to own a large, vast amount of notes, as it is to own one, because you want the one note to be paying really well and to go really well for you, instead of the one that's dragging you down. Because if you have, you know, a bunch of loans, if one of them goes down or a couple of them go down and slow you down, it's like it doesn't really pull down the entire portfolio. You don't really see a lot of effect from it. So we have good balance in our portfolio is what I'm saying and that's what's nice to see as a portfolio manager.

Richard Thornton: 23:22

Yeah, and I think there's a lot of surprises. Hopefully most of them are for the good. But you know, there's our loan, like our what we call our sister's loan, which is basically we got out of. It just got because there was dispute between two sisters and there was non payments and now there's a lot of payments and it turns out it's going to be sold and been a very profitable deal.

Justin Bogard: 23:47

Yes, some of the some of the more interesting deals turned out to be the more profitable deals, because all we do is just listen and we we try, we try to fix by just helping the borrower and putting the borrower's needs before ours, and they end up coming back to us and end up making the most profitable loans for us. So it's, we're pretty happy with those, definitely Right. All right, richard, that's about all the time we have for today. Thanks again for being on our podcast episode number 16, season five of the be the bank podcast brought to you by American Notebuyers. Don't forget to check out our YouTube channel, american Notebuyers, and we will see you on the next episode.

Richard Thornton: 24:26

Yeah, if anybody has any topics that would like us to address, to please, you know, drop an email to either Justin or me or text, and we'll be glad to put it on the show info at a and b funds dot com.

Justin Bogard: 24:40

till next time, see you.

Richard Thornton: 24:41

Okay, see you.

Narrator: 24:47

Thanks for listening to be the bank. We hope you learned something from today's show. If you enjoyed this episode, please rate and review us. Plus, check out our channel on YouTube and follow us on Facebook and Twitter at be the bank, and on Instagram at be the bank podcast. Be the bank is sponsored by American Notebuyers. Thanks again for listening.