Season 8, Episode 76: Guest: Derek McGowan: Stumble To Succeed

You're listening to the Empowering People More podcast with Eddie Perez. Hello everyone, welcome to all the Empowering People More podcast listeners, where we bring leaders that are in that definitely point of their career where they're growing They're getting better, they're improving, and they have always a unique story, a story that always has that light switch moment, as I like to say, where they've realized the greatest way to really highlight others and to grow others is by the investments they put in themselves and how that has an overarching effect on the overall people in their spheres of influence. Uh, we have a guest today that I had the privilege of getting to meet here and in person. Yes, even in today's day and age, even though he lives somewhere, he was here in person at our office. I got to meet him, got to know him a little bit better, and I'm very excited, uh, for this call because I definitely want to hear more about his story and everything. Derek, first of all, thank you for being here, and please take the stage.

No, pleasure, pleasure. Thanks for having me, Eddie. Yeah, I got to go down and check out the awesome facilities in, uh, in Atlanta. Um, no, it was a blast. You guys are really accommodating, and no, I like what you're doing for the, the broker community. So pleasure to be here, appreciate it.

Yeah, so I love this question. How on earth did you get in this industry? Because there's always a— nobody wakes up with it outside of— I did have somebody the other day that their parents were in it, so that was a—

that's, uh, that's rough. The path was chosen for them. Um, man, poor kids. Um, uh, yeah, man, no, that's the same. Yeah, same thing for like anybody in mortgages. I could see people wanting to go into real estate. Houses are cool, sexy, you know, fun. Mortgages, not always so much, you know. You don't, you know, go to, you know, kindergarten and want to be a mortgage broker. Um, yeah, man, I, um, I was a sports guy, played baseball. That was my thing. I just liked people interacting, teamwork, kind of a common goal. That, that's just my mentality of things. And, um, you know, if you work hard, you can achieve something out of it. Um, I like people, I like numbers, and I— once my baseball deal kind of fizzled out, um, had to get a real job, uh, didn't know what I wanted to do, joined a car dealership and started moving into like eventually going to go into finance department. Sure, finance guys were like, hey, it's great, but, uh, you're going to live at the, the car lot, you know, pretty much 12 hours a day. That's not the life. Um, like, we went out, like, we just, uh, sold a couple cars to a couple mortgage guys, and, uh, hey, they, they do pretty well and they can work wherever their laptop's at. Like, oh, That's a pretty cool concept. Like, okay, so I can kind of control my business from my laptop. All right, cool. I'd never bought a house at that time, you know, never had— I don't know what a mortgage really is, but yeah, let's roll with it. And then flash forward to now, they both jump back into the car dealership, their car world, and I'm here and wouldn't have imagined where it took me.

How long ago was that?

2016. So 8 years ago. Yeah, yeah.

How long did you play baseball?

Until 2013. I was 23 at the time. Yeah.

College, minors.

College, parts of 2 years in the minors, and then realized that the concession food and minimum— not even minimum wage and long bus trips. And I'm like, man, yeah, it was cruising along. And then like all of a sudden everybody's really, really good. And I look around like everybody throws hard here. Holy crap. Like what I used to do doesn't really work anymore. And I'm like, man, this guy over here, he's like 36 years old, doing this still, has a wife and kids. I'm like, I don't want to be 36 and doing this still. So I'm like, yeah, sports are really fun, I love it, but I think I got to like kind of see the writing on the walls and not be like that guy at the end of the bench for the next 10 years. Like, let's be 10 years ahead of something else. Sure.

Were you a pitcher?

I was, yeah. Yep, nailed it. You nailed it.

My son wants to do that. Um, yeah, he can throw pretty hard at 14. He's tall. I mean, I know that you're big and tall too, and I know that that helps a lot in pitching, but I know that that's a tough road. Very, very tough, tough road. Very unforgiving, tough road.

Sure, sure, sure. Is he righty, lefty?

I wish he was lefty.

We all— same here. I wish I was lefty. Yeah, yeah, yeah. Little less tough road. But yeah, yeah, yeah, you're right. That's awesome though. I mean, hopefully makes it big. I mean, but it's the, it's the things they learn along the way though. That's no matter what, that's the takeaway from it. I just think you could definitely just tell in day-to-day life people that kind of have— doesn't have to be baseball, doesn't have to be sports necessarily. I think sports is a good example, but sure, just that mentality of you got to work hard, the teamwork, a different attitude on life, I think, where things aren't given to you, you got to work for it. Um, but if you work hard, you can, you can do things, and that's kind of how real life works as well, I feel like.

So yeah, you bring up a good point. So you talk about the mindset and what you learned through sports and dealing with that adversity, and the market the last couple years has been a little, uh, tougher. What have you been able to apply then that is working for you now in that mindset that's helping you? Because I know you're doing well in what is not considered a normal market to do well.

Yeah, that's a really good question. So, man, I feel like I could talk all day on that. Definitely. Please do. Yeah, yeah, yeah. Come all day. No, no, you're an important guy. You got plenty of things. No, no, I think definitely you, as I've heard you talk on plenty of things as well, and I completely, well, I was not around for 2008, but from what I can tell and talking to those that were, it's like, This is a pretty rough time. I think it definitely compares, if not worse. I mean, I don't want to make light of any tough things people went through, but this is, this is tough. I'm like, holy crap, I was, you know, rates jump, yeah, it's going to be a rough road. And I'm like, holy crap, this is like, we really got to like double, triple down to, to get like half what we used to do, like half the results we used to almost. It'll be worth it at the end. But as far as the sports mentality, um, and on this one, I guess I'll, I'll give a shout out to baseball just because the percentages in baseball are really low. You don't do very good very often. I think that you just have to have that mindset of, you know, because I mean, everybody— yeah, I ended up being a pitcher, but I was a position player earlier on as well. You know, everybody says it all the time, you know, you bat.300, you're doing fantastic in baseball. And that's, that's true. I mean, that you've succeeded 3 out of 10 times. That— and in almost anything else, that really sucks. Baseball, you're a rock star if you do that. So it's like you almost like— not that you get conditioned for failure, but you also, you're able to handle it like, okay, I did this thing, I was close. Like, you don't— I think it's the— where I'm going with this is it's the middle ground. I think it's the even keel part of it where you're not down on yourself. All right, damn, I screwed up on that. But hey, I just— I was off. I dropped my back shoulder, whatever it is. I could— the next time I got this thing, I'll do better. My next approach, I'm gonna get another chance in a couple innings. I think it's that thing where now it's like every deal is precious. And if for some reason we bumbled it on something like, crap, man, we're going to get the next— I know deals are precious, but we got this. Okay. Hey guys, we just did this thing. We would have wanted to do that. We would want to do it this way the next time. Let's get it. We're good. Not because I, I've talked to other LOs I know that I feel like it's like life or— not that this isn't life or death, but like where it's like they come down hard these days because like, hey, we only have so many deals to go around, you can't be screwing this up. Um, I think it's the bigger picture that like you can ride through it. I would say the first big leaguer that I, um, um, spoke with, Andrew Wishy, um, he, he had a stint in the big leagues, not a big name guy, but And as a kid, as like a 14-year-old kid, I was like, oh, he's like a rock star. He stayed in high school, he moved on. He came back a few years later. He was older. I just remember like that was the one question I had for him. Like, hey, like, what's the difference between like— because you were in AAA for a long time, then you made it, you made it to the majors. What's the, what's the difference? He's like, man, everybody's good. He's like, there's guys that are just as talented in AAA as they are in the majors. Like there's guys that throw 100 miles an hour, probably more in AAA because they're wild. But You know, but they, they're on the map because they throw hard. But like, hey, there's more guys in AAA that have this, the, the raw tools and skills to go hit 500-foot home runs or throw 100 miles an hour or super fast in the base pass. Like, they're, they're there. It's not like, it's not like the guys in the major leagues are just better freak athletes. They're more consistent, and they're more consistent up here. He's like, in the, in the minors, like, if, you know, AAA, AA, whatever, going through the dugout, the clubhouse, I could tell during a game just by like talking. If I didn't even watch the game, I could just tell by interacting like in between innings how that guy was playing that day. Was he having a good game? Was he having a bad game? Because he wore it every— you know, on his sleeves. You could tell his demeanor, his emotions. He was— if he was doing great, you knew about it, you heard about it. If he wasn't doing great, man, slamming stuff, pissed off, the world's ending. The majors, he's like, the real good guys, I couldn't tell. He's like, you know, I couldn't tell you if they were 0 for 3 with 3 strikeouts or 3 for 3 with 3 home runs. They were the same person every day because they know it's not going to be this high all the time. It's not going to be this bad all the time. It's like they just were the longevity, so they kept themselves consistent. Or they would come out and consistently throw strikes every night, not occasionally, or whatever it might be. So it's like consistency, that's the one takeaway at a young age that I took from the whole thing. Like, okay, that's the difference. And that, I think that's in all the, all walks of life with your consistency on your regimen. Like, you know, you've talked about just like, well, well-being things like sleep and eating right and working out and doing like the right thing. Don't take shortcuts on the deal. Like, hey, the client needs me to do this. Yeah, some LOs could just slap this together. Let's go the extra step and really explain it to them. And like, oh, this is why they'll come back to us, because we, we did that extra touch. The consistency, doing it every time, I think that's— because we get so many reps of this thing, so many conversations throughout the day. If you're just a little more consistent than the next guy, I think the odds, you know, play out in the end.

And you bring up a good point. If you go that extra mile, there's no traffic jams, as I heard, on the extra mile. Explain things a little bit deeper. I think you bring up a good point that could be in any sort of business, life in general. You'll get a lot more referrals because you have a higher level of credibility if you're willing to go, uh, the extra mile. And not like a lot of people say, hey, don't talk too much, it'll kill deals. Uh, I think that used to be prevalent Not anymore, because information is so readily available. It's—

yeah, 100%. 100%.

Right now, the human lie detector is right here.

Exactly. Yeah, you tell somebody's full of it or not right there. Yeah, 100%. People want information quick. And yeah, they— but then you can also only read so much. It's like then, like, applying it or the extra explanation. Yeah. And that— but that's where the trust is built. Yeah, 100%. 100%.

So the good news is you've only been in the industry 8 years, so you don't have a lot of the bad habits in pre-'08. And what I can share with you there is, uh, thriving in this market is abnormally well. And the reason is this is tougher than '08. I know some people have argued with that one on me now. Yeah, however, uh, that one, everything happened like that. Like it was really, really brutal and fast. So then you hit rock bottom sooner. This has been a perpetual, uh, state. I, uh, I'd like to get your thoughts on it. I feel like part of the reason people are in denial is because they haven't realized something, and I'd like to get your take on it. Because quantitative easing had interest rates so low for so long, I feel like a bubble popped. And it's not coming back. And that's what people aren't understanding, is not that the Fed or this— I, I think a bubble burst, and when a bubble bursts, they don't come back.

No, that's a good point. That's good. And you're right, it has just been a long duration of this whole thing. I know I can think of this time last year, people were talking about, oh, May 10th is the day rates are going to drop. And, you know, yeah, who, who knows? Uh, but, you know, like, mark this on the calendar. Um, but yeah, it's just— and here we go, we're a year past it. It's like, holy crap, they haven't come down. Like, they're still just just brutally going along and people are holding off. And yeah, sales are down. And so you're right, I think it is just that long, slow burning. It's just, it's not just a quick, like, cut. It's just a weird, like, slow lingering burn. So definitely agree. And yeah, you're right. I mean, I feel like that it was almost artificially for a while. I feel like with, like, how much money is being pumped in from, you know, into bonds and, you know, the Fed pumping money in. That's why COVID rates were low, just funneling $120 billion a month or whatever it was in bonds like craziness. That's not real. That's like on, you know, performance enhancers, you know, that's like not, not a real thing really. Um, but they got unwound and we're like, oh, this is like more of the real thing, which is where rates used to be way before I did this thing. But like, yeah, or they were kind of compressed almost, um, or getting a whole lot of help that isn't there anymore and kind of exposed. So you're right, a bubble bursting is about, you know, probably best way to explain it.

I like what you're doing on social. Tell us, how did you start on it? Because that, I think, is one of the journeys that a lot of people struggle with, and I think that's really important more than ever to build your brand, um, which is who you are, not anybody else's brand, but your brand. How have you been able to build that? You know, where did you get some thoughts? Uh, you're definitely building a great brand out there. Tell us a little bit about it.

Yeah, no, I appreciate it. Um, honestly, a lot of— I mean, you're obviously doing fantastic on social. I mean, there's some big names in the industry like, oh man, that's So I guess it would have been a couple, 2 years ago, a little over 2, 2 and a half years ago. Because prior to that, I was just, I was a loan officer. Again, I, car dealership guy, just on the coattails of the other guys. I don't know where we're headed, but I'll follow you. I trust you guys. Let's roll. And I was just consumer direct. I was just getting leads that came in. So I just had to be able to, you know, have that whole conversation. Boom. Let's sell them. Let's roll. Didn't have to go out and generate business, which is a whole different animal. Yep. When whole different, whole different world. So first handful of years doing it one way, I'm like, all right, this is good. And I'm starting to get people to come back around, but I don't have time to really thoroughly actually stay in touch and do that properly. How do I do this? Like, oh, I need, I need help. I need, I need a team. I need to now go out and generate. So just transformed to what it is now. And then I'm like, man, okay, I see these people that are crushing it on social media. And I'm like, I've always just been the guy behind the desk, behind the computer. I'm like, man, but I gotta get out in front of people. So we try to do more like in-person things, but then it's just like, so social media is the way of the future. People are just— no denying it. Like, I didn't used to be much of a Facebook, Instagram guy at all. It was pretty bare. But I'm like, I can't fight it. Like, it's what— it's just what it is. But it makes sense because I'm like, well, me, when I'm a consumer for something, I want to know who I'm dealing with. If I could get to feel like who that person is and hey, like, and they're, they're there every day consistently. I could see their mannerisms way more than just an email or a text. You know, you can see their facial expressions. Yeah, you get to actually know that person. Like, I feel like, you know, we met one time and, and, or time or two in person while I was down there. And yeah, but I see you daily on social media. Like, I feel like I've known you even that much more rapidly since then. Um, oh man, like, I feel like I know who Eddie is, you know, um, from it. So seeing those things from a couple years back, like, man, we got to figure this thing out. And man, I know it's going to be a long journey. I know you can't just post a video and just boom, there you go, goes viral and you got it. Yeah, good luck. Um, but man, okay, we're gonna figure this thing out. So it was I guess a little bit back to the sports mentality. This is going to be a journey. Let's just not like get down discouraged. And I, I will never watch my old videos, the initial ones. I don't even want— I don't need that negative space in my head because I think terrible. Um, my wife helped, uh, Tao, she, she helps edit them from since day one. And yeah, she's give me so much crap for, Derek, you're at 2 and a half minutes now in a short like reel. Like, you gotta, you gotta figure this to get the words out. Like, Oh shit, you're right. Yeah. It's like nobody wants to hear me talk for 2 and a half minutes about mortgage.

YouTube, YouTube would be a good one for that, but that's not Instagram, Facebook, YouTube. Yeah. You gotta have like 6 minutes on YouTube. It's something crazy like that.

Yeah. Yeah. Yeah. You gotta deep dive into it. She's like, let's just start with reels. People just want quick, you know, most of our generation, we just want quick, you know, go, go, go. Give me the info. So it's been even just like the little things of figuring out, all right, like what's the quick pitch right out the gate to catch some attention? What are we talking about? And then get to the point. Cause I, I watched other videos now and I'm like, oh man, or my old videos. Oh yeah, I was really dragging. We didn't know where this thing was going for the first 30 seconds. Like people are tuned out by that point. So long story short, been a lot of like figuring out how the heck to do it. Just trying to make it a little bit better each day, seeing what other people are doing. And I can't, I can't do it like you do it or like your style. I can't emulate that exactly. I could like, okay, I see the gist of this. There's a lot of, you know, there's other mortgage influencers, if you will, that are, that are doing their own twist and, uh, you know, their versions of it. So it's kind of just gathering that, like, all right, well, I can't be them, but this is the way I can do it, and I'll, I'll just, you know, but I'm taking little bits and pieces, I guess, of it. And, um, it has certainly made a whole difference in our business, um, like it has, I'm sure, in yours or anybody that, that really does it consistently and tries, you know, gets better and better at it. Because yeah, I was like, 2, 2 and a half years ago, I was just the guy behind the computer where some of my clients I had already worked with, they would reach back out, but I wasn't getting like new people reaching out that like, hey, I saw your video here, I saw you guys offer this program, or you could do this. Like, and it's the credibility is the biggest piece, um, 100% from the loan officer's point of view, for sure. It's because going back to like just the somebody reaches out to the bank I'm working for and, yep, hey, this is Derek at blah blah bank. Um, I gotta— they, they reach out to the bank because they have some trust, but they don't know me from anybody. I, and now I'm the point of contact. We got to like build this trust and who— so you got to like almost like quickly talk about who you are and build your credibility right there on the spot. With the social media, it's, it's there. It's, it's, you know, it's much more built where they come in warmer. The team has realized that, like, oh man, people are reaching out, like, they're, they're good, they trust it, they've watched your videos, they, they know that like you got, you know what you're, you know, the we're a legitimate place, we know what we're doing. It just makes it— then it's like, let's just take care of them. We can focus more instead of like trying to fight and win the deal. We can focus more on just taking care of them, being there and available. So it's kind of cool to see how it's gone the last 2 years and kind of interesting to see where it'll go, you know, next 2 years.

Yeah, what are your goals with it? You know, you're talking about it. I, I mean, the good thing about Instagram, when you talk about videos to build rapport, they can go back real fast, you know, Facebook's a little bit different. LinkedIn, they have to go through all the posts, but Instagram, they can, you know, what are some of the new things that you're looking to do on there to really gain even more knowledge and traction?

Yeah, that's a good question. Um, one, last year we upgraded all of our equipment, especially to see your guys' place, uh, your video corner. I'm like, oh shit. Tao was like, oh man, they got this and this backdrop. And okay, Derek, we need to get, get these things going to make a better quality.

Yeah, no, no. Yeah. Present better. Sure.

Yeah. Like, you know, all the little things, better mic, better, better lights, better camera, all the little things. Um, and then I think it's just using those videos in as many different positive ways as possible. Um, where of course social media, absolutely. That's the no-brainer. Put them, put them everywhere. Put them in Instagram and Facebook and LinkedIn and TikTok. And because people reach out all different ways and doesn't matter whatever medium that they use. Great. Um, that, that works, but put them everywhere. Um, we, you know, have considered bringing like, you know, we've done a couple where we've like featured a realtor or something like that.

Oh yeah, nice.

Which, you know, gives them something to share, which is good for their business. And, um, it's a little value add, but then also we're in front of their audience too. It's good both ways, of course. Uh, kind of in ways that this is right here. Uh, so tried to like expand it a little bit more. Um, and that's gotten us into some realtor offices because that's a, that's a value add with it. And they've kind of seen our videos like, hey, how could I want something kind of like that? Because Realtors have to market just like we do, if not more. Um, and then it's even like, it's the experience on the loan. So some of the videos are like, I get them from questions that we have from clients during the process. Like, oh, I get this question every— or the team, somebody on our team gets this question every time we get to this stage in the process. What if we just plug this? I do a video, edit it all up nice and neat, and just put this in before they have the question, because I know it's coming. I know this is going to be the next Hey, why do I have to pay for my appraisal upfront? Boom, got it. This is why, you know, uh, before you even ask it. And then it's just a little less friction, um, you know, that the realtor's like, oh man, they didn't ask all the normal questions they normally ask. What's the loan estimate? Like, they aren't calling the realtor about that because they trust the realtor. It's like, nope, that video goes out to them, text and email, before they get the loan estimate. Like, I'm already walking through it with them, don't worry about it, we got it handled. So it's kind of like implementing it in some places like that. We've also ran more targeted ads on Facebook and Instagram kind of towards our audience or people we're trying to go, you know, get in touch with. Um, so it's more taking those videos, I think, you know, multiplying, doing more with them throughout our process.

What do you think of the future of the industry, the future of the market? Uh, like I say, you're bucking trends, so you're obviously doing— outside of the great logic that you said, you're having to work 3 times as hard for half as much, but as I heard somebody once say, one day you'll work, uh, you know, half as hard and make 3 times as much. So what do you think you see next 12, 24 months? You know, where do you find opportunities? Where do you think you can seize opportunities?

Yeah, no, that's a really good question. Um, I mean, I think, I think if there was a rock bottom, I, I'd like to feel like we already hit it. Um, I certainly would say we've been busier. Um, the last 2, 3, 4 months than we were pretty much any time last year. I feel like it's picking up. I'd like to think a little bit of that is, hey, we're continuing to improve, but a lot of it's just the market. There's just more opportunities popping back up. I, I still think, I mean, the rates are going to be cut. We don't know when, but at some point they're going to, they're going to, you know, I think be cut. Unemployment's hiking back up and reaching levels I don't think the Fed's going to like, and, um, you know, creeping up to 4% unemployment. That think they said like 4.1 is when they— that's kind of the Fed's hot button. Um, and inflation slowly but surely is kind of coming down. So I think with rates, because rates are the biggest topic of this whole thing for the real estate world, you know, they have been for 24 months. Yeah, sure, right, right, right.

Yeah.

So in our, uh, near, uh, looking in the rearview, the near— what was right behind us, yeah, that's been the biggest, the biggest hot button. Um, you know, item there. So I think once we see rates getting back into, you know, into the, you know, 6s more consistently, or if people see a 5 in front of a rate, I think they just go crazy because they've been suppressed from that for so long. Um, so I think it's mental, it's a silly mental thing, but it's important. But it's a mental thing. They see 5.99, oh my gosh, the floodgates, I feel like, open. Um, like a little relief from that. And but like right now I mean, for the first part of the year, mortgage applications for the most part have been picking up like week by week and rates haven't dropped. If anything, they've gotten worse since the beginning of the year. I feel like in conversations with clients, it's almost like, yeah, we've been waiting for rates and they just haven't come down and house prices just keep going up. It's like, yeah, yeah, we told you that was kind of going to happen.

There's not enough supply. Demand can dictate the price.

Yeah, rates or not, like whether it's 5, 6, 7, 8, doesn't matter, percent. Houses still, there's not enough of them. So yeah, prices aren't— prices are stable and going up. It's like we've seen more people finally come around to that now. Looking, it's like the same things we were telling them a year or two ago, like you're going to want to probably buy now and not wait. But all right. And some did. And the ones that haven't are okay. Yeah, yeah. Okay, we're ready. We're ready to roll. Ready to do this. You're right. Rates won't come down for, you know, we don't know when they will. And while we're waiting, we're just losing money on the house, on our house is getting more expensive that we're going to end up buying. So I think some people are almost like, all right, enough's enough. I'm coming in off the sideline. You know, rates are kind of where they are right now. They've become more acclimated to it as well. So I just think we're heading into the spring, summer buying season. It gets busier every time right now. But I just think people have been waiting for 24 months. You know, some have. They're like, all right, I thought rates would go down in a few months. They haven't. Like, let's— we still got to get the house. Life happens. People need house, you know, need change, need to move. So I think for the next couple of years, next 12 to 24 months, I certainly hope— I mean, you probably shed some light on this too, but I feel like things are trending to where rates are going to be better in the next couple of months. I mean, I know, you know, if you listen to all the Barry Habib and Matthew Graham and all the people about the rate gurus, but still, I think that that's where things are headed. And I think as they do, we just keep getting more buyers back. I think we'll cash in on deals in the next 12 to 24 months, and in a normal market, we would have cashed in in the last 12 to 24 months.

Yeah, I definitely think there's pent-up demand, to your point. I know that inventory is getting better because there's a surplus of construction, and surplus not meaning what we need, but surplus year over year. So that obviously adds— I mean, we need 4 or 5 million homes built, so that's going to take at least 5, 7 years to get there. However, a few years of $200,000, $300,000, $400,000, even though it may take a while to get there, that definitely adds to it. But I actually— I don't know if the rate thing's going to really matter. And the reason I say that is, to your point, I think a lot of people been on the sidelines and now they're ready. And basically what they've come to realization is it's payment. You know, I've said this for a long time, we're in a payment society. I'm not saying that the rate obviously determines the payment, but at some point in time Your debt ratio determines the payment too, because if you can afford it and it is a higher interest rate, maybe it's time that you just bite the bullet. I mean, wouldn't you agree those that waited 2 years ago for interest rates would have probably been wiser to buy 2 years ago?

Oh my gosh. And yeah, it's like we were echoing the same things during COVID times as well. You know, people waiting during those days of, I feel like for rates to get a little bit better or whatever it might be. Or, or then it was house prices though. Homes are too expensive. They're just too expensive. I can't, Yeah, rates dropped and now prices are ballooning up and I'm going to wait till prices come back down.

It's like, well, you needed rates to drop that.

Yeah, yeah, yeah.

A lot of people didn't realize.

Yeah, yeah.

Interest rates to go up for a while to stabilize home prices.

Yeah, exactly, exactly. It's like if you're waiting for house prices to drop, you're never going to buy a house. But, um, but yeah, you need rates to jump up and our rates have jumped up. Oh, rates are too high, I don't want to buy right now, wait for rates to come back down. So just the the back and forth, like the joystick deal, um, of it. So yeah, no, if we could all go back in time, we'd buy another house or multiple houses 2 years ago.

Um, I would have bought a truckload in like 2010.

Yeah, that would have been the time.

Yeah, 2009, 2010, I would have bought a truckload, held on to them.

Yep, yep, yep, yep. That would have been the— it's always hindsight. Who, who would have—

hindsight's always 20/20.

In 2010, like, the, the sky was falling, you know, like Yeah, how could you, you know, how could people know? But you could, you could take little snippets of that, like, all right, well, remember when the last time there was a down market? Well, look where things went the next 10 years. You know, it was an uphill climb every year. So it's that thing. This is our, our pullback, if you will. But then it's like still in the grand scheme, because I mean, and definitely I'm actually curious to hear your take on it because that was, that was before I was in the industry, but After 2010, I feel like 2011 through '20, things were recovering, getting better, but there was pretty prime time there for quite a few years until we hit 2022, I feel like.

But I mean, it wasn't a bad market for about 14 years. Even 2008, the market— for all the listeners out there, this is great information to learn. The market started contracting late 2006, 2007. So, by the time the financial crash, which Everybody always talks about really when Lehman Brothers and Fannie were seized in September of '08. By then, the industry had already known, oh yeah, this is, this has been going on. Right after Obama was elected and they started buying mortgage bonds, they went to QE and the HARP got created. I'm not gonna say it wasn't tough. A lot of refi action, you know, and refis carried the game for a long time. I think refis can help today. However, it's going to be cash-out refis, right? And sadly, a lot of them could be people that have 3-4% interest rate that has to cash it in for something higher only because their debt load and their credit has already— they've let it get too far. And that's okay, things will get better. It's better to save monthly on your cash flow, I mean, to keep a 3% interest rate, but keeping the debt where it's at, at 30% interest rates, and having an effective interest rate a lot worse. So It was a pretty good run. I mean, there were spots, there was a spot in 2013 that was a little shaky for 6 months.

Mm-hmm.

Called it the taper tantrum. '17 and '18, there was margin compression, but there was still amount, there was still amount of units. But what we've seen the last 2 years, that hasn't been seen to the same effect before. Rates right now that do exist are what, when I got in the business 22 years ago. So it's not abnormal there. However, unless you got in 2002 or before, consumers from after that don't understand.

No.

And very few originators that are left today understand. So you basically have a population almost 20 years that went through, you know, even some of the refi booms before '08. That went through like 9 or 10 refi booms.

Yeah.

And now it's purchasing cash out. So to answer your question, it was a pretty good run for a long time, and that's why I say I feel like a bubble's popped.

Yeah, yeah, you're absolutely right.

But you can pick up great pieces. That's, that's what I'll tell you. Yeah, the opportunity is immense.

Yeah, yeah, I know, 100%, 100%. Um, yeah, with— and a lot of people exiting the business and opening up opportunities as well. I mean, there's less competitors out there, and the whole— the good will survive, you know, and that's even more quality people in the industry to help consumers, if anything. But yeah, that's kind of the thing. And then yeah, the refis were definitely like a big bandage on everything, which—

80% of production at one point. 80%.

Crazy. And now obviously, as you can see, that it's just not the case anymore.

Now, in purchase— well, because a line that I heard back then, that's houses were not for sale, they were on sale.

There you go. There you go.

Yeah, now they're for sale. They're not on sale now. There's a big difference.

Yeah, yeah, you, you pay the price now. Um, but you're right, back then that helps the units though. I mean, the people that could afford it, bam, buy them up. Houses are half price.

Yeah, a lot of people bought, you know, I'm sure there's people selling today, possibly downsizing, that bought in 2010, 2011, 2012. That are maybe moving into a condo or renting or doing something that really put themselves in a financial position.

Oh, 100%. They're set now. Them and their kids are set. And, you know, all of it just with, you know, ginormous amount of equity. Yeah, absolutely. In a time period they bought when a lot of people thought the sky was falling, you know, so that's kind of the bigger—

are you sure you want to be a homeowner? Do you really think it's a good idea?

Yeah.

Want your kids or you want to grow up in a different area? You know, I always say that home buying does have— and, and all of economics does— there is a behavioral component to it. There's a behavioral economic part that you have to think about. And homeownership, yes, of course it's wealth building. Yes, it's having your own castle. It's also where you want to raise a family, uh, where you want to live in the surroundings. Say you don't ever have kids, let's just say that. It's where you want to sit. Or even if you're by yourself, you want to have your own space instead of I'm renting a house and the landlord may sell it one day on me, or I'm renting an apartment. So it's a lot of your peace of mind. So it does have an emotional piece that ties and bonds it together.

No, absolutely. It's a totally different investment from that perspective, which is also why it's such a good investment even in hard times or in a recession or something. It's easy to pull my phone and if I need to sell some stock or some Bitcoin, boom, done. I'm not going to go sell my house because I'm scared of the market or inflation. That's where you hunker down. And that's why those investments are strong though.

That's why you would say they're like, oh my God, what am I going to do with my stuff? Where am I going to live? That shock factor comes in versus to your point, selling a stock or if you have savings accounts or anything like that.

Yeah. More liquid things that we do. Yeah. So that's why— but it even goes more into the point of why real estate's, you know, a long-term good investment though, even in those rocky times. You know, you can go back any 10-year stretch and real estate's up. Doesn't matter. Yeah.

Yeah.

I think next 12, 24 months, you know, like I think we've— I think it's still a lingering little thing, but I think also we've all adapted more to it in the industry. Consumers have— they understand, oh yeah, rates are 6, 7%, whatever it is. Okay. Yeah. It's not that sticker shock because I think it's also the, the rapid trajectory of rates. What, 2022 was like the fastest increase of mortgage rates in like 40 years? It was just like people—

yeah, it went from, to your point, 2 years ago is the time period it started shooting above 5, and it was over 18 months ago on a post I saw today that it went over 7. So if you want to think about that, let's just say from 5 to 7 in 6 months, 2% jump in rate And if you just want to use basic math, 2% of 5 is 40%, a 40% jump, which a 40% jump in that your payment really goes up.

Oh my gosh. People couldn't keep up to it. Yeah. Yeah.

So it's, it was, uh, to your point, rather violent is the way I would put it. It was a violent, fast move, which definitely sent shockwaves. That, to your point, because you are more busy, because, uh, something that you were touching on earlier, there are less people in the business, clearly. And the survivors will— and like you said, it's worth it. It does give people opportunity, uh, especially like you say, if you're applying that baseball mindset that I just got to go 3 for 10.

Sure, right? You know, that's it.

I just gotta fail 70% of the time. Yeah, I mean, baseball is my favorite sport too.

Yeah, yeah, yeah.

And that's— I say that in leadership all the time. I'm like, look, I, I'm going to tell you, you're a god in leadership and in business, um, if you go 3.5. I said a lot of players go 3 for 10. Business, but if you could somehow make it to 3.5 for 10— only a couple baseball players made it there— yeah, bro, you're a god. And that's— I think a lot of people can do that in life and in business. What are your thoughts?

No, I think 100%, um, I think, because I think so many people, you know, everybody comes from different walks of life, different background. And then it's that like, because I feel like a lot of people that want to set out and be a leader and go, go to the, you know, the highest highs, they start off with like a perfection mindset almost. And that's, that's great. Who doesn't want to, you know, strive for that? But there has to be a little bit of realism in that too. And I think that's where the, you know, the baseball, the sports mindset is like, okay, okay, yeah, let's, let's try to do let's do the daily actions like perfect and the results, you know, they'll, they'll play in our favor as long as we do the things we can control throughout the day, day in, day out. Don't take it, don't take the day off, don't, don't skip steps, whatever. But you're right, I think it is. Yeah, people definitely have to get their bearings straight. I think it's a little bit easier when you were groomed in that kind of background a little bit like you're saying, hey, baseball, like, you know, you're telling that to people in your board meetings and stuff that, hey guys, this is this is how, you know, for years you've had that in your mind, you know, and I think it's new, that's news to people. Some people think, oh man, like I'm failing if I do that. Like, no, just be consistent. Don't stop. Don't— I think some people will do it, they see a couple struggles, like, oh, I gotta abandon ship, I'm not doing this right, let's go start a whole new way, you know, a whole new thing, a whole new motion over here. It's like, that was working, just keep doing it. Like, you just had a couple lucky or bad breaks, like, just keep going. Like, yeah, get the result.

And I say, it's like, you know, it's, it's, it's perfectly okay to make mistakes because that's how you're going to get better. Baseball, I say, it always reminds me, it's you at the plate against 10 people. You have the 9 players in the field and don't hit a ball 500 feet a little bit too much to the left, a little bit too much to the right, don't matter. Better yet, don't even hit a— if you say the fence is 400, don't even hit a ball 402, but the outfielder happens to jump over and bring it down. It's still an out. And that's going to happen. And that's a lot like life and not in a negative way. Things just aren't going to bounce your way, even if you hit it really, really hard. However, that's where the lessons are learned, because there'll be times you don't hit it very hard. You get a blooper, you get a ground ball with eyes, you get wind that carries something for you. So it's, it's the same way that it's just you got to take more hacks at it, got to get more at-bats. It's not mistakes, it's at-bats. It's the— yeah, it's the falling to the level of your preparation and memory.

Mm-hmm. That's a really good way to put it. No, I like that though. You're right. Because yeah, it's, it's, it's the, it's when you hit a, you know, just a line drive and the whatever, the left fielder snags it and grabs it and you're out. You're like, oh man, that was like as good as I could have done it. And then that's where people get discouraged though in business, you know, like, oh man, I did that perfect. I told, I, you know, I gave them a great deal and I did all the things and they, they didn't want to do business with you, whatever, whatever the deal was. And then they start like second-guessing like, oh man, well I need to change the way I'm doing it. It's like, Dude, you, you did it perfect. That just wasn't the one that worked out. But do that 10 more times, like you said, 3.5 of them will connect. Don't start changing our swing and, uh, you know, altering what's working. It's just, it's not going to be— you could— nobody, no, no, no damn loan officer goes 10 for 10. Like, for sure, it's not even close.

I don't even think you go 5 for 10. Some will tell you that, but I don't— I mean, maybe, yeah, you may go 5 for 10 because that does happen in baseball, but then you go 0 for 21 and you And then the average works itself back out.

Like, exactly, exactly. As long as you're doing like the, the day in, day out things right, the average works itself out. It's a long season, 162 games, long season. Yep. It balances out at the end.

It's like life.

Yeah, sure.

But it's, it's a— it's all about the today, you know. Yesterday and tomorrow are the two most worthless days of the year.

Right, right. 100%. 100%. That's the— yeah, that's the sports mentality. That's like the Mariana Rivera mentality or whatever, just coming in and just like stone cold, doesn't matter, like whatever. I blew the save last night, doesn't matter, tonight's tonight. I don't care, we got to get to tomorrow, you know, kind of thing. But what can I do, execute right now? Um, 100%. Yeah, no, I like the— didn't blow a whole lot of them, but yeah, yeah, fair, he didn't have a lot of those. Yeah, yeah, yeah, he was—

yeah, you know, he had a famous one in the World Series against Arizona, but how much he did, that just Yeah, once again, that's a guy that went like 9 for 10 or higher, and it happens. It just happens.

Yeah, off one pitch, man. Crazy.

Yeah, the cutter. But it was—

yeah, stupid.

Yeah, it was nasty. Yeah, had this like crazy— supposedly it was one pitch, but it had like 3 different spins he would do to it. So it's like, yeah, 3 pitches in one, like which one?

It's like, yeah, that's crazy. I can't— nobody else figure out how to do it. You know how many people sure try to emulate that? No idea.

Some people are born with things and they find it. Derek, man, it's been a pleasure. Any last tips that you'd like to share with anybody out there? Because look, you came from the car business, you admitted, hey, I don't watch my— everybody says the same thing, I don't watch my first videos. I don't either, by the way. But you at least went out there and did it, so that took a lot of courage. You're optimistic because you're seeing more and you're grinding. What's something that you can give out to a young leader, anybody listening, or even to a home buyer that is still stuck on the fence that can provide them extra value that's listening?

Sure. Yeah, um, I mean, quick recap on the video thing, you know, it's, it's, uh, again, more right in the same tune of everything we've been talking about. It's the— you're gonna fail, you're gonna— it's— you're gonna stumble and stutter and Eventually I had to get to a point where I'm like, that, that was good enough. That was it. I could sit here all day and not actually close a real loan because I'm trying to perfect my video. Like, that was it. I got my words out. It was good. Boom. Next. And I'll get better tomorrow kind of thing. But it's putting it out and consistency with it, you know, trying. I, I attempt to do a video a day. If I get 3 or 4 throughout the week, I'm doing good. And that, that's still a pretty steady dose. People get to see, you know, enough of me and, um, it works. But I think it's just For most people, because it started with me just picking up my phone before we actually had a camera and kind of a whole setup, but just pick up the phone. People want to see you and talk. And if you, you talk to clients all day long, I mean, just take a, take one little piece from that conversation, a common question. Oh, if I, if you get that question often, well then there's a lot of people that have that question. That's what to do a video on. That's a, that's the place to start. I think a lot of everybody, anybody that has reached out to me on videos, it's, I don't know what to do. I, I got my, got a phone. but where do I, what do I say? What, what's like, dude, you cost—

hey, have a great day.

I don't know. Yeah, yeah, it doesn't matter. Yeah, say something. Just start, start there. Start small. It just starts to click with it. And it's like, if you get 1,000 questions in a week from clients, like, just pick one of them and do that and answer that and save it and post. And that's going to help somebody else you don't even know.

Um, to your point, if you keep getting 2 or 3 of the same questions, then you, you've, you've got content you can create.

You got content all day long. Some people have that question, and a lot of people aren't asking. They, they're afraid to ask it, but you're like making it easy on social media to give them the answer, and they start— then they start feeling comfortable with you. And, um, man, I think the other thing I tell people on the video stuff is people don't buy a house every day, so keep that in mind. Like, I think some people think you're doing video for a couple, you know, somewhat consistently for the last couple months, and, you know, my phone's not ringing off the hook. It's like, yeah, somebody's some of the people that are watching it, they, they don't always comment or like or reshare it, or you might not know, but they're— we've come to find it, and this is only with 2+ years of doing it, so still feel like we're early in that whole game. But it's like, there's people that have mentioned, I've been watching your videos the last couple years, and now I'm ready. Now me and you got married, now I need to move, and whatever it is. Now life happened, the raise, yeah, got the raise, had the baby, whatever it is. We need the house. Like, oh man, I didn't even know they were watching our videos this whole time. You know, if we would have like stopped early because we thought, oh man, we're just isn't, isn't it. We weren't seeing like instant, you know, responses to it. We would have never— we would have missed a little bit of the prize, the whole prize, uh, at the end of it. So I think it's just, it's a slow burning thing. It's a long season with that, you know, it's ongoing deal. Um, so consistency, and it ends up building on itself, and then word spreads, and social media does social media things. So, um, like with that, with— for the, for the LOs and the video piece of it, and, um, for, for home buyers, I think it's I mean, we go super complex with it. I think we also keep it really simple. It, like we talked about, in, in times where the market was really rough in the, around the 2008, you know, crash, still would have been a really good time to buy a house. And I think people, you know, obviously pull back and, oh my gosh, terrible. I think the fear side of it is the gist of it. Really, really scary time to buy a house. And then you have interest rates were really low during COVID times, but prices were really high. And that was scary because people are like, oh man, so many conversations with homeowners back then of, well, I don't want to buy now because I don't want to build the housing bubble. Like, houses might, you know, might drop in value. And this house went up, you know, people are bidding $20,000, $30,000, $50,000, $100,000 over asking price, waiving appraisals and inspections. I, I'm going to hold off until prices come down. And now prices are just like surpassed that overage that they were bidding and they just continue to go. It's like Hey, if you could have paid $20,000, $30,000 over, you'd go back and take that deal now. And, and I think same kind of thing now, yet again, in a different, different dynamics. But, oh, rates are high and I'm going to wait for rates to come down. It's like, well, you, you didn't buy in 2020 and 2021 because rates were low and prices were high. That's the same thing that you'd be gearing up for with a lot of pent-up demand, you know, to your point on it, where there's our pre-approval and pre-qualification pipeline is probably fatter than it's ever been because so many people are just waiting on the sideline. Like, I want to buy a house, just Not yet, not yet, not yet. And that, that's going to be the thing that bursts, is like when, when rates drop and I think people have the affordability of the payment, then people start flooding in. But you don't want to buy when people— it's a busy market, the prices aren't favorable. So I think that's—

well, they're going to overbid, like they're going to have to overbid.

It's a, it's a bad game of like musical chairs, you know. It's just— that's—

I like that, I'm going to use that. It's a bad musical chairs. That's a good thing.

Yeah. But that's how I like to explain it. Yeah, it's just, you know, you got, you got 5 people going for that one chair. Good luck. Somebody's got to do something drastic to get it, and that's what they're having to do in the housing market. So yeah, the longer you wait, prices go up.

Well, definitely, uh, thank you so much for your time today, uh, Derek. And for all the Empowering People More podcast listeners, thank you for being great listeners. Uh, Derek, where can they follow you? What's your handles on Instagram, Facebook? So that people can see it, got great content, get great knowledge, that they can follow you.

Yeah. Um, so yeah, Facebook and Instagram, very simple. McGowan Mortgages, my last name, McGowan Mortgages. Um, and I've got Derek McGowan on Facebook as well. But yeah, McGowan Mortgages, uh, pretty easy to find there. Um, yeah, no, Eddie, this has been awesome. This has been, uh, my pleasure. Pleasure, man.

Um, appreciate it. Uh, Derek, and looking forward to chatting and seeing you soon.

Yeah, appreciate it. Thanks for all you do at APM. Thanks, Eddie.

My pleasure. Take care.

Bye.