Be The Bank
Be The Bank
001 - Read The Tea Leaves
Our conversation with Chris Seveney takes you through the labyrinth of commercial loans, where we reveal how investors can turn the challenges of balloon mortgages and rising interest rates into opportunities. Discover the intricacies of cap rates and their effects on property values, and get a firsthand account of strategies that can pivot your investments toward success, even when the market takes an unexpected turn.
Venture with us as we dissect the complexities of converting office buildings into residential havens, a process fraught with economic and structural hurdles, yet ripe with creative potential for the astute investor. We'll also shine a light on the tumultuous tech industry, sharing the growth journey of 7E Investments and how they navigated the storm to emerge stronger. Our personal successes and strategies culminate in this insightful episode, offering you not just a glimpse, but a clear pathway to achieving your own real estate and entrepreneurial aspirations.
Resources and links discussed:
- Videocast on our YouTube Channel
- ANB Funds Website - https://anbfunds.com
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:
Facebook - bethebank
Twitter - bethebank1
Instagram - bethebankpodcast
American Note Buyers - https://anbfunds.com/
Monthly Broadcast - https://youtube.com/playlist?list=PLzc944w1xydt5aLDrrEPHJhdJeDkBjjD4
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 Bogard, 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, take 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 Bogard.
Justin Bogard:Hey, hey, welcome back listeners. This is Justin Bogard here on the Be the Bank podcast, season number six. This is the first episode in 2024 for season six. Today I have a guest, my friend, mr Chris Seveny, founder of SevenE Investments, and we're going to be talking about kind of commercial loans. It's kind of a subject matter that Richard and I really hadn't got a chance to talk a whole lot about this year. Chris can bring some valuable insight to this and we're just going to discuss kind of what's going on there and what opportunities are you going to see, and just have a little fun, little conversation. So stay tuned. Happy New Year, my friend. Happy New Year.
Chris Seveney:How are you today?
Justin Bogard:I'm doing pretty well. It's been kind of cloudy here in Indianapolis and so the last few days have been just kind of like depressing. I hate to start off the podcast that way, but I'm just going to be honest. It's just been kind of gloomy and yucky out.
Chris Seveney:We've gotten cold. It hasn't been too gloomy, you know we're over here in the Northern Virginia area but getting colder it's a nice balmy 42 here today.
Justin Bogard:But yeah, I'll tell you what I live like on the third floor and so I have a lot of windows and so when the sun comes out on the cooler days, like these 30-degree days and stuff, it's like I'm going to turn on my heat because everything resonates from the bottom up. So it's kind of nice. I actually kind of like enjoy the winter because I don't have to pay as much electricity.
Chris Seveney:Yeah, I joke when you know my team who's out in Southern California. You know joke about being 70 degrees there. I'm like it's 72 in my house every day. So, hey, I'm at 72 every day. You know, we built our house, we spray foam insulated it, so we only did it. So it's pretty tight and thankfully we, you know, don't have a 100-year-old house. That basically lets all the heat out where our electric bills are not too bad.
Justin Bogard:I love the character of old, like colonial houses and stuff built in like the late 1800s or late 1800s. But, man, I don't want to live there anymore because, I agree with you, it's so inefficient, so inefficient.
Chris Seveney:Yeah, when I was up in Massachusetts I'll share this one story before we get to going. Same thing I love historic homes. Yeah, I love the house that was built in. I think it was like 1789. This was in the early 2000s. This house was awesome. Eight fireplaces, I mean. One of them was just humongous. I couldn't buy it, though, because I was getting sick because the floors were so unlevel that, like I was like almost like in a I don't know it just screwed with my perception of things. Okay, my house was just so awesome and I loved it, but I'm like I couldn't live in this thing because, like I feel like I'm like walking up and down hills because you know the foundation, you know it's, of course, settled over time old fuel, stone foundations and wide pine floors and everything but oh, it was awesome house, but yeah, so it's the oldest house that I've ever considered.
Justin Bogard:I never seen a house that had, you know, an established built date back that far. So Indianapolis has a lot of late 1800, early 1900s homes and then a lot of 1950 style, craftsman style homes that are just all over. You know the blue color parts of Indianapolis. So, but anyways, man, we're not here to talk about our stuff, we're here to bring up, you know being the bank talking about loans, specifically commercial real estate loans. So over the past year I've noticed you've probably noticed more that a lot of people are talking about.
Justin Bogard:Hey, you know, watch out, because things are changing in this climate as far as a lot of these office buildings that are that have mortgages on them. You know strip malls and things like that that people got loans on early or pre COVID. Those are being called due because, for the listener, as you may not know, when a commercial loan gets created, you don't necessarily have like a 30 year mortgage with 30 years with the payments. You have a balloon with an amortization of, you know, 20 or 30 years on it and that balloon Chris correct me if I'm wrong can be anywhere from usually like commonly, probably like three to three to eight years.
Chris Seveney:Yep, typically so short term, you know, anywhere. So some will even go a year, which now back in the day wasn't too much of an issue. But typically the ones you'll see are between the three and seven.
Justin Bogard:And so now, if they're being called due, they are in a bad environment to refinance that loan because interest rates have obviously gone up. Uh, I would say probably 2.5%, 3% pretty easily, since they got those loans originally.
Chris Seveney:Yeah, yep, and that's part of challenge. And when people look at that commercial side, which will dive into deeper, is that interest rate risk that they play. They play off of because you know your cap rate, which is how the loans are. You know, I'll say it's the valuation method. It's not the end, all be all. Yeah, but the way they're valued is based off of cap rates. And what's happened is you know the cap rate previously was, let's say, 5%, and you know your borrowing rate was at 3%. So borrow money at 3%, the gain 5% is, you know, arbitraging. Where it works Today, interest rates might be, you know, at the you know, 6%, 7%, but the cap rates are also at that or slightly, even if they are lower. So to borrow money is actually hurting you because it's like I think we're taking a home equity line of credit. If I took a home equity line of credit out at 7%, then best in a treasury of 5%, would you do that or she wouldn't.
Justin Bogard:Right, right, this makes sense. I owe you 2% what I don't like that deal. Yeah, no one likes that deal. So that's the quandary that they're in and I've I've heard more that the office, like the downtown office space type of type of loans are ones that are getting hit the hardest. Have you heard the same thing or are you seeing something different?
Chris Seveney:So there was during the break. There was a statistic or a chart that just came out. I saw on LinkedIn that the number of distressed multifamily loans is now greater than office. So both situations in reality are not in a good place, and part of that also is it's not only the loans that are in default, but the loans that are in default. Let's say I had a multifamily building or an office building, doesn't matter that. Let's say I had a floating rate that was coming due and you have a loan that, hey, you've got. You're smart, you got the fixed rate, five years, whatever the case may be.
Chris Seveney:Now what's happened to you know, I'm basically in trouble. I'm probably going to lose my property, so I'm going to get foreclosed on which is going to sell at a discount. Now you're building that's four blocks away, just like appraisals happen, so forth. What's going to happen to your building, even though you're still doing well and so forth? Your building's going to be devalued as well. Yeah, it's coming down. Yeah, and that's what's happening is even to the ones that are doing well. You got to remember a lot of these are in syndications that one investor went and raised a bunch of money from people and was like hey, I'm going to sell this thing in five years and my loan is for seven, so it gives me some play. But that five years has come up and guess what? They can't sell because they're cap rate, even though they're okay on that debt service to pay the loan. That cap rate has increased so now they're going to take a significant hit and on average every 1% is about 15% of value of a property, roughly to give you a ballpark idea.
Justin Bogard:Wow, that's a big hit, yeah. So I'm not sure when a lot of this is going to come to fruition. I'm guessing it's going to be more like a longer waterfall, from starting probably last year and probably go out another two or three years that we're probably going to see, depending on if the rates actually come down a lot, which I don't think they will. So I can see this being opportunity for people that have funds that are ready to pounce on those opportunities to turn those real estate, commercial buildings or what have your multifamily, large multifamily buildings into some good opportunity where they can get some good buys, because I can see some of those owners just handing back the keys to the bank and be like it's not even, I can't even try. I can't even try to sell it.
Chris Seveney:Yeah, and the reality is anyone that knows when it's going to happen or how long they don't? The reality is there's so many, you know, impacts that affect, you know, the housing, the interest rates and everything else. Everyone can assume, everyone can guess. Everyone's like, oh, there's election year, so this is gonna happen. First, that's gonna happen. You know, nobody knows. I mean we, you know, you've had, you know, a pandemic, we've had, you know, wars going on that have impacted things. So I think people can read the tea leaves on things, and even people reading the tea leaves, I'm think everything's gonna be hunky dory, fine. Others are like and not so much. You can be in either camp. The reality is, no, nobody knows. But you can just look at data and say, hey, there's this percent of commercial debt that is coming do and this much is underwater. Oh, you know, what's gonna happen with that debt is really what's gonna. And those properties is gonna be the million dollar question.
Justin Bogard:Yeah, I like how you brought that up, because you're and I agree exactly what you're saying it's so hard to really have a good prediction as to what's going on far out. It's more or less like you said you guys gotta understand the data and see what the trend is and make sure that you make a direction change, if you need to, as quick as you can, because so many people have been wrong that have been experts at I. You know that I respect and look out to, but you know they're really just guessing off of past experience and, unfortunately, past experience. This is new territory for everybody. I think there's a cycle like this.
Justin Bogard:The last five or six years, because of things like you said, you know we had a pandemic. That was just. You know, nobody was expecting that obviously. Then you had a couple wars and supply chain issues Because of all that just a trickle down effect and had a super bullish market in real estate for so long since the great recession. We kind of knew there was gonna be a correction, but we didn't know how correction was gonna happen or when. But it's kind of it's kind of like it kind of started correcting. I feel like the market has started to correct as far as real estate.
Chris Seveney:It has, and you know you mentioned interest rates as part of that. I think the Fed, you know they forecast out where they anticipate you know the fed rate to be. I think next year they expected to be at like 4.5 or 4.75. Which I think today is what fought between five and a quarter and five and a half.
Justin Bogard:Yeah, I'm not sure what's that, but yeah, that's alright, yeah.
Chris Seveney:And people like, well, technically the Fed rate doesn't impact mortgage rates, but it kind of does and it doesn't. You know, the last time and again you can go back in 2005, I think the Fed rate was at like 4.75, and where were interest rates? Now they're about a point to a point and a half higher, which is typically where they are. But again, they're based on ten year treasury and you know we not gonna go down that deep dive, yeah. But I think the people who are sitting there like, oh, I think interest rates are gonna go back down to like two and a half or three, well, if they do just realize that the economy is in a world of hurt if it gets down to that level, you know the feds are not going.
Chris Seveney:You know they're trying to control inflation and part of that is, you know, the cost of goods and certain cost of services. So they're trying to increase unemployment back up to four and a half percent or wherever it is. And then, you know, trying to decrease that cost of goods, they're not. If the economy is doing well, they're not gonna drop it back down the two percent or again, because we're just gonna take off again. They're trying to control it. And if it does shoot down to like two and a half percent, just realize that everything else is probably also probably in a deflationary period. And again I'm guessing, but yeah, now, based off of common sense. In that point of view, you know, the only reason they're gonna go really low is if it's going to be a hard landing.
Justin Bogard:Yeah, I can't imagine an environment anytime soon that it would get down that low. But then again, you know who are we to try to predict what's happening, because there's just too many unknowns that happen in the future that we just don't know about. But yeah, what? What when these commercial loans like this is something that I don't know if your fund is preparing for these opportunities with not performing commercials, but we're trying to prepare for it and we're trying to come up with strategies and ways to think like, okay, when we get these opportunities in front of us that we can get these not performing loans or maybe they just become REOs pretty quickly and we can buy these things for a really good discount, what are we gonna turn these into? What are we gonna do with it after that?
Chris Seveney:Great question and it really is going to be dependent, I think, on the asset itself, for example, office. I come from commercial background and converting a office building into residential is usually not economically viable, and I'll explain quickly why. Office building is usually a square box and you got to get light into, you know, those areas. To have a bedroom, it needs to have a window. Well, unless you're making it a donut and cutting a hole down the middle, then you have to realize that an office building does not have adequate water and sewer supply, as a residential does not have enough power. For a residential it just doesn't make sense.
Chris Seveney:Now, a few things that people can do is A you know try and you know whether it's office or residential. You know try and rework it or upgrade it. But you know some other options besides just buying that defaulted debt is if you can get out early enough on it, you know, can you provide rescue funding. So let's say I need a million dollars, that I'm short to do a loan extension or a modification where the bank says, hey, we'll modify this or refinance it, but you got to come up with two million dollars or a million dollars. Well, let's say I need two million dollars. If I go to you, justin, say I really need two million dollars, well, you kind of have the upper hand on that and say, okay, if the value of the property is 10, I'll give you two million, but I want 30% of the equity.
Justin Bogard:Yeah, an equity play. I was thinking you were going to get there, yeah.
Chris Seveney:So that's another option that you can have in regards to some of these assets. And when people look at, real estate is very cyclical and people who, if you can hold for the longer period, you know long haul you typically win. So let's say, you do buy an office building, that okay, I have a 10-year horizon. So eventually I suspect you know this will come back in 10 years. You know, unless it's out in the boondocks and just like really random you know I've seen people do is turn that into self-storage. You know as well. So things you can do, but over a period of time, more than likely it's going to be a wave where you know you might be under water for a period of time but hopefully you can come back up and ride that wave as time moves on.
Justin Bogard:Yeah, when you brought up the architectural part of taking real estate commercial real estate and converting it from, like, an office space to residential, there was an article I read I think I posted about this online where there was a big New York landlord that is doing that, who wants to turn his building into luxury apartments. Because they can see a lot of these, you know, autonomous vehicles being able to pull up, kind of like. You know, I picture this at Disney World where the train runs through the hotel. Yeah, Like I can picture these short-term taxi rides that are made coming up, you know, through the resident building for people just to be able to travel wherever they want and not actually have to go outside. So like I can see that sort of thing happening. Yeah, you're right, if you don't figure out how to use the space that's in the middle of the building, you know very well it's going to be very difficult for all the plumbing and HVAC and you know well much more Elevators If you need more elevators.
Chris Seveney:Yeah, it's a. Yeah, it's a, I've done it. You know I did a project. Actually I've done. The last one I did was a project in Alexandria, virginia, called the Ornoco. We turned it to high-end condos and this building was C-shaped. We still had a lot of demo involved in the project, but it was suitable. Well, somewhat suitable. We actually, in this building, had to take where the concrete slab and we had to raise every floor by six inches to meet handicap accessibility, wow. So we basically had to build it up on two by sixes across. And let's see it was. It was at 60 units, 60 condo units averaging about 2,000 square feet. So I mean, it was a major, major renovation. You know, renovation and a lot of work to do, yeah, but we've looked at others, like especially in downtown DC, and it's just the numbers. You know, typically they just don't work, fortunately.
Justin Bogard:Yeah, so you're. When you did that stuff were you? Were you based out of DC? Yeah, Like in the Washington DC area.
Chris Seveney:Yeah, I was working for a local real estate developer that was doing it and you know they were. They got very creative because everyone else was looking at this ugly office building that literally was on the water. There was a park in between that and the Potomac River. So where it made sense is you could get a premium for those units where you know the top unit sold for about $1,800 a square foot. They give you an idea, for you know what the unit sold for. They sold for anywhere from 1,000 to 1,800 square foot, and this was back in 2014. So which, at the time, I think the high in the market in the city was close to like 900. So they were really pushing the envelope on doing it and the only way they made the numbers work is because they could get such a premium price for those units.
Justin Bogard:Is the DC area pretty pricey and lease or rent payments for commercial stuff compared to other major cities in the US?
Chris Seveney:Oh, it's, you know there's what's called K Street, which is where all the attorneys and law firms are. Yeah, so DC is astronomical. On housing and on office Rentals are, I think one of the last time I checked where it was a little over, I think $5 a square foot for an apartment. If you have thousands of square foot apartment, pay about $5 grand. Wow, I want to say office space, depending on location, is anywhere from like 40 to 90 square foot. Yeah, it's because, again, look who's in DC. You have the federal government, all the lobbyists. Yeah, Everybody wants to be as close as possible.
Justin Bogard:Yeah, no, that makes sense it. Just when you were talking about that I was like, yeah, I think because you hadn't mentioned that to me before how expensive it was and I've never lived there so I never knew. I think Richard spent some time there so he had told me it was expensive too. But you know I have no. I live in good old. You know the crossroads of Indiana here, so that it's a lot different. Mark, there's not a lot of companies that want to be out here.
Chris Seveney:Yeah, it's different, but it's also again, it's going to be expensive. And the other component to it where it's going to cost you is you know how many companies are experienced in how to do it. You know perfect example is Up in Boston, for example, most buildings are built with steel construction. Down in DC, most buildings are concrete. Okay, I want to build a building in DC and I want to build it out of steel. In Boston it's cheaper because everyone does steel. In DC it's more expensive because everyone does concrete. You have less competition. So when you think about oh, I want to go do this, well, I got to hire a contractor. If they know there's not a lot competition, I'm the only one who can go do this type of work. And of course, they're gonna charge a premium also to you know to do that work, especially if they're busy.
Justin Bogard:Switching gear slightly, so I read a couple articles recently that I didn't pay attention to until I started reading some headlines more and more, and it was about Bank jobs that have been cut in 2023. I think it was something over 60,000 jobs with the the major banks that have been that they have cut jobs. So do you think that's a telltale sign of the banks are having having some issues with With their profitability?
Chris Seveney:Yes. So I would look at banks and people realize too you know banks, especially on the commercial side, banks are a primary lender, but even on the residential there's a lot of other non-bank traditional lenders and how much they're cutting Staff and actually going out of business or closing shop. So you're seeing a significant decrease in Jobs and a the mortgage industry, because who's getting loans? And then, like you said, people look at the residential side of things and say, oh, not a lot of homes or transactions. That's happening on commercial and multifamily as well. There's a bid-ask spread of the seller needs this much and the buyer only Wants to give this. Much is the same, especially in this interest rate environment. But it's a tug of war where there's not a lot of transactions happening. Well, yeah, think about how many people are tied to a transaction. You have bank the one, you know how many people with the bat at that lender bank the title company and so forth and so on. There's a lot of people involved and you're seeing those Aspects or those areas cutting a lot of jobs.
Justin Bogard:I In that same article that I read and I think I read this a few days ago I thought I read there was over a quarter of a million tech jobs lost in 2023 as well.
Chris Seveney:Yeah, you know that, yeah, the tech industry. Have a family member who's in tech and actually they were in the mortgage tech and the company they were with literally just shut down Because they were doing a lot of the lines of credit that were like no appraisal. They do kind of like online. Those companies, you know, basically are just dead in the water today. But you know, people look at, okay, facebook, amazon, tesla, google, like the big three or five I think somebody mentioned to me like big three or five tech companies are the only ones that made money last year. You know everyone else in tech and I follow a woman online who raises money for venture capital, which is all in the tech space and it was a statistic. It was. I don't remember the numbers, but the number of tech failures last year and a number of companies that have just shuttered is like in the thousands because of, you know, not being able to raise money and just the interest rates. So the tech is also really taking a beating.
Justin Bogard:Do you, do you correlate some of that with the fact that so many tech companies started up during the COVID time period? Or maybe we had an inflation and big influx of tech companies and now we've kind of reduced the fat a little bit of, you know, non-essential ones?
Chris Seveney:I think there's two pieces. That one is, yes, during the COVID, but also, you got to remember, the government printed I don't even know how many trillions of dollars at very low interest rates. Yeah, so a lot of companies were like, hey, I'm just going to, I have this money now I'm going to go invest it in all these startups and all these areas. And now you're seeing those companies being a lot more selective and where they're investing.
Justin Bogard:Yeah.
Chris Seveney:You know, three, four years ago, vc had money flowing in like there was no tomorrow. Now you look at it and they have completely dried up, and a good example is that I'll use is like look at those NFTs, those non-fungible tokens. I mean those. Basically, people were starting companies or right nose things, and they were selling for thousands or tens of thousands of dollars for just a piece of digital art that really had no value. Now what's happened to them? They're like baseball cards, they're basically worthless, and so, yeah, I'll use that as a similar scenario.
Justin Bogard:Funny image in baseball cards. My dad and I happened to look at some of our some of our full, full set of tops baseball cards from like the mid 80s and stuff and we were reminiscing about it and we were just twining around and looking at the values and stuff and you're right, the values aren't anything astronomical like you would think. You know, with 30, 30 to 40 year old, you know baseball cards. That's just kind of funny how you brought that up compared to NFTs. So what is going on with 70 investments? I've, obviously I follow you. You're my friend, yep, and I get to talk to you. You know, at least once a month we get to talk, if not more, and so I know that you have definitely grown a lot this year as far as the expansion of people that work with you guys and growing your fund and all the you know the asset management part of what you do. So what? What has this 2023 been like for 70 investments?
Chris Seveney:So you know, 2023, a lot of people will look back at 2023 and be like, oh man, what a hard year, difficult year. And you know, I thought the same thing and then I started. You know, I read the book over break the gap in the game Great book, by the way where it really tells you a focus on everything you gained. And you know, we went from, at the beginning of 2023, from a $5 million company to over a $20 million company at the end of the year. We have over 500 investors within our fund. So we are continuing to grow and, you know, raise money to invest in performing and non-performing defaulted paper. And you know we're looking at 2024 is another good year.
Chris Seveney:And you know, last year in the space, there was a lot of pivots. You know, early on in the year, you know we were at a point where, oh, we're trying to buy loans early on and it was difficult. And then, towards the summer and the end of the year now, all of a sudden, it's like, wow, we've got all these loan deals coming in and it's trying to raise money to fund those deals. So, overall, I look at it, as you know, being a successful year. Of course, there's other things you'd like to look and do better.
Chris Seveney:Interestingly enough, I'll share this with you because I was doing a, you know, a recording for some people in one of my membership groups about, you know, setting a one year and three year goal, and I was using the template from 2020, actually, and that I had put together for my own personal goals and had a three year goal where I wanted to be at the end of 2023.
Chris Seveney:And it was, you know, having bought over 750 notes, which I think I'm pretty, I think I'm there, I doubled the amount of money that I've raised. But the big thing, or my big, hairy, audacious goal, was I wanted to leave my W2 to work full time and run my own company, which, fortunately, I was able to do that in 2022. So it was a year early and it was interesting because I didn't even notice I had, I forgot I had this actually, and I went back and pulled it out and it's kind of like dusted off. I'm like wow, actually like check the box on some of these things. So that was very I don't think it made me feel very good. That's his best way.
Justin Bogard:Well, you should. It's in a lot of people. I don't think they knew the people that know you in the space. They might not have known that you still had a W2 job because it seemed like you were so fully active in the real estate space and I actually had forgotten that you still had a full time job till you told me when you did finally quit the W2 job. But it's just, it is impressive how much you're able to have system and processes and all these efficiencies to help you grow to where you are today. So congratulations, and that's awesome to see how you guys went from. It seemed like this year was a very powerful year for you, at least noticing it, at least from an online perspective. It was always that way the whole time and I just didn't notice it, but definitely noticed it this year.
Chris Seveney:Yeah, and I think part of it is. You know, within the space, a lot of people come and go and a lot of people will chase the shiny objects. For us, you know I'm a big top gun, you know movie buff. You know never leave your wingman type. And you know that's how I look at your investment strategy is, you know, you just got to harness and focus on that strategy because I've seen people who've gone out there and you know they chase. They went from one to chase the short term rentals. They've chased all these other asset classes and it's okay to diversify, but when you do a, you know a huge shift from one to the other. You know it's a big uplifting and understanding what it's going to take. Most people underestimate that and that's where I've seen a lot of people fail is because they underestimated that and they left what they're good at. You know, and for us, we just want to be. I'd rather be the best at one or two things than be average at five things.
Justin Bogard:I fully agree with what you said and I've seen it too, with people coming and going pretty quickly and you hit the nail on the head, and my opinion as well is that they don't realize how much work it is. It's not passive to run a business. It's not supposed to be passive, right, unless you are having people run it for you. But when you're the owner operator, it's not passive, it is active and it's hard work, just like anything else.
Chris Seveney:Yeah, and the other thing I'll just mention to that is, you know, having the, you know looking ahead and being able to. You know, one of the things that we do a lot of is, you know, if this than that type of situations okay, if this happens, how does it impact our business, our market, our profile and that's where having been in real estate for a few years for me goes shows that experience comes into play understanding that. You know, when government was printing all this money, I was wrong that I thought home prices would drop dramatically. Yeah, I was right that interest rates were gonna shoot up and but now that, how did that have its impact on things?
Chris Seveney:People are seeing it today where, for example, I know a note investing company that they have bank lines of credit and they were Originating commercial loans at, you know, 8% because they were dead. Was it 5%? But their 5% was floating. They're lending at a fixed rate. Yeah, now that their floating debt is now at 11 and they're getting 8%, they're like, oh, now what do we do? So? And they can't sell the loans or they'll sell them at a loss. So they've got their hands tied. So for people, no matter what you invest in now play out every single scenario in your head, even though, even if it Doesn't happen, if it could happen, play it out and how are you prepared? Or what are some of the steps, and you don't need the full-blown plan. But if it happens, it's like okay, here's what I would need to do, or here's how I need to be defensive with my business, because it can take a company down, and I've seen it Happen, so you just need to be careful.
Justin Bogard:Yeah, you're right, it's, it's scary, and thanks. Thanks for mentioning all that. Dude, we are out of time for today, so thank you for being on the first episode of season 6 on the be the bank podcast. I'm Justin Bogard, my friend here, chris 70, founder of 7e investments. What, what's your website? Is it 70 investments, calm.
Chris Seveney:Yep, the number 7, the letter e investments calm cool.
Justin Bogard:Check him out. Check out. It's fun. Check out. They do have a podcast and they have a group of people that they that they do webinars to. If you want to be part of that group, you can reach out to them and you can. I'm sure you can find all the information on your website.
Chris Seveney:Yep. Everything's on the website cool.
Justin Bogard:All right, brother. Well, it's good to see, is good talking with you, and I will see the rest. You guys on episode number two, don't forget to check out the video stream of this on our YouTube channel, the American note buyers YouTube channel. Until then, I'll see you guys later. See you, chris. Thank you.
Narrator: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 note buyers. Thanks again for listening you.
