Russell Petty is Transforming The Mortgage Industry with AI and Cutting Edge Tech

All right, welcome back to Mortgage Daddies. We got our man from North Carolina came up, Russell Petty, the AI genius himself, changing the world for loan officers. Tech genius, Russell Petty. Is he in the room with us here? I’m Vernon. I run the top mortgage brokerage in Massachusetts with over 20 years of experience. I’m Craig. I’ve done $100 million consistently since my second full year in the business, and I’m Massachusetts top mortgage broker. We’re the Mortgage Daddies, with real advice, real stories, and real results. Let’s get going. I think the best is when you told, uh, my daughter that he created Google-the other day cause, uh, she believes that. She goes- She’s like, You made this? No way, he created Google? I’m like, Oh, yeah. He’s crazy. He’s in my presence. Oh my goodness. And then I told her, You’re half a robot. So I think she bought that too. Self-proclaimed half of a robot. I mean, he’ll tell you. Yeah. That was pretty funny. Don’t get me in water. But you’ve been busy. Yeah. So obviously, you know, as a loan officer, like, like, a lot of questions or a lot of things that, you know, I think a lot of loan officers, especially top producing loan officers are always looking for is a way to make it more efficient, better. Hiring staff, putting the right team in place, it’s expensive. It’s time-consuming. All the different technology that’s out there, yes, you can go and buy it individually, but it’s tough to get those systems to talk to each other. It’s very time-consuming to learn how to do and use all those systems. So, you know, I would have all these systems where people would buy, Oh, I have this, I have that. I’m like, Great, do you use it? Oh, well, no, because why? Well, it doesn’t talk to this system. Yeah. It’s time-consuming. I didn’t really figure out how to use it. You kind of took it all in, put it all into one platform. You want to tell us a little bit about that? Yeah. So three, three and a half years ago, um, I realized the bottleneck of my company was, you know, everything was in a thousand different portals cause I’ve been retail and I’ve been wholesale. Wholesale is cheaper 7 out of ten times by, like, $10,662, I think, is the metric. Like, it’s, uh, it’s not by a little amount. We’re faster than retail. By the numbers, we are quicker. We’re cheaper, we’re faster, and yet 7 out of ten loans go to retail. Why? Why? Uh, if we were cheaper, we’re faster, we have all the same products, everything is there, why are 7 out of ten choosing a more expensive, slower process? And it’s marketing is really what it comes down to, and you can’t market if you don’t have the data. It also comes down to process. Their AMC is in one system, their loan is in one system, their underwriting is in one system, their disclosures are in one system. There’s none of this jumping around. When you go to wholesale, you got lender A, you have all these options, and those options come at a cost. Now I have to go into lender portal A, but then I have this other loan, I go into lender portal B. You can’t get into some sort of a flow state doing anything cause every single thing you do is in a different system. You have to take the same data, put it in the lender’s portal, put it in your LOS, update your CRM, and guess what? You don’t. You might update the lender’s portal to get the loan done, but you don’t update the LOS. And if you did, you’re sure not putting it in the CRM. Maybe the 2 talk together, but did you really build out the campaigns? Did you build out the automations? Did you build these things in? The answer is no because loan officers are not marketers. They’re not tech people. They’re salespeople. So if you’re going in telling a salesperson now they have to have all these different hats, well, they’re not gonna be good at sales. Mm-hmm. And sales is what drives the revenue, so they go right into the sales team. So I took everything and built Portal. We’ve, uh, we’re now on Portal 2, but Portal 1 was a high-level build. We ended up giving that away to the whole community. We have thousands of mo- mortgage loan officers that are on that system using it for free. Then I realized that you have to own the technology. If you do not own the technology and control the code of the technology, you’re only gonna be able to scale it so far. We hit a bottleneck, um, once we were on that platform. There were certain things we just couldn’t do because we’re limited by the platform. So we hired a dev team. We built out Portal 2. It’s all custom code, custom software, POS, CRM, LOS, everything, and it integrates with whatever we want because we own the source code. Everything A to Z is owned by us. And then we started looking at it and we’re like, Well, AI is here. We’re gonna get so left behind if we don’t have some sort of an AI. So we started training our own LLM, our own self-hosted custom model. 671 billion parameters, this thing. I mean, it is, it is super advanced. We give it tools, we train it, it’s trained on the datasets because if you go to ChatGBT, A, you cannot give, you you can give it all of the customer’s compliant data, you’re gonna go to prison. Um, not a great idea. Don’t upload tax returns and personal information to your AI because it’s training on it and not great. Um, when John Smith finds out his Social Security number is in ChatGBT’s, he’s gonna be very upset with you. you want to go in and you have to have this self-hosted secured AI. We have that, and we plug that in and built the system around it. So not only do we integrate with everything that we want to integrate with, it’s all in one spot. Your loans in one spot, the lender portals are in, in one spot. Loan sifter, your pricing is in one spot, one system, one login. And then once you have that, the AI has all of that data and you have all of that data, and the decision you need to make for the day becomes incredibly clear because everything is right in front of you instead of a little bit over here, a little bit over here, a little bit over here, and it’s sporadic. And once you have all the data, you can make the decisions. Once you can make the decisions, it’s just up to you on how hard you want to work. I think, like, that fixes the issue that a lot of high-producing loan officers at retail companies, the reason why they’re not in the broker side is they got their business built up- Mm-hmm. they’re used to it, they have people, and they’re afraid to go to a place where they have to do more. And it’s true. You’re 100% correct. Like, we’ve had processors that come prior and would work here and be like, like, they, Oh, I did 40 loans in retail, but they’re, like, 20 and they’re capped because it’s more work. Yup. It’s into different investors, different AMCs, this is here, this is there. You know, you’re having to update different systems. Now we have it all in one where no brokerBecause most broker shops don’t have the money- Yeah. to have it, so even if you want to individually pay for all these little things, who’s gonna go and take the time to build it all out? How many broker shops even have a marketing person to even go and do it? Mm-hmm. We had that at least, but still, there’s a limitation on what that can do because you still have to go and do some of those things likemy, I always looked at it as like, okay, I could do it once, but I don’t want to have to redo that same thing every single time. Like, whatever it is. If putting a person into a campaign- Mm-hmm. I don’t wanna go and, like I want, I need it to be automatic. I need it, if this happens, then it, then this gets triggered. If that happens, this gets triggered. And we were looking to try to build something like that out, and we spent a year trying to with Salesforce- Mm-hmm. trying to get that done, and it just was very difficult. It was very limited, and it still was never going to be 100% of what I wanted. Yeah. What you did was you took it all and you put it all into one, where now it is. It’s all legitimately into one. I mean, the task side of things, like for an LO, you, the, the loan officers almost don’t even need an LOA anymore with this system, be- cause why? So it’s a couple of different reasons. Number one, the follow-up is a click instead of you manually sitting there on your cell phone trying to call the person and then you gotta call the next person. It’s just all through your phone. We’ve built in iMessage directly into it, so now it’s no different than texting from your phone. There’s an iPhone, it’s a blue bubble that’s gonna pop up, 49% higher response rate. On top of that, you’ve also got, you can call from that same number directly from the system, from your phone, from the, from your computer, whatever you wanna do. You also, when you’re in your task page, you just click on text and it automatically creates a group chat with your borrowers and the real estate agent. You can select which ones you don’t want, hit your update, go to the next task, hit your update, go to the next task. And the system’s smart enough that it remembers when this lead was added, when the app link was sent, what stage they’re at, have they started their application. It moves them automatically. But on top of that, it also is gonna fire off different tasks to you every day to do to go into that. And as it starts learning that loan officer’s text pattern and their speech pattern and all of this, it’s gonna start pre-writing all of that for them. Hey, I know you probably wanna update these people. This is the me- I already wrote all the messages for you. Click here to send them all. And now you’ve just freed up an hour of that LO’s day they can go out and present their offer to more agents and get that out there, which they can do in the system as well. And then- Which loan lo- most loan officers aren’t even following up because they don’t even know- No. who to follow up with. Right. A fairly busy loan officer, even somebody who’s not that busy, what kind of a record do they have? Yeah. M- m- they got a group text with an agent. They sent an application. Are they even putting that in somewhere to track? No. Never mind to follow up on it. Right. Even if the application comes in, it doesn’t have anything. Like, maybe at best you have a trigger that says the application’s complete and documents are uploaded, and then you have to go and you get an email. And that’s it. And now if you’re busy and that email gets lost- You’re done. you’re done. Yep. Never mind if maybe they got 80% done and they didn’t finish it and no task got fired. Right. Well, we solve for that. Like, 80% done, doesn’t matter. 30 minutes after, boom, task comes out. Yep. You need to work on this. And you know exactly what you need to do. It’s dummy proof. Never mind all, some of the other things that are coming along with AI calculating the income, reviewing the documents right away so that when the borrower uploads something, it scans it right away and can tell them, Hey, this is not the correct document. You needSo they’re already in that system, and they’re working on uploading things. And before they’re even done, they know, oh, that bank statement wasn’t the right bank statement, or that W-2 is not a W-2. How much time do you spend as a loan officer waiting for the borrower to upload all their paperwork to then finally go back in and review everything to find out that half the stuff is wrong and now you gotta go get a hold of them, and now they’re at work? They didn’t work on the file till 10 o’clock the night before. They’re not gonna work on it again till 10 o’clock. Then they do the same thing again. And you play this back and forth game just to try to get documents. Mm-hmm. Never mind, we don’t even need documents half the time now, right? Mm-hmm. Or at all if they wanna fill it out. We have an integration with Plaid. Tell everybody a little bit about that and the time saving that that has. Yeah. So I, to my knowledge, there’s less than a handful of people in our entire industryRocket just now added it, and I don’t even think they’re done yet. Like, we’re, it’s cutting edge to get that integrated. So we built our own POS, and in doing so, we were able to integrate Plaid. So clients can go in. They can, instead of filling out all their income information, all their asset information, they can click a button. They can link their accounts. They can click done. We get all their pay stubs. We get their W-2s. We get their bank statements. We get their 401k. We get their stock accounts. They get all that data. They don’t have to do anything. Fills in all their employment, fills in all their assets. Everything’s done for them. And when they get to the end of it, we need a picture of your ID, and you get a preapproval. Just wild where this technology’s going. I sit back on demos with loan officers coming in all over the country with Russell, and to see their faces of just being blown away. Like, these are things that I wish I had 5 years ago. Craig wishes he had them 5 years ago. And to know that we’re on that cutting edge, it’s just wild to see that it’s gonna be able to go from ap- application to closing. And y- you have some data on this from, from your previous company. The processing time goes from like, what was it, 15 days to 7? 7, yeah. Right? So, I mean, we’re already fast. We just got 50% faster overnight, just because of the technology. I think one of the hard things for loan officers is collecting the docs, reading the docs, and now y- we’re able to eliminate that from their job, almost function on 75% of the loans- Mm-hmm. where they’re able to just click that button and Rose, the AI bot, reads it, calculates the income, and she’s just gonna keep getting better. Like, I think that’s, that, that’s one of the big things. Uh, you know, one of the big things that comes up on a lot of our demo calls is, you know, you guys have 35 investors that you guys deal with. Like, how do I know which one to, to use? The system, right, you can tell us a little bit more, but it willThere’s a pricing engine built into it. Like, you’ve thought of just about every single thing, and the ability, you said, you have to own the technology. The benefit of owning the technology in my, in my perspective is Craig doesn’t like something in the system, it takes you 5 minutes to take it out, move it to a different place, change it up. We can add stuff to it. We have, you know, a lot of different tools coming. We’ll, we’ll keep some of them under wraps, but, um, you know, tell us a little bit about that, of streamlining the loan officer’s process, not just in the application. The application isEvery loan officer is a little different. I mean- Mm-hmm. we talk about this all the time. Like I run things differently with my team than Adrian runs it with his team. But he can just easilyLike if you get a plug-and-play system, you can’t touch anything. You’re lucky if you can put your headshot on the thing and your inf- information, and that’s it, and it’s just the way it is, and you have to adapt your process to the system versus you adapt the system to your process, which is how fast we can get things changed just in a view, just a, You know what? I’ve, you know, I’ve been clicking around on this, and I just think that this button being here would be a little bit easier. Okay, no problem. 5 minutes, it’s pushed in and it’s done. Twah. You know, and it’s like that’s, that’s unheard of. You can’t get that anywhere else. Never mind just the added features that keep rolling out. I mean, on, like, the social media stuff that, that, that we’re gonna be rolling out with the AI stuff through Portal. Touch on that a little bit, because for me, for a loan officer, social media is my least favorite thing- Yeah. never mind, like, what I spend the least amount of time doing. And half of it’s just because it’s, like, a repetitive thing. Like, okay, you need to put these posts out, you need to do this. That can get automated. That’s huge. Yeah. Tell us a little bit about that. So we built our own social planner directly in the system. So you can link, uh, Blue Sky, Facebook, Twitter, TikTok, Instagram, LinkedIn- I don’t either, but we linkSomebody suggested it, I was like, Let’s add it. Um, so you can link all this stuff in there, threads, and you can do your posts directly from the system. All of the analytics come in from all of those, your comments, your likes, your posts, everything. Your views, all of it pulls into one, feeds that data, A, to the dashboard for you, but also to the AI. And it can go, Hey, when you make posts like this”- That’s huge. you get more engagement. And by the way, these names actually ended up being leads, and this is the route that they took. So when you make more posts like this, you close more loans. So having that data instead of just a ChatGPT-generated post. It’s actually looking at it and going, These are the things I need to post for Craig, cause this is what works for Craig. One of the things in the system-that I think is huge on my side, like on the, with, with dealing with the loan officers, dealing with processing, it’s always like, oh, you know, How do we become more efficient? What are you not good at? What are you good at? And people are just telling you their opinions of it. Well, now we have data on it. Yeah. Like, you’re telling me you, you spend this much time a day doing XYZ, but now we can look at the data and be like, Well, all those posts that you’re putting on Facebook and all that time that you’re spending making these things on Facebook or Instagram, they’re getting no traction. this is gonna be a better option for you, or this is working for somebody else. That, to me, is huge because itLike, why does somebody wanna be wasting time doing something that is having no results? Yeah. And I feel like a lot of loan officers just do things that they think is good cause they’re just, they’re doing an activity. Well, they might not be doing the right activity for them. And with that data on either, you know, what is better for you, how do you get moreYou, we, we just see how many apps come in, how many preapprovals. This is just a basic tracking, but it was like we never really had something like that. How many apps come in? How many convert to preapprovals? How many of those go into contract? And now you can get real granular and figure out, Okay, where do I have to get better? How come I’m losing these here? How do I get better at those? I need to hit these more. Okay, well, let’s build a way that the system automatically hits these people so I don’t even have to and I do- I can’t forget. So if my preapprovals, if I’m losing a percentage of my preapprovals and they’re not going under contract, well, why? Well, maybe my follow-up isn’t as good. Okay, well, I need to set a task now. You’re gonna create a task for me to make sure that I hit my follow-ups on these preapprovals every week. Maybe we’re gonna also build in a campaign automatically that gets triggered every week with a text message, not just an e- Nobody opens emails. Mm-hmm. Unless you’re in a business where you’re in your email, I open up my business email. That is it. You send something to my personal email, 0 chance I ever see the thing. 0 chance I ever see it. But if you send me a text, 100% I see it. And now this is sending texts, Hey, just wanted to see if you hi- you’re looking at any houses this weekend. I didn’t even have to do it. It does it automatically. Video text. Video text. Yeah. Yeah. IMessages. Yeah. The video thing’s insane. Like, you can just create a video and mass send that out. And also, with AI, you can have it change names. You can have it change names and your email. So, hey, Vernon, and then. The same video can get sent to, Hey, Russell, . without you having to redo it every single time. I mean, that’s insane to me. And it’s alsoLike, good luck scaling it. That’s the other thing. Like, a lot of these companies that are out there, they’ll have 27 different subscriptions. okay, so your offer is based on these 27 subscri- A, you don’t control these. These tech companies are all operating at a massive loss, burning money. What are you gonna do when they actually start charging for their service? What are you gonna do when they stop doing the service? Does your value proposition fail now because that tech company is no longer there? So when you own the technology, you control the technology and you don’t have costs that scale up, right? So, you know, uh, your hosting bill is gonna go up for your server, but that’s negligible. If you want, really wanna scale your business out, if you wanna send something out, maybe you wanna have a team and loan officers and all thisI’m talking to the branch managers and broker owners here. If you wanna have 30 people, are you really gonna go get them a Claude, a ChatGPT, an ElevenLabs, uh, you know, all these different subscriptions to try and keep up here that don’t talk to each other, all separate? A, they’re not gonna use it, but B, now your cost per-ALLO per month is like 1500 bucks. Yeah, nobody’s gonna pay that. They’re not gonna pay that. Online applications- Yeah. CRMs, LOS, like- MBSIA’s pricing engine- The bill gets crazy. Like, it gets insanely expensive. I mean, we would had, add things and then be like, Okay, this would be great. Everybody use it. Nobody uses it. And then we cut it and then we get something else. Nobody would use it and then we cut it. Tens of thousands of dollars just gone. Yeah. JustUh, y- it’s insane how much money over theAnd to try to make it better for people, but people don’t use it because it’s not all-in-one, it’s not easy, it’s not built into their process. They don’t adapt to it. This gets built in, and it gets built in automa- You don’t have to doLike, that’s the best part for me, is it’s taking everything that I wanted to have, and I’d have to have somebody go do this for me, and then I have to hold them accountable to do this. I’d have to watch, I’d have to train them, I’d have to make sureWell, now that personI got busy in this section. I had to move that person over. Now that task isn’t getting done. Now that task got forgot about. It’s been 6 months since that even- has been happening. doesn’t happen anymore. Everything gets done because it’s a computer working 24/7 that never gets tired, never wants to go on vacation. NeverI love that part. I think we all do. It, it’s crazy. I mean, theAnd it’s just the beginning stages of it. Oh yeah. I mean the AI, uh, you talk about training too, like having training at scale. Like, you can, you can grow a smaller team. You can have one LOA, and maybe they sit with you for 3 months, but good luck scaling an, a enterprise doing that. You, you can’t do it. So, you know, if you wanna have these things in, rather than having someone sit and train and onboard and do all this, and now you’re taking away from your revenue generation, or you’re bringing s- salary on that knows this stuff and they wanna go on vacation. Now you don’t have anyone to train onboard. Th- our AI can view your screen. It can turn your camera on and talk to you and it knows who you are by looking at you. It knows who you are by your voice. It can look at your screen and go, Oh, what do you wanna do? I wanna, I wanna figure out this lead they applied. I don’t know where they went. Oh yeah, you’re on the wrong screen. Click Pipeline at the bottom. Now I want you to click here. now you’re in your lead. Anything else I can help you with? Have a nice day. Yeah. That, that, that side of it’s crazy because there’sL- like, when we’re trying to bring in all these loan officers, we have all these loan officers and we get something, to try to train them all is very difficult. You can show them it all once, but until people do it multiple times themselves, they’re never gonna get it. So having the system to just say, Hey, I don’t remember how I need to move this file over, how I need to add this campaign, or how I need to price out this loan, and it just walks you through doing it. Never mind the academy that you built out as well in it, so that somebody could come tomorrow completely learn how to use the system without actually anybody- Talk about it being free. having to spend time to show them how to do it- Yeah. which is, for scalability, is huge. And I think that’s why we’re getting a lot of broker owners that are kind of at the point where, you know, they’re trying, they, they did this rat race and they try and they try and they try and theyYou know, people want more and more and it’s imposs- it’s hard to scale and grow, that they’re giving up their broker shops and taking their teams over to more of a plug-and-play model that we have. Yeah, I mean if you’re paying $1500, $2000 for technology with your LOS, POS, all of those things, without counting any overhead of the leases, the credit reports, all of these things, it starts adding up. And I’ve been on the phone with a lot of broker owners recently that are likeI’m like, Why did you become a broker owner? Like, that’s usually like one of my first questions. They’re like, I was just tired of working retail and having be told something, not being able to get a pricing exception to match a rate with a great business partner. That’s like one of the top reasons. I mean, I left for multiple different reasons. I knew this is where I, where I kinda belonged. Um, but that, to me, is the biggest thing that I’m hearing from broker-owners. It’s like, “I don’t wanna do this. I just wanted to produce and be left alone. “And the cost of originating a loan has gone up. And then what does everybody, for the most part, in sales always wanna do? Your top loan officer, branch manager, broker-owner, you wanna build a team, right? ‘Cause that’s the next step that everybody tells you to do. In my opinion, build a team if that’s what you wanna do. But if not, close 100 1000000, have your LOA, and be super happy. It’s- it’s- it’s a lot less stressful. And I feel like from the broker-owners’ perspective, that’s all they wanna do, right? They’ll- they’ll build their team. They can come over to Milestone on a P&L model, have all of the technology, free up a lot of that. But they don’t wanna deal with the compliance. They don’t wanna deal with the licensing. They don’t wanna, uh, deal with HR, hiring, all of the other things that are not sexy in our industry. And I think, you know, having Russell come over, uh, you know, from Grow and bring over the t- a lot of the technology pieces, it’s really enabled us to go out and recruit a whole different sphere, right? I spent the last couple years growing the company organically, word of mouths, reaching out to this. Now, it’s like, uh, you know, you’re walking into a, uh, you know, mortgage event and people know who you are, right? They’re like, “Hey, I don’t really wanna run my own mortgage brokerage anymore. “I never wanted to. It was the only avenue I had to get to the broker channel, because there’s not a lot of broker-owners out there compared to retail, right? It’s a lot easier to go to any retail place, pick up the phone, and they’ll hire you. Uh, you know, on the broker side, you just don’t see that, so it’s a lot harder to attract good talent because they don’t have all the tools, right? A lot of broker-owners, w- we had the same problem 6 years ago when we started, right? We had one LOS and Compass. We had paper applications. We’re running around with our- our heads cut off, and it all has to lead by revenue. You don’t have revenue, can’t do all the other ancillary pieces. You can’t hire that LOA. You can’t hire that marketing person. And that’s been one of the big jump-offs for- for Milestone is the licensing, the compliance, the technology, that we’re getting a lot more inbound phone calls from, you know, broker-owners or big teams, right? Somebody running a team. And when I say big, it can be 3 to 6 people, but if you’re closing 150, 200 1000000, that- you’re a big team, right? I mean, um, the technology piece to me is, that’s the leader. I mean, Russell loves me, and every time I say that to him, it makes his- his head get a little bit bigger. But you lead with some of the technology and then I butcher it ’cause I’m 46 years old and I do not lead with technology in my own personal life. So, by the time I butcher it and I tell him about all the t- cool things we have on the tech side, and then you get on and Sean gets on, uh, you know, Sean Link jumps on the call, and we’re- we’re on there with 5, 6 LOs, maybe one LO that’s leading the team and just trying to look for other options. When they start looking at the technology and doing the demo with Russell, the game’s over. Like, you can just see it in their eyes. Like, they’re like, wish I would have done this, like, 5 years ago. “Like, “I wish we had this tech,” no, “I wish I would’ve known Russell 6 years ago ’cause we probably wouldn’t be sitting here. We’d probably be adding our 5,000th loan officer to- to the company, but we’ll get- we’ll get there. “I think it’s- it’s crazy in this business, where it’s like, you know, any other business, I’m not happy, I’m gonna go look for another job. And with wholesale, we go, “Oh, you’re not happy? You should start a business. “It doesn’t exist anywhere else. Like, no one’s just like, “Oh, you don’t like your job? Start a company,” yeah, you’re like, “No,” um, in a heavily regulated field that you don’t know anything about. It takes too much time- Yeah. and too much effort. And if you’reI would never do it. Like, personally. Him and I, we’ve talked about it, like, years ago, and I’m like, “I really have no desire to do it because I see how much time it takes- it took off of him from producing, and I never wanted that to be the case. “And it- you just- you cannotIf you’re producing X and you open up your own shop, you will never produce X. No. It’s impossible. There’s too- At least 30-plus percent, and that’s if you’re super efficient. Easily, and that’s if you have- if you’re able to get people in right away that know what they’re doing, and you can build a pretty good system right away. Never mind if you can’t and if you don’t know. It’s very difficult. Yeah, I mean, I- I built 2 shops and exited 2 shops. And after the first one, I go, “Never again. I will never ever own a mortgage company again,” and I went retail. And then about a year and a half into retail, I was like, “Oh, I should do it again. “So I did it again ’cause I’m a glutton for punishment. And I opened the second shop. We built out the CRM. We gave away the C- the other CRM. We built this system. We scaled to top 100 in the country in less than 2 years. We did all these things. I was still able to do 45 to $50 million a year each one of those years. But all of it went right back into the company. Mm-hmm. Every single penny, I didn’t take a check out of the company. It all- We know how you feel. went back in. Rito, how you feel? So- so it’s like, you know, everybody sees, you know, top 100 brokerage, $50 million for me. Oh, surely he’s taking the full comp on that. Andy’s got 30 loan officers. They’re doing 300-plus million a year. This guy’s gotNo, every penny, I didn’t take a check for 3 years. Everything went back into it. And I don’t think people realize, if you do not know the model with your CAC, your LTV, your MRR, all of your churn, if you do not have all of that and you’re in a business where margin’s compressing and costs are risingWhen I opened that company, credit reports at $31 apiece. Now they’re 108. Like, your cost just tripled. So, if you don’t have all those things, plus compliance, plus all the other costs, plus W-2 taxes, plus health insurance, plus payroll taxes, all this stuff-you’re not going to be able to do both. And you’re going to find yourself in a spot where you are originating as much as you possibly can and you are making less money with 1,000 times more work than if you had just closed the business. Like, if you had just been an LO, you would have made way more money. Had I gone out and just been an LO here, I would have made millions of dollars whereas I made 0 dollars. So i- it’s so much more profitable to be an LO. And a lot of people think, “Well, if I just scale it out, I’ll make all this money. “No, you will dump more money back into the business. And that is just the way that it goes because there’s always gonna be another fine. There’s always gonna be another audit. Like, audited financials just to get a state worth $20,000 a year. Like, you now have to go close 2 loans just to pay for the audited financials so you can apply for the license over here. This stuff’s not cheap. Mm-hmm. And if you’re a broker/owner and you’re just thinking, “Well, I’ll just open it and it’ll just be me. Maybe a couple of my buddies, whatever. “That’s great. Compliance, payroll, taxes. Taxes will get you, that self-employment stuff, um, until you hit a certain threshold on your 1120-S. But anyways, you go through those things. You go through, now you need a processor. “Oh, I’ll just do contract. “Really? Okay. Why? Why would you go through all of these things where now you’re running a business and having all the overhead that you now have to pay out of your check? It wouldIf you do the math on it, you make more money i- per hour just working somewhere else. Like, i- this business is not incredibly lucrative until you get to a massive amount of scale. And if you don’t want to get to that massive amount of scale and you don’t have a surefire plan to do it, don’t open a shop. Mm-hmm. Like, if I could go back and tell myself, “Talk to that Russell,” I would smack him and say, “Do not open a shop. What are you doing, you idiot? Just go close the business. “Um, here I am, so I’m telling all of you guys, do not open that shop. Terrible idea. Russell, I would’ve gotten to work for you in 2019 if I would’ve known, right? Like, I- I’m fortunate and happy and I wouldn’t change anything now. But 2019, I thought that was the gr- that- that was the best move for me. Aw. And I- I just got lucky, right? Like, I had great people around me. I fell into, you know, great operations people. No one ever talks about operations, like, on the sales side. It’s the hardest part. Or when they go to open up a- a mortgage company. I’m like, “What do you got for ops? Like, bring over your ops. “”Bring over my processor. “”Oh, that’s great. You know what’s gonna happen? You’re gonna get audited. “I think we got audited on month 6 or seven, and I was like, “Uh, is this normal? “State of Massachusetts goes, “No, not really, but we see the volume that you guys are doing, so w- we’re calling for an audit in, like, November. “You know what that did for my entire office? He remembers. Probably about every sin- a- it was on all hands on deck. Mm-hmm. A, it’s the first audit you’re going through. B, you’re scared shitless. I don’t care who you are. I mean, now we’ve gone through tens of audits, like, dif- between different states. Now it’s like, “Are we g- we getting audited? “Great, we have the technology, we feel really comfortable. Back then, that first one? Mm-hmm. Hoo! I wasn’t sure if I was gonna lose my house. I was like, “I don’t even know what’s coming-” Lot of paper got printed. Lot of paper. Oh my God, reams of paper. We were at Staples picking it up. But I think that’s one of the things, like, for somebody that’s thinking about opening up a broker shop or already has one, they’ve gone through an audit,That first couple audits, at least the first one for me, after that, the first one, I was like, “Yeah, we’re good now. “But getting through that first one, there’s not too many things that have rattled me personally and professionally in my life. And I don’t know, I don’t remember what I looked like when that audit was coming down. I can assure you the inside of my body was tr- I didn’t know what to expect. Like, “Are we getting checked? “And, like, what if they find something? And they’re like, “Oh yeah, look, you missed this, did that,” oh- okay, what’s that mean? Right? But, like, “You guys are doing a great job, keep it up. “I would never want that feeling again. Like, if you told me, “Hey, this is what you’re gonna feel like,” before I opened it, I would be like, “I don’t want that stress in my life. “Because it was like 2 weeks where you just, like, sit there and you just stress out. And I think now we’ve been able to grow to a- to a point where we can afford and we’re lucky enough to have a full-time compliance person, full-time marketing. Basically, you know, 2 amazing, uh, operation heads. Like, we have 2 of the best in the business. Where else are you gonna go to get this stuff, right? Like, we’ve invested over the last 5 years basically every dollar back into the, to the business to bring it to the, to where we are now. And now you throw in the technology and it always ends up back as the technology for me. Craig always yells at me. It was the last piece. That wasAnd you know what? It just fell in our laps, right? Like, I feel like winners always put themselves in a position to win, even though they didn’t see it coming. I did not see Russell Patty and Portal 2 coming into my, i- into our lives in, what, March or something- Mm-hmm. when we first started talking about this. I thought I was still gonna be dealing with Salesforce. Yeah. IAs soon as he was like, Yeah, you don’t need that anymore, like, Buy Salesforce. Like, we can’tThat was a year. And look at the stress and the time it took away from originating or growing the business just dealing with trying to grow our technology. Now I think I know for a fact one of the biggest pluses in, in being able to be partnered with, with you, Russell, is you have 10, 13 years of mortgage experience and you have tech experience. It’s hard to talk to a tech company and tell them, Hey, we’re looking for this. They have no idea what DTI is, LTV. None ofHey, I wannaWhat do you think about putting in a pricing engine? Right? Okay, can you tell me what that is? We’re done. Like, I’m not a tech guy, you’re not a mortgage guy. It’s easy for, you know, Craig or I to call you up and say, Hey Russ, what do you think about this? Like, Hey, I wanna do this. Oh yeah, that’s a great idea. That’ll take me 3 days, right? Like, I think that’s the big disconnect too for a lot of people who think that technology is A, it’s coming, but B, how do you implement it and roll it out, and, or how do you build it out? Like, are there a lot of companies out there that help you build these systems? I couldn’t find any. If you’re out thereRussell needs some sleep. I mean, for everybody that’s watching, just, I mean, when weWe can prove this maybe if we had the show, the show the numbers, but he sends us a, a text of his weekly hours logged on his computer coding and working on, uh, on this portal. And like, what was last week or the week before like? I think, I think on average from, from February to last week, I’m averaging 136 hours aSo when we started this conversation and we said we were sitting next to a robot, think of what you’re doing right now as a potential broker owner, a team leader. That’s a special human being right there. Like- Tired. Peptides. You guys are on peptides. And he’s also got the entire office on peptides for all of us. A lot of espressos. Yeah, yeah. A lot of Starbucks. I got about 3 years left in me, but we’re getting this tech done. But yeah, no, I think it’s, uh, it’s an exciting time. Oh, yeah. For theI think it’s an exciting time for the mortgage industry. You know, on our last podcast, I, I, I always talk about you should be uncomfortable ascomfortable, right? Like, you have to be uncomfortable at all times. This is a super uncomfortable time for all the mortgage industry because if you think you’re gonna be able to do business the same way that you did last month, last year, or 5 years, the game’s over for you, right? Like, you have to adapt. You have to blow up your system, per se, right? Like I talk about all the time, I’ll blow something up. Craig knows. Like, I’m like, Hey, upI’ll run into Craig’s office, I’m like, I think it’s time to just blow this thing up and just start over. And he’s like, No, no, no. Why? I’m like, It’s, it’s coming. Sometimes he talks me out of it. Sometimes he’s like, Yeah, blow it up. More times than not he talks me out of it. Some wild ideas. A lot of, a lot of ideas. Quite honestly, this is why like, like I really like having Russell around, because I’m like, Hey Russell, what do you think about blowing this up? He’s like, Great idea. I think we definitely make it better. I’m like, We’re not allowed to hang out without Craig anymore. Like, if it was up, if it was up to Russell, like, it would just, everything would just be blown up and started right from scratch sometimes. Robots everywhere. I show people sometimes the, in GitHub history, which is basically like the library of my code over the past 3 years. And you’ll see like the fir-ThisWe call it Portal 2 because it’s the second release of Portal. It’s probably Portal 3,946-because we build it and then we go, This is terrible, and then we wipe it, and then we start completely over again, and then we build it again, and it’s just iterations of like, what if we built it from the ground up again completely differently? We’re done doing that now. But the, you know, we kind of did that when we were working with Milestone. You know, if you look at Portal, what it was before and now here, because it was built around growing Willows process. It was built around a completely different process for completely different states and completely different goals and needs. And then you plug it in here and it’s like, well, the way that we did business and the way they do business, their core and we were brokers, like, it’s just a completely different thing. So we’ve completely redone the entire sales engine of this thing from the ground up. You know, Craig and I over the past, what has it been, two, two and a half weeks? Mm-hmm. If you look at what, what has been 2 weeks ago and what it is today, it’s a completely different system. If you try to do something like that withgo high level, ain’t gonna happen. It is what it is. And it’s exactly what Craig said earlier. You’re taking your process and adapting it to that system. And that system is not built around your process. Whereas with this, whatever our process mends into over time, our system mends into that. Yeah. And that I think is where it’s super, super powerful, is you can go in and build that stuff and, you know, you can do it with dev teams, you can do all of that. But like Vern said, they don’t understand mortgage, you know. If you try and talk to these people about what mortgage is, good luck. Very difficult. It’s terrible. I tell you from first-hand experience. Yeah. It’s very difficult. And then they build it and then it’s not at all what you thought it was gonna be. Or if you get a guy that ishas mortgage experience that doesn’t have as much tech experience,in theory it’s good, but then the technology lacks. Because we’ve had another company where the guy was a loan officer. He ha-Like, I liked how he had it. I liked the flow of it. But the technology just wasn’t there behind it and it justThe adjustments couldn’t get done quickly at all. It was very, very delayed. Like, the, theIn theory it was there, but it just never worked great and it was tough and it wasn’t scalable and it was clunky because the technology wasn’t great. It’s hard because you haveIt needs to be- bend to loan officers and it needs to bend to your system. And if you can’t make those changes, it’s very difficult. Yes. And nobody’s gonna want to use it-is the biggest thing. Like, you’ll never use it because it’s not easy. Or you’re always gonna be trying to change to something else, to something better, instead of just changeAnd then, you know, you’re relearning a whole new system and you’re having to move everything over. You’re gonna spend money, you know. It’s just not very feasible. But I think that was a ton of great information. I wanted everybody to kind of get a little bit of an idea of, you know, where we’re at with the technology and what’s coming and there’s a ton more that’s gonna be rolled out. But if you guys, you know, want to get a demo and check it out, get ahold of these two and they’ll set it up for you guys. Thank you. Thank you. See you guys.