Origination
Join us as we delve into the world of multifamily and commercial real estate, engaging in insightful interviews with industry-leading loan originators and salespeople. Discover the secrets that set apart these top performers from the competition as we uncover the strategies and skills that drive their success.
Origination
Episode 32: Jim Gillespie, EVP of Bellwether Enterprise
Executive Vice President of Bellwether Enterprise Real Estate Capital, Jim Gillespie, oversees affordable housing finance and started their direct bond purchase program. He and Mordecai discuss what a "no" means in the industry and how to look at it like an opportunity, as well as current trends in sales.
TIMESTAMPS:
1:36 - Early Sales Experience
4:17 - Approach to Retail Sales and Seeing People's Energy
9:51 - Maybe It Will Kill You
14:04 - Asshole or Straight Shooter?
20:09 - That Rolodex!
23:14 - It's a Pretty Small Industry
25:24 - Got My Foot in the Door!
30:21 - Turnover Now vs Then
34:10 - Competition and Performance
36:32 - Experiences Between Companies
41:19 - Selling One or the Other
45:40 - Minimizing Options to Make A Decision
48:20 - The Team Focus
lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt
Welcome back to the Origination podcast, where we speak to the top originators and salespeople in the multifamily industry to try to understand what separates the top performers from the rest of the pack. On this episode, I'll be speaking with Jim Gillespie, Executive Vice President of Bellwether Enterprise Real Estate Capital. Jim oversees affordable housing finance for Bellwether, and also started their direct bond purchase program. I first met Jim, at Redstone when I was working there at Redstone, Jim was a founding principal and Managing Director of their proprietary tax exempt bond funds. I think you'll really enjoyed this conversation. You know, how do you know when you hear when you hear a no from a prospect? If you just take it at that, that no means no. Or whether it's actually an opportunity. We'll get into that in this interview, and also talk about the importance of a strong network, and much more. So without further ado, let's speak with Jim. Jim Gillespie, the legend. Welcome to the rich nation podcast.
Jim Gillespie:Thank you Mordy. It is a pleasure to be here.
Mordecai Rosenberg:Pleasure. Well, you know, you should you can you can you can hold off on on that judgment. You know, we'll wait till we till the end. So, Jim, I'm gonna start the conversation the way I I typically do on the podcast, which is to ask you about your early sales experience. You've been a phenomenal salesperson in the multifamily finance for for decades. As far as like early sales experience, anything comes to mind as far as like it could be grade school, high school, you know, maybe out of college or during college, anything come
Jim Gillespie:Yeah, you know, this is the one question Mordy, to mind. I know you ask everyone that I actually gave some thought to. But when I first graduated from Hanover, undergrad, I knew I didn't want to move home. I knew I wanted to move to Louisville, I didn't really know what I wanted to do with my life. But a friend of a friend, a mother of a friend, recommended I call Stanley bears to work at a store called the fashion posts in loyal to men's clothing store. And that's what that's where I landed. It was going to pay the rent. And Stanley started this business himself. I think they celebrated 50 years when I was there. But my priorities were a little different at the time, but Stanley was kind of a ballbuster and kept me engaged in showing up on time and, you know, forced me to sell really in an environment where I felt a little out of my comfort zone. You know, this is the men's clothing store hire in you know, the mayor we come in, they'll Samuels who owns Maker's Mark, it was kind of a hoo hoo hoo hoo of Louisville. But Stanley number one provided structure for me at a time when I needed it, but also was a good kind of sales coach and kind of with his foot on my back push me to sell but not be too hard. And I've never liked you know, being sold hard. I like to kind of do my thing when I'm shopping, too. I don't like people kind of lurking so yeah, kind of what's what's the right balance, but it you know, he was a he was at the right place at the right time.
Mordecai Rosenberg:Yeah. So do you remember any specific advice that he gave you on selling?
Jim Gillespie:I do not, you know, just kind of be yourself. Don't be overburdened or overbearing, and then be competent. Yeah.
Mordecai Rosenberg:So walk me through your, your approach, you know, as you I'm sure there's a lot of learning, right? But retail retail environment customer walks in, right. So the big question is, alright, do you approach them? Do you stand back? Do you? Like how engaged to be like, do you remember how did you How do you handle those situations?
Jim Gillespie:Honestly, I think in retail, it's a lot of, I mean, everybody has energy, right? And you can just pick up on if somebody's got a, you know, stiff arm Leave me alone, don't bother me, kind of shopping approaches and others who are more amenable to hey, I need something from my husband sportcoat you know, I could really use help here. So You know, I think a lot of it is just using your instinct and reading the other person. And I think that's parlays into you know what we do today?
Mordecai Rosenberg:Yeah. So reading other people's energy, that's like a very interesting way of looking at it. I'm also wondering if everyone, I don't know that that everyone does that. So naturally, that reads their energy. So I'm curious, like, did you find that as a as a as a kid? Like, do you remember kind of like having a natural feel for people's energy? And how would you describe that? If so?
Jim Gillespie:Yeah, I don't I don't know that I really, I guess he's just, you know, I think instinct, you just have instinct, when you meet someone, for good or for bad. And it's been proven wrong to where you're like, I'm not gonna like this person, and then you end up loving. But most of the time, you can even kind of gauge where, where someone's coming from, or at least their mood, right? Yeah, they're open to engaging or not.
Mordecai Rosenberg:Right. So fast forward to today, let's say you're at a conference, right? And you're meeting people. Right? So what's your read on? How would you describe like different people's energy? Is it just about like, if they're open to conversation? Or is there more texture to it? Yeah. How would you describe like, what are you reading?
Jim Gillespie:I think is, you know, if they're open to conversation, you know, I can think of a couple of meetings where you're just getting shut down and left and right. And I think, whether it's at a conference, whether it's in someone's office, you know, it's, it's, it's more, I don't want to say it's about, I don't want to use an analogy, like it's dating. But it is, in some respects, because it's more about selling who you are as a person and getting them to trust you than it is about selling a product. You know, I think that's secondary. But you, you know, I mean, let's get done affordable housing for, I guess, close to 30 years now. So, all these deals are complicated. And when you kind of engage with a borrower or a client, it's a journey, it's kind of a marriage, at least until you get to closing. So you got to trust the other person.
Mordecai Rosenberg:Yeah. Right. So so let's say you meet someone, and they're just shutting you down at every turn. You say, all right, forget this one, like onto the next one? Or do you say, Oh, this is not alright. This is like an interesting one. Like, let me see if I can crack this one. Or is it? You know, it becomes? Yeah, there's become a challenge.
Jim Gillespie:There. You know, there have been, usually when I'll go call on a client, I'll pick a colleague, and sometimes, I may not hit it off with either the individual or individuals, but my colleague will say like, alright, you all guys like, well, that's clearly your flight because they weren't hitting me off. And we'll just work together on them. So where was I going with that?
Mordecai Rosenberg:Yeah, but whether or not you go, or do you try to like crack the nut, or, or just say, you know, life's too short. On to the next one.
Jim Gillespie:With some clients, I will be persistent and try to crack the nut. Right. But I also think, I mean, this has happened recently, where, you know, we spent a tremendous amount of time working with a developer and structuring a deal. This is a bond purchase transaction, where we have a lot more discretion over kind of terms and what we can negotiate. We negotiated fees and earn out, and then they just ghost you. What I'm at that point in my career, where if you don't have the, if you can pick up the phone as a courtesy to at least respect, if you will, the commitment of time that we put in to the transaction, I know things aren't going to be good when we hit bumpy times. And this was a new client. So that's a case where I'm like, Alright, life's too short. So there are there are occasions where I say, okay, it was fun, but good luck. But yeah, for most clients aren't that way. I mean, I think that's one thing I like about I'll say our industry, the affordable housing industry is for the most part, I've made friendships at a lifetime with folks in this industry. You know, it's there's some really good people out here.
Mordecai Rosenberg:Yeah, yeah. I think there's a difference they say in sales that a yes is is the best, right? I know. A no, it's not as good. but to the maybes I will kill you. Yeah, yeah. And it's like there are there people who you meet who are just kind of quick notes, right? I'll go into in a minute, but it's the people who don't have respect for your time and just kind of keep you hanging, right? That's where it's like, you could kill yourself waiting for them, right? So it's maybe kind of keep it soft. You try. But like, if they're not, you have to make sure that they respect that they're your time. One of my best clients ever was someone who hung up on me. Before I got two words out of my mouth. They picked up the phone. Yeah, it was just me myself. Is that not interested? Hung up? So I called back I thought, I thought maybe we got disconnected. So I called back. And he's like, Are you kidding me? Flam again, right. But in some ways, like he was respecting my time, right? He, you know, he, he didn't waste a lot of a lot of time with me, right? So, but that I took as like, Alright, so the other way to look at it with those kinds of situations is like, Okay, this guy has a big moat around him, right? This guy is not accessible. Right? So if you because everyone look back back, then you I mean, when you even I don't know, 10 years ago, 15 years ago, it was like, it was difficult to identify who a borrower was. And to get the right, you know, the contact information. Now, it's, it's everything is is open and available, right? So everyone is calling this guy? And if this is someone who picks up the phone, and we'll have a conversation with anyone who calls? Well, that's not a very large moat, right? You can, you know, ever you can even if you do a deal with them, there's, you know, they'll they're always open to hearing from the next guy, right? But if someone else, someone that hangs up on you, it's like, okay, no one is going through to this guy, right? So I would try it every few months, I would reach out, and I would and I would always try, I got his email address never responded. Then, finally, I was able to get them on the phone. And I started to make a wait, now I have something else something different. And and it's like, no, I write. And I said, No, no, what's that? Like? It was it was an a seven on an FHA loan. I said, No, no, you don't have to pay for the prepayment penalty. We can, like cover it, you know, in in the interest rate. It's like, Oh, okay. Tell me more. Right. And then we and and, you know, ended up doing like, a couple 100 million dollars with with that with that guy. Right. And as long as he was doing deals with, with me, he was not taking calls from anybody else. You know, there was someone else, a developer in St. Louis, who he also he was, this was a nice guy. He talked, it was friendly, but he said, You know, I've had a 30 year relationship with local with the local lender. I'm sorry, like, it's just not gonna happen. Right? So we were, we went to visit him. And he took out his like, site plan. And he was laying out like his it was a, an Alzheimer's facility, I believe that he was showing how he had all this land. That was part of the collateral, but was undeveloped, but he thought he could develop something else on it. So he said, Oh, that's interesting. You know, have you ever thought of doing a partial release of collateral, which is a program that's on the books for FHA? Not very widely used, but it's like, oh, no, no one ever talks about that. So we were able to so we ended up, we were able to do that we were able to get his collateral released. And he was able to develop on it, and then he gave us a shot at that loan. And then, you know, again, Greyston has done, you know, several 100 million dollars of business with that with those with him. So there is, yeah, I wonder if like, they're, like, light on the one hand, like Life is like, too short to like, have to deal with like assholes, like, on the other hand, like, if you never dealt with them, then, you know, you may not have a lot of business. And, you know, sometimes it's just a challenge. Yeah, that it's a moat that other people have to get through. Right.
Jim Gillespie:Right. Right. And a lot of times there can be confusion over someone being an asshole or just being a straight shooter. And I'd much rather like you were saying I'd rather have a quick No, and I tried to do that with my clients, right? I'd rather than a long, maybe that's the worst thing you could do. You know, call them back in three weeks and like, Well, I'm not sure we might have this and it's like, really, you know, I'd rather quickly be like, I don't really think we have an option on Mondays.
Mordecai Rosenberg:Yeah, that's another trap that you get into at the VA like when you're when you're starting out because like you're so desperate to get a bite on a nibble on the hook. Where it's like oh, it's a you know, it's a conversion of of a McDonald's to a condo you know, with me half condo have Co Op and like those be two rental units on top. And it's like, oh, yeah, maybe we could You do that under agencies and you try to figure out all kinds of ways to contort yourself. And, and meanwhile, it's just like not a fit, right? And so you're not deepening your relationship. Just taking a swing is not always the best way to start a relationship. You know, if even if it's, if you What do you think about that? Because I know also, like, let's say, a lot of the business that you've done, let's say at Redstone, for example, and probably at right at related when you're doing a lot of the bond placements, those some of those were hairier deals that that, you know that that they would call you when they were when another, other lenders can do them. So like, what do you think about kind of reaching for the hairy deals as opposed for just like waiting for like just a fat pitch to smack like because you're, you may not get that one that's right down the middle when you're when you're trying to start a relationship.
Jim Gillespie:It it's related, those were all hairy deals. They were all highly structured and highly negotiated. And it was a I wasn't frontline sales at that point in my career, but it was a different type of sales because it was a very limited clientele, including right that was my first introduction to your father to Greyston. And because we financed so Grayson was acquiring a portfolio of bonds, large pieces of Providian insurance, which at the time was was in Louisville, we took a little boondoggle to Kentucky do due diligence on some bonds, but it was up we closed with a little over $160 million portfolio where we but that's a here's an example. We there was a bond in that portfolio. This is the kind of deals that we would do. It was a very valuable bond financed the deal in Georgia, I think called Chateau forest came Oh, yeah. But the bond, knees are not real numbers. But the bond was very valuable in that, let's say it had a 14% coupon. And it was $10 million. And what we did, thanks to masterminds, including like Michael lair, the guru of bond financing. We drop the bond into a trust what we call the leveraged trust. And we issued variable rate floating rate certificates in the amount of$20 million. That could go up to a rate of 7%. So we really, we took the 10th 10 million of bonds issued $20 million and certificates. Nobody, no bank is going to do that no GSE Fannie or Freddie aren't going to touch that. So it was marketing to folks like you know, your dad Greystone. We're just doing very structured deals that we're not commoditized. From the sales perspective, since so when we left related and foreign Redstone and created not just the credit, enhanced floating rate bonds, but the private placement, it was a broader product that we were marketing to a broader clientele, meaning we went from kind of the more market rate developers doing at 20s, and more structured deals to tax credit developers, and those were not clients we had long standing relationships with. So when we tackled that kind of market universe, thankfully, you have there was the internet was around. But as you know, all of those allocations of tax credits or tax exempt bonds, it's public information, it's published on the state or the municipalities. website. So I don't know, it's like six degrees of separation to how I've always marketed my attack. We would, let's say one of the top five issuers of bonds, what states and then we would go tackle those states, identify the top developers over the last five years that had been awarded or allocated or applied for bonds. We would go into we do some research, go into conference room, ever all the partners analyst team, and brainstorm on what is the common denominator? Who do we know that knows this developer? Client? Because the best way I mean, look, it's how I got my first job. It's how every job I've had, or every client relationship, for the most part has been some either a referral or there's some sick but I'll say six degrees of separation on almost every client I've worked with. Because it's better to go in and be like, hey, you know, XYZ and it's kind of a common denominator. Can I say that? Do you ever watch that movie? Six degrees of separation? Oh, probably. Yeah. Great. Yeah.
Mordecai Rosenberg:Yeah. That's really interesting. And I remember I mean, so you I mean, you and I worked together at Redstone for a couple of years right and and Johnson Cole avec David Levine. Like they, I mean, they did have an incredible Rolodex like they were one of the only two people actually maybe the only two people who I've seen still have a role an actual Rolodex. David always had that Rolodex. Yeah, yeah, but they knew everybody. Right. But that idea of like, alright, well, let's see, here's the developers we want to target. And, and I feel like the approach, a common approach would be alright, let's just cold call them and just pitch them our product. But the idea of thinking about who is, you know, who can introduce us, right, is simple, but so much, so much more powerful, right? Even if you have to work a little longer to find that person. Today, you have like LinkedIn. Right? So you can see your common common connections, although, yeah, I don't know, I may have like four or 5000. Like, you know, connections on LinkedIn, like, I don't know, almost 100. Real, like, yeah, like no idea who most people are. That being said, it's, it's, it's something and especially today, I mean, it's not easier to get someone on the phone today than it was it's good. It's getting gotten more difficult on the phone. It's gotten more difficult on emails, right. So, but one kind of one silver bullet way in is if you can find a trusted relationship in common. Right, they can make an introduction?
Jim Gillespie:Yeah, absolutely. Yeah. Yep. And a lot of times, I mean, you know, if it's an attorney a lot of times they won't, they're like, don't really, I've got a conflict here. I'm not going to make a direct introduction, but at least it's a name you can draw. As someone they know that then they can call and check out like, Who's this guy Gillespie is the legit or the is nuts?
Mordecai Rosenberg:Yeah, I did that. I did that. The other week. I was I was I was looking at the list of Fannie Mae's came out with a list of like top originators in the country individuals, right. So I thought, Oh, these are probably like good people to have on the podcast. So I like looked up. One and I realized, like, alright, I can reach out to him directly. But but, you know, I wouldn't respond to me necessarily, if I got to, like, you know, it's like, there's, you don't know what spam and what's not spam, right. But I had a contact in common. So I reached out to them and said, Hey, like, do you know this person? So it kind of Yeah, but uh, you know, make Drummond make an email intro. And they did. And then I was able to get on the phone with them, you know, the next day. So it's, it's, that's probably is really something that needs to be leveraged. A lot. As far as the network though, like, how do you build that? Like, because at the beginning, you don't have a lot of common? Like, you don't know a lot of people. So how do you build How did how did you build your network?
Jim Gillespie:It's it's a pretty small industry, right? Portable housing. Yeah, I mean, maybe I've been in for 30 years, and it's changed. But it's a pretty small it's pretty small world. And, you know, when we are launching Redstone and its programs, you know, all about going to network. Radek conference, you know, it's an era I've been on their board for 20 something years, it's getting involved in these trade organizations, speaking at conferences, hitting the road. And being on the phone, thinking the other day, I'm just I'm not on the phone as much as I was. I remember reading Rachel, who was a different that she's like, You were on the phone all the time, like all the time, like, it's my job. And yeah, I think I think, you know, I think myself, but perhaps others have become more reliant on email when I think, especially now. You'd rather have somebody hear somebody's voice?
Mordecai Rosenberg:Yeah. Not me. I don't rely on email. I don't do it. I don't do email. I do it a little bit. drita. But I do but I couldn't. But I do. I will do more like text or teams. That's like my, yeah, I'll do that. Yeah, I don't spend a lot of time on email. So let's talk about related a little bit. Yeah, cuz that's, that's where you got started. And yeah, I, you know, related from what the stories that I've heard, I think it sounds like you have such a unique environment and it's produced so many industry leaders, you know, that if you looked at across the, you know, the spectrum in, in affordable housing I mean, there's so many founders came out of related. Yeah. And I'm curious what it was like to get started there. You know, what was it? How, I don't know if there was training? Like, how did you learn the business there? What was the what was the environment? You know, it seemed like it was very competitive. But what was it? Can you describe like, what it was? Yeah.
Jim Gillespie:So I got my foot in the door. Here's the six degrees of separation. My thesis advisor, a guy named Brian Gallagher introduced me to Denise Kiley, who was the head of she was treated chief credit officer for related capital. And I got an internship for a couple of months. I was finishing at Columbia. And I got an internship for a couple of months with related capital doing tender offers on their old partnerships, which I had no idea what it was, but was able to weasel my way, weasel. I got position working full time, for related. What had happened was Ross is gonna roll up all of his ad 20 properties at 20 properties for those listening that don't know it's a bond financed, affordable housing property where 80% of the units are market rate 20% are affordable. So related was going to roll up, I think it was six of their 8020 properties in New York, into a REIT. The week before the filing, maybe even days before the filing the REIT market crashed. Ross pulled the offering and just shifted gears very quickly and created a new kind of joint venture that was going to focus on credit enhancement on 8020 bonds. So I kudos for their ability to shift so quickly. And I think a lot of that comes from Ross's leadership and leadership being very focused.
Mordecai Rosenberg:That's Stephen Ross.
Jim Gillespie:Yeah. Stephen Ross, founder of Related and owner of the Dolphins.
Mordecai Rosenberg:Yeah.
Jim Gillespie:So I find myself I have no, I honestly don't know what to do. And I don't know what to do to save my life. And I'm in a cube. So there's, there's Ross and his secretary, Peggy, Edie Merritt, who ran our group and his assistant whose name I forget, and then I was right there. Right. So I was you're thrown in, right. And there were there were some senior folks who were very good mentors, but it was also very cutthroat at the kind of my level. And there were days I went home, you know, it's working 12-14 hour days, there are days I went home in tears in their old days, I went home, you know, feeling like, big shit. It was a sink or swim environment, you had to fight. And I hate being told what to do. And I felt many times I was implied that I'm not good enough to be here. And it gave me fight, you know, and we were, these were great times, because we were we were rocking and rolling. And I just had my head down and was just executing on deals and just learning so much. We kind of created these two funds, and I was doing everything from modeling cash flows to closing deals to sending out servicing invoices, because we didn't really have a certain thing department. So it was doing whatever and whenever needed to be done. And just making sure it was it was done. But yeah, they were those were great times. In my career. You had to be on your toes back in the day because we were all in the ninth floor 625 Madison and no phone system. You could push a button, sit intercom pick up the phone, and pays the entire floor. And I will never forget the first time I hear Jim Gillespie or Yeah, Jim Gillespie. See Steve Ross, and you know, first you crap your pants, you grab everything on your desk, and you run to the corner office. And then happens over and over again. But yeah, it was great time for us has a mind of steel. I mean, I the first deal I closed was a little deal called atrium apartments. We were buying for like 3,000,009 50. And I get this random, you know, Steve Ross. You know, run through his office and he just would I'm like, how do you how do you recall like with everything the company is working on how do you recall the details of some little $4 million 100 Make unit acquisition in Daytona Beach. But he's just on his toes. But yeah, you just you had to be on your toes.
Mordecai Rosenberg:Yeah. So as far as like the leadership and the vision, I mean, because just seem Ross is clearly a visionary with what he's done on the development side. But what was it like working for him? Like what was what was the interaction that you had with him? Like, did you Did he set the pace that he's established the vision? Like, what was the you? How did he kind of create that? Dynamic?
Jim Gillespie:Yeah, I mean, I think just by his vision, I mean, Ross always said he wanted to hire the smartest and best people in the industry and surround himself by people that were smarter than he was. And I think that's something I tried to do in my career. But yeah, I mean, he's just by his presence. He's a respected through the office, or at least when I was there was very well respected. Yeah, he never took the jacket off. Somewhat formal. But, you know, set the tone you either you perform, or you get out--
Mordecai Rosenberg:--a lot of turnover.
Jim Gillespie:Remarkably, there was some turnover. But I would point to the fact that senior management at related even today, bow below some of the folks in affordable in retail have been there for decades, people are incredibly loyal to the man and he is loyal to them. I mean, that's leaving there was was not an easy decision. Nor was it an easy negotiation in that I did have a contract and had to negotiate my exit directly with Ross, which was fun.
Mordecai Rosenberg:Wow. Yeah. Yeah. But there is something about you, I don't know that you have that today. That boiler room, you know, the mentality. You know, there were it's, I don't know, what's the line from? Maybe it's from Glengarry Glen Ross is like, you know, first prizes. You know, $1,000, like, second prizes is steak knives, third prizes, you're out, you're out, like, there's I don't know that people feel there's something to be said for that. Accountability.
Jim Gillespie:I hate to say it in some respects, but we can't do and say a lot of the things that we would there. I think we we take a very soft approach. And say, we are the only we take a very soft approach with our employees these days, because we don't want to offend them or hurt their feelings. And sometimes we just need to drop the F bomb. Yeah, because it was dropped quite frequently there that was met.
Mordecai Rosenberg:Yeah, it's funny. My kids like my my oldest kids are like 16, 15, 14, and my youngest is nine. And my older ones. They lament how that I'm, like, softer with like me other the youngest that I was, like, he's never had his mouth washed out with soap. Like, but you know, it's I don't know if I'm allowed to admit that. Yeah, that may or may not have happened. But like, it was their certain may or may not have has paddled my child. Yeah. I mean, there's certain certain pedagogical methodologies that just are are not acceptable anymore. anymore, which look, probably a lot of that for better it could. I mean, I'm sure it was not an easy place to work. But there's like, that idea of just look like the fact that there was very little turnover is telling, right? Because the people who showed up were people who were looking for that kind of an environment, maybe?
Jim Gillespie:Yeah, yeah, I agree. When I not just got my internship. And certainly when I got my permanent position, which just a month or two later, in my mind, I had landed a job with it. While I was at Columbia, if there's one company I would have picked that I could have worked for, it was related. And so there's that there is a cache in saying that I worked at or I work for related. And for a reason.
Mordecai Rosenberg:Yeah. Yeah. I think also that idea of competition. I feel like it's important to be at a place where you can compete, in some ways. I remember like, when I was originating, you know, my brother and I were, were, we ran a team together. And then there was there was another team that was always it was very high producing team. And when we, we'd look at the pipeline and say, like, like, Oh, crap, we signed up $200 million last month, like, you know, like, hell with that. And so the next month, like we'd signed 300, right, and you want like, you need it's that you're Louisville. So your, your your horse racing got down there at that pace. If you don't have that pace horse like it's, you're not gonna get the same performance at all. So look, it's tough because there's people who are so far out outperform, write that you don't consider them as competition. But I feel like you want to kind of like, create some kind of a mark and say, Alright, I'm gonna let's see if I can get, you know.
Jim Gillespie:I'll tell you, I mean, this is jumping to Redstone. But I look back at it now. And I just laugh because when we were building, the company kind of production was all under me. And I was, I don't want to say solely responsible because it does take a village. But John and Dave, especially David, were just good at manipulating my psyche. In that several times. I remember there was one year I think we had five deals closing in December was just it was it. It was it was a it was a good end of the year. And I remember they all closed the calls in the office. And it was, you know, kind of this half assed, congratulations falling, but your pipes, your pipeline really sucks. And I remembered I would walk. I remember once I was so angry, like I left the office. But what that fueled in me was this, I will show you right, and before you know it, the pipelines fall again. Yeah. And I look back at that, like they totally knew what they were doing. Yeah. Yeah. Yeah. It's, it's a competition. It's drive. I mean, I was just driven. You know, at the time, I just I love that company, but done anything to further its success.
Mordecai Rosenberg:Yeah. So I want to talk about about Redstone a little bit and kind of comparing it. So. So I came from I was akracing. For a couple years, I was had learned, you know, Fannie, Freddie, FHA, and then I went over to Redstone. And it was a very different experience to have a balance sheet product, you know, where it wasn't, there was a lot more freedom and autonomy. And it was also a smaller shop. So there was, didn't have the same kind of division of labor. Like I remember, there was a deal that I'd signed up, where I was wanting to sign up. And I went in to talk to John and David about it. And they said, Alright, why don't you just fly down to Memphis and go, go see what you think. I was like, What? What do you mean? What do I think like, what's the I don't know what I'm looking for? Like? Yeah, that's what the underwriter does, like, they go down, look it you know, I have no idea what to look for. And it's like, well, just think like, would you, you know, would you be comfortable living there? You know, and that was a whole different. I was like, Oh, that's interesting. Like, I can actually look at this as not just a transaction, but as a piece of real estate as something that's a home. But you were in the bond world. And then you went over to you were at Hunt, and now you're a Bellwether. So you now you're seeing kind of the Fannie, Freddie, FHA, right. And you're also still you started a bond purchase program there as well. But what how would you compare the experience of working through like agency programs compared to like a balance sheet program?
Jim Gillespie:Quite different, but there are similarities. And I want to jump back to your comment about kind of the related or the Redstone approach to underwriting right. That all of us that came out of related that formed Redstone were from related were within the bowels, I'll say of a real estate development company, we created a lending platform. And the way we approached underwriting all of our deals, at related was not from more or less a lender's perspective, but from an owners perspective, especially given a lot of the deals that we were doing, originally were in some cases 100% financing where we would take a participation. So we looked at and our deals weren't underwritten by property managers and asset managers within related. So yeah, I remember the first deal we were closing at Redstone we had not hired Diana, we didn't have an underwriter. She was there when you were there, right? Yeah. And we saw capital was from Prudential. So yeah, I mean, the early days were interesting because I was not an underwriter, but I was preparing the underwriters. We've got to hire maize now. There's a very different underwriting process and underwriting an agency loan versus how we would do it. But yeah, so not only have I focused on affordable housing, but yeah, kind of specialized within tax exempt bonds. And yes, and left Redstone have built out or building out the two years in private placement product at Bellwether and the similarities to agency are that most of our investors are going to securitize these loans or bonds, much like we did at Red Stone, they'll build a pool and securitize the senior piece to typically Freddie Mac, right? Yeah, so the underwriting conforms to Freddie Mac standard. The beauty of having mostly, mostly mostly, but that's you know, and that's kind of a Redstone way to write that you're going to underwrite to Freddie Mac, because you know, that's where you're going to lay off your senior piece. But you're going to retain a 10 or 15% bps. And that's where you can pull different levers through longer term amortization or earnouts. Or that's where you differentiate yourself from from the agencies is underwriting some overhang on a section eight deal. Where you you conform to but you make educated risks? where appropriate.
Mordecai Rosenberg:Hmm. Yeah. So did you think it's easier to sell one or the other? Or, I mean, like your own, it's not a commodity, or is it a commodity? That's bonds.
Jim Gillespie:It is. For me, it was a transition right? When I left Redstone, we were going to build our private placement at centerline now, Hunter Lumen, whatever they are now. And that never happened. Given the sale to centerline to Hunt. So I went from selling a product that was pretty highly negotiable to what was a commodity, so I had to change my mindset, especially like I said, Before, I hate being told what to do. Now I've got to get everything to fit in this box. Right? Right. It's like, okay, well, how do I it's gonna take me some time to figure out what that box is. But how do I leverage the resources who know that box and figure out where can we push those levers? And I think that's what a good agency originator does is, here's, here's the little, you know, your desk guy with Fannie Mae. But how do I work with the folks I know at Fannie Mae or underwriting team to provide some terms, get waivers where appropriate to provide the best execution for them. So it's, you know, it was, it was definitely a transition for me to go from the Redstone to an agency originations model. So today, I'll tell you what we do at Bellwether. If we get a new tax exempt on transaction in the door, we typically will size it up for both Fannie Mae we'll do a side by side comparison of Fannie Mae, Freddie Mac and private placement, including the costs and come down to a net proceeds level. And then present that to the client. To talk about the pros and the cons. This may be the net best execution, but your construction, you know, you've got an equity partner who requires a construction loan. So it's got to be a forward which we can't do through. So it's, it's, that's where I think we add value is presenting a limited amount of options, being completely transparent about what's good about this execution today, what's not good at this time? And really time being their trusted advisor. Yeah, do you not giving too many options, right to FHA as well.
Mordecai Rosenberg:So do you present that too?
Jim Gillespie:Sometimes if they would like to see it will be like the cashback bond structure. But yeah. If they have time, a lot of times with bond deals there is got a gun to their head as to regards to the expiration of the bond allocation.
Mordecai Rosenberg:Yeah. Yeah, I guess that's one benefit of doing tax credit deals is that, you know, that's always like, one of the questions is how many options to show, right, because you have, you know, just just Fannie Mae alone, you could show 30 Different options between Yeah, and that leverage levels and IO and term and, you know, all that. Right. So, but with a tax credit to like, you know, they need 1517 years financing. Right, that so there's like one term because that has to be has to go through the length of the tax credit compliance, well, tax credit or no period, compliance period, maybe have longer and then it's, it's just about fewer variables, maybe in terms of what their considerations even could be.
Jim Gillespie:Right. I mean, that's, you know, a music analogy. I don't know if you've ever worked with an interior designer at like, go to re-do your bathroom and you go to pick out tile, or, God forbid, recently go to Duane Reade and try to pick out water because there's like 50 Different waters now, right? But I can't walk into a tile store and pick out tile for that. There's way too many options. So why what's the best thing an interior designer does is like, here's, I know your taste, I know your style, like we do, I want to know what the background on your deal what your equity needs. It's my job to give you four options. Here's your four best options, the pros, cons, you don't like any of them, we'll get back to the drawing, and I've never used the interior designer analogy.
Mordecai Rosenberg:Like no, it's a good one. It's a good one. It also makes me think, like, I read so first of all, you have a lot of options. That is difficult, right? But even worse than that is open ended. Where it's like, you know, the example of tomato sauces, right? Where it's like, you know, that you have you had, you know, 50 tomato sauces, then in the supermarket aisle, someone won't pick any, if there's three, then they'll make a decision. Right? But if you said someone, like, design your own tomato sauce, make your own decide the consistency and what's added to it right, then it's like, forget it. Yeah, I'll just get, you know, I'll just get pizza. So it's, that's, you know, when when you are guiding a client in a conversation? There's a balance between like, alright, well, what would you like, you know, what, you know, kind of, you know, this, what the sky was the limit, like, what would you want, but also really trying to understand their needs, and then say, Okay, well, based on what you're telling me, here are the three things I would consider. Right, right. It's much easier. I mean, like, I can feel my heart rate just slow when I hear three options, as opposed to 15. Right. Exactly. Yeah. And have you stayed exclusively in affordable housing, like throughout your career? Or did you have you done market rate? Also?
Jim Gillespie:I have done maybe a handful of market rate. But yeah, it's all been affordable. From ad 20s, to 100%. Tax credits to Section Eight acquisition.
Mordecai Rosenberg:I always liked when I was originating, I liked affordable and bond deals. Because I felt like it also it was like a bit of a moat. Right. Like there. Were there certain things that if I'm calling you and saying, Oh, hey, you know, I see your loan is maturing, you do want to refinance? Well, now you're like one of like, 1000 other people that are calling them, right. If I said, Oh, I see you have tax exempt bonds. Yeah, we have a structure where we can, you know, purchase the bonds. Yeah. And then create some kind of a synthetic refinance, where we're going to put them in a trust and issue certificates out of the trust and you don't have you won't have to Yeah, just reset your lockout, like, the things that I could say that no one else that I knew that they probably weren't hearing elsewhere. You know, you could in the bond world, there's an affordable housing, there's just there's more. There's fewer people that speak the language.
Jim Gillespie:Right. It's specialized. I mean, that's we try to really create a team approach at Bellwether. I mean, because we have I don't know how many originators non affordable. I mean, that's the mostly the biggest part of our, our business minutes probably a dozen affordable, focused originators but more and more market rate originators running up against or up into a an affordable opportunity. And so rather than try to school them on the dozens of acronyms, we try to team them up with an affordable originator who can walk and talk about language.
Mordecai Rosenberg:Yeah. Yeah, that makes that makes sense. You know, I feel like I see with not all originators but a lot. I think, this is how my brain works. Also, it's like, it's usually talked about, like first like, first in first out, like, it's that it seems like you have more than one product coming in. But for me, it's like once I had one product that landed in my brain, like that's what I understood, and it was hard for me to like, adapt to selling that there's I started an FHA and it's like, wires your brain for that for that product. And then to sell Fannie or Freddie just was a lot more challenging for me to wrap my head around, you know, but it's the same when people start with with Fannie or Freddie or or then go to go to FHA. But market rate and affordable like if you're used to those considerations that a market rate deal has, I would imagine that it's it's it's tougher for the My brain to learn a new language.
Jim Gillespie:Right. I mean, FHA, you know, I will sell FHA and I know enough about FHA to sell it. But I also 100% Bring in kind of our underwriting team, we've got a kind of a structuring person who I'll bring in. But that's one thing I think in production is to admit, when you don't know the answer. I've seen it, you know, before, where originator, you know, walks into an affordable developer experienced affordable developers and tries to pretend they know what they're talking about, and it doesn't sit well. So yeah, admit when you don't know. And that's what FHA, I mean, I understand the product and some of its nuances, but there's just like, there's so many nuances that that's why you have specific map underwriters, right? Yeah. That's not a roll I'm applying for.
Mordecai Rosenberg:No, but you know, one person's confusion is another is another one's you know, playgrounds are there. Thank God, they're there. Yeah, your point about the kind of coming full circle, I think that the fact that I think you came out of related coming out of with the developer mindset, you know, like, just trying to really be able to be probably gives you an ability to put yourself in their shoes, and I think picking up on people's energy. I think that's probably I mean, you and I both know that probably a lot more people have are like, totally blind, like energy that someone's get, you know, giving off, like, you know, you're seeing a conversation and you're like, how are they not aware that that person is totally uninterested? You know, and you see it in retail? For sure you see it, you know, that? So? So I think that's, yeah, I guess, you know, just a couple of minutes, if you have to say like, if I ask your clients who has been with you for all these years, it's like, why do you do business with Jim Gillespie? What do you think they would? What would they say?
Jim Gillespie:Like, let's take a poll and see what the survey results say.
Mordecai Rosenberg:I think, you know, by the way, it's a worthwhile poll to do to reach out to me.
Jim Gillespie:I think you're right, I think that's great. Yeah, we had before the pandemic, I'm gonna get no rattle, engaged with some of the executives doing full 360s reviews, including from some of our clients, but then we pulled the plan during the pandemic, not knowing what was going to happen. I would love to, I would love to see that picked up again. Because yeah, I would love to get that feedback. But I would hope they would say he's just he is an honest man of integrity. Who picks up the phone when we need to talk?
Mordecai Rosenberg:Yeah. Yeah. I think that it's, it's actually, it could be very interesting for you to spend some time going to your clients and saying, Well, you know, why do you do business with me? Right? And, and well, there's two ways to approach it first of all, like, because when they're giving you the answer, they're selling themselves. Why they do business with you? Right? Yeah. Cuz like, well, because like, you're you always come through and you pick up the phone, and you're like, oh, okay, that's great. Oh, by the way, I have this other deal. I wanted to like me to talk to you about it, because you're, you're having them do the selling for you. Another approach that I've heard is there's certain types of clientele that that you like doing business with, right? If you had to think of this as an exercise that Dan Sullivan, my executive coach does with people. But he says, All right, think about like that three clients that if every, everyone were just like that, it'd be great, your life would be great, you know. And now think of three clients, two or three clients where like, if you never had to talk to someone else like that in your life, like that would be also great. And now say, so now you have the contrast. I say, Well, what is it about that first group that makes you want to do business with them? Yeah, they are visionary. Yeah, they have a long term perspective, right? They value relationship. And let's say you try to come up with like, eight things, right? That here's what you're the things. And now you go sit down with them and say, Alright, I was thinking about, like, why I like doing business with you. And here are the things that I came up with, like, this is what i Does this resonate as far as things that you relate to, right? And they'll see themselves like on the page. It's like, oh, yeah, no one's ever gotten me. Like that. Right. And so the next thing is, I'd love to
Jim Gillespie:Except to be acknowleged - getting to be acknowledged.
Mordecai Rosenberg:Exactly. Acknowledging yet. Well you can then do is to, is to say, you know, I'd love to expand to do business with other people who fit these criteria. Have these similar character traits or features? Is there anyone you think I should speak to write because people like spending time their networks are oftentimes similar to themselves, right? And so you can use that as like a as far as networking, it's another potential tool. To, to use.
Jim Gillespie:Yep, yep. Yep. I like that idea like that.
Mordecai Rosenberg:Well, Jim, I really appreciate that your your time. You know, you've you've been a giant in the affordable housing space. Everyone is not everyone is significant. Forget about six degrees of separation. Yeah, I think everyone is one degree suffered in the affordable housing space. You know, there's no one more than like one degree removed and hearing about your experience through related and your ability to read people's energy and just respond to that is really, really awesome. So I appreciate the time and the relationship.
Jim Gillespie:Always a pleasure. Always a pleasure, Mordecai. You're one of my favorites.
Mordecai Rosenberg:Thank you. Thank you, Jimbo. All right. Until next time,
Jim Gillespie:All right, thanks.
Mordecai Rosenberg:I'll talk to you later.
Jim Gillespie:See you later.
Mordecai Rosenberg:Bye.