[00:00:00] Speaker A: Welcome, listeners. You're listening to the Deeds in the Desert, where real estate investors tune in for the latest news.
[00:00:08] Speaker B: Welcome back to Deeds in the Desert.
Today we're going to introduce somebody that's been behind the scenes for a few months now that we are ready to introduce to you. And I know it may seem a little scary that we have maybe hired a chief legal officer, but there's a benefit to all of our investors for doing this. So welcome, John, to the team.
[00:00:31] Speaker C: Thank you.
[00:00:32] Speaker B: What is going on?
[00:00:33] Speaker C: What is going on? No, it's great to be here. It's great to be with Ignite Funding.
[00:00:37] Speaker B: Yeah.
[00:00:37] Speaker C: Thanks for inviting me here to talk.
[00:00:39] Speaker B: Absolutely, yeah.
[00:00:40] Speaker C: Looking forward to it.
[00:00:41] Speaker B: We have a little history.
We knew each other before the hire.
You had worked with us on a court case back in 2011, 2012, and let's just say I've been acting as the legal liaison since then. And I am ready to pass that guard to you and have over the last couple of months. So wanted to just kind of introduce you to our investors and help them understand why you're here. And so walk me through that a little bit. Like, what was Carrie doing that you're now doing?
And probably more so suited and well suited for than I was. But give me, give us a little bit of an idea of what your role is here.
[00:01:25] Speaker C: Okay. Well, yeah, among the many hats that you wear, as I always mention, was the lawyer hat. And that's, it's not an easy hat to wear and it's, you know, a team effort as well. But, you know, with any organization as you grow, I think it's kind of a difficult decision that I've seen many clients have to make is do we actually need full, full time in house attorney? And if we did, what would they do? Would it be, you know, duplicative of maybe stuff we're already doing, or is it cheaper just to continue using outside counsel?
But I think ultimately what it comes down to is once a company gets big enough, there's. There's just things that come up on a day to day basis that you may not even realize that having someone dedicated to the legal aspect of the company would be beneficial for you, for the investors, for, you know, your customers.
So, you know, first and foremost, you have someone in house that's sitting here every day and. Yeah, right. And if something comes up that even if you don't think it requires legal expertise, having someone that has that training, that knowledge, that background, and then the experience of always looking at things from a legal standpoint, I Think you by now, hopefully you agree it's, it's just invaluable to have because it just takes a little bit of pressure off of you so you can focus on the things that you're, you're, you're best suited for or that, you know, that come up in your role instead of having to. Again, it's like just one less hat that you have to wear all the time.
[00:02:55] Speaker B: Absolutely, absolutely. And I honestly didn't realize until we brought you in house how much I was on a day to day basis spending on making those legal decisions or talking with legal counsel in different states that we have or engaging. Because keep in mind, I run multiple companies, so it wasn't just a one trick pony. I mean, you're here to help all of the companies that we have. And so the job doubles and triples at times. And so yeah, it has become apparent to me having you here, how much time I now have to focus on other things.
And so that was eye opening for me as well because we had always had outside counsel and we still will obviously continue to have outside counsel, which I think some people are like, well, why would you have outside counsel, Carrie? You can save us so much money as investors by having in house counsel.
What does it mean from an investor standpoint?
Because I think that that may be, and maybe I didn't describe it well enough, so I'll allow you to. But you always need to have outside counsel.
So explain that to us a little bit because your role is really cost savings, but still maintaining that liaison with them.
[00:04:13] Speaker C: Right. And I guess to go back to your original question, my day to day role, or what is my role within the company and the companies.
One of the big roles that I've been spending a lot of time on already is working with outside counsel and being the point person. That frees up you, it frees up Pat, Misty, others on the team from having to step outside of their normal role to try to deal with attorneys, right? Yes.
[00:04:38] Speaker B: Oh yes. I know them well.
[00:04:39] Speaker C: I always used to joke, I've been practicing law for 20 years now, almost going one more year. I have the 20 mark.
[00:04:46] Speaker B: Oh boy.
[00:04:48] Speaker C: But I have always said over the time that the worst part about being an attorney is that you have to deal with attorneys all day. Right. You're always talking to attorneys and no one really wants to have to talk to an attorney.
So I mean, I joke with that, but really though, very time business standpoint.
[00:05:04] Speaker B: Oh yeah.
[00:05:05] Speaker C: I mean, you don't want to have to step out of your normal day to day functions and focused on what you're doing to bring revenue in and to manage everything that you manage to have to stop and deal with counsel.
[00:05:16] Speaker B: Absolutely.
[00:05:17] Speaker C: So having someone in house that does that and especially someone that brings that wealth of experience that I bring to the table here, that's going to make that, that is a big benefit, I would think, for the investors. Because you have someone that's minding and watching these cases that that's their full time job.
[00:05:32] Speaker B: Yes. And watching every piece of the case. Because it's important.
You know, when you have a big case that involves multiple parties, you have to make sure that your interests are never jeopardized in any way. And it could be through somebody else making a comment relatable to the project that could affect your assets.
[00:05:53] Speaker C: Yeah.
[00:05:53] Speaker B: And so you gotta stay on top of everything.
[00:05:55] Speaker C: And it's not only, I mean, just the time aspect of it, kind of what we're talking about, but I think because you're staying on top of it, you're looking at everything, but you have someone looking at it that has the background that I have and that, you know, kind of knows the inside baseball behind what it is. Exactly. The lawyers are doing. They don't need to explain to me.
[00:06:12] Speaker B: Yes.
[00:06:12] Speaker C: What this motion is that they're filing and why and what the strategy is. I mean, so a non lawyer will see things like that sometimes from, from their perspective and add things that a lawyer wouldn't see.
[00:06:24] Speaker B: Yes.
[00:06:24] Speaker C: So it's, it's good that we're going to of course, continue to work hand in hand with a lot of this stuff.
But having someone looking at it and working with outside counsel and following along and giving input to counsel that has the legal background and can understand what it is we're doing, why we're doing it, and then also can direct outside counsel in a way that's hopefully going to add value and be more efficient overall. Because I've already had a couple opportunities to say, okay, let's not go down this path, let's focus on this. Because I know from my experience and being a trial attorney and going to court and fighting these battles in the courtroom, what, you know, what, what a good spend is. I guess from our standpoint, when we're spending investors money to fight these battles for them, you don't want to waste any money now. And legal bills are expensive enough as it is. They are to be spending it on things that really have a very low probability of moving the needle on the ultimate outcome. That's, that's what I'M trying to focus on is, you know, if we're going to be spending time and resources on some of these legal cases where we have to, unfortunately.
[00:07:26] Speaker B: Yeah.
[00:07:26] Speaker C: Let's make sure that that money is spent very wisely because again, it's not our money investor funds that ultimately that's going to affect their bottom line.
[00:07:34] Speaker B: Absolutely. I remember one of the first things I dropped on your desk.
It was a legal bill. And I'm like.
[00:07:40] Speaker C: Right.
[00:07:40] Speaker B: I think that my quote, which I probably can't use on camera, was, are you effing kidding me?
And, you know, it was. It was you. And as you looked at it, you're like, no way.
[00:07:53] Speaker C: Yeah.
[00:07:54] Speaker B: And the first thing you're doing is negotiating legal bills. And I think sometimes, you know, investors take a lot of this for granted, but we take spending their funds very seriously. If there's an opportunity for us to even question, hey, what's going on here? It's even easier for you because you can go, come on, like, I've been down this road before. Like, what are you doing here?
Let's not have you cut our teeth on, you know, your newest guy in the office. Let's. Let's shave some of this off. And you were able to do that to the tune of over $10,000 for the first bill. And so the value now. Yes. Could I have done that? Absolutely. Have I always. Absolutely. But it's not as easy as you think to get attorneys to cut their bills.
[00:08:42] Speaker C: Right. And you're in a more difficult position because you don't necessarily know, as you look at a legal bill, I've been sending out these bills for better or worse for, you know, 18, 19 years now. It's nice to not have to do that anymore.
[00:08:54] Speaker B: Yeah.
[00:08:54] Speaker C: Being in house and focusing on one client or, you know, being part of one organization now in the role that I'm in.
[00:09:01] Speaker B: But, you know the game.
[00:09:02] Speaker C: Yeah, I know the game. And, you know, unfortunately, you know, it.
[00:09:06] Speaker B: It.
[00:09:07] Speaker C: I wouldn't say it's not fair to say the game per se, but, you know, there's. There's things where, you know, as an attorney with experience.
[00:09:14] Speaker B: Yeah.
[00:09:15] Speaker C: That certain things that, you know, even if it took the attorney a lot of time to do it, it shouldn't have taken as much time as maybe they did take or ended up billing us for. So we can go back and then talk to the council. And, you know, most attorneys, they're willing to. To work with us on things like that. And, you know, the important thing, or one of the most important things I've been doing in working with our outside counsel is making sure that they fully understand that even though, you know, we're a big company, we're growing, we have, we're dealing with a lot of funds, a lot of revenue. At the end of the day, I know the, the, the group of clients that they're working with, and we're still small on the relative scale to, you know, compared to some giant corporation.
[00:09:53] Speaker B: Sure.
[00:09:53] Speaker C: Publicly traded company or huge bank, as they try to. Exactly. Institutional. More institutional clients.
So it's like, if I can let council know, make, make the big bucks off of those big institutional clients.
[00:10:06] Speaker B: Yeah.
[00:10:06] Speaker C: We're really managing investor funds here.
[00:10:08] Speaker B: Yes.
[00:10:09] Speaker C: And so we, I, I'm going to be watching you, basically. Yeah. And in the particular instance you're describing, I can tell you that the subsequent bills from that attorney came in much more lean. Reasonable, right?
[00:10:23] Speaker B: Yes, reasonable.
[00:10:24] Speaker C: Because they know that they have an experienced. We have an experienced attorney here looking at those bills and scrutinizing them.
[00:10:30] Speaker B: Yeah.
[00:10:30] Speaker C: So, you know, again, working with outside counsel, that's, that's just one piece of the, of the puzzle, though, of what I'm working on. But, you know, in legal, you never know. Anything could come up on a daily basis.
[00:10:43] Speaker B: And it has.
[00:10:43] Speaker C: And we have even just in the couple of months that I've been here.
[00:10:46] Speaker B: Yeah.
[00:10:46] Speaker C: We've been dealing with subpoenas in federal court, in state court. Different states.
[00:10:52] Speaker B: Yeah. For different reasons. Some of them unrelated to us.
[00:10:56] Speaker C: Yeah. Most of them are administrative issues. Yeah. Things relating to maybe.
Yeah. A customer who has something come up on their account. So we have to look and see what's going on.
You know, things where preferred trust, for example, is named as a, as a defendant on a case. Really? Just as a nominal defendant.
[00:11:13] Speaker B: Yeah.
[00:11:14] Speaker C: Because at one point we did hold title to some property on behalf of a client that was involved in this later litigation, that the client or the customer of ours isn't even any longer involved and doesn't own the property. But we were in the chain of title in the past, and so we get put in as a defendant and, you know, you'd like to pick that up and think, well, that has nothing to do with us or customer because, you know, we just ignore it. But if you ignore something like that, then you get a default against you and it might put you in a bad position if you don't immediately address it the way it needs to be addressed.
[00:11:44] Speaker B: Yeah. So, yeah, it's crazy. And I, I don't think investors realize how much of that pops up from time to time.
[00:11:53] Speaker C: Right.
[00:11:54] Speaker B: Because they really depend on us from the A to Z. Right. We originate the loan, we capital raise, we service the loan, we collect on the loan. You know, we take it through foreclosure, all of those things. But those things involve a lot of litigation, a lot of legal issues, a lot of posturing that's happening between parties that have to be tended to.
And lucky for them, they don't have to deal with any of that. But the bigger we get and the bigger we got, the more we were having to deal with those situations.
So it was becoming extraordinarily time consuming for me to have to deal with and Pat. So let's turn to defaults for just a second because you are taking on a role here.
You know, Pat Vassar's job as director of underwriting is to go out and find these quality borrowers with quality product.
And that's truly his main, main focus.
And when we have situations where a default is involved, it does become was a good cop, bad cop, where Pat became the bad cop. I had to become the good cop or vice versa to keep that borrower in line, to get that project finished, to get it paid off. And again, a lot of behind the scenes that investors aren't quite aware of. But you're a litigator, you're a negotiator, and so you are now taking on that role of working with the borrower when there could potentially be a default, or maybe there is a technical default, meaning interest is not paid. You now are the person that is interacting with that borrower. You now are the person that's starting the foreclosure process.
You now are the person that is writing the communications that are going to the investor. So talk me through how that process has been, because maybe something, maybe some of those pieces are new to you, but for the most part, I mean, this is what you've. This is what you do, this is what you've done.
[00:13:50] Speaker C: Yeah, well, and maybe it helped to give a little bit of background, you know, before I got to ignite funding.
[00:13:56] Speaker B: Yeah.
[00:13:57] Speaker C: But so, you know, I started out here in, in Las Vegas. I've been in Las Vegas my entire career. Like I said, Almost 20 years, I think. I graduated in 2006 from the University of Oregon. Go ducks. Right.
And you know, the first job I had was as a law clerk to one of the business court judges here in Clark County.
And in fact, at the time there was. We had a specialized business court in Nevada, but it wasn't yet functioning too much. There was only One judge assigned as a business judge at the time. And, you know, Nevada was trying to. And still, I guess we are.
We are. We hold ourselves out as the Delaware of the West.
[00:14:39] Speaker B: Yes.
[00:14:39] Speaker C: Meaning, you know, it's where we. Where people want to come. If. Even if you don't have the business happening here in Las Vegas, it's a good state to come incorporate.
And one of the things that Delaware has that most states don't and that Nevada was trying to model was a specialized business court where if you have a business dispute, you file it and you get one of the business court judges who has specialized experience, maybe before they went on the bench, as being a business lawyer.
And with the idea being that Nevada understands that litigation is not good for business.
[00:15:13] Speaker B: Right. Yeah.
[00:15:15] Speaker C: It slows things down. It drains resources, not just money, but time.
[00:15:19] Speaker B: Yeah.
[00:15:20] Speaker C: So the idea was we wanted to put a specialized business court in place so that people could file there, go in and get back to what they're doing, what they want to do in business. Right.
[00:15:30] Speaker B: Yeah.
[00:15:31] Speaker C: So I helped worked closely with Judge Elizabeth Gonzalez, who was the business court judge at the time, presiding civil judge. She's now retired, but helped helped her get the rules in place to start a business court. And so my. Even starting from my first job as a law clerk, I was always doing business law. You know, I wasn't involved in doing all the other random, you know, criminal defense or civil. Random, random things. It was always, like, business focused. And so for that year, I got to see seasoned business attorneys, commercial litigators that were going to trial, they were in court, and see, you know, what was effective, what was not effective from the judge's perspective, too. Learning. Okay, what did this attorney do, John, that was good or bad or what should they have said when I asked this question? So I got really good mentorship at ground level. Yeah, totally cool. And then my first job was at a local litigation firm, commercial litigation firm. I was there for a couple years before I moved to another local business law firm. Really business focused? Always.
[00:16:32] Speaker B: Yeah.
[00:16:33] Speaker C: And then from there, I went to the firm where you knew me from.
[00:16:37] Speaker B: Yeah.
[00:16:38] Speaker C: Which, you know, again, that was a national firm, really strong, A thousand attorneys from coast to coast with offices in every city.
So I got to handle all kinds of different matters, you know, from those big institutional clients to, like, more local things.
But as being a trial attorney or, like, focused on litigation and on bankruptcy law as well, I did a lot of that doing workouts and, you know, foreclosures, loan modifications, all kinds of, you know, trustees, receivers, all this kind of stuff where we're dealing with assets and trying to cram loans down creditors throats and things, things like that. You know, what I've learned along the way is that, you know, if you, if you can resolve something through negotiation, it is so much better really than going all the way to the final trial and sitting there and being at the mercy of a judge or a jury.
[00:17:39] Speaker B: Yeah.
[00:17:39] Speaker C: Who may not understand anything that you're even talking about. You know, when you spend all that time presenting contracts and presenting all the history, you could just. It's a, it's a crapshoot.
[00:17:49] Speaker B: Yeah.
[00:17:49] Speaker C: You know, it really is. You don't know what you're going to get if you go to trial. So as much as we as attorneys always think, oh yeah, well, we, we, we're going to win. We know that the, you know, the facts, the law, it's all in our favor. Or I can convince the judge, I can convince the jury, our position is right. We have a just cause. You just can't rely on.
[00:18:10] Speaker B: Yeah. You don't know how they're going to rule.
[00:18:11] Speaker C: Right. So.
[00:18:13] Speaker B: So interpretation is 9/10 of the law.
[00:18:15] Speaker C: Right. Yeah. And sometimes it could just be something random.
[00:18:19] Speaker B: Yeah.
[00:18:19] Speaker C: That the decision hinges on that you didn't even think was that important.
Yeah. But it was to that judge for some reason.
And you know, sometimes judges are wrong, believe it or not. You know, they do, I'm sure, make mistakes. And then you have to go to an appeal, Supreme Court. And that's a more process. Exactly. So.
So you can eliminate uncertainty through on the front end with the negotiation process. But you know, sometimes you have to litigate in order to get to that solution. So sometimes you need to go and fight and litigate and spend time and resources doing that in order to get positioned to be able to resolve something.
[00:18:59] Speaker B: That's true. True.
[00:19:00] Speaker C: So.
[00:19:01] Speaker B: And we have cases like that right now that we're involved in.
[00:19:04] Speaker C: Yeah. And you know, it's not always your decision too, whether or not to settle right away. You'd like to settle sometimes. And maybe your opponents or you know, the other party on the other side, they're just hell bent on fighting and wasting their fund, their clients.
[00:19:18] Speaker B: Yes.
[00:19:19] Speaker C: You know, so there's a lot of moving pieces, I guess is what I'm getting at with all this. And so, you know, you have to be sort of a high level strategist as you go. And I think from, from my experience working the three different firms I've been at and seeing being as involved as I have been in just the minutia of it all, you know, you see that you have to be able to almost. It's a lot of game theory that goes into it.
[00:19:43] Speaker B: Oh, sure, sure.
[00:19:44] Speaker C: So, you know, my background before law school was, you know, I have a master's degree in economics. I don't know if you even knew that.
[00:19:50] Speaker B: Yeah, that I do.
[00:19:51] Speaker C: That. I taught, you know, Econ 201 and we talked. I taught about game theory and all that kind of stuff.
[00:19:58] Speaker B: Yeah.
[00:19:59] Speaker C: And you know, it's a. It's sometimes like a game of chess. So you got to see the moves ahead of the other side and know where. Where things are going. So you can make good decisions now or position yourself with the decisions you make now so that ultimately you can reach the outcome that you want to try to reach.
[00:20:15] Speaker B: And Pat and I were doing that in our own little non esquire way.
But what we would do and what we were doing and what we'll continue to do is, you know, Pat would take an approach with a borrower and he would go down a path until he hit a dead road into the road. And then I would take an opposite path with them and see if we got a different resolution.
And, you know, most of the time between the two of us, we were able to get things resolved before investors even felt an impact. Right before there was even a missed interest payment. And I think a lot of people don't realize that that behind the scenes that's happening, that negotiation, that, that that occurs is what keeps our portfolio actively working the way that investors expect it to. That's our job.
[00:21:08] Speaker C: Yeah.
[00:21:08] Speaker B: And so we take that extraordinarily serious. And we're always wanting to make sure that there are no missed interest payments.
But there are times when it just, it happens we have a borrower right now that just Mia just couldn't get a hold of. Right. You know, you know who I'm talking about.
[00:21:27] Speaker C: I've been trying and you know, turn my call, please.
[00:21:30] Speaker B: Yeah. It's one of those things where you're like, what. What happened to them in the East? You really start thinking, well, gee, something horrible maybe happened.
[00:21:38] Speaker C: Right.
[00:21:38] Speaker B: You know, because those scenarios can come into play as well and have in the past. We did have a borrower that passed away and it took us a while to get a hold of the wife finally. Obviously she's grieving. You know, she's trying to figure out what's going on. An interest payment is missed.
You know, that one all worked out. We were able to get the property back and sell it, not a problem, but it happens. I mean, these things are regularly happening. And if you look at other public company portfolios, you'll see that they're 30, 40, 50, 60% in default.
And in those particular cases, they're happy to take back the property. They want to take back the property. They want to go through the scrutiny and the process and whatever. We don't want to do that here.
Our goal is not to take back property. Our goal is to try to come to a resolution before we have to foreclose on the property.
Because the cost, the timeframe, associated, hiring attorneys, I mean, the whole process is quite costly for our investors.
It really, really is. So now you're in that arena where we're saying, hey, we had a missed payment. Here you go, John, you've got five days. We need to either communicate with the clients or we need to get the interest payment in and we're okay with a late payment here or there. It happens. Stuff happens. People miss sending the wires on time. Like those things happen again, investors may not know about them because we're resolving them. And on the 15th, they either get an interest payment or they get a communication as to why.
And now you're that five day guy.
You're the guy that we reach out to, to say, John, I don't want, I was going to say Houston, John, we have a problem.
[00:23:27] Speaker C: Right.
[00:23:27] Speaker B: But now you're stepping in and you're acting in that capacity, in that role for us, which is, which is huge, especially with your history.
[00:23:35] Speaker C: Yeah.
[00:23:35] Speaker B: And, and your negotiation powers and, you.
[00:23:39] Speaker C: Know, and, you know, resilience.
[00:23:41] Speaker B: I would, I would use the word resilient when I use your word, when I use your name. Because holy cow, he, he'll get, he'll get you an answer.
[00:23:49] Speaker C: Yeah. And you know, every, every borrower is different. I'm seeing already, you know, in the, you know, as I'm ramping up and getting to know our borrowers and every situation is different, as you said, but the bottom line is we always have to keep our investors in mind and knowing that we can't allow repeated late payments and if it's going to be late and, and we need to foreclose, then, you know, that's, that's an arrow.
[00:24:15] Speaker B: Yeah.
[00:24:15] Speaker C: That I have ready to load up and fire because just to move things forward and a lot of times you, you threaten the foreclosure and once they know that we're serious, then it's like suddenly that interest payment comes out of nowhere.
[00:24:30] Speaker B: Right.
Yeah. Because with, with a borrower you know, even if they're, let's say they're trying to refinance it someplace else, maybe they're trying to go get bank financing at 5% instead of our 12%, which they should be right though.
[00:24:42] Speaker C: That is, that is a. Hopefully.
[00:24:44] Speaker B: Yeah. The majority of our exit strategy is that our borrowers are getting bank financing or traditional financing after ours. Ours is intended to be short term. So we get all of, you know, if we file a notice of default while they're trying to refinance something, it's going to make it very difficult for them to refinance.
And so the threat of it alone sometimes is enough, but sometimes you have to actually act on it at the same time. So you know, maybe that phone call between the 10th and the 15th to just say, well, here are your options with us.
You know, you may want to consider making that interest payment because otherwise your refinance could potentially be jeopardized. And lo and behold, what do we get? An interest payment. Right. It's not our investors issue to tend to because your refinance didn't happen in a timely fashion.
[00:25:35] Speaker C: Right.
[00:25:36] Speaker B: And so stuff like that. It's just that one phone call.
[00:25:39] Speaker C: Yeah. And that's what I was going to say is, you know, as much as we want to work with our borrowers, of course, absolutely we want to help them because a lot of times they, you know, a little bit of help from a lender can go a long ways to a borrower. I'm seeing that. And we all know that just, you know, in dealing with our own banks and issues, sometimes you need, you know, the person that's holding the gun to your head to be a little bit understanding, to back off a bit.
[00:25:59] Speaker B: Absolutely.
[00:26:00] Speaker C: And I get that and.
[00:26:01] Speaker B: Absolutely.
[00:26:01] Speaker C: And so, you know, it's not always in our best interest to just forge ahead and just be super aggressive. Because in like the example you just gave.
[00:26:10] Speaker B: Yeah.
[00:26:10] Speaker C: If that makes it so that then they can't complete a refinance or something to get us paid off in full, then that's counterproductive. So you know, you've got to be smart and again, you have to look at each situation as a unique situation and decide ultimately what's going to drive the goal the best or the most efficiently in terms of wanting to get that loan paid off, get that capital back in our investors hands, allow them, if they choose, hopefully to reinvest in a new loan.
[00:26:36] Speaker B: Yeah.
[00:26:38] Speaker C: So you know, going straight to the foreclosure immediately if there's a borrower who in good Faith is trying to work things out with us and, you know, and is communicating with us again. But the key is they've got to communicate with us.
[00:26:50] Speaker B: Right.
[00:26:50] Speaker C: So you got to call us back, back. You gotta pick up, take, take my calls, respond to my emails. Even though, you know, if it says chief legal officer, I get maybe that, I get it. If that drives people, you know, to just put their head in the sand. And because they've got issues they're trying to deal with, I'm sure that's usually the situation. They don't want to have to face it. But being proactive from the borrower standpoint is going to work.
[00:27:13] Speaker B: Yeah.
[00:27:14] Speaker C: It's going to be the best thing they can do as well because again, we're just trying to help them get the money pay back to our investors.
[00:27:22] Speaker B: Ultimately, that's the goal. That is, that is the end goal. And you've, you've had an opportunity. You've been here a few months now. You sat outside of the client service representatives. You've heard them on the phone, you're, you hear what they're dealing with.
And we're really looking to kind of ramp up our communication with our clients. Anytime you have a situation where a borrower doesn't make a payment, it can be alarming to investors. It really can. Yeah. And, you know, makes them pull back, makes them think about, you know, who am I working with? What's going on here from your perspective? When you kind of stepped into ignite funding and you looked at a couple of the loans that we have that are in default right now, many of them have resolutions already in place or moving forward.
I know you helped negotiate a few of those most recent ones that we've had over the last couple of months.
What's kind of your take on how we kind of manage that whole entire process with our investors, things that we can improve upon?
One of the things you had mentioned was communication because, you know.
Yes. If investors want to know what I was doing on the weekend, it's reading all of the legal. I mean, some of that stuff is just hundreds of pages long.
[00:28:32] Speaker C: Yeah. It can be really dense.
[00:28:34] Speaker B: It's very, very tough. And it has been for me, obviously. I've had time, about 20 years experience reading all of those things now to pick up on things and. But you have to read it all. You can't miss one sentence because that could be, you know, that could be the difference. But what, what do you think you're going to bring to an investor from a communication standpoint to make Improvements upon what we have been doing.
[00:28:59] Speaker C: Yeah, well, there's sort of.
It should cut down some of the translation errors, I would say.
[00:29:06] Speaker B: Yes.
[00:29:06] Speaker C: You know, being able to communicate exactly what is going on with, with a pending lawsuit.
[00:29:12] Speaker B: Yeah.
[00:29:12] Speaker C: And in a way that just simplifies it and puts it into plain English.
[00:29:15] Speaker B: Yeah.
[00:29:15] Speaker C: Because you know, a lot of times if we're just repeating things from our lawyers that were all kind of legalese and don't make a lot of sense and we're passing that on to our investors, therefore, if.
[00:29:25] Speaker B: But.
[00:29:25] Speaker C: Yeah, right.
Or you know, like, whereas. Yeah. Like a bunch of words that sound nice, but what the hell does that mean?
[00:29:33] Speaker B: Right.
[00:29:34] Speaker C: Yeah. So just trying to translate and explain to them where we're at in the legal process on a couple of these bigger defaults that are unfortunately going to be stuck in litigation land for a little bit.
But also trying to communicate forward looking because I think prior to me being here we probably. Because again, none of you are lawyers.
[00:29:56] Speaker B: Yeah.
[00:29:57] Speaker C: Although I think that, you know, if you want to go to law school someday, I'll put in a word for you that maybe you can skip some of the initial classes or something.
[00:30:05] Speaker B: Yeah.
[00:30:07] Speaker C: But you know, I think since you're not lawyers, you're, you're just going with what the attorneys are giving you and you're keeping up with, with them and you're asking questions, you're giving direction to the lawyers, but you're not going to see the 30,000 foot view and the whole chessboard to know what we might want to do and what's coming next.
[00:30:25] Speaker B: Yeah.
[00:30:26] Speaker C: So I'm going to try to focus on in the last month or the last couple of months that I've done these communications I want to be able to give investors because what investors are worried about is the future. Right.
[00:30:36] Speaker B: I mean, what's going to happen when.
[00:30:37] Speaker C: We invest, we're invest.
[00:30:38] Speaker B: Am I going to get any of this back? Like that's what they're thinking and we know that.
[00:30:42] Speaker C: I want them to, to understand, you know, that we have a plan and where, where I think it might be going. And then that way if things evolve differently, which they often do.
[00:30:52] Speaker B: Yeah.
[00:30:53] Speaker C: There's like a starting point where I can explain, you know, we had expected this, but this is what happened instead. And why. Here's why.
Because again, it's the uncertainty about the future. I think you, you touched on that earlier. It's having the uncertainty when you don't know what's happening. That's what really I think is, is disconcerting.
[00:31:11] Speaker B: Right. Yeah. It really is.
[00:31:12] Speaker C: Because investing is thinking about the future.
[00:31:14] Speaker B: Yeah.
[00:31:15] Speaker C: You know, I, A mentor of mine on, in an investment world 10 years ago, I remember, told me that good investments or being a good investor has to do with you basically putting your money where you think the future is going to be.
[00:31:28] Speaker B: Yeah.
[00:31:29] Speaker C: And, you know, it's. It's like you're. You're trying to imagine what the future is going to look like, what a certain project might do because it turned out a certain way. And so you're betting on the future. So it's the future that you believe in that you're betting on.
So being able to explain as much as possible what we expect to come in the future. Even though, you know, I don't have a crystal ball.
[00:31:49] Speaker B: Yeah.
But I call it a snow globe.
[00:31:52] Speaker C: Yes.
No snow globes. But I at least have, you know, the tools that I need to be able to, you know, try to conjure up, you know, what's going to happen down the road here now.
[00:32:02] Speaker B: Totally makes sense.
All right. Anything else? Any other fun little tidbits about John we should know, kind of moving into the next year that you're going to kind of bring to the table for us?
[00:32:17] Speaker C: Well, I don't know.
Right now I'm working on the November. Novembered with the Ignite Funding. I guess it's a time honored tradition here.
[00:32:27] Speaker B: Yes, it is.
[00:32:27] Speaker C: That, you know, no shave November.
[00:32:30] Speaker B: Yes.
[00:32:31] Speaker C: So you might see a more hairy John by the end of this month, but then a more clean shaven after that.
[00:32:37] Speaker B: Okay. We're going to keep the top nice.
[00:32:39] Speaker C: And smooth, nice and clean at all times.
[00:32:41] Speaker B: I'm wondering how many at first thought. Oh, is that Pat?
No, we just have two very handsome bald men now that work at Ignite Funding.
[00:32:51] Speaker C: I mean, I think investors should feel good about that. I mean, more power balds is never a bad thing.
[00:32:58] Speaker B: This is true. This is true. But no, in all, in all honesty, it is. It is a blessing for us to actually have legal counsel at this point.
And I hope investors find that to be a reward honestly for them. Because remember, investors don't pay anything to invest with us.
So we are utilizing our revenue to put that into creating a better structure here at Ignite Funding for investors when it comes to dealing with any legal issues that come up or foreclosures or negotiations with borrowers, that we are now putting more effort into that initiative and making sure that we minimize that as much as we possibly can and keep their capital as preserved as we possibly can and get the return of their capital. When we have foreclosures, try to speed that process up as much as possible. And it's difficult. But having somebody that's focused on that really, I'm hoping, is going to shorten that time frame or condense that as much as possible.
[00:34:05] Speaker C: Yeah. And to give you a serious answer to your question about what to expect in the future, besides just my good looks continuing is, you know, I think that, I mean, that's, I think the biggest focus that I'm trying to hone in on is the defaults and the communications on those defaults, but also just the process time. I think, you know, we've already been processing them very quickly. But when you have someone whose top priority is the defaults and doesn't have to stop other daily activities to hone in on them, maybe it goes from, you know, a five days to be able to get a ballot in front of an investor to one day or two days on a certain issue.
But also I think on negotiating exits on those defaults, being focused on that full time is going to cut down the overall turnaround time from the moment a loan goes into default to when we have the full resolution, even if it's through foreclosure or through, you know, a short sale that gets approved or something like that.
[00:35:03] Speaker B: Yeah.
[00:35:05] Speaker C: Because time is money. And so every day that that loan sits in default is just another day that the investors don't have the capital returned so that they can do something else with it.
[00:35:15] Speaker B: Yeah.
[00:35:16] Speaker C: So I think, you know, shortening the turnaround time as much as possible on a default from start to finish, that's a big, you know, that's something we can look forward to hopefully. And then, you know, for example, just settling a case, sometimes it just takes a lot of hand holding of your outside counsel when you have it, you know, persistence and resilience with the other.
[00:35:40] Speaker B: Side and being present.
Yeah, that's a big part of it, too. I mean, instead of hearing it third hand, you know, we're able to actually be there and present for these things when appropriate.
[00:35:52] Speaker C: Yeah.
[00:35:52] Speaker B: But I certainly did not have the time to fly out for all and listen to and be at the mediations and all of all the components that went along with it would. I have liked to. Sure. But I also need to run companies at the same time, so. Yeah, that, that's a huge, huge part of it.
[00:36:07] Speaker C: You have outside counsel who are on it as well.
But, you know, having me here will cut down, I think already has cut down on the need of how much time outside counsel has to Spend.
[00:36:17] Speaker B: Yeah.
[00:36:17] Speaker C: Or whether we need outside counsel at all or at what point we need to engage outside counseling.
So handling things proactively before we have to go out and retain a law firm. Whereas before, I'm sure, you know, we got to a certain point, you needed to just get counsel involved because otherwise.
[00:36:31] Speaker B: You know, it wasn't going anywhere.
[00:36:33] Speaker C: Yeah, but settling a case as, as soon as possible, when it's a case that should be settled, that, that's, that's going to improve.
[00:36:42] Speaker B: Absolutely.
[00:36:42] Speaker C: I mean, I think we just settled one recently that had maybe had we gotten better advice from our outside attorney early on, we could have made hard decisions earlier than we eventually did make those, those decisions. So again, cutting down on the time frame of getting that capital back in the hands of our investors, that's, that's a main goal that I have.
[00:37:04] Speaker B: And we've talked about defaults a lot, but here's the reality. We actually don't have that many.
[00:37:09] Speaker C: Yeah. Relatively speaking.
[00:37:10] Speaker B: There's a whole other side of your role that we didn't talk about, which I'm gonna talk about a little bit. And it's really the protections that we're putting in place so that if we had a default situation, how are we able to navigate it more swiftly, quickly, et cetera. And it goes to title policies.
Do we have everything that we need in there for those title policies? Are we actively looking at our loan documentation, making modifications when we go into a judicial area that has potential non judicial clauses that could be put into place, Are we putting them in place? I mean, there's so many more ahead of the curve that we are, you know, really focused on and having you focus on to make sure that we're in preparation of, you know, something that could be later on a big issue. Right. And as we're navigating all of these different states, because diversification is hugely important to us, but we want to make sure that we're entering the right states. That one we're allowed to from a commercial lending standpoint that we're looking at, you know, if there is potential, any issues on, from a security standpoint, looking at can we market in those particular areas, should we be in those particular areas?
Those are. There's much more to this story. We don't have tons and tons and tons of time to talk about it, but a lot of energy is being placed on that as well. And not just the states we're in, but any potential future states. We may want to go in looking at this more from a strategic standpoint. Hey, Knucklehead. Pat and Kerry, why have you guys not looked at this state? This is prime for X, Y and Z.
Now, obviously, we take some, some market data and we put that together and we go, yeah, where are we in that state? State. So I'm, I'm sure there's going to be a lot more to come, you know, and when we enter into a state, you know, there's a lot of research that's being done to make sure that we're in the right state and that we're not adding additional risk because we're about mitigating that risk, obviously keeping our defaults as low as we possibly can. That's a whole nother side of the fence that, that you will and have started working on as well. So I don't know if you want to add anything to that or not, but it's is, it's, it's a, it's a machine and it's a machine that we need to poke and prod and make sure we have everything in place for the future success.
[00:39:39] Speaker C: Yeah, absolutely. I mean, looking into every avenue of potential revenue for the company is important. And, and yeah, we've talked a lot about kind of the cleanup of the few loans that have had problems, but there's a lot more that don't have problems. And there's also just the piece where we're always, again, talking about the future, thinking about the future of the company, future opportunities that we want to bring to our investors.
And as we do that, having me here in house, I think is going to be valuable because we'll be, I'll be able to look at things from a legal perspective at the front end.
[00:40:16] Speaker B: Yeah.
[00:40:16] Speaker C: And, you know, as the old adage goes, an ounce of prevention is worth a pound of cure.
[00:40:21] Speaker B: Right, Right.
[00:40:21] Speaker C: So having eyes legally on everything on the front end will prevent us from maybe getting into a situation where we feel some pain at the end. Right, Absolutely. So, so that's, you know, something that I have been looking at, will continue to look at. You know, you've already put me on a couple different states and, you know, I figured out what the different rules are. And that's an interesting thing about, you know, the practice of law. Right. Is in, in this country Anyway, you have 50 states.
Each one has its own regulator, has different divisions. They're not the same. Some have, you know, in Nevada here, we're of course regulated by the mortgage lending division.
[00:40:58] Speaker B: Yeah.
[00:40:58] Speaker C: Not every state has a mortgage lending division. They might have some other financial division that would potentially implicate it?
[00:41:06] Speaker B: Yes.
[00:41:06] Speaker C: You know, regulate us if we were to go into that state and how.
[00:41:09] Speaker B: Much and what exemptions, I mean, just under what circumstances.
[00:41:13] Speaker C: And so, you know, before we originate alone in any particular state, we really need to know what, what does it look like for that state or what are the things that we have to comply with so that we can do everything properly, efficiently and assess whether or not it's going to be ripe for a positive return.
[00:41:32] Speaker B: Yeah, absolutely. And really looking beyond what we offer now, I mean, we're offering collateralized real estate investment opportunities, but we also have to look into the future. And you know, as we bring in a younger generation of investors, a lot of them don't want to fill out the paperwork on every single loan. A lot of them don't want to complete an sboa. A lot of them don't want to talk to us. A lot of them, you know, and so that evolution is something that we also have to take to heart. And we have to realize that in order for us to grow for the next 20 years, that we're likely going to have to start offering fund opportunities where we're syndicating our investments. Now that everybody knows us, knows the people behind the scenes, which I think is the biggest due diligence that is missed in syndications is really looking at who are the people that are putting these investments together and what is their track record? Will they be around for another five years or is it as 70 year old individual at the helm? I mean those are things you have to look into.
And it is something that we're also looking into that another reason why we have you here is there so many. But you know, another reason why we have you here is because we are looking at a potential fund opportunity or syndication with Ignite Funding. And so we want to keep evolving. And that evolution does take us into some uncharted territory that we need to have legal advice on. And so that's something that you're also working on for us. So we do definitely appreciate that and brings a whole nother perspective to what we do. And you know, for 20 years we're focused all of our attention on collateralized real estate investing. And you know, we're starting to maybe change our tune a little bit on that, still offering it. Obviously we're not going to leave just leave that behind, but we have to be strategic. The younger generation expects different things.
[00:43:34] Speaker C: Yeah, I mean, it's kind of a click generation, right? You want to be on a computer, click the mouse and make things easy. So as much as we can streamline processes for potential investors and for current investors and bring things up to date to this digital age that we're part of.
That's important, you know, and we have to evolve as a company because if not, we're doing a disservice to our investors, those that might want to, to look at different types of products and just again, it's diversification as much as anything, having different potential offerings or things that our customers can invest in. And after, of course, before we do anything like that, it has to be compliant, it has to be done correctly because we're in a very highly regulated industry.
We, we have the trust of our customers, our investors, and we, of course, will continue to earn and deserve that trust.
[00:44:26] Speaker B: Yeah.
[00:44:27] Speaker C: And the way we do that is through doing things the right way.
[00:44:30] Speaker B: Yeah, absolutely. Well, I don't think there's any better line to leave that on. And I appreciate you joining me today. I hope the investors have enjoyed getting to know John a little bit better.
He's around for the long haul. We're not not letting him go. He's got a lot of work to do, both to protect us in the future and now.
But we're happy to have him on our team and we hope you guys enjoyed this episode of Deeds in the Desert and we'll see you next time.
[00:45:01] Speaker A: Thanks for joining us this week on Deeds in the Desert, where short term investments meet long term investors. We hope you enjoyed the content so much that you share it with all your friends. Who doesn't like learning about passive fixed income, right?
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