The Jason Theory
Jason Stratton of KlopasStratton Team, a top 20 team in the nation with over 1.2 billion sold , sits down with weekly guests to talk about becoming successful, the real estate market, and crazy stories/people we run into. Visit www.klopasstratton.com to see more!
The Jason Theory
S3 E9 - Securing Millennial Retirement: Chris Delaney on Financial Planning and Reverse Mortgages
Unlock the secrets to a financially secure retirement with Chris Delaney, co-founder of Reside Mortgage Brokerage, as we explore the crucial role reverse mortgages could play in the future of millennials. With Social Security’s future hanging in the balance and a lack of retirement savings looming large, Chris shares invaluable insights from his journey from Molitor Financial to establishing his own successful mortgage company. Learn about the unique challenges and advantages faced by millennials and how strategic financial planning can pave the way for a secure retirement.
Get an inside look at the growth strategies that have propelled Reside to success. Chris discusses why keeping the team small and focusing on collective growth has been key, and how self-accountability among partners ensures high performance. With a direct, no-nonsense approach to managing employee performance, Chris also sheds light on how the current economic conditions—federal rate cuts, government interventions, and market liquidity—are shaping their strategies.
Navigate the complexities of real estate development and the financial landscape with Chris’s expert guidance. From the hurdles of permit processes in different regions to the significant impact of insurance costs in storm-prone areas, Chris provides a thorough analysis. Discover the benefits and challenges of using HELOCs versus refinancing, and gain a deeper understanding of economic policies, unemployment rates, and the financial intricacies of entrepreneurship. This episode is packed with actionable advice and eye-opening discussions that will leave you better prepared for the financial future.
But the millennial retirement plan will be the reverse mortgage. Yeah, I mean for most people my age. Where are you going to? A lot of people don't have retirement savings and things like that.
Speaker 2:So if you own a home. It's almost like having a whole life insurance where you borrow back from them. Yeah.
Speaker 1:I mean, I think that very well could be. The retirement plan for a lot of millennials is a reverse mortgage, assuming it's still around or assuming we're still here.
Speaker 2:It's not going to be Social Security. Yeah, because there's no money left in that.
Speaker 1:I mean, I don't even you know, especially you know that's fixed incomes. That's where you're hurt the most when it comes to inflation.
Speaker 2:What's the five P's? Do you remember it?
Speaker 1:Proper preparation prevents poor performance.
Speaker 2:There you go. It doesn't matter how much money we get, if we don't close it's no money, right? So no, close is no money. I'm everything that I am because of my dad's death, and I wouldn't be as successful without his death. All right, welcome to the Jason Theory. We have a returning guest with a new shirt on. Look at that. Look at that.
Speaker 1:Chris Delaney New shirt, new side.
Speaker 2:Home loans new company Same beard. Yeah, Maybe a little bit of a trim in the hair.
Speaker 1:You know, I usually get a couple inches off, and she just went wild.
Speaker 2:Yeah, it is short. That's what it is. No more, eddie Vedder. It'll come back. First and foremost, congratulations on the company. Talk to us about that.
Speaker 1:Yeah, so I started this with a couple guys that I worked with at our last company, molitor Financial. Worked together with those guys probably 10 years and, with the lending environment changing obviously interest rates a lot of different stuff was happening and we just decided it's the next logical step in our career. And at Molitor Financial, you know we were mortgage brokers we really liked that model. You know I have a lot of friends that work for you know your big retail lenders and things like that and I just I love being in the broker space, not only because of having the different options, but just being able to help more clients and typically costs can be a little less, turn times can be a little faster at times, depending on volume and things like that. So just all around, I love that environment and the guys and I. We crunched all the numbers for months and months and months and just came to the realization like this totally makes sense, right, we'll never have to work for another company again. This will be it.
Speaker 2:So do you have? I mean, like it's a big move putting your own company together. Now, when you wake up, there's not another person that's riding the ship or doing the show up and you still have to do what you do. We're still in sales, but what is the extra stress like for you owning your own company?
Speaker 1:It's funny, I really don't feel any more stress than I felt before, right, because when you're commissioned, only that's your income structure, whether you're a W-2 employee of a company or you're self-employed. It's just like being self-employed, so that aspect of it hasn't changed at all. Just like being self-employed, so that aspect of it hasn't changed at all. So you know, the only extra layer and I wouldn't even call it stress is just the additional responsibilities as a business owner. Yeah, that's stressful. Having two partners helps divide that up.
Speaker 1:And the nice thing is, you know, we never sat down and said you know, you handle this, you handle this, chris, you handle this, you handle this, chris, you handle this. We just naturally fell into those roles of when you guys which a person right. So you know, I handle all the social media stuff and need to do more of that, but I'm working on it. And ben handles a lot of the payroll stuff and josh handles a lot of the hr type stuff and Josh handles a lot of the HR type stuff and we just collaborate on a daily basis. And you know it's kind of funny as we all work remotely.
Speaker 2:That doesn't ask you are you guys have? Do you guys brick and mortar? We do.
Speaker 1:We do have an office which right now is in Northfield, uh, right off, right off 94. You know, everybody works remotely. You know we. You know everybody works remotely. Yeah, you know we, we. We need an office space. We have it. We'll eventually get an office in the city.
Speaker 2:We're just biding our time, your processors, everyone else's remote, so you guys are all okay.
Speaker 1:Yeah, so, um, and it's our pretty much our original team from from the last company. We brought them over kind of in stages, so everybody's very familiar with each other in the process and, um, you know, I it's, it's, it's been great I don't know a better way to describe it. I wouldn't say there's an extra level of stress at all.
Speaker 2:How did you work from home when you were at Mahler too? So is that not?
Speaker 1:changed. I did pretty much. Yeah, I just you know I would go into the office every once in a while, but I function a lot better when I'm getting work done just on my own and in my own space, Especially when you go into an office where there's a lot of people. A lot of people tend to ask you questions and things like that, and it interrupts your flow.
Speaker 1:you're not a collaborator, well, I can collaborate with people, uh, but if I'm just, you know, if I have to get in the zone, I gotta knock these things out. Yeah, no one bothered me. I need to make sure I can focus on it, so that's awesome.
Speaker 2:What is the? What is the? What are the goals? What's the five-year goal for your company, for reside? Have you guys sat down and thought about this? Is I mean, I know it's just a lot just to do that, but there's got to be. Is there a vision? Is it to stay small? Is it? Hey, do you want to add? Like, hey, we'd like to add three people. Like, for us, I know what our goals are and kind of where we want to be in terms of adding people. If we do want to add people, what kind of people we want to add? I mean, are you looking to grow in-house in terms of bring people in and train them? Are you looking, hey, this guy's a great mortgage broker. Hey, have you ever thought about being with a smaller shop and having a little bit of control of your income flow and stuff like that? Have you ever thought about growing that way?
Speaker 1:So our goal with this was to keep it small. We're not really looking to recruit loan officers and things like that. Based on the projections that we made and the volume that the three of us have the capacity to do, we feel that's more than enough like employees. Our idea is we grow our business collectively rather than saying, hey, you know, all these people work with me, all these people work with Josh, all these people work with Ben, you know, we're going to individually do our own things. Well, now we're going to grow as a team. So, instead of hey, you know, you just have one loan officer to work, well, now you've got three. And then we're going to bring in support staff, processing staff, to help with that flow as we grow. That's our main goal.
Speaker 2:Do you guys sit down and say, hey, this is what have you ever had? I mean, you guys are new, but at some point you're going to have that discussion where someone is not pulling their weight.
Speaker 1:It's going to have that discussion where someone is not pulling their weight.
Speaker 2:Yeah, it's going to happen. So, like, do you guys have like a structure set up, said, hey, listen, you know, this is what we expect all of us to do, a baseline, especially if you're collaborating cash wise.
Speaker 1:I don't know. Oh, you're talking about the three of us.
Speaker 2:Yeah, so the way that we have it set up is so that there is some kind of equal distribution based on the amount of work that we're each doing, as well as a kind of a one, you know, one third split. So if you're a slam let's say you've got 10 clients another client comes to you. You would say, hey, I'm right here for you, but I'm going to hand you over here. I'd sit next to him, we're perfect. But this because of my workload right now. He's going to handle your loan. Is that how you guys would do that?
Speaker 1:Uh, we could. Yeah, uh, we definitely could. I, you know I. The thing about these guys is and you know, you never know, get to know people the way you get to know them when you go into business with them. Uh, but, I think the three of us.
Speaker 1:One of the reasons this is a good partnership is we all put so much pressure on ourselves, just as is to provide for our families and things like that. That it's you know, it's we're naturally going to. You know, we don't need to hold each other accountable because we hold ourselves accountable enough. But as far as employees go, you know we've other jobs and things like that. You know we've seen how those things are handled and we don't ever want it to get to that point.
Speaker 1:So, you know, luckily, our team is fantastic. You know, some corrections here and there, nothing major, not like anybody slacking or anything like that, but always just trying to tweak the process. Make sure that you know our, our team is functioning well, that everybody's on top of stuff. Know our, our team is functioning well, that everybody's on top of stuff, and if it ever gets to the point where we hit, bring somebody in. That's not, you know, right. Well, you know we'll address it directly, right and that's. But that's part of being a business, yeah, right, and you know, josh is our HR guy, so it's on him, that's it. You find it.
Speaker 2:You have that talk and I'll post it.
Speaker 1:Yeah, yeah, yeah, I'll put. I'll put it on. I'll put it on Instagram, I'll put it for TikTok.
Speaker 2:Here's your firing. This is how we do things that reside. You're out All right. So crazy times.
Speaker 2:You know we've got the feds obviously being pressured to cut rates, thinking that that's going to solve everything. Obviously, we know whatever the government does you're going to have I mean, we just had this conversation in my last podcast like whatever the government does, the opposite reaction is going to happen. Right, the you know, for instance, the changes that are going to happen this saturday, the 17th is meant to help the buyer. The the buyer's getting screwed. Prices are going to go up because commission is not going to be compressed. Now. People on the sell side are going to ask more for commissions and buyers are going to say that they're buying. Agent. Now, you owe me two and a half, you get three. It's a mess. We can't let them aggressively cut rates again. It naturally has to happen. We need the 10-year to naturally go where it should go and the traders know best which risk they want to take. I don't think there's an answer. But how do we unwind? How do we get this money off the streets?
Speaker 1:I think the problem is, the only comparisons that we have are the past, and I don't think that past economic downturns and booms and everything else can quite compare to what's happening now, because when you look at the data, the consumer looks strong-ish still, but you have to really dive into it to see what's really going on. And then you also have the idea that the data that we see is an aggregate of the country right, but inflation, for example. Inflation is different on the West Coast than it is here in the Midwest and the South, and there's no perfect answer on how to do it. But I think, if we were to go back, you know, when the Fed started raising rates in this most recent cycle is they started too late and they went too aggressive. They should have started much earlier and let people unwind, right.
Speaker 1:Well, and then you also have that period between, you know, 08 and up to I think it was 2018-ish when they started raising rate, but they held rates near zero for so long and that's almost why I think you didn't see. You know, typically you have a recession every 10 years or so, and that's why we had such a period without one. And then, as they started to raise rates. The cracks started to show. Covid kind of exasperated that and we have kind of a mini recession, but I think we were headed in that direction yeah 16, 17, 14, 15, and 16.
Speaker 2:I remember those years the three years before Trump got into office, were rough. I remember that because I was like, okay, and then you had some exuberance. You know you have any time there's change but like happy, this, this or this, and then all of a sudden you get into COVID and it's just like I think we didn't have a recession. What we had was just an explosion in debt to create no recession. So now we've got this debt bubble. That's just so incredibly crazy, and the only positive I see on the rate cuts is maybe people can refinance out of this debt, but that debt that's floating what's that really going to do? What?
Speaker 1:is a half a point going to do to floating debt. Well, on a mortgage, I think it's all relative to the loan balance. But, for instance, if you could consider a cash out refinance to consolidate debt and convert that 20% credit card into 6.5%, 7% over 30 years, you're not eliminating debt, you're just managing it. You're managing it and you're giving the consumer more money. The problem is what will happen, especially if things get tight and people pay off those credit cards and they need money. Where are they going to go Back to their card? Back to the credit cards. Obviously, the Fed starts cutting rates. That will help with some of the credit card payments and the interest rates on those. But then what does that?
Speaker 2:do to inflation. That's the problem. The problem is the inflation is that hidden tax, that hidden killer that it's like. How do we get out of that? I mean, how do we get? You know, how do we get from lowering rates and helping people unwind out of debt or, like you say, restructure that debt. And really I mean, like you said, taking that credit card, doing a home equity and just making that debt manageable, which is a great idea to do but at the same time, not accelerate prices, because I'm telling you, the minute this thing hits mid-fives, what's going to happen to home prices? Dude, it's going to be insane.
Speaker 2:It's going to be insane. We're caught in this conundrum.
Speaker 1:It's going to be a continuing crisis for a number of years. Yeah, very long time.
Speaker 2:I mean we need ways to produce more energy, not less. Like this may not be the best time to say, hey, let's cut back on all energy, just may not be, you know. And if we can get more energy out there and more home production, right, and then all of a sudden we start lowering these costs, I mean I think then you can be like, all right, we've got costs lowering. Like you know these, these Fed numbers, these inflation numbers? People like, oh, it's under controls 2. Like you know these Fed numbers, these inflation numbers? People are like, oh, it's under control, it's 2.9. It's like, dude, you want it under control? We need negative five.
Speaker 1:Yeah, that's what it's, 2.9. You posted that, yeah you posted that.
Speaker 2:I'm like and I was like, yeah, like you and Jason post the same stuff, which is crazy. Look at both of your guys' stuff.
Speaker 1:It's great. I have commented on some of the stuff.
Speaker 2:Yeah, and it's just like I'm like no, this is still rising.
Speaker 1:Right. Well, and I always think about what you know when the Fed's mandate, which is stable prices and maximum employment, but that's kind of a loose term, right. 2% inflation means they want things to essentially cost 2% more every year and keep that consistent. So that's the stability there and maximum employment. I mean, what is maximum employment? As many people employed as you could possibly get, but what's the number?
Speaker 2:They don't have a number on that, yeah, and all we really have to do is not print money. We could have no inflation. Yeah, we had no inflation until the Fed decided to start fucking with stuff.
Speaker 1:Yeah, and sending checks to households while production was shut down.
Speaker 2:We had no inflation like literally, I mean, up until Nixon. The dollar in 1930 is the same. The dollar was worth the same in 1950. A dollar now is worth 25 cents in five years. I mean, it's just nuts. So by looking at the charts and studying the market, what do you feel will happen to home prices? You said you're starting to already see an uptick in your business. And you're starting to already see an uptick in your business and you're basically the leading indicator.
Speaker 1:Well, I think it's what we've been telling everybody for the longest time is, if rates keep coming down right, that just creates more demand on an already limited supply of homes. Just creates more demand on an already limited supply of homes. But I think it's also regional too. So I saw some chart this morning of active listings across the country and you see, across the South, south and the West their inventory year over year, because I just did a post on it.
Speaker 2:It's like up almost 35%, 40%. But Chicago over the last five years is down 66%. The Midwest and Northeast are a nightmare.
Speaker 1:Well, and that's even with people leaving, leaving these areas and moving to these other areas, which is interesting to me. I always say that who the hell's moving? Here, but I also wonder I'd have to look at the data but is the rates of development in those areas compared to the different regions, so you cannot get a permit, and I think this is what you're talking about.
Speaker 2:Think about what you're saying. I don't know about the West Coast, but I have to think that when you get south, getting a permit is a lot easier than getting a permit in Chicago.
Speaker 1:So I can just tell you, texas, I don't know, but it's got to be easier. Well, so, so we're, we're, we're one of the states we're licensed in, this texas that's perfect.
Speaker 1:That was the easiest. I mean, it was just a few things to submit, boom you're done. Most states are financial statements, credit checks, all this different information, all these different fees that we have to pay, takes four to six weeks for review and approval. Or they come back and say, hey, we need this, this and this. I think Texas was under two weeks and it was only a few documents we had to submit. So that just goes to show you the areas where there's less regulation. They've probably had increases in supply due to the fact that they can build a house.
Speaker 2:Yeah yeah, I mean you can't build a house. I talked to a guy yesterday, one of my best builders. He's like I can't, from inception to the knob turning the city's a little quicker, but in the suburbs it's like it's two and a half years. Yeah, he goes. I'm in review for just site plans for one year he goes. I needed to. A guy bought a lot, a big lot, and it was big enough that he could divide it by two by the village. The village is like no problem. He handed in the new surveys to the village. All he needed was a signature. Everything was done. It was six months to get a signature to approve a lot being broken into. That lot being broken into provides more housing, more jobs, more taxable income. Six months just for signatures.
Speaker 1:It's all the hands that are involved that muck up the process.
Speaker 2:If we could just get supply right, if we could get supply, everything would drop naturally. If people could just build more apartment buildings, more single family homes, more units we just need density. And Chicago is terrible on density, yeah, terrible. So you can't produce affordable housing and if you don't have density and then you cut rates, I mean if we could cut rates and up the supply in Chicago dramatically, they're going to offset each other. Demand and supplies can offset each other, but you can't do it and it's really bad here.
Speaker 1:It's really it's the most basic economic, fundamental supply and demand.
Speaker 2:The, the place that I go to on a monthly basis for like research, they have like a. I actually posted it yesterday like a heat nap Okay, and it was the, the, the, the. I posted like 40 seconds but it's about two and a half minutes just just on supply and the literally it's boston, new hampshire, new york and a couple other places, and then chicago, illinois, and they're dark red for under 60 reduction in the last five years of supply. And then, like you have texas and florida, tennessee, kentucky and even the west coast where you have Texas and Florida, tennessee, kentucky and even the West Coast where you have supply itching up A lot of those West Coast places. They were all Zoom towns, like Idaho and Wyoming. People are building there like no one's business because people are like, oh, I'm never coming back to work and all of a sudden like, oh shit, I got to come back to the city.
Speaker 1:You know I could. I would think that part of it may be a result of the cost of insurance. You know, especially in the South where they tend to have more storms and things like that, I mean it is. You know, we had a property in Miami for a while and I think at that time we were paying about eight grand a year for insurance, which was more than the property taxes, and I'm fairly certain if we still had that property today it'd probably be north of $10,000 a year for the insurance.
Speaker 1:Well, my insurance is going through the roof in Chicago.
Speaker 2:Yeah, mine's gone up too. I'm like what is going on? They're like from California and Florida, they're spreading the costs out. They can't survive yeah.
Speaker 1:So I mean that could also be part of the reason is that, you know, even though the homes down there may be more affordable, it's that the costs of owning those homes are also increasing down there.
Speaker 2:So what are you seeing most people getting into that are either refinancing or purchases. Are people flocking back to 30 years? Is it still much? Is there a? I saw a little bit for the first time, a little bit of a spread between the 30 and the 50 at the 15. I saw the 15. Obviously these are just random numbers out there, but the 15 was like at five, eight and the 30 was like at six and a half. Those things were trading at par for a while.
Speaker 1:Yeah, yeah, the 15-year was not, it wasn't worth it. Well, it's. Also, if we're really just talking about rates and just going back to supply and demand, you go back to mortgage-backed securities and bond markets and everything like that. I mean nobody's doing a 15-year fixed with rates in the seven, no, six and sevens, right, so everybody's doing 30 years. So there's just not a lot of incentive for lenders to lower their prices on those rates, incentivize those rates right now.
Speaker 1:As far as refinancing goes, you know it's all relative to what that client needs. You know, for most people I would say, especially in this environment, it's probably lowering their payment. So they're going to stay on a longer term, whether that's 30 years or we do. You know you can do like 29, 28 years, right, so they're not kicking out the term longer. But you know, I've also had some clients that had some lower loan amounts and so you know I said, hey, instead of doing another 30-year, which is really only going to save you like $150 a month, which with the cost probably doesn't make sense, convert it to a 20-year. Right, payment stays almost exactly the same as what you have now, but you're saving this much on interest, you're paying down this loan faster and you're going to have more equity when you return to leave.
Speaker 1:I love that. So it just, it just depends on the situation and you try to analyze it as best as you can. And and you know, like on the 2nd of August when, when that employment report came out and bond prices shot up and rates shot down, you know you try to call as many people as you can and at that point it's like, hey, here's what I'm looking at, let's lock the rate, I'll call you back with all the details. You don't have to proceed, and that's kind of how we have to do it sometimes, especially when things move that fast.
Speaker 2:Yeah, because you'll get a jerk the next day the other way, or it can reverse in a matter of hours.
Speaker 1:So you just try to see how many people you can help get them locked in, and then you know anybody that you missed or anybody that wasn't quite there. You know what we've done is gone back and say, hey, we want to get you ready. You know, let's get all your information together. You know we can hold off on like credit and stuff like okay, this is where this person is, this is where the rate is?
Speaker 2:do you have software to be like, hey, you should call these people their rates so so we, we.
Speaker 1:I kind of like that well interesting. They could devise something like that with the software we have now um, yes, but the resides prior. Like we all had Excel spreadsheets so I can go through and sort it by rates and see where people are at. But then also people's credit situations change, right, so then it's like you may not be able to do it, so you just try to advise them the best you can. And obviously refinances are great lowers your payment or cuts your term or whatever the case is, are you?
Speaker 2:seeing people refi because of the economy from those threes to sixes just because they need to cash out or take credit card. Even though you're going from three to six, I'm taking $60,000 of 20% debt and dropping it to six and a half, which may be worth the spread.
Speaker 1:Yeah, well, I probably had a few. A lot of people are hesitant to do that for obvious reasons. So then people ask about home equity lines of credit, and I don't think it's a bad tool for it, but there's certainly. You need to make sure you look at all the options right, Because if you've got a 3%, we're converting, we're taking out a 12% HELOC or something like that. Right? What's the blended rate? What are the differences that you're going to pay? What is the real money cost? Right, and you just you have to analyze that properly. One example that I could give you is I had a client who owned a four unit in Roscoe Village. He had a HELOC on his primary residence. Okay, Cause that's a second lien on his primary residence, there's no tax benefit for having that.
Speaker 1:So he had a nice low rate on that four flat. We did a cash out, he paid off that HELOC and now he's got all the interest benefit Cause it's on the yeah, right, so and and Right, and he originally was going to close that HELOC and I was like, well, you don't have to close it. I was like you can pay it off and it could still be there if you need it. It's 10 years, right. A lot of them are 10-year draws. I'm starting to see some of them go towards five and three-year draws. Okay, and there's a little more incentive on the rate. Part of me thinks that the anticipation is these are going to be refinanced and combined into first and seconds or, I'm sorry, into one mortgage. Okay, but that's just pure speculation on my part.
Speaker 2:There's no, no science behind that when do you see things next year in terms of rates and the fad and like do you think that? Do you think that they make a cut this year?
Speaker 1:Yes, absolutely, just one. I would say it's going to happen in September. Okay, at least 25 basis points. I wouldn't say I would be shocked if it were 50 basis points.
Speaker 2:Where do the traders have it? Do they have it for one or two? They're usually pretty dead on.
Speaker 1:I would say one is priced in for sure. I don't know that if they. Well, in terms of the number of cuts, I would say there's probably two to three priced in. In terms of this next meeting, I would say, obviously 25 basis points is factored in. I think when that employment report came out on the 2nd and markets just went wild, it was probably oh, they're going to do 50 basis points and I think some of that's probably tapered back a little bit In terms of next year. I don't know, I feel like we're just in really uncharted territory. Even though it may not seem like it, it's just when you compare things Because revenue and inflation starts to tick up again.
Speaker 1:Yeah, well, especially in terms of housing inflation, it's naturally going to, and one of the metrics for that is owner's equivalent rent right, and they just say, hey, what would you rent your place for? So there's not really any fact base behind it, and that's with a lot of the data that they get.
Speaker 2:Yeah, the unemployment number is suspected.
Speaker 1:Well, yeah, I mean, we never trade it.
Speaker 2:We used to just wait for revisions.
Speaker 1:Well, that's the thing, the whipsaw is the best. The revisions are terrible, have been downward for how many months?
Speaker 2:Four months in a row? Yeah, the revisions have been down like extremely down.
Speaker 1:Yeah, Well, and if you just look at I was looking at the last BLS jobs report and if you look at the month-to-month job creations, yeah, it's kind of up and down, but if you just were to take a line and average it, it's this yeah, so the, the job growth is slowing down. And I was also looking at another chart where it was the, the job openings and the non-farm payrolls and then part-time employment and the job openings data I think only goes back to about 2002. And the only time that we ever had really had non-farm payrolls over part-time income was around the end of COVID. And now the job openings numbers, I think since maybe late-ish 2022, are in the negative. They're starting to kind of tick up, but they're in the negative. So things are. And part-time employment's increasing too, which I think tells you something, and that's not necessarily do these people have other jobs or are they taking on more jobs because they need more money?
Speaker 2:yeah, the part-time employment and government jobs are like basically what all the job creation is. Yeah, like you look at manufacturing, you look at all this other stuff, and it's like there are no, like there's. That's not occurring. And the the problem is is that the more employers that the government employs first off, the government right now is the number one employer in the world. He has a government the more and the more employers the government employs, the more inflation we're gonna have because the government is broke. So how are they paying these government workers? Well, well, they're printing money. So it's, you're just feeding the beast. Yeah, other than just saying hey, why don't we lower how? Like no one wants to take that initial pain down to create just years of beautiful growth, but it's because it's not good for political careers.
Speaker 1:Yes, and that's a selfish reason.
Speaker 2:I mean it's our kids that are going to have the issues. Our kids are not going to be able to. Everyone always says that and I feel like I've heard that since the 70s that we're hurting the kids. But I think we're like I'm starting to see that now. We're like it's so interesting when we go somewhere and we buy something and we'll have like two cheeseburgers and will my third channel goes that was 40. I'm still gonna go see this money's worthless yeah this is worthless.
Speaker 2:Yeah, you know, when people around the world are getting off the US dollar as their standard, that's a problem.
Speaker 1:Well, that's really, you know, that's a big problem. That's really our backing. Right is the faith in the US dollar, and if that erodes, where do we go?
Speaker 2:And it's eroding, right. And I just think that people are like how do we have faith in something that a group of people keep messing with its value? The Fed just keeps whipsawing the value of it. And the conspiracy theorist in me says the Fed whipsaws the value to redistribute the wealth, right, Think about it. They lower rates. People think that that's good. I mean, it's going to be only good for landowners. It's going to be good for when they lower rates, people that have money are going to make an exorbitant amount of money. If you're on the lower end of that schedule, those lowering of rates is going to push everything out of your reach.
Speaker 1:Well, not only that, but I mean here's one thing you could probably look back in history and say is that when the Fed cuts rates, it hurts the market. So those people invested in the market, especially on a large scale, know this information. So that's how that snowball effect works in the market pullback and then they reenter at the right time.
Speaker 2:Yeah, is that why Warren Buffett owns more US treasuries than the Fed itself? That's a warning. Yeah, except for a warning.
Speaker 1:The smartest man in the world owns a grip load of treasuries. Well, they're going to. You know, if they start going into quantitative easing and stuff like that, they're going to have to purchase more bonds, more treasuries, more mortgage-backed securities start flooding the market with liquidity?
Speaker 2:How about the fact that they print the money to buy the money?
Speaker 1:back.
Speaker 2:Yeah, is that the most insane thing you've heard in your life? That's how it works, I know, but that's like the biggest scam. Yeah, like some diabolic person was like I got an idea. Diabolic person was like I got an idea, let's just print money and buy stuff back.
Speaker 1:And we'll just keep doing that. I mean, you know kind of like a, I suppose, a form of money laundering.
Speaker 2:Yeah, it is. And then we'll take that money and we'll give it to government agencies who then buy stuff from our friends, and then we'll just keep printing that money, which devalues the money. But the amount of money that they're spending on these certain things is so astronomical that, even though they're devaluing the currency, those people are so rich it doesn't matter. But everybody else is just getting squashed. It's not like everyone's like oh, there's no middle class because of this. There's no middle class because you keep printing money. That's it. It's really simple. Their value of their money, of their savings, just keeps dwindling and dwindling, and dwindling. Now, if you're a homeowner, it's great because the price goes up, but is it really going up?
Speaker 1:Yeah, but when do you-.
Speaker 2:Because the dollar is worth nothing.
Speaker 1:Well, and you don't typically access that. Yeah, you're not flipping it Equity until you sell or you retire. I mean, I'm almost convinced, and maybe I've said this before, but the millennial retirement plan will be the reverse mortgage. Yeah, I mean, for most people my age. Where are you going to? A lot of people don't have retirement savings, things like that.
Speaker 2:So if you own a home. It's almost like having a whole life insurance where you borrow back from then. Yeah.
Speaker 1:I mean, I think that very well could be. The retirement plan for a lot of millennials is a reverse mortgage, assuming it's still around or assuming we're still here and have gotten wiped up.
Speaker 2:It's not going to be social security. Yeah, that's what I'm saying. There's no money left in that.
Speaker 1:I mean, I don't even you know, especially you know that's fixed incomes. That's where you're hurt the most when it comes to inflation.
Speaker 2:And you know I was thinking about too, like I was thinking about in terms of supply, what do we do and this is not a statement or a stance on open borders, but how do you supply homes for these millions of people that are coming over that we don't really have that capacity for? Especially, I know, if we're short four and a half million homes, which is about practically short, and we're bringing in an extra five or six million people a year, how does that equate into home prices?
Speaker 1:It doesn't. I mean you can't, there's no way to build. I'm just wondering how home prices go down. They don't. I mean again, you're going to have some regional variances.
Speaker 2:Yeah, but I Because even if the market crashes. So if the stock market crashes, job market crashes, they cut rates. Everybody that has money is going to buy all the homes for pennies on the dollar yeah, interest rate wise and they just turn around and rent them. So even more of the supply is going to be ripped out. That's why I think lowering rates I'm telling you it's going to be just like it's going to be the devil's curse, because it's just going to create so much supply issues like so much. They have to just be able to be like hey, if you want to build a house or if you want to do this, you want to do this. This is how we're going. You're telling me we don't have computer programs that can fast track this.
Speaker 1:Listen, I think that the way the economy's headed, the only thing that the Fed knows how to do is cut rates, quantitative easing. That's what they've done for the last what 40 years or so? I wish I had the answer, because that'd be amazing and I'd be a very rich man. I don't think that there's an easy way out of this. That's not going to be painful, but I think if we can get to the other side of it, it'll be a lot better.
Speaker 2:So in your opinion, you're saying they're going to cut rates maybe three times and we don't know what's going to happen in 25. Do you think cutting the rates can help that pain or do you think it's going to cause more?
Speaker 1:I think if they do it too fast, too much too fast, just like they did when they the other time, I think that's.
Speaker 2:How they did every time they did it in 98 wrong, they did it right. And 98 wrong did an 08 wrong, they did it not like. Has there ever been a time that they did it right?
Speaker 1:the swings they caused, especially the last. I don't know 25, 30 years it's, it's all been.
Speaker 1:I'd have to look at it, but I think most of at it, but I think most of them have been almost all emergency cuts to the point of getting it close to zero. And if you do it too fast like that, the liquidity comes flooding back into the market At an unnatural pace. So I would say it'd be nice if they take it nice and slow, but they're always looking in the rear view mirror Although there's probably some aspects of it that they have a pretty good handle on of where things are going. I mean, I think Powell originally said their target for unemployment what they wanted it to get to was like 4.1. Well, now we're two tenths of a percent higher than that, at 4.3., and I don't think that that's the end of it.
Speaker 2:And that's really not the unemployment rate. How many people are sitting at home that are not considered? You know you're not unemployed if you're not looking for work, which I always thought was one of the biggest. You know, the participation rate is much more important because that's the people that are in the basement playing video games.
Speaker 1:They're like I'm just not going to work. I did tell my son he's part of the unemployment problem.
Speaker 2:Does he have any summer jobs? Are you doing that?
Speaker 1:Give him a coach, lead coach. I talked to him about doing stuff like that. My wife's a realtor too, so every once in a while she'll make him help her. Does he have his license yet? Not yet he could be a chauffeur. He'll be the way it works here. They have to have their permit for so long He'll be able to get his. I think in October or maybe it's next month, so he'll be able to get his. I think in October or maybe it's next month. So then he'll get his. And then I got to buy my wife a new car so he can have the old one.
Speaker 2:I can't wait for you to see your insurance bill.
Speaker 1:I've already talked to my insurance agent about it. What'd they tell you? It'll go up by about a thousand bucks, that's it. I mean, that's what she told me like six months ago, so it's probably a little different now.
Speaker 2:Mine went up 3,700. Holy shit On a 2005 Mercedes with 50,000 miles Like a beater. I say that I know Mercedes, I mean like an old car that we just held on to. How did you?
Speaker 1:only have 50 000 miles on.
Speaker 2:My wife never drives. Oh, it may be less, it may be like 30. Wow, yeah, we've always lived in the city. It's like, yeah, you know, and she worked at wrigley. It was like a mile and a half away. We never left bucktown because she's like I'm seven minutes away from work, yeah, and now she works from home. She's like you know, she doesn't like working from home, though. Really, yeah, she's like it's just like not seeing anybody. She's like you're just in this room. I couldn't do it. I would shoot myself.
Speaker 1:Well, I'm on the phone a lot Most of the day, so I'm talking to people, but also Do you get out and get a walk in, get some sun? Sometimes I have to remind myself to do it, Because otherwise I stay in my office and just work, work, work If I don't have meetings or anything like that. But the guys and I will sometimes hop on teams on a video call just all day long working together, going through scenarios. So that's always some helpful human intervention in a day that I wouldn't otherwise normally.
Speaker 2:My sister doesn't come in hardly ever. She loves she's like I just get work done at home. Yeah, if I sit at home and I'm working, I'm just like hello, anybody Bueller.
Speaker 1:Well, if you have a designated space yeah, I don't, I have one, I took it over no, so I have my office, which is the whole second floor, is our bedroom, bathroom, and then the other bedroom that's up there is my office. Oh, so you get light and it's nice.
Speaker 2:Yeah, yeah, I converted a closet. There's no windows.
Speaker 1:Oh, that's rough. I've got to have a window.
Speaker 2:The light was yellow, so everything was yellow and our ceilings are like 12 feet. I had to go buy a ladder. I'm like I have to change this fucking pit bull. I've got to lose my light.
Speaker 1:I see I can't do overhead light, I've got to have a lamp. A lamp, yeah.
Speaker 2:Or just you know, the natural home. I was like she's like I'm just going to sit in the office. I'm like it's really depressing down there. She's like she goes down there like 830, comes up at like seven at night. I'm like how do you do that? It's just talking the whole time. I'm like I would just I mean I talk all the time, but I'm like I could not just sit there.
Speaker 1:No, I mean I have to get, because otherwise I just get freaked out, just burn out from being in there.
Speaker 2:the whole time. Well, that's interesting stuff, man. I love the fact that, first off, you took a step to go back and you're opened up. I know we had lunch once and you're like I'm thinking about starting my own shop, and you did it. It's always great to be in control of your own dust we are but it's even different when you're your own entity and you can do what you want to do and you can mold the culture and what you want to define your company as. Where did the name come from?
Speaker 1:And the D is green. Is that just what it is? Well, that was. We had somebody design it, okay. So I don't know if you can kind of tell it's kind of like a doorway.
Speaker 2:Oh yeah, it's shadowed. Yeah, that was kind of like the idea behind it.
Speaker 1:Josh, one of Josh's friends, designed it for us. So the name it's not like anything crazy that went into the name. We were just trying to think of a good name for a company that said what we did, and pretty much every name that we came up with we'd Google an RD company, like every name, right. And so I think I was on just like some AI logo generator, just punched in some words and I'm just scrolling through and I came across Reside and I'm like, oh, it's got to be a company. So I look up, like Reside Home Loans. I'm just scrolling through and I came across reside and I'm like, oh, it's got to be a company. So, like, like reside home loans, I'm like nothing's coming up. I checked the NMLS nothing's coming up. And so we were like that's it. Yeah, let's do it.
Speaker 1:So, um, yeah, just again wanted something that said what we did, and you know which sounds silly, but to me, as well, that's not silly, as, like the, the marketing guy, you know, I felt like that was really important and just something simple and uh, yeah, so I mean I, I like the logo.
Speaker 1:You know, we decided to go. Uh, I feel like everybody's like red or blue, or you know. So we greens also money, yeah, or you know, so we green's also money, yeah. Well, I mean it was just more of like we wanted to go with, I don't know, a color. That wasn't something everybody I, I wanted teal, that was the color, I wanted Teal. The other guys, uh didn't. Uh, I like the green, didn't? Uh, teal, teal, teal pops, though you know, I just I had this vision in my head of the color I wanted. But you know, the other guys decided green. One of them wanted a little darker green and then I wanted to. So I was like, well, maybe we can meet in the middle with a lighter green. So that's what we went with.
Speaker 2:So nothing too crazy. I like it, man, it's, it's awesome, it's a good feeling to have like that. I don't know, I don't know if it's self-worth, but like to have like hey, this is something I'm building, this is me, yeah, almost owning a home, like this is my house, like this is what I do yeah, I well, and I couldn't be, you know, more fortunate to have the guys that I'm partnered with, but I couldn't do it this by myself.
Speaker 1:Um, and you know, again, we just kind of fell into the roles that we're in for the company. But other than that, like nothing really feels different. You know, it's nice to have country, cause I'm very much a process oriented. You know, especially like the actual processing. You know I was a processor when I started. So you know, making sure that that process was set up the best way possible for us, for clients, and things like that was really, really important. So having that aspect of control was is great. Yeah, I mean that's you don't want to lose that?
Speaker 2:No, no, all right. Well, we're about to wrap up Any parting shouts, anything you need to say. Parting shouts First off, give us your. You gave us. I think you gave us your old stuff last time.
Speaker 1:So that's your new, your new info to reach out. So Chris and I've used Chris on mortgages, so he's it's it's very good, chris at residehomeloanscom, and then on social media at CD Lens, which my kid always makes fun of me for, and atresidehomeloans.
Speaker 2:Atresidehomeloans is your other social. What's the one?
Speaker 1:Well, the company one is Are you posting a lot on that too? I've just got some general stuff on the reside one. Right now I'm working on other stuff and then my personal one is obviously more uh, focused on what I'm into, especially the economic aspect of it, um, so I'm working on a bunch of different stuff with that, uh, like our YouTube channel. I'm working on some more long, long, but a lot of just like standard going through the process a little bit these types of loans, that types of loans, and then cut all that stuff up and we'll mix it all up cool, all right, well, thank you so much, chris.
Speaker 2:Yeah, thank you, jason. Um interesting conversation. We both think the world's gonna end, but hopefully it does nicely after we're gone. Um and uh, we'll look to. We'll be posting this first week in September, hopefully at that point we'll do if there was, if there, if there has, if there's a rake up by the time this post, we'll do like a mini post inside the rake.
Speaker 1:I think that's happening. I don't remember the date. It's not till mid to late September, I don't remember correctly.
Speaker 2:So it might not be. We'll reconvene on a light one if they do cut. Thanks so much, you guys. Thanks for the follows, the Jason theory, and we'll see you. Don't forget to like, follow and we'll talk. Thank you so much for your time.