Hard Money Lending

Episode Transcript

(00:00):
For thirty five years, Cindy Stumpohas been a female homebuilder with a passion
for design, a mastery of detail, and a commitment to her crack.
With daughter Samantha Stumpo by her side, I don't need my whole family on
a date with me. That's agood note. It's goddemn weird. See.
Stumpo Development is the only second generationfemale construction company in the country.
You're crazy, You're a wacko,You're insane. I mean, it just

(00:23):
doesn't end together. Cindy and Samanthawelcome guests to explore the world of construction,
real estate, development, design andmore. Unpredictable. Every time I
think I know what you want,you switch it out. But that's what
makes sure houses all your They discussanything that happens between the roof and the
foundation. Nothing is off limits.You truly do care about everybody. She
can yell and you get screen,but when you get her alone, she's

(00:45):
the best person on the planet.Cindy Stumpo is tough as nails. Yeah,
welcome to Cindy Stumpo Toughest Nails onWBZ. Who's Radio ten thirty and
I'm in do tonight with I'm notintroducing another person, go me too,
please? Where with Sean and Tyler? Do they have last names? Do

(01:07):
we know who they are? Theylike little ghost people? Like what are
they? They're like my besties.I talk to them all the time.
Well, do they have last names? They can introduce themselves. Oh okay,
go ahead. Oh no, Ican go with the first name only.
I'm like Seal in the New Generation. But okay, I'm cool.
But no, I'm Tyler Wnder ofTV Winder and Winder Capital and developer,
lender and broker here in Boston.So what is this? What is the

(01:30):
developer? Do you? If youdon't mind me asking this new generation?
How old you thirty one? Okay? Your baby baby? What does the
developer mean to you? Buy aproperty, add value to it and sell
it. Wow, things change inmy in the generations. That's what developers
to you? Right? So whatam I? You're a developer? Mm

(01:51):
hmmm, which means it means you'reyou're buying land, You're buying property,
You're tearing it down, you're addingthe value to it and selling it.
If the numbers work for the rentaland that's what your ex is, then
you hold on It's the difference betweenwhat you call developer and what we've called
developers is we bought the land,we self perform the buildouts, and we

(02:12):
made a development fee and a constructionfee. That's what that was all about,
right now, developers, We werebuilders, right, but today developers
and money guys most likely. Andthen they got to hire some schmagigy like
me to come and do all thehot lifting, right most likely. Okay,
and then you're gonna hope this theschmagigy like me doesn't hurt your pockets,
right. I just want to stickwith that word McGahee for a while.

(02:35):
That's what it was. If wegot a good sch mcgahey and then
hopefully everyone makes a little bit ofmoney at the end of the day,
and then you hope that schmaghy doesn'ttake you down with them. Yeah,
sure, hope So because as largemcgigi's out there right now, so we'll
just get like a watch list ofthe do not work with smagige. Yeah,
I think we need a schmaghigi list, okay, and like just get
rid of them. Smart. Doyou notice that it's going to be harder
for your generation to find good soliddudes? Out here and women, right,

(03:00):
I haven't worked with women, sothirty six years, I see one
here popping in and popping out hereand there. But do you notice that
it's hard to get more better skilledlabor guys out here? Then again,
what would you know, because youwouldn't know what it's like to work in
the real world back in the day. One thousand percent. No, And
I and who I learned from whenI got into this business are the you

(03:21):
know, developers from the late eighties, early nineties gcs who worked through the
eighties nineties. Well, then thatwould be me. So I'm learning through
you know, people like yourself,the baby boomers. The baby boomers,
by the way, last year,don't push it. What's that I'm in
the last year? The baby boomers, don't push it. You want to
said it, I'm not allowed tosay that. She's turning. Oh shut
o'p already with that number. Iswear if I have to age, you

(03:44):
have to age? No, youkeep aging. I'm not aging, So
you'll you do have two years inone month. Though you do listen to
the older guys. You have to. I don't listen to your generation.
I didn't go to I didn't goto school with it. It was kind
of self taught and then you know, learned from people who've done it over
the last twenty thirty five forty years. Okay, follow the lade, trust
me, you got all of them. Just don't follow the ego maniac ones.
You know, the ones that havebeen up and down, like what's

(04:08):
the word yo? Yo's thirty sixyears c Stumble is still in business.
We've never been another name, we'venever gone bankrupt with the same company from
day one, and we've never beensued by an end user of vendor,
a subcontractor. That's what you lookfor when you're hiring a builder for your
development. Got it beautiful? Seriously, like go through it all? All

(04:28):
right? So but you're still doinghot money lending. So with that being
said, what are you charging rightnow? And all I know it all
varies. So let's let's play.Let's play a game here right now.
You're and I yeah, all right, I need a fast closing two million.
I only want it in ninety days. Where we going Most likely you're
going to start off at twelve andtwo when Sean gets around. So dumb
it down so people understand because we'rein the business. So a twelve percent

(04:51):
interest rate in two points at closingone point resembles one percent of the total
loan amount. That's pretty much yourstandard what you'll see. And again when
Shawn's up here talking, he's goingto talk a little bit different. The
quicker the clothes, the less trackrecord of of a barrow, where the
less cash a barrower may have,that twelve and two is going to adjust

(05:12):
accordingly. But if we're going touse that twelve percent interest rate two points
as a close, that's going tobe your best way to kind of underwrite
a deal of kill hard money.And now the guy needs you to carry
him through construction loan. What's up? Now, let's say, let's change
it up. I'm coming to youfor two million, and the two million
is to buy the property. Right, I'll put the twenty percent down finance

(05:34):
a property. The whole thing comesto two million. We're going to just
compare apples taples. What's the industrate then, Now, knowing you're going
out a year or two years witha guy, if you're in hard money,
you're still going to be looking atthe twelve percent and two points.
I mean, if it's a fouryear progress, So you don't want more
money knowing that you're going to golonger and you're speculating with them. The

(05:54):
only thing that we really will careabout at the end of the day is
what is our risk parameter set?At what point are we losing breaking even
or we're crossing over that risk threshold. So if it's a four year project,
we're going to be looking at it. It's like, all right,
here's a four year carry, here'swhere costs are. We still better be
below that, you know, seventypercent loan to the after repair value.

(06:14):
Basically, you want thirty percent downon your clients. Not necessarily thirty percent
down, but we want to havethat thirty percent margin on the back.
What's a downstroke on two million?Downstroke meaning Okay, I'm paying three hundred
thousand for the land and I needa million seven for the construction. I'm
just using numbers like we can justplay, so use most like you're going
to say, how about this onebetter. I'm paying a million for the

(06:36):
land, yeah, and I'm payinga million in construction. What are you
giving me? So right off thebat, if you' putting twenty percent down,
you're going to get an eight hundredthousand dollars acquisition loan, and then
a million dollars is basically going tobe sitting on the sideline ready to reimburse
you through constructions. A little funnythough, you the banks, you're all
funny. I love that game.You guys put the money out, then

(06:58):
we'll rEFInd you after the job isdone. Yeah, that's kind of crazy
because that's what gets guys into troublebecause they don't have the money to fund
and put out and then we haveto wait for you guys to come out
and mister banker to come out tosay, oh, yeah, you did
this, this, this, this, this, So when you're out there
building, I have to have millions, not one hundreds of thousands if I'm

(07:19):
going to take instructional money to carrythese guys because they want to get paid
right away, and a lot oflike our guys, they come in weekly,
right, so they want to bepaid weekly. So we pay the
performance and then you guys step inafter work is done. Okay, here's
a check. So when you sitdown, do you explain to your clients,
like, you got to have twohundred thousand whatever the bank to start

(07:42):
the process. Do they comprehend thator they just powing had on the site
work, and that's where the numbersget put in there to carry them.
You make it up through draws.So if you don't have as much capital,
I get it all set. You'regoing to juice up what you're doing
at the beginning of course to approve. You know when you're being juiced up,

(08:03):
Yeah, you know, good sentYeah, I mean, we're all
a part of the business. We'veseen enough loans, we've done enough loans,
we've seen enough projects successful, unsuccessful, struggled. We're going to go
through all of those and we're goingto have an idea. So we're going
to see something's thirty percent higher thanwhat it is. We're going to raise
some flags. So here's the crazypart when you really think about it.
They're borrowing construction money from you.They're paying the interest of the construction loan.

(08:26):
Then they're paying interest on interest.Mostly you're going to be looking at
a per draw interest rate. Okay, that doesn't matter. If so,
if it's a million dollars sitting onthe sideline, you need one hundred thousand
dollars for process the project, andthey brought five hundred thousand. They're paying
the interest back to you with yourown money. You know that from construction

(08:46):
on right, So that means they'repaying interest on interest, is what I'm
just saying. Like, dude,I ain't paying you interest on interest too,
Like you got to have some capin my brain, but I'm old
school, Like my brain says Ibetter have this much money back when I
was twenty three, twenty four,twenty five to carry the juice follow me.
I don't want to pay you intereston interest. It just something sounded
so crazy about that. Oh you'regetting good, you're coming on the twenty

(09:09):
three second mark. I like that. What's that? A good? It's
all good? All right, Sowe're gonna all hold that thought. When
we go to break from city stumping. We got say Tapes Nails on WBZ
News Radio ten thirty sponsored by Floorand Decor, National Lumber and Village Bank.

(09:37):
Just written it all and welcome backto WBZ News Radio ten thirty.
Tepes Nails City STUMPO. Okay,Sean, we heard Tyler's opinion. Now
here's here's my question to you.Why is it called the construction little money?
But we don't get the money tillafter we do construction. Can you
introduce himself? Oh, I'm sorry, can you introduce your stuff? Go

(10:00):
ahead, and let's start. Giveyou a little bit of background. So
John Kelly Ran, managing partner ofore the Advisors. We're a real estate
private lender in the Boston area.Quick background, So you know we talked
about construction, we talk about builders. Well, I grew up My father
was a carpenter. My mother wasa realtor selling foreclosures in Boston. So

(10:20):
you know, I've been on jobsites for how a long time? Forty
five? Okay, my shoulder,you have the baby. I've been around.
I've worked with my uncle in construction, so I spent my summers in
DC working with t J. RandConstruction. So I come at the lending
side from a kind of construction builder'sfirst side. And then, you know,

(10:41):
after kind of doing this and growingup in this, I went into
real estate private equity and real estateinvestment banking, and then came back to
Boston seven years ago to set upour own real estate private lending business to
kind of bring some of this privateequity and kind of Wall Street you know,
kind of money and philosophy back toMain Street. So you know,
how we position ourselves in the marketdealing with builders is we're a non bank

(11:03):
lender for bankable clients that have projectsthat just don't fit into the bank box.
And a lot of that has todo with timing. So the clients
that are coming to me are notthe clients that are saying, hey,
I have no money and I haveno credit. That that's not my client
and they're not clients. So myclients are typically builders that are financiable.

(11:26):
And this is not for every singleone, but typically so they're financibal so
they can get bank financing and theychoose not to because of either speed.
So you're buying something at auction andyou have less than thirty days to close.
Oh yeah, because we mind somuch an auction last five six years
here in messages, Yeah, wellgo ahead. Or you're buying something and
you're a competitive bid process and they'rebidding against you, and you know they're

(11:48):
going there and they say, well, I can send it, sell to
city somepo or who's getting bank financing, or I can sell to this builder
or actually check who's going to closein ten days and they're going to have
to come to us in order tobe more competitive because the seller is not
going to wait forty five days orninety days for bank to close, and
so that there end up need togo to somebody for speed, and so

(12:09):
it's a performance product, it's notnecessarily a product there. And then where
we are today is just looking atthe environments are banks aren't as active as
they used to be, and banksare pulling back, especially on the margins,
on the construction projects and the buildprojects and not everything. They're not
not on all builders, but noton all builds. Right. They are
still with the sophisticated builders, they'restill taking care of one. But the

(12:35):
guys that are not tasting their ownblood a little bit, they get nervous
of those guys. And we're notlending to those guys either, right,
So that that's not our market.But we are doing things where we'll close
on an office to REZI conversion.Right. So I'm looking at office buildings
now downtown I'm looking at but notall can be converted, but some can,
and you need to move fast onthose that can, be right,

(12:58):
And so we're trying to deal withthe clients that need a product for speed,
not because they can't get a bankloan, and sometimes we're there,
we do the fast closing and thenwe get taken out by a bank loan.
That's for that and a matter ofhow much time it can be anywhere
from we've done loans as quick asyou know, been paid back and as
quick as a week pre penalty,no penalties, and that's why they work

(13:20):
with us. We're cheaper than bankfinancing when you take into account like a
five percent pre payment penalty. Andthat's the norm for high money guys that
there's no pre payment. No thatusually is is there usually a pre penalty
with you high I don't know.I don't I don't know. You know,
I don't see it tons of itto you know. I think there's
probably some guys will do hey,you know it's three months minimum or certain

(13:41):
minimum period, but most of themit's there's It seems like the guys I've
talked that do that is because thepoints spread on the other end, they'll
charge them a lower interest rate,but they get them on the other way.
They get them, They get themwalking out the door, not coming
in the door. Maybe I seethat as more bank financing the way it
goes. But if banks are doingcharging three, four or five hundred basis
points over if you're only two percentmore, so why go to a bank?

(14:07):
I mean that and that's some ofour So they had ones to pay
the ten percent, then by thetwelve and the nines. I mean then
come on, look at we knowone thing in our business, in any
business around a long time, rightLike, it doesn't matter if my commodity
is construction. We all know whatbrings you down to your knees in business,
and that's called interest. I don'tcare if you're in a Mama Pop
Pizza place and you got to linethe credit here and a ligne of credit

(14:30):
there. Look at the look lookat the how how we're servicing the debt
nock country, right at the interestrates that we're paying. And I would
say that the deal if it worksfor a bank loan today, and it
works for a private lender, thenthe deal works. We run the numbers
ourselves, and that's one of thethings. We have no originators on our
team. There's not a single salespersonon my team. I'm not you're on

(14:52):
top of that. Looking we're notlooking for going out actively soliciting clients in
that way, right, People cometo us because they have a project and
they're going to earn a margin onit. And I think as a builder,
you should be targeting at least atwenty percent margin. And so if
you're not making a twenty percent marginon the project, if you're making a
twenty percent margin on the project,you can afford twelve percent as your cost

(15:15):
to capital on the dead side.If you're not making a twenty percent margin
on it, then you're paying toomuch for the project, and you shouldn't
do it. And if you don'thave and I think people should, and
this is an industry thing. Okay, let me bring you back. How
many guys in the last three years, when prices would absolutely berserk on them
and they didn't see it coming,had to come back to for more money.
Not that many, that's insane.I would say number went from three

(15:39):
or five, from three or fiveto three fifty five a linuar foot to
eighteen eighteen fifty little foot lineal footby twenty twenty one. If you were
in the middle of a project andyou were buying lumber, you got schmeckls.
So if they had an advance fromyou, let's say one hundred grand
for a frame, and the framewent up to four hundred thousand. Who
was covering the difference. But let'slet's look at it this way, right.

(16:02):
So one of the things about privatelending very different than a bank loan.
And one of the things that welook at our loans are our loans
are short termed, they're twelve months. Why do we do that? We
do it? We do it.We're not taking on projects or you know,
if a borrow comes to us andsays, hey, I've got a
three year project and this is goingto take three years, I'll say I'm
probably not the right lender for you. You really want to go to a
bank or you want to go anotherlender, because we don't have that visibility

(16:23):
on cost and sales prices as wellthree years from dow as we do twelve
months from now. And so yourpoint about lumber is the next one.
But we did have that in thatperiod that two years. We're getting hit
with everything. But if somebody's closing, right, it's a twelve month loan,
so we're probably doing you know,if it's a two year project,
we're not doing that project, right, that's not our But even in a
year project, they're buying their lumber. They're signing up their lumber the day

(16:48):
you know, after they're closing.They're getting in there and getting lumber price
in delivery. It's not twelve monthslater you're getting your lumber. You're getting
your lumber at the beginning of theproject, not the end of the project.
Right, I hopefully waiting twelve months. I can guarantee that any loans
that you were writing for new constructionguys in that period, they came up
with the money. Whether they didn'tcome back to you, they had to
come up with a difference of moneybecause everything was up. Well here's everything,

(17:11):
here's what we did see. Soone of the things that was up
right, so very interesting in thatperiod is prices and construction costs were up.
Right. Price to acquire the propertywas up, but also the end
product, the value shot up ina period of time, and that and
that you know, we you know, talk about this forever, But that
bailed out a lot of guys,right, correct, You know, a

(17:32):
lot of people got bailed But that'snot happening right now. That's not happening
now. So the numbers are up, but we're still only pulling a certain
number on the other side, soit's not matching. So the spreads.
Look, I'm in a very nichemarket, so I don't pay attention.
I'm not concerned. Right, Butfor the guy that's entry level, let's
say three and a half four millionin new Massachusetts, right, he's the

(17:55):
guy that can go down faster thananybody because it's entry level. That's kind
of that's a new number for anew construction. That is crazy. And
what town Newton? Two Oh,there's no two million. Not a single
family, not a single family,not in the nice part, not the
nice part you might be an in. Yeah, seven thousand square foot lot
on Comma Averge. Yeah, notvery new. But it's crazy. I

(18:18):
mean it's crazy where prices are.I find that absurd growing. I mean
I grew up a very modest incomefamily to think about like what but which
where Jamaica Plane in Roxbury? Okay. So again, when I hear you
know, Newton's not affordable, Brookline'snot affordable West and what it never was?
It never was. So I'm sosick of hearing it because it's all

(18:41):
I just laughed. It's like thecraziest conversation I have with people all the
time. My parents went from ourtwelve thirteen thousand square twelve thirteen thousand brand
new house they paid for West Pevityin nineteen sixty four, in sixty four,
sixty five and seventy eight they pulledI want to say, twenty thousand
for that house and moved to Newtonand paid ninety something ninety nine. Was

(19:04):
that affordable? No pee? Buthe was affordable? Newton won and the
only and the guy was ritally askinglike one forty They moved dollars furniture out
and he just every he just tooka beat. It was nineteen seventy eight
was some bad times anyways. Andbut again, what where's that affordable?
We are when you're leaving wes poebeat a house that you're into for next

(19:26):
to nothing, and you moved toNewton and you're one hundred and plus thousand
dollars more, right or whatever?The number of different than Boston area housing
is absurdly expensive and it's only goingup. And we can't talk about that
too. Hold that thought, I'msitting stumpointing was to his nails on WBZ
and his ready at ten third sponsoredby Pillow Windows of Boston. Next day
molding and Kennedy Carpet in the morning, and I'll come back to tenness sales

(20:00):
on WBZ News Radio ten thirty andI'm Cindy and I'm here with who,
Mantha Tyler and Seon. Okay,finish up with you saying Boddy Austin's expensive
and it's only getting more expensive,and it's hard to build, and it's
getting more expensive to build. It'stough out there. I get it.
So let's go there. Why doyou think we're in the housing crisis that

(20:22):
we are now? I think becauseit's so. I think there's so much
red tape on building, and Ithink it's so. We've had red tape
for fifteen years. We've had redtape for a lot longer than that.
There used to be a time Icould build anything one as long as I
fit my side, setbacks, rearand front period and the story height restrictions.
Non far Non, it's not theproblem. The problem was. And
I set us on Bloomberg Radio intwenty eleven. When you stop building for

(20:45):
three four years and we're only ineleventh of time. We missed eight,
nine, ten, we're already threeand a half years before I went on
too Bloomberg Radio when they said,Cindy and I started going right over their
heads. How did you think thiswas not going to catch up on us?
Many states? Everything closed down liketake Florida, like every excavator stopped,
everything stopped. Mass a little bitdifferent. We're still building, just

(21:08):
took longer to sell. Right,So we're kind of cushioned here, But
we can't judge that across the wholeentire country. You are we're going to
catch up on a housing problem withina decade that was dead on on that
one. And the other problem ishere here. Here's where we are right
now, is that you have aI think you're short about seven million houses

(21:30):
in the country right now. Now. You want us developers and builders to
go out there gamble every day,right, think about this, and we
got to pay crazy interest rates,crazy number for product and crazy numbers for
skill gap labor. Right every thinkabout this. For every fifty guys that
are going out, the average ageof a contractor is fifty years old.

(21:52):
That is a true fact. Whetherthere's plumbing, electrical sman, whatever,
fifty is the average age. Everyfifty that go out, one's coming in.
Every fifty that go out, toretirement or death. One's coming in.
That's not a good ratio of numbers, right, that's not how it
works. Fifty go out, fiftyshould be coming in. Fifty go out.

(22:14):
Give me thirty back in, giveme fifty, give me seven,
give me ten, depending on thetrades. Some we are getting seven seven
back in. But here's your trifector. Here is I said money's expensive.
It's not used to being you usedto hear. Oh, it's all on
how you buy. Right, it'sthe bye. It's not bye, it's
on the buy. It's not onthe buy anymore. We gotta pay what

(22:34):
we gotta pay. Period. Endof story. No one's giving away their
product anymore. Right, and thennumbers just keep going up. So how
does it become affordable. It's notgoing to become affordable because we don't know
what the new norm is going tobe. Number one, We don't know
where product's gonna level. We makethis inflation curve. Maybe June comes out

(22:55):
again with a better report, Maybewe'll drop one or two. You know,
we'll have I don't know. You'relooking at me like I don't think
so, Cindy, okay, oneone point twenty five. But that's not
going to change the needle. It'snot going to change the needle. But
remember, the stock market looks intothe future. For whatever reason, the
stock market is up at all timehigh Friday of four hundred. What are
they seeing that we're not seeing,right, They're seeing a stable economy.

(23:18):
I don't know what they're thing.I could say to you, they're overflated.
I don't know. This is ourthirty six years. This is something
I've never seen before. I meanpersonally, I think we should be in
a precession, depression and everything elsethat comes with it. We haven't figured
out why we booming right? Why? Why? Why? Why? Okay,
So I just think that this windowof opportunity right now is right here,

(23:40):
and I'm taking full advantage of thiswindow, meaning I got no competition
that's stepping in. I'm going outand buying everything I can buy, because
when that window closes again and interestrates do drop, there's gonna be ten
office again in every house. Therecomes to the game again. So how
I look at this and if peopleare listening, hope they're listening, really

(24:00):
well, if I buy as anend user, right, we'll get back
into your hot money for a minute. But I just wanted to go here.
If I buy a product today andI can find a way to carry
the difference in the interest rate asa young you're thirty one, Well what
does that mean? Well, Ican't go off for dinner every night.
I got to slow down my lifestylea little bit for the next year,

(24:21):
not a vacation, cut back onthings that need to be cut back on.
Carry the rate when you run thenumbers from what you're going to pay
in the difference, So you're notgoing back to two, three four percent.
That's done. Guys, that's notever happening in my lifetime, your
lifetime seeing me. That's never goingto happen. But let's get back to
something that's fear fives and the fives. Okay. So if people have locked

(24:44):
in mortgages between three and a halffour and a half, four point seventy
five, okay, they can swallowthat. They can swallow it. The
buyers will come back out. Ifyou take the difference of spread to your
brain things you're going which you're notgoing to three and a half percent.
So folks, get that out ofyour head. You know it's to fall
down again in real estate to cometumbling down again. It's not gonna be
the old market. That's not gonnahappen again. But if you lay out

(25:10):
the difference of the spread of let'ssay, okay, if it gets back
to normal, it's five and aquarter, let's say five and a half,
right, and not six point seventyfive or wherever we are right now,
wail the difference every month. Ipromise you you'll be cheap on the
interest rate. Then you will bewhen this ten off is coming and the

(25:30):
product's going again eighty ninety one hundredthousand dollars over asking price. Just see
how I see things. No makessense. So if more people understood that,
they'd be less afraid to buy,you're gonna be it's always where it
goes. You're gonna spend it hereor there. You're gonna spend it on
the interest rate, or you're gonnaspend it on overpaying for products. You

(25:53):
can't forget that we're seven million housesstill short. That you know we haven't
caught up to that. Now you'repulling back on developers again because a lot
of us have pulled permits that we'renot going to ever build out. We're
trying to flip the deals. I'mme not I'm not flipping anything. But
I'm saying I use the word webecause I have a mouse in my pocket,

(26:14):
I guess, But I'm talking tothe average guy there. When you
start checking Brookline, Newton, Revere, at Chelsea, I don't care where
you go. Massachusetts, and againwe're in thirty plus states here, but
let's talk about Massachusetts. You speakto the building departments because I've called them,
Hey, how many permits for newconstruction? Fifteen? Fifteen? No,

(26:34):
fifteen altogether, Cindy, what doesthat mean? Decks, bathroom,
kitchen? No? How many newbuilding permits have pulled from ground up?
Three? Four? They were gettingfifteen a day. You see where I'm
going with this, No think,and that's in a month. So there's
a slowdown right there. You seethe slowdown happening. I see it,

(26:56):
and I think there's anything But that'sokay. But now if you take the
seven million houses was short and youadd the slow down again, seven million
will grow to nine million overnight.All I'm saying, yeah, there's a
massive need for housing. Correct,let's talk about greater Boston area, but
nationally, but coction is huge andit's very hard to build and we need

(27:17):
to loosen the restrictions on builders.Okay, let's gold there, right,
and let's be clear that a lotof the restrictions that are on builders in
terms of regulations, in terms ofbuilding code, they kill the cost.
Right. So we sat down.What it does is it makes us builders
carry something for a year longer,pay the interest, pay the insurance,

(27:37):
and paying the taxes because you getour hands tied behind our backs like it
all times. And then special permitZBA, the design review blah blah blah.
Then we the market going to beand then affordability code absolutely and so
you make it. I mean webrought it in. And then affordable housing.
We brought in ten builders into ouroffice, sat down through a destruction

(28:00):
project up on the screen. Ithappened to be one of the developments that
we had personally, and said,let's go line by line on what your
build costs are. You know,what is it going to cost you for
framing on this, what is itgoing to cost you? And where are
my savings? And we went throughthis and we went through, you know,
dollar by dollar, looking at itwith every single builder, with all
those guys in there and you couldn'tcome up with savings. With all your

(28:21):
guys in there, I would ripthat apot in five minutes and tell you
you're going to be over budget,over budget, over budget, over budget,
over budget, over budget. Wehave not brought a project in.
I never brought my quick books,my Excel, spreadsheets, all my software.
That's my bible for building. SinceCOVID, we are over in every

(28:44):
buildout. We've never come in underbudget or to budget. And here's the
issue is that that never happens bythe way. You know, you talk
about the Brooklines, the Newtons ofthe world, you can still build those
budgets. You go to the restof the market and you talk about the
media and income, and you lookat the build cost forget, if you
get the land for free, youlook at the build costs and the affordable
bad work it. You can't buildit, and so you're gonna have a

(29:06):
massive shortage of housing in a lotof these neighborhoods that need it the most.
Okay, So if you listen tome in xpaces and clubhouse and social
audio devices, I say this topeople, if you gave me the land
for free, the numbers don't pencilout period, end the story. Don't
call me on these deals I'm lookingat right now coming through our office.

(29:29):
I don't know I'm getting fifteen eighteendeals. The last time I saw fifteen
eighteen deals, it's been nine yearssince the eleven ten eleven market. So
what I'm saying is, you guysare only gonna get busier, and I'm
only gonna be able to name mytune because it is what it is,
right, So we're not gonna beafraid. We're gonna be very careful how

(29:49):
we maneuver this market because this issomething none of us have ever seen.
Hold that I thought. I'm SidneyStumple and you listen to Toughest Nails on
WBZ News Radio Temper sponsored by NewbrookRealty Group, Boston, would Smaller Insurance
World Auto Body and Tosca Drive AutoBody and welcome back to Taba's Nails on

(30:19):
WBZ News Radio ten thirty. AndI don't care if you don't know who
I am by now, then youshouldn't been listening to my show. What's
your name, Samantha? Okay,you're Tyler Winder? Okay, Sean Kelly
ran all right. So we justhad a conversation. Now give me your
abuse of what I just said.You can say, Cindya dead wrong.
No, I think the one riskand speak careful when you say I'm dead

(30:41):
wrong. Okay, I'm never deadwrong, but go ahead. I'm still
waiting for Cindy to come to mefor a loan. I'm waiting for that
dec It's gonna happen, Sam,it's gonna happen. That deal is gonna
come up. And you're like,we're in the middle of these projects.
It's such a good deal. Whois sophisticated can close this in ten days
get it done? And I hopethat I'm the one you can. Then
I'm want to beat you down onyour weight so you don't want me.

(31:03):
You're not I am because you're gonnawant that deal so bad because there's gonna
be so much margin in it,and you're gonna be like, Wow,
this is an amazing deal and itgoes Cindy, do you want the deal
that means I have to run outof money? Right? I don't know.
You know that could happen. Itcould be you could be doing so
many projects because what we talked aboutis right, there's gonna be so much
to build. I told you infifty nine. Yeah, but somebody's got

(31:23):
to take it over, and somebody'sgonna be doing a lot of projects,
a lot of energy. Go talkto miss Brunette. Yeah, she should
be running this company by now.I know a thousand percent. She's got
everything it takes to run this company. She just doesn't like to chase the
guys all day. And I getit, you know what I mean.
I'm just used to that. Shebut she's sweets all the time now,
like I can't stop her from swearingshe's a sailor. She is. Please

(31:47):
tell her it's not very nice.Uh, Sam, that's not very nice.
Let's go, well you should becauseit doesn't. It works coming out
of my mouth, but it doesn'twork coming out of her mouth. We'll
send me tell her that, please. Oh your mom just said it should
listen to me. Go ahead,you can tell me where I'm wrong.
So I think in the economic environment, we're were talking about rates, right.

(32:09):
Every builder, every developer, everyreal estate person is talking about rates,
and I think let's not play withrates, right, Let's not go
out and build, Let's not buythings with the idea that rates are coming
down. Anytime soon. And Ithink that the risk is that people are
going to say, hey, ratesare coming down soon. You're going to
serve us to death this country atthose rates. It's a problem, right,

(32:31):
But I think you can be rightrates are gonna come down, but
you can be vastly wrong on time. And so I I don't know right,
and we're not gonna We're not.But is it going to be twenty
five bases fifty basis points in ayear? You're gonna get one percent in
a year? Does it matter?Is one percent going to matter? Does
it mean that mortgage rates come down? And then you have to ask your

(32:51):
question yourself, the question why arerates coming down? Are rates coming down
because inflation's coming down because the governmentrate does all the time and goes this,
Oops, we made a mistake therates we made a mistake. Or
do the rates come down because theeconomy goes down and they need to lower
the rate to save the economy.Is it is it a rates falling because

(33:15):
inflation is falling? Or is ratesfalling because employment is falling and unemployment is
rising vat sleep And so then thenif you look at that picure, I'm
not a conspiracy person by no means. But if you think I believe the
data or anything anymore, I don't. So let's get that straight. There's
a lot of people unemployed that hasstopped collecting unemployment, so I'm not gonna
have real data numbers here. Okay, that's the truth. So I think

(33:37):
we have a two speed economy.I think we have a lot of people
that are doing very very well.And I think if you look in the
data, and if you go backand and you know, I do a
lot of this on social media.LinkedIn is my place. People who follow
me, I'll see it. Icomment a lot on on the economy.
Well, I'm coming after you onLinkedIn. Then I'm gonna yeah, come
on, let's go. Let's goout to bat. And I think one

(33:58):
of the things that's out there,and its reason is, hey, if
you look in in the data,if you follow the bank data, so
mortgage delinquency, I need them onxpaces with me. Remind me of that
place. Go ahead, the mortgagedelinquencies on the edges. So faha right,
So the faha loans the language isa certain spike. If you look
at car loan delinquencies, they're goingup. If you look at credit card

(34:20):
delinquencies, they're going up. Sosomething in that consumer on that end is
not going well, right, andso is a commercial. And then if
you look at the commercial real sex, and then you look at the then
you look at the down Joe's it'sup for I mean, it's just crazy.
And so you ask yourself, iseverything going well or have we reached
have we gone to a point thatwe've said, hey, it was going
well, and it's carrying on pastthe edge of the cliff, and we're

(34:45):
now looking and saying, you knowwhat, the momentum is carrying us forward,
but the fundamental economy overall isn't asdoing as well as people are looking
at. And that's why as lendersand we say, hey, what is
there I look at as a lenderas an investment position, right, and
why am I lending? Why I'mlending because it's a defensive role. So
our investors and we're investing on behalfof our investors. We see it as
more defensive than going out and buildingourselves right and being an equity investors.

(35:07):
And that's because we look out theeconomy and we say, hey, it
doesn't look as rosy to us asit does looking at the Dow, and
we think people need to be defensive, and I think people need to look
at that and start saying, hey, you know what, we need to
proceed with caution. So okay,so everything you just said, just dumb
it down. Now, dumb downeverything you just said, because sometimes we

(35:28):
talk over people's heads and they're notgrasping. I think the economy is not
doing as well as it shows andthe figures greed and I think the same
page on that one. We are, but a lot of people aren't.
No, and I think people thinkthere's a rosier view than maybe they should.
And I think people need to proceed. I'm not saying you need to
save money for a ready day.Just save money. Oh he's the cheapest

(35:53):
person in the world. Thanks forbringing that in. He's a Libra.
Okay, I'm I'm a thirty oneyear old Libra. Every dollar I get
goes right back into the business.Okay, So you save money for rain
day, you or you reinvested in, reinvested in. But you're stupid,
right, try not to Okay,walks around holding his sock. I'm just
trying to make it's a whole time. He had something he's getting very personal

(36:16):
talking about Okay, I like,guys, what Nana does, It doesn't
matter. You save for a rainyday with the coffee cup. Then I'm
just trying to explain to Samantha,like you, just if you make a
million, doesn't mean you spend eighthundred. Okay, how about spending five
hundred? Make a million, givena load to the government, and then
I don't know, there's not eighthundred left. That's true too, right,

(36:37):
So make a million, you givea five hundred, right, done,
and then go get some property taxin there. And okay, but
I mean all time in so ifwe're looking to dumb everything down, you
look at everything at a very michdoes that mean CALLI youre as dumb as
me because I like the dumb things. Now. I can't answer that as
I'm as dumb as I am.Right now, We'll just stay right.

(36:59):
Either of you are dumb people.You simplify everything, and you look and
when twenty twenty one where they droppedeverything and it was zero percent interest rate,
it was the dumbest thing you couldpossibly done for the financials and the
government. Moving forward where three yearslater and you're seeing the affordability spike,
right, so rates go down tozero, mortgage rates go down to practically
and that right there, right there, what you're talking about right now is

(37:20):
why the guys that have been inthe business for the last seven years are
tasting their own blood right now,and they don't know how to maneuver.
They've they never felt this before.So they were all like ah deers with
headlights coming at them. I'm laughingbecause I've had deal with I've been a
deal with headlights for thirty six years. Eighty seven, eighty eight, eighty
nine, ninety ninety one, Marketninety seven was a hiccup two thousand and
eight. I've seen this movie,and I know how to maneuver around this

(37:44):
movie. But your generation, ohyeah, things are going to great.
Real estate's gonna stay great for twentyyears, body stopped. There's always something
that breaks us down. We justnever know what it's going to be.
And we had the longest real estaterun I've ever seen in thirty six years.
Yep. We literally had twelve yearrun, a twelve year run where
things have been great. Something's gonnaslow this down. Well, you look

(38:06):
at you look at the two thingsof so by the way I believe that
young guys at a cocky need totaste their own blood right now. And
is it bothering me? Absolutely not, because they need to. You know
why, you don't know good timesto your felt bad times. You don't
appreciate good times to you felt badtimes, and vice versa. And by
the way, bad times checks yourego right back at the door real fast,
and you hope you'll never forget that. I've never forgot those days when

(38:30):
I tasted my own blood, rightSo, I just think there's a little
bit of blood tastes that's gonna gettaken care of out there, and then
they'll come back and maybe do thingsa little smarter. Everybody wants to be
the biggest, and everyone wants thisovernight. They want to be very,
very wealthy in five years, anda lot did get wealthy in five years.
The questions will sustain because the biggeryour balls are, you're going to

(38:54):
stay with that mentality, and thatmentality is going to take you down at
some point. Just watch, like, look around you, look around you.
I'm not gonna be wrong here.Yep, it was happening my generation
is gonna happen in your generation.Me. I was smart. I watched
all the other guys. What didthey do wrong? So I don't do
this wrong at twenty three, twentyfour, twenty five, then I saw

(39:15):
it. I figured out they wereover leveraged and underfunded. Wow, two
crazy words. Over leveraged and underfunded, and we're right there right now again.
These guys are underfunded and they're overleveraged, and there's no more robbing Peter
to pay Paul. So they havefour houses sitting. The banks are shutting
them down, saying you're not gettinga fifth because the fourth one carried the

(39:36):
interest on the first. The otherthree follow I'm saying, yep, so
look for another deal to pull themoney to carry your interest loan. And
they're out shopping other deals, andthen eventually the bank says, until you
move one or two projects, we'renot taking you on against they go to
another bank. You guys, I'mjust saying, what's been for thirty six

(39:58):
years? You can tell me what'sbeen going on here with I think starts
blinking whenever seizure from it. Butit is hot live, we're live,
we know we're live. Go ahead. I think there's one of the things
that you know we tell our builderswe work with, and I think a
lot of them were more experienced builders, and that's we deal. That's a
clientele we built up, and that'sin everybody in the industry. Okay,
I hope that bub we're going tobreak. I know, I know this

(40:19):
thing. I'm so sorry. Youknow. It's in Toughest Nails on WBZ
News Radio ten third'd be right backand welcome back to Toughest Nails on WBZ
News Radio ten thirty. And I'mCindy and I'm here with Sam, I'm
here with Sean. I'm here Tyler. Okay, So guys, you're inducted

(40:40):
into the Cindy Stampo world. Sowe're gonna come on every four or five,
six weeks. We're gonna bring uppeople up to speed on interest rates,
hard money, regular bank, traditionalfunding. How's that perfect, Tyler?
Sean, how do people reach youeasiest ways on LinkedIn? Tyler Winder?
If you go on Instagram, misterWinder, that's what we're running with.
And if you're ever in North Endin Boston, that is where our
headquarters are. Go ahead, SeanKelly Rand RD Advisors, so you can

(41:04):
look us up on Instagram. Wehave a presence, but really you find
me personally on LinkedIn. So it'sSean Kelly rand So Kelly k E L
Y hyphen R A N D andit's on LinkedIn. You guys always going
to complicate things your generation. Okay, have a great safe weekend. I'm
sorry that the things are so long. I'm just Sindy stumpboy Gmail. I
have a great safe weekend and we'llsee you next week. This is Cindy

(41:25):
Stumpo Toughest Nails on WBZ News Radioten thirty