Changing The Way You Search For A Loan

Hey, it's Mark Podolski, the land geek with your favorite niche real estate website, www.thelandgeek.com and I'm really excited for today's guest because, you know, it's not often Scott Ty, we get a guest that can literally overnight change your life. Right, Right. And this is that guest and I'm really, really excited. It's very innovative. I can't wait to get into it. But before we get into it, I would be remiss if I didn't properly introduce my co host, Scott Todd from Scott todd.net landmodo.com and most importantly, you're not automating your Craigslist and your Facebook postings hosting Domination.com TheLandgeek so, Scott, are you ready for this?

Mark, you know, the thing is, is that you can never run out of what this company provides.

You really can't. This, this company, it's like, it's like you can never get tired of hearing I love you. Right. So let's, let's talk to Dean Sukas, the CEO of McGilla Loans from mcgillaloans.com. dean, how are you?

I'm very good, thanks, Mark and Scott.

So Dean, if we were in an elevator and it was kind of awkward, but I looked at your, you know, your badge and said McGill Loans CEO, I said, Dean, what's McGill Loans? How would you answer me?

The shortest version is we are kayak, the equivalent of kayak for business and home loans. Or as others like to say, we are match.com for business and home loans. Or if you're even younger, we're Tinder for business and home loans. Depends on your, maybe your age. I say we're kayak.

Okay. I, I can buy with kayak. Now let's say for example, that I need $22 million.

Okay.

Right. And I want to go out and I'm going to buy some commercial real estate. Correct. Why wouldn't I just go out and call my buddies and say, hey, I'm going to start a fund, let's raise 22 million bucks. Take some of your self directed IRA money, your QRP money, let's make it rain. I'm going to give you this percentage of a return and let's go on. Right.

Yeah, you could certainly do that. I mean, I'm, as you know, my background, I'm a real estate developer by trade. That's what I've been doing prior to McGilla. And you can certainly do that again. That's a financing tool that I've used and a lot of real estate investors have used. Most of the time you do that because you don't have the ability or don't think you have the ability to get FDIC insured bank financing, which is of course going to be a lot more advantageous to the sponsor guys like myself and guys like you.

Okay, so why is it more advantageous? And why would somebody like, you know, on the big O loans platform give someone like me $22 million FDIC that, you know, might not have a track record or might not credit or whatever it is?

Of course, I mean, McGill is not going to. Is not the fairy godmother. And we can't make it. We can't make it happen. Just like you can't go to kayak and say staying with a kayak example, I want to fly from San Francisco to Paris non stop direct. I want to fly first class for $400. You might want it. Just because kayak doesn't give you that response doesn't mean kayak's not working. Kayak's working fine. Kayak is showing you the opportunities that are available for you to accomplish that task today. And it changes from day to day as airlines have different promotions and different needs and different schedules. They might have a flight that's not very full and they run a sale. How would you know? You don't know. You gotta go to kayak. Because we're not that smart. We don't have the ability to search every single airlines websites. And you might not be aware of a certain website let's. Or a certain airline like, I don't know, Lufthansa, let's say you're not familiar with Lufthansa. Didn't come to your mind. And there's Lufthansa running a sale. Similarly, in McGilla, there are 6,000 FDIC insured brands in the United States. That's a lot. It's a lot more than airlines, a lot more than cars. And we have countless tools to help us plan a trip, buy an airline ticket, or find a white Audi A4, a 2005 with 20,000 miles on it. I mean, there's a bunch of car sites that'll help you do that.

Right? So if we flip that example around and we say, hey, here's Scott Todd. He's got liquidity, he's got great credit.

Okay?

Right. He's got a track record.

Correct.

Why should he have to hustle and go to his local bank or start talking to his friends, right? And, and going through that song and dance when he can just go to McGill loans. And all of a sudden he's got 6,000 options. Is that right? Yeah, that the way to look at it.

Of course, McGillah doesn't have all 6,000. It's gonna take us a while to get all 6,000. But we're approaching. We have well over a hundred brands and hundreds of loan officers. Of course, within each brand, we have multiple loan officers. You have a residential, you have a refi. You have a commercial real estate. Greater than 20 million commercial real estate refi. I mean, you got a loan officer at a brand for every variety of loan. And so if you're Scott Todd and you say, well, I have a banking relationship with. Let's say Scott has a relationship with or thinks he has a relationship with three banks. Okay, that's three. And to get to see what those three relationships can do for your particular need at that moment, despite the fact you have a relationship with them, you're going to go and fill out all their forms, give them three years of tax returns, all your K1s, et cetera, et cetera. Wait, talk. That's the typical process. If you're even in Scott Todd's category of having the relationship. We're making the assumption in this example, I have three relationships. Not everyone has three. Some people don't even have one. And so you put your loan in McGilla. You don't say your name is Scott Todd. That's the beauty of it. You do tell McGilla, this is the asset that I'm looking to buy or refinance. These are the metrics of the asset. Then you move on to the metrics of Scott Todd. Scott Todd. Financially looks like this. We don't know if it's a man or woman. African American, white, Greek, we don't. McGillah doesn't care. And we don't think anyone should care what you look like, what your gender is, what your race is. I want to know what the asset looks on a financial scale and what Scott Todd looks like on a financial scale. The loan officers get push notifications when a loan meeting their criteria enters the system. They use their smartphone, they review the proposal, the request, and they make you a proposal. It's that simple.

So, sorry. So basically what they're doing is they're looking at and they're saying, okay, well, this is an asset class that we would lend to or not lend to. So we'll either engage or not. And then from there, they might send me a generic term sheet. It's not necessarily an approval, it's just a hypothetical term.

Sheet. It's a little more than that. It's not, it's not a generic term sheet. It's a generic term sheet would be like some other websites you may go to to say, let me check rates. Well that's generic, right? There's a rate sheet that somebody gave a website that says, okay, these are the rates from this institution. Now that's not what McGill is giving you because a live red blooded person reviewed your proposal, your request and made you a proposal and added notes in the proposal to expand on it to say this is a fixed rate option for five years. And in the notes they're going to say, you know, if you connect with me on McGilla, we have some other opportunities as well that we can explore, we can explore a LIBOR based option or whatever. So it's not a generic response. If they don't like the asset class or don't feel comfortable, they won't make your proposal. And we see it happen all the time.

And so then so am I, am I, I mean I'm still constrained to their like loan to value type of stuff. I mean I'm still got, I still got to come up with money for my, for my portion of. It's not like they're going to give me 100% loan to value.

I mean life's not like life isn't fair and life isn't easy. McGill is just making it a lot easier and a lot fairer because we're giving you the borrower, access to information that there's no other way to acquire. You're lucky if you can get proposals from, I mean, wouldn't you be happy if you got three proposals from three different FDIC insured banks for a certain real estate project? How long would that take you to get? It's not a day, weeks, months. I don't know how long that would take. You're gonna have to go through the whole process, right. And what have you accomplished? You have a handful of proposals.

So Miguela gives me a response in.

How long we give the commercial loans. We give the lenders 10 days. In reality, a residential loan is going to be done in about 24 hours. Commercial, depending on the complexity and the size, could take the whole 10 days.

Are there any commercial asset classes you don't like or FDIC insurers don't like? I would imagine land would not be one of them.

Land is one of them and land is definitely one of them. And I'm a land guy and you know, we don't always have the luxury of getting loans from FDIC insured lenders. The asset classes that do the best in McGilla, of course, and the ones the banks want are real estate based assets. So whether that's commercial office, multifamily, single family rehab, flip and of course all the consumer side of things, purchase, buy, second home, that kind of. We started it as a business only platform. We expanded to residential, single family residential. A couple months in there was just every business owner and investor has a house, so they wanted to refinance their house and their second homes through McGill.

So Dean, from business aspect, your search engine for loans. Right. You don't, you're free, no hidden fees.

Correct.

Well, how is Dean making money?

Subscriptions from the banks. Yeah. I'm not a real estate broker, I'm not a loan broker. Of course we use brokers in our real estate lives. McGilla is doing things a little differently. We're saying we have access to the data, we have access to the inventory of loans and in order to make it so that a real estate investor doesn't see using McGilla as increasing the cost of their loan. Because as a real estate developer myself, I wouldn't want that. What are we doing? We're saying lenders, this is a much more efficient way to find Mark or Scott or Dean or somebody who looks like us in a financial sense. And for that efficiency they're willing to pay a monthly fee.

Is this a VC backed company?

No, not yet.

Not yet. Okay, it will be.

But because we had careers before and, and we're not nothing against 18 and 22 year old kids making innovation. It's amazing what they do. This is a little different because in order to have determined what works for banks, what works for real estate professionals, you kind of have to have lived it. Otherwise I don't think we would have come up, I know we wouldn't have come up with a system in the format that we built it. I just wouldn't have had.

You're solving the, the raising money pain point efficiently with artificial intelligence and big data, is that correct?

Correct. I mean it's a pure economics. I was an econ major in college and we always say it's pure efficiency. We're trying to make a system with the least amount of friction possible. And we feel that at least for our system, the brokerage commission gets in the way where I'm sitting there and I say I'm basically playing cops and robbers at that point. Right. I say McGilla. We introduced Scott Todd to Bank of America. What happened to the loan and bank of America may say it didn't go through. Okay, technically true, maybe, except that they didn't refinance Scott Todd's multifamily request. They found in McGilla. For whatever reason, maybe Scott decided to move on or he dropped the property. But. But I've already introduced Scott Todd to Bank of America. He's already talking to the guy or woman. And in the conversation they did a different loan and refinanced a building for Scott Todd that he didn't even realize that he could benefit himself from. And this has happened in McGill on many occasions where the original request. Just like business in general, you don't know where a meeting is going to lead. All meetings are good meetings. You don't know what's going to come of. It happens all the time. You sit down with somebody, you realize 10 minutes in, this is probably a waste of time. Five minutes after that you're like, oh my gosh, I can't believe that you, this person that I was having a meeting with about one topic and now I'm going to do business with you about something that it was completely unrelated. And that happens in magilla all the time.

Now what happens for the guys like, you know, let's say me, right? Maybe I've got an asset that FDIC insured companies don't like. Is there a second tier of this where let's say that I'm like my good buddy out here works for a billionaire and he's got a, he's got a, you know, a private office and one of the things they like to do is private loans, right? So the banks pass and now you're looking. Now instead of getting a loan at say, you know, 3 to 7%, now you're looking at 10 to 13% with a point or two. Right. Does McGill, you know, go that route as well?

Yes, and it actually happens the way. Similarly the way you described. I mean, everyone, most people, unless they have really quick, really, really intense time constraints, are better served with an FDIC insured lender. That's why we built it. You're going to get the best rate, you're probably going to get the best terms. It may be a little more arduous, probably more documentation and take longer, but that's really where you want to be. And like you said, there is a second tier where not all loans are going to fit in that category, especially if it's a business loan. Let's say you haven't been in business for three years. Let's say you've been in Business for two years and three months. Well, a lot of banks have a hard rule. Hard and fast rule. You got to be in business for three years. Well, McGill wants to help you. Again, we're throwing a wide net. So for the lenders who have set their default search criteria to say, I'm willing to look at all businesses, not just businesses. Three years and over, they're gonna get a push notification. They're gonna be aware of your loan in the system without you having to go knock on the door of the branch. And in a lot of cases, like you said, there is no branch. How are you gonna find them? So how is a guy in Sacramento gonna know that there's a private lender in San Diego who has the capacity to do the loan I'm looking for today? It's impossible. They don't know you exist. You don't know they exist. It's two ships passing in the night. It's not gonna happen. So we all rely on word of mouth. Like you said in the beginning of the conversation. I asked my buddy, I asked my friend, I asked my colleague, I asked a fellow real estate investor developer. Who do you use? That's okay, right? We learn from our peers, but your peer only has visibility, again, to so many lenders. There's too many. There's too many.

Now. Now, in this world, right? There's always. We always get to three Cs, right? We got collateral, we've got credit worthiness, and we got character, right? How important in your world, are those three Cs, or is one weighted, which I'd imagine would be the collateral more than the others?

It's. Yeah, I think it's the collateral. I think the collaterals. Collateral is king. It's kind of like when you tried to get into college and. Or when I went to law school, let's say, and I had a buddy who had a better GPA than I had. Okay, so what do you have? You have the same things. You're going to college or you're going to law school, and you have your gpa, right? What I do for the last four years, the results of the test, right? Sat, lsat, you know, whatever test you're taking. And then what's your character? Right? What does my essay look like and all that. If you could only get one of those, which one would you choose? Well, I choose the test. That's the only fair equalizer in that example, right? And in my case, it worked. I did extremely well in the test. I got into a lot of places, my friend. Who had admittedly a better GPA than I had, did not as well in the test. And he got in basically not too many places. Similarly, in real estate, I would choose the collateral. You just would. You want all three, but if you can't have all three, that's the better way to go.

Scott. Todd, I think Dean's onto something.

Yeah, I think so. I think that. I think that the fact that you're matching lenders in this large space.

To.

The consumers and making them find people that they don't even know exist, banks that you don't even know exist, I mean, that's a good move. I was driving down the street the other day in my own neighborhood. I look over to the left and I'm stopping a stoplight. Look over the left and there's this, there's this bank. I've never even heard of them before. I think it's like Millennial bank or something. You know, they probably have like one branch. Okay. And I was thinking, like, well, man, here's a, here's a branch that, here's a bank. Let's say they have one branch or a few branches and they really, really, really could use, could use, you know, some business loans, right?

Because.

Because they've got money to move at the same time, they're going to make money off of this asset class. And I would have never found them had I not just been driving. So we always think that it's bank of America or the big banks on your platform. Are most of these people, are they smaller banks or bigger banks?

It's pretty much everybody. I'd say right now the bigger banks have been very receptive to McGilla, so. So we do have a lot of the big banks, a lot of the ones, the name brand banks that you would expect. We also have a lot of community banks. The banks that are even more interesting for McGilla are the. Let's say it's a community bank that has a national charter. Well, that's the best for my system. That's the best, right? You don't have a lot of brick and mortar. You're maybe known in your community as a very solid community bank. But because of historical accident or how the bank came to be, they have a national charter so they can loan in the 50 states. Well, at that point, McGilla becomes a very powerful tool for both the consumer and the bank, because who loses in that? Nobody. Nobody loses. If you're in Texas, why can't you get a loan from a small community bank that is physically based in California? There's no reason not.

I mean, like some national banks. Let me pick on bank of America, for example, bank of America or Wells Fargo. I know that there's certain asset classes that they'll say, yeah, yeah, we do that. But then in reality they don't. Right, so is that something that if I put this asset class through and they really don't have the desire to do it, are they going to come back to me and waste my time, or are they just going to not respond back to me?

You know, what we've seen, Scott, is we've seen it play out in the chart. So we have something that we, you know, trademarked. We call it a mag chart, you know, formigilla, a McGilla chart. It's basically a comparison chart that any person would want to create for themselves. If you had the ability to get multiple proposals, what would you do with them? They're all going to be on different kinds of term sheets, different pagination, different formats. Right. So you're probably going to take those term sheets and synthesize them into a little chart for yourself. Well, McGilla just does that for you. So when the banks put in the proposal, we present it to the borrower. Any easy to read, easy to compare chart. And the bank that really isn't that excited about the asset class, we find that it's very obvious in the chart. You can see it in the terms, something will stick out. It's going to be pretty obvious that they're not that jazzed up about the asset class or you'll see it in their notes. So when the borrower puts in their loan, they get to put notes. It's your opportunity to pitch yourself. Right. And we make the notes compulsory. And we make it compulsory because it's for your own good. The more you can say about it, you have to sell it a little bit. And the banks do the same thing, selling themselves to you. The bank doesn't put a lot of effort into it. They probably don't care that much. They care a little bit because they made your proposal. You'll see in the chart another bank that will make it very clear to you that they have room in their portfolio for that type of asset. And that's usually how it plays out. And you're talking about something that, again, the consumer can't know. So if I asked my buddy, the real estate professional, who's the best in town? Okay, that's strike number one. Why am I looking just in town? I shouldn't look just in town. I shouldn't look in just California. I should look everywhere. But you would say, who's the best in town to do a $10 million office refi? Well, if the gentleman says XYZ bank, it's not that he's necessarily wrong. That might have been right when he had experience. But that was February. It's now May. So what's happened in the last quarter? Well, I don't know. You don't know? Your friend doesn't know? Nobody knows. The only person who knows is the head of the bank who's balancing their portfolio. And there's no neon sign that says not so hot on office loans this quarter. Right. You don't know that, but McGillow will find out for you, and it'll be pretty obvious in the chart. And if a bank skipped over on you, they probably skipped. And if you walked into the branch, they might tell you they can do the loan. But once you go through it all, they're probably not right. So, I mean, a lot of times we see banks where the large banks have skipped over on a loan and the borrower only is getting proposals from smaller community banks. Does that mean McGill didn't work? No, it means McGilla worked. It's telling you, for some reason, it doesn't mean you're a bad borrower or a bad loan. It's just, for some reason, you're missing one element that a big national FDIC insured bank wants to see.

Right.

Okay. And you don't have it.

I just went through the system while you guys were talking. It was very simple. It's pretty simple and enjoyable. It wasn't that bad.

I mean, we're trying to make it. We're trying to walk a line between approachable because banks are intimidating. Right. We all know that. I mean, I don't care how long you've been doing it. Banks are intimidating. So we're trying to make it less intimidating, but at the same time, it's not a joke. This is serious. This is a serious topic. Right? So, you know, we don't have dancing people or people jumping around on the site. Like, we want it to be inviting, but take it seriously. Like, you wouldn't be here if you weren't serious. And if you're not serious about it, you know, we may not be the platform for you, but if you really, really want to refinance your house or really want to buy that vacation home or if you're a larger investor, you want to buy a $65 million retail center. Yes. And why wouldn't you come to us? Well, you would say, well, I already have relationships with KeyBank and Wells Fargo and US Bank. Three. There's 6,000. You, you rattled off three. And how do you know? And we see this also in McGilla. Within a large bank there's different silos. It's possible that your asset and your profile fits into two different silos at the same bank. So there are times when a proposal gets a loan, gets two proposals from the same brand. Well, how can that happen? Because they're from different sides of the bank. One's the real estate divisions and one's the, whatever they want to call themselves, the personal wealth division. It doesn't matter. And each of them have different criterias and the terms will, can be and often are different. Different, same branch, same bank.

So Dean, one more question before we get to the tip of the week. Why would I go to McGilla? I need money and not go to something like, you know, some real estate, like let's say realty shares, like a real estate crowdfunding site. What are the major differences?

Well, the biggest difference is again, we like to, we like to align ourselves with the concept of kayak, where technically any lender, whether it's an online lender, like Cabbage or On Deck or other aggregators, right. Are all falling under the umbrella of McGilla, McGillis. We are not a lender. We're not giving you the money and we're not trying to give you the money. We're giving you a safe, and that's important, a safe, honest place where we don't have an influence over the outcome. We are trying to make a very, very efficient and friction free system for you to see all your, all your options. And those options may be from crowdfunding sites. They could be from alt lenders, they could be from investors like you said, who are going to take a point or a couple points and you know, take an equity stake in the company. Of course it started as an FDIC insured lenders platform and I think that's always going to be its main focus. But our goal is to make sure that you today may need an alt lender a year from now. Hopefully maybe you don't two years from now or your, your internal portfolio looks different and you can support larger debt loads and you're going to grow over time. I mean, I've been doing, doing real estate for decades. I couldn't do 20 years ago what I can do today. I'm a different person. I have different skills and I have different experience levels and McGilla wants to grow with you. So the market will dictate what your best fit is today, in 2017, and in 2018, come back, it might be different. We're gonna have more lenders. You're gonna look different. The economy is gonna be different. Right? Interest rates will be different. And McGill is free. And it's easy. So there's no reason not to keep trying. We don't run your credit. How can we? We don't know your Social Security number. That's important. We don't want to know your Social Security number. You're gonna give your Social Security number to the bank that you choose to have a further conversation with. You're in control. If you get 15 proposals and you don't like any of the 15, don't act. Nothing happens. You don't have to throw your cell phone away because it won't stop ringing. Right? This is a businessman and a businesswoman's game. You don't have time to take phone calls from salespeople. You want to get down to doing business, and if that's buying an office building, get to it. If you want to refinance your house, do it. That's the point.

I love the model. I love the way you're leveraging time, right. And making this simple. I think the kayak analogy is really apropos for this, actually. It's great. Dean, you're a big deal. Nice job. Nice job. So, all right, we're going to put you on the spot now and ask you for your tip of the week. A website, a resource, a book, something actionable where the art of passive income listeners can go right now, improve their businesses, improve their lives. What have you got?

I would say, and this is kind of the type of person I am, I would pick your least, you know, look in the mirror, find your way. You're honestly, you're the weakest in if it's accounting or statistics or even basic real estate legal concepts. If you don't know the difference between, you know, tenants in common and a joint tenancy. And you know, these are basic concepts that come up and you want to sound as intelligent as you possibly can can. When you're in meetings, you want to project confidence. And if you don't know something, you want to power through it, project it, and then you'll figure it out after. So I would suggest going to lynda.com and lynda.com has. It's a great resource to learn anything that you need, whether it's coding legal to the most basic to the most extreme, and if you feel in your heart of hearts that your ability to make complicated spreadsheets is compromised, don't live that way. Go to lynda.com and dedicate. You know, when your kids are out at a friend's house or something, dedicate some time to yourself. Go in a quiet room in your house or your office this weekend. Pick one topic and learn it.

All right, Great tip.

Yeah. And just, I mean, it's important to know, to find your weaknesses, and we all have many. And bolster them up as much as you can.

All right. Lynda.com Scott, Todd, what's your tip of the week?

Mark?

Have you ever needed to count down something like, you know, like, you have this big date. Something's happening on this day, and you want to know, like, you know, like, how many days are left? Well, my tip of the week is to look at the Mac store, the Mac Apple Store at. Waiting list. Waiting list.

And I'll check this out, and what.

It will do is on your desktop, at the top, on the menu bar, it will put another, like an icon, and you can put in special events, like, hey, this is a day. So maybe it's your birthday. Maybe it's a trip. Maybe it's boot camp, right? And you can just pop it down and you can see, like, how many days are left, right down to the minutes, seconds. It's a countdown clock.

I like it. Have you seen the death clock, Scott? Yes, I love the death clock. This. This is, like, fun compared to the death clock. Yeah.

See?

All right, I'm in. Okay, so I'm going to. I'm going to count down how many days left I have to live. Plus days to boot camp.

Boot camp. The next boot camp. You know, so that.

Or how long is going to take McGill loans, FDIC lenders to approve my loan.

Hey, they got 10 days, right?

They got 10 days.

They got 10 days.

So I can create that as a countdown. Yeah, but, Scott, isn't this going to be distracting? I already have the attention span.

No, it's only when you need it. Like, how many days till boot camp? Okay, I got it. I guess. I mean, you could ask Alexa how many days until Whatever. Oh, I shouldn't have said her name.

Scott. Todd, you're not supposed to do that. You can't say the word.

Yeah, see, it's bad.

Alexa, buy Mark a gift. No, no, no.

It's. It's. I got earbuds in. She can't hear.

Oh, okay. In that case, Alexa, return the drone. All right, well, this is Great. My tip of the week. Learn more about the Kayak of lending@mcgilla.com I'll have links to it.

Yeah.

Mcgilloans.com mcgilloans.com I'm sorry mcgilloans.com there's also an iPhone app and a Android app, which is surprising since so few people are on Android.

But I mean, do people. Do people with Androids get loans?

They do. They do. We have a lot of Android users. You be it's not just an iPhone game. Yes.

No kidding. Who would have found. Who have I? I mean, unbelievable. Wow. It's a changing world, Scott.

Todd, save your hate mail. I'm just kidding.

We're all just kidding. We love you Android users. One the one of you listening to this. All right, well, I want to thank everybody. Look, the only way we're gonna get the quality of guests like a Dean Sukas is if you do us three little favors. You got to subscribe, you got a rate, you got to review the podcast. Send us a screenshot of the review. To support thelantgeek.com we're going to send you for free the $97 Passive Income Launch kit. Don't forget. Just like we were talking about. You can always make more money. You can't get more time. Start automating your Craigslist and your Facebook postings. Posting domination.com forward/the land geek. Hear that, Scott? I just press the button and just put out 124 ads.

I got it.

Boom. All right, Dean, are we good?

We're good, we're good. Thanks a lot.

Thank you. Scott, are we good?

We're good.

Mark, are we skipping it?

Yeah, we gotta skip it.

All right, all right, listen, listeners, thank you. Let freedom ring. Thanks, Dean.

Thank you both.