Phil has extensive lending knowledge and experience, thankfully he’s here to share some of that knowledge with us today. He spends most of his time opening branches and coaching originators. Needless to say, he knows a lot about what originators are looking for when they are qualifying you. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
Phil Treadwell Real Estate Background:
- 15 year mortgage industry veteran, regional VP for Highlands Residential Mortgage
- Has been the top producing originator in a multi-state region
- Host of the Mortgage Marketing Expert Podcast
- Based in Bentonville, AR
- Say hi to him at https://philtreadwell.com/
- Best Ever Book: Principles by Ray Dalio
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.
With us today, Phil Treadwell. How are you doing, Phil?
Phil Treadwell: Doing great, Joe. How are you?
Joe Fairless: I’m doing great, nice to have you on the show. A little bit about Phil – he is a 15-year mortgage industry veteran. He’s a regional vice-president for Highlands Residential Mortgage. He’s been a top-producing originator in a multi-state region. He is also the host of Mortgage Marketing Expert Podcast. Based in Bentonville, Arkansas. With that being said, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Phil Treadwell: Yeah, Joe, and I appreciate you having me on, and the introduction there. My background for the last 15 years has been in mortgage, mainly on the origination side. I got the real estate bug fairly early on. My dad was a builder growing up, still owns a company to this day; as I grew up seeing real estate, and seeing the ups and downs of it, I knew that I wanted to be in some type of role within the mortgage industry, and had a love of numbers and finance, and ended up in the mortgage business. I owned a small broker shop years ago, prior to the bust, as the bubble was about to burst in the late 2000’s. I ended up selling my company to Wells Fargo Home Mortagage; I went to work for them, and became a top-producer in about a six-state region (the center part of the country).
About five years ago I came to work for Highlands, where I’m at right now, where I build branches, coach originators, build teams in a 3-4 state region right here in the center part of the country.
Joe Fairless: When you coach originators, what are the high-level points you talk about? And then I’d love to get a little bit deeper in each of those.
Phil Treadwell: Sure. The main things right now, especially in the climate that we’re in within the industry, is the old adage of comparing rates and fees, or having competitive rates and fees, and closing on time. That’s now the new par – closing a loan fast, getting a property done, and just providing on-par rates and whatnot isn’t enough to differentiate yourself.
So the things that we really coach on and that I really coach my teams on is to provide value with your referral partners to make sure that you’re branding yourself in a way that differentiates from the competition and the other vultures out there, if you will, that are going after the same clientele. If you can do those two things successfully, that’s a great start.
Joe Fairless: How do you provide value with your referral partners?
Phil Treadwell: So instead of just simply doing the things that is expected of an originator, come up with ways to help them build their business… As opposed to doing a homebuying seminar with a referral partner, maybe teach them how to create leads online, to have homebuyer seminars themselves. Come up with ways to help them build their business, and in turn they’ll refer business back to you.
Joe Fairless: Do you have an example of something you’ve done to illustrate that point?
Phil Treadwell: Absolutely… A couple different examples that come to mind. One is provide them with information that they can provide to either their homebuyers, or to potential prospects, like information about the market that they’re in, whether that is an analysis of the appreciation or the median home prices and the median incomes to kind of show an affordability… There’s some great software out there that can provide those things. One of them is MBS Highway with Barry Habib, who’s a great friend and partner with our company, and several others.
Another thing is to do a cost of waiting analysis. If you can see the appreciation in a certain market, if you can look at the way the interest rates are increasing little by little, as they have over the past year or so, and put into numbers what it’s actually costing a buyer who is on the fence to wait three months or six months or whatever – that really helps them convert those leads into buyers, and in turn there’s a possibility for you to get that buyer’s referral.
Joe Fairless: Yeah, that’s great. I love the cost of waiting analysis; I hadn’t heard of that type of analysis. Is that something that you came across, or is that something you all came up with?
Phil Treadwell: That’s something that MBS Highway has provided us as a company. Our entire company subscribes to it, and each individual loan officer has those tools… And there’s a lot of things within that platform that a lot of times are better information for real estate professionals than they even are mortgage professionals… But they’re designed in a way that you can provide those, as we talked about, to add value with those realtors, with the real estate professionals, so that, again, they can create more business and create that relationship. That’s just one of the ways that you can add value to their business.
Joe Fairless: What’s a skillset that wouldn’t be as honed as it is if you didn’t have a dad who was a builder and had his company still today?
Phil Treadwell: One of the skills that I have that’s not honed?
Joe Fairless: No, one of the skills that you have now that would not be as honed if you didn’t have your dad in the business?
Phil Treadwell: I think just an overall perspective of the industry. I think a lot of times the building market – you have kind of two different sides of it, as I’ve seen personally. One is the builders who build custom homes and build for the individual, and the builders who are more developing a subdivision… And they might let you customize a few features, but it’s essentially the same couple of floor plans and exteriors, and just duplicated across a subdivision or a piece of land.
I think the differences in the quality of the home can vary at times, the difference in the qualities of the builder… Just understanding those types of things have been a huge benefit in partnering with real estate professionals and builders on the mortgage side, because my background is heavily in the marketing and sales side. So any time that you can identify a competitive advantage or a selling point or a feature on a property or a subdivision, those go a long way to getting the attention of the consumer and the end homebuyer, and I’ve really subscribed to both.
Something we talk about a lot on our podcast and something we talk about a lot with our teams is a balance of trust and attention. That’s really what marketing is all about. I use the example that I could light myself on fire and put it on social media and get a lot of attention, but that doesn’t mean that anyone has any trust that I can provide what they need in a business sense… But someone can be the most trusted business professional out there, but if no one knows about them, then again, they’re not gonna do any business.
So when it comes to identifying characteristics of properties to help that builder or to help the real estate professional who’s selling properties, I think that something that I was able to learn early on is that all homes aren’t necessarily created equal.
Joe Fairless: I love that — you said “definition of marketing”, balance of trust and attention?
Phil Treadwell: Yeah, we think that marketing and effective marketing is really that balance of trust and attention.
Joe Fairless: Oh, that’s beautiful. It’s so true. I love your example, too. So you talked about providing value to referral partners, doing the leads etc. That was one component. Then you said the second thing was branding yourself and making yourself differentiated. What are some tactical things that you do to do that?
Phil Treadwell: The first is to identify what you wanna be known for, and I’ll use the example of a mortgage originator, but it can be a real estate agent, it can be really any sales professional… When wanting to build a brand, it’s what is it that you wanna be known for? Some mortgage originators want to be known for the loan officer who can get the loan closed really fast, some may be one that focuses on first-time homebuyers, or veterans, or maybe it’s that they’re extremely experienced and they can really take time and answer a lot of questions. You have to identify what it is you wanna be known for.
Then the second piece of that is to figure out what market and niche that you’re trying to market to, and make sure that they pair up. An example of that is if someone’s wanting to say “I wanna close loans really fast”, but they wanna focus on renovation loans. Well, those probably aren’t gonna match up very well, because renovations generally take some time. So you wanna make sure that those two things match up and you have an ability to do that long-term. You don’t wanna spend a lot of time and effort branding yourself or marketing yourself in a way, maybe on a specific program or a specific niche in the business that’s gonna go away relatively quickly.
Once you do that, it’s just a matter of finding a — there’s not really an elevator statement anymore, but finding a short statement when people ask what you do and how you do it, that’s short and to the point, and can really relay what your value is in your profession, and what kind of differentiates you between you and the other originators or loan officers that are out there… And then really just owning yourself online – owning your domain name, trying to put on that online resume on a website that has maybe a video of who you are, some things of what you’ve done, being able to put some things out there on social media. All of those things go into building a brand, so when someone can build a brand and get that attention and pay close [unintelligible [00:12:36].22] of the things that they do, that’s also going to create that trust… And you go back to that balance, and you’re effectively marketing yourself.
Joe Fairless: Switching gears to the underwriting and working with your customers – and I get that now you’re really focused on coaching originators, so you might not be on the front line, but in the past you were… What’s a challenging loan that you came across and you either were or weren’t able to help that person, for whatever reason?
Phil Treadwell: I think the biggest ones that come to mind are the ones who have either an income issue or a credit issue that’s preventing them from getting a loan. Obviously, a down payment, what does your credit and pay history look like, what your income, your ability to repay, and then whatever assets or reserves you have – those are the main components of what an underwriter looks like.
A lot of times you’ll have a self-employed borrower (it’s a great example) who has a great income, but it’s not necessarily verifiable when it comes to their tax returns. Most good self-employed people are gonna write off a lot of expenses in their business, and they may not show on the bottom line as far as taxable income what they actually are able to use to pay down debt or to pay expenses. So those are the biggest ones that come to mind.
I had one instance – it’s been years ago, whenever some of the large auto companies were having difficulties, if you will… [unintelligible [00:14:13].11] They owned a company who hauled auto parts for some of these big auto manufacturers, and they had kind of a lull in their income, and that caused them to have to leverage themselves with debt in a big way.
What we were able to do, in short, is partner with an SBA lender to do some small business loans, as well as do some financing and refinance some of the debt that they had on the real estate properties, and get them qualified for the purchase that they were trying to make… But I think that’s something for people to be mindful of – whenever you’re going out wanting to borrow money, whether it’s an investment property where you’re gonna have a tenant, where you need to look at cashflow, or whether it’s your personal income – those things really have to be verifiable… And I think a lot of folks think in their mind “Because I have a good credit score, I’m paying my bills, I’m obviously getting the money from somewhere” – but that doesn’t always necessarily translate down into being able to qualify for a home loan.
Joe Fairless: You mentioned earlier you got the overall perspective in the industry from your dad and his company… Why didn’t you go into building and developing?
Phil Treadwell: That’s actually a funny story… I grew up during summers and after school working on properties that he was doing, and a lot of building aspects… And early in my adult life, if you will, I went to work for him full-time, and started my own little crew, doing some finish work, and told him that I really had a lot of interest in taking over his company, and going into building, and that type of thing. He looked at me and said “Nothing would make me happier if you decided to do that, but before you do, I really want you to think long and hard before choosing the building industry for the next 30 or 40 years… Because while the last 20 years has been good, you don’t remember the times through the ’70s and ’80s that things were really difficult, and just like anything else, industries are cyclical. So before you do, I really want you to look out there and see of some other things that you may be interested in.”
I reached out to a company that was looking for someone that had both sales and management experience, which I had on my resume at the time… And it was a mortgage company. 15 years later, I’m still in the business.
Joe Fairless: Any regrets?
Phil Treadwell: Not at all. There’s been a lot of highs and lows in the mortgage industry, but I’ve met some amazing people, I’ve had some great mentors, I have been able to help a lot of people with home ownership, and no regrets at all.
Joe Fairless: It takes a very tough mindset for a person to get into building and to stay in building, and props to your dad for doing that. I don’t have the stomach for doing development; I’ve mentioned that multiple times on the show. The psychology, and the ups and downs, as you said… But you did just mention something that I hadn’t thought of – when you were in the mortgage industry, you had ups and downs, too.
You said you owned a small broker shop, and you sold it before the bust. Did you just have ESP, or did you just luck out? What happened here?
Phil Treadwell: It was a little bit of both… I don’t think it was ESP. Wells Fargo had approached me multiple times to essentially sell my company, or work out a deal where I would close my company, they would take care of what I wanted out of that financially, to come to work for them as an originator and absorb it in. And there was one or two other small mortgage companies in the market that I was in that had also done that, and you could feel the tightening on programs, you could see the difficulties the industry was having, large companies are there one second and gone the next… And the dominoes had started to fall, so I just decided that I wasn’t established enough in my career and didn’t have the financial resources to try to weather what it could potentially be, and I knew I hadn’t been in the business long enough to really have experience with the cycles, and decided to go ahead and not weather that storm alone.
Joe Fairless: What is your best real estate investing advice ever?
Phil Treadwell: It is to have a good team of people, especially when you’re talking about people who are wanting to build a portfolio of real estate. Make sure that the team of folks, whether they’re appraisers or home inspectors or realtors or lenders – make sure it’s not just a good team of people, but they’re also doing more for you than just their specific job.
Like I talked about earlier, from a lending perspective, we don’t just want to provide good financing options for homebuyers or for investors, we also want to take it a step further and help build their business in other ways, which could be as simple as making a connection with another good title company, or another good appraiser, or someone else that seems suited to the type of business that they’re doing.
Joe Fairless: Yeah… Great advice, that’s for sure. For any of our customers, we should do more than just what they’re hiring us to do; that will make us stand out. In your industry, certainly, it’s not just about speed and reliability. You have to do more to differentiate yourself, and same with most industries right now.
Phil Treadwell: Absolutely. It’s a matter of just under-promising and over-delivering, and we talk about that a lot. If you under-promise and over-deliver, that’s from a position of strength, where if you over-promise and under-deliver, most of the time that’s because people are insecure and self-conscious about their actual abilities, where they feel like they need to over-promise to get the deal.
Joe Fairless: Very true, absolutely. We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Phil Treadwell: I’m ready.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Break: [00:19:51].25] to [00:20:37].25]
Joe Fairless: Best ever book you’ve recently read?
Phil Treadwell: Recently… Principles, by Ray Dalio.
Joe Fairless: What did you take away from it?
Phil Treadwell: That you can set up a system for just about anything in your life, whether that’s personal or professional.
Joe Fairless: Best ever deal you’ve done?
Phil Treadwell: It was the first deal that I did, which was for a friend of mine from high school, brand newly married; I was able to get them into a home with almost nothing, and they still live in that home to this day.
Joe Fairless: What’s a mistake you’ve made on a transaction?
Phil Treadwell: On a transaction… It’s a great question. I will say probably waiting too long, if it was a personal transaction, for real estate. I waited too long; I was too hesitant. I should have pulled the trigger a little quicker.
Joe Fairless: Will you elaborate on the transaction? I would love to learn more.
Phil Treadwell: Yeah, it was a potential investment property for myself personally. My wife and I were looking at purchasing it, we were going to either buy it, rehab it and keep it for rental, or potentially flip it… And we waited, we weren’t sure if our numbers were accurate, and they were probably even too more conservative, and somebody came along and scooped it up.
It was a lesson I learned very quickly, to trust your gut, trust your instinct; if your math works and you’re got a good feeling about it, you can’t wait… You’ve gotta pull the trigger.
Joe Fairless: Best ever way you like to give back?
Phil Treadwell: My wife and I work really hard at our profession, so that we can give financially. There’s a lot of good causes that people sow their time into, and we do, as well… But we have specifically a guy that has worked for me for years; he and his wife are missionaries in Romania, humanitarian missions, that dig wells and do a lot of religious causes as well, so we like to give back in that way.
Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on and get in touch with you?
Phil Treadwell: My website is PhilTreadwell.com. Pretty much all my social media handles are @PhilTreadwell, and I would love for them to check out our podcast, which is Mortgage Marketing Experts. You can find it on iTunes, Google Play, Spotify… All of the main podcast outlets, as well as the website, mortgagemarketingexpert.com.
Joe Fairless: Getting customers and keeping them and growing them within your business is a balance of trust and attention. You said that not exactly like that, but I elaborated on it a little bit, because that’s so profound, what you said; it can be applied to just customer acquisition and retention too, not just marketing. I love that… And how you do that is you provide value that goes above and beyond what you’re specifically hired to do.
One tactical way is to provide an analysis to your customer, so they can provide it to their buyers; the cost of waiting analysis that you mentioned… There’s many different was we could do that.
Another is to brand yourself so you’re differentiating from the competition, and you talked through the questions to ask yourself, and then how to approach that. I’m really grateful you were on the show… Thanks again for being a guest. I hope you have a best ever day, and we’ll talk to you soon.
Phil Treadwell: Joe, thanks so much for having me on, and you as well.