Episode 22: Alan Litt and Tom Lally, Founders of MonticelloAM, on Getting Comfortable with Being Uncomfortable, What Selling Pink Shirts Can Teach about Origination, Skating to Where the Puck is Going, and Much More ...

Tune in to this special double-guest episode with the co-founders of Monticello Asset Management, Alan Litt and Tom Lally.

Timestamps:
1:34 - 10:49        Early Sales Experience  
10:50 - 16:03     Don’t Give Up, Overcome Setbacks
16:03 - 32:00     Building Relationships, Making Connections 
33:52 - 40:30     Admitting When You’re Wrong, Evolving the Experience 
40:30 - 47:41     Staying Positive During Uncertainty. 
47:50 - 52:31     Collaboration, Building Relationships

lenders, market, people, loan, client, equity, selling, deals, screen protectors, year, calls, rates, business, borrower, easy, long, sales, chase, interest rates, debt

Transcript

Tom Lally-Alan Litt

Wed, 1/26 9:18AM • 53:23

SUMMARY KEYWORDS

tom, people, alan, sales, selling, shirt, relationship, mordecai, suit, buying, customer, product, salesperson, tulane, steve, learned, lally, brown, years, create

SPEAKERS

Mordecai Rosenberg, Alan Litt, Tom Lally

Mordecai Rosenberg  00:00

Hey, it's Mordecai. And welcome back to the Origination podcast where we interview the top originators and salespeople in the multifamily and commercial real estate industries to try to understand what separates the top performers from the rest of the pack. On this episode, I'll be sticking with Alan Litt and Tom Lally, both co-founders of Monticello Asset Management. Tom and Alan founded Monticello in 2014. And it quickly grew to become one of the leading providers of bridge financing in the healthcare space, really just taking the industry by storm. It's a great conversation. It's the first one I've done with two people. I was a little nervous about it, but at the end, it went great. I hope you'll enjoy this conversation as much as I did. So without further ado, let's talk to Alan and Tom.

Mordecai Rosenberg  00:00

All right, we have Tom Lally and Alan Litt. Welcome to the Origination podcast. It's great to have you guys.

Alan Litt  00:08

Thank you, Mordecai. 

Tom Lally  00:09

Thank you, Mordecai, good Morning.

Mordecai Rosenberg  00:11

So I will admit that this is the first time that I'm interviewing two people at the same time. So I guess, you know, it's funny what your subconscious does. I guess I must have been a little nervous about it, because I had a dream last night that we were recording this podcast, and I couldn't remember your names. And so and everything was going wrong, I was forgetting to introduce the podcast, I was forgetting to press record, and I couldn't remember your names. So it's funny how that works. But we'll go with it. And we'll see. I think it would be fun. 

Alan Litt  00:44

You know what Mordecai, that's a great lead in if you think about it, if we're talking about sales. Obviously, when people are nervous, it's simply because they're, I believe they're concerned about their audience or what they're about to talk about. To me, I think our audience should certainly realize that- certainly, nervousness is part of any part of sales, but they should be confident in the product that they're trying to sell their understanding of that product. And as a result, the audience is very interested, I believe in hearing what they have to say otherwise, they wouldn't be there. And then you take it from there. So to me, nervousness is always a positive thing.

Mordecai Rosenberg  01:34

Yeah. So and you learn to just live with it. I like to start by taking a trip down down memory lane. And in, I'd like to ask each of you, if you would think about, you know, both of you are very entrepreneurial, which naturally involves sales. Tom, you've been in lots of different industries, you know, in capital markets related. Alan, you're in the construction industry for a very long time. But if you think about the first sales experience, that you can remember, maybe from when you were, it could be when you were just a kid, or maybe in high school, or college,  what would come to mind? So Tom, why don't why don't you start? Anything jumped out as far as early sales experience?

Tom Lally  02:22

Yeah, one of the things that pops out, I could go way back to when I had to, you know, sell myself to my father to allow me to get Coca Cola, because we were never allowed to drink soda. So I agreed to clean all the bathrooms in his pub, in order to get that cherished Coca Cola at the end, but I'll skip over that part of my life. And I think the first time I really had to sell myself was, I was introduced to a particular person who heard that I wanted to get into the sales and trading end of an investment bank. And the interview was supposed to be for 10 minutes. And it wound up being for five hours. And so after a half hour, I thought I might have been on the, on the right terms with this fellow because he started introducing me around to many different people. And so I was in between my first and second year of graduate school. And lo and behold, at the end of that five hours, I was expecting a nice to meet you will keep you in mind for after you graduate. But what was presented to me was, okay, you want to get into sales and trading. Here's your first trade. How would you like to come work for me starting on Tuesday, rather than going back to school? Let's see how well you can handle trading. And I accepted the job right then and there. So that person who offered me the job turns out to be none other than Larry Fink, who now runs BlackRock, and for the next 10 years, I worked with some of the most influential people in the certainly in the trading business in the mortgage securitization, business, etc. So, to me, I had no idea what I was stepping into. But I knew I had to sell myself simply because I knew I wanted to get on the to a trading floor and be in the sales and trading effort.

Mordecai Rosenberg  04:39

Do you remember what you were when you were having that conversation? I mean, what a remarkable story. But do you remember what you were trying, anything that you were trying to get across in that conversation? How your approach was and what did they what did they see that made them give you that offer on I'm gonna stop. Let's take the first question first. Is there any goal that you were trying to direct the conversation towards? 

Tom Lally  05:08

My summer. That was I was actually very fortunate I was on the trading desk, the commodities trading desk at Bear Stearns. And we were a few feet away from Ace Greenberg. So I got to see, you know what true trading was from a Bear Stearns perspective. And I knew I fell in love with the whole trading and sales aspect of the business. And friends of mine had been trying to get me into corporate finance. But having worked in the summer, on a trading floor, I knew I wanted to work on a trading floor. So when I sat down with Larry, my main goal was to get him to know that I thought I was meant to be on a trading floor, that I thought I could be valuable. Although I knew nothing about mortgages, I knew nothing about fixed income, you have to realize I grew up in a very big family, we lived in a rental apartment. So at that point in time, I was 24,25 years old, I still didn't even know what a mortgage was. And here I am telling Larry Fink that I thought I would be great in trading a mortgage. But I wanted to get that point across that my desire was so much more important than my knowledge. And I thought that came across. 

Mordecai Rosenberg  06:37

That's great. Alan, how about for you in terms of early sales experience I grew up in in New Jersey, Bergen County. Anything, grade school, high school, college where you just felt you were selling something.

Alan Litt  06:50

So I think my first big sales experience was in the 70s, 1970s. I remember back then, I had a job at night at Gimbels department store on 86th and Lex and I went to school at night, I had a Wi Fi to kid and I got a sales job to try and make extra money, because I needed to make a living. And I was put in the men's shirts department. I've never sold anything. And the guy gave me 15 minutes of training. The training was we have beige shirts, blue shirts, and pink shirts. Everybody wants today a white shirt, we're out of white shirts, go out there and sell beige shirts, pink shirts, and blue shirts. So I said but nobody wants that. He said, I don't care, you have to convince them that they want this shirt. And quite frankly, for the first two months, I think I was the worst salesman in all of Gimbels history. But then I started to realize how to create a connection with people as part of a sales process. It's not about the shirt, it's about the relationship with the customer. And because the only way back then you got paid is how many shirts you sold, I think I got $1.25 A shirt. So you didn't get really a salary they gave you like $10 a week, and then whatever it was a commission the different rules back then. And so the concept is in sales for for me has always been, you got brown suits, you sell brown suits, you have what you have, and you have to make the most out of it. But if you create a connection, like what Tom was saying, he created a connection with Larry Fink and said, Larry, here's what I want to do. Every night, from 6 to 9:30, I worked at Gimbels, six nights a week. And basically, the customer would come in, I was the counter right on the front of the right hand door, this department store, you don't have these department stores anymore. And my job was to get them to buy. And when we finally got in white shirts, I made like a lot of money because it's easy to sell a white shirt. But I think it's always about that connection that you try to create what's on. If you think you're gonna go on a sales process, just here's the shirt, buy it. They're not buying your shirts, you have to create a connection, you have to create a relationship. And it has to be more to them than just buying the shirt. And you only have three minutes, your first three minutes with a customer is everything. And then you have to take that and launch that into a sale or into a relationship. And what happened is over time, I worked there two and a half years, people came back and people knew when I was there and I and they remembered me and they asked how my kid was and it was like a very interesting situation in such a stupid industry selling men's shirts, but it enables us to think about in the long term. Are you interested in just making a sale? Or as Tom said he was looking to create a career he was looking to learn a trade It's sales is never supposed to be just, one shot. It's supposed to be how do we create a relationship? Why is this good for you? And then if it doesn't work, like I always had this thing I said, if you bring it home, and your spouse doesn't like it, you bring it back, and I'll give you all your money back. No one ever came back. They always kept the shirt, we had to figure out a way to make them feel comfortable to buy a blue shirt when everybody back then Tom's older. So he'll tell you, everybody will white shirts. No one wore a pink shirt. I don't know how Gimbels bought pink shirts, but they bought so many of them, that we had to sell them. And we sold them. And we convinced people that they were great. And in the 70s, the colors started to change. So we were able to work off of the whole industry in the colors. So that's what I remember is my first real sales experience. 

Tom Lally  10:49

Okay, so Mordecai, I am not Alan Litt. And that as you get to know us, and as your audience gets to know us, people will know that Tom and Alan come from two ends of the spectrum. But I thought Alan, and I'm just goading Alan here, I thought Alan was going to tell me or tell the audience about his endeavor to get into college. Okay, because I think that was like the, what are the great things I know about Alan Litt, but-.

Alan Litt  11:19

So it's a funny story, Tom, but I got rejected from every single college I applied to, because I suffer from dyslexia. And everything to me is confusing when I look at the things and it is a disability that I deal with. And I'm proud that I've survived it. So a friend of mine invited me down to Tulane in New Orleans for a weekend and I said, Well, this will be my college experience, because I'm not going to college. And Mordecai, you probably know Fairleigh Dickinson University in Teaneck, they rejected me. So I got no acceptance. So I decided while I was down visiting my friend, to just go to the admissions department, because Tulane rejected me as well. And I went to go meet the head of admissions, and the guy wouldn't meet with me. And I said, Okay, that's fine. I understand. I'll be sitting here on the chair. And so I sat on that chair with no phone, then because you had no cell phones then, for a week. Every day, I came in at 9am. And I left at five. Okay, by the end of the week, I was doing filing for the secretary who was sitting in front of his office, because she felt bad for me just sitting there all day. But I said I needed at least a meeting. The next week, he gave me a five minute meeting and said that they don't accept students like me, and I said, Fine. And he asked me to do my tests again, which I did. And I did terrible in the tests. And I came back and I showed him my terrible results. And he said, don't tell me, you're gonna go sit up there again. I go, Yep, I'm just gonna sit here. And I sat there for another couple of days. And I finally convinced him to give me a chance. And he made a financial arrangement, a bet with me. And I won the bet. And I ended up going to Tulane for a year and a half. And then I transferred to night school in NYU. But it just shows that if you just don't give up, it's the same thing in the sales process. Just stick to your knitting. Don't be obnoxious. I just sat there very quietly, all day. Every night, I had fun with my friend. But all day I sat there and I didn't give in. I forgot about that story, Tom, because it's so painful to talk about it. 

Tom Lally  13:22

Well, I apologize. But what I take from my experience at First Boston at the point, and Alan's experience were the selling shirts, or whether selling himself to Tulane is that look if you know yourself, or conversely, if you know your product, and you believe in it. You can sell it. I mean, that's the natural part I think of sales is true belief in what you're selling. And I don't want to skip ahead, Mordecai. But when Alan, Jonathan, Alan's brother and Alan and I started Monticello, we started, I think, in the product that a lot of people feared, but that we believed in, and that product was the healthcare product. And one of the ways we figured we could start in that arena. It's a very intricate product to try to sell. It's also an intricate product that had burned many investors over the prior, you know, 15 to 20 years. So we knew we could start off with some very good breathing room where we can make some fine returns, for many reasons. And Alan and I can get into that. But it was something that we believed in and we stuck with it. And Alan can probably talk as as we go on about trying to get something across to the buying public. the investing public in something we believed in. But ideally, believe it or not, with 35 to 40 years of experience under our belts, everyone thought we were the new kid on the block with no experience. And so how did we get our business going? May be a topic of conversation we can pursue. 

Alan Litt  15:24

Yes, it's the same, just one thing. It's the same concept. It's like not giving up. Sticking to your knitting, being modest, keeping your head down. What's funny, Mordecai, my two nieces went to Tulane. And 30 years later, we all went down there, that chair is still there in the admissions office. And I have somewhere a picture of my whole family. My kids, my wife, my brother's kids, my brother, my sister in law, I love all standing around the chair. Because that chair is a very meaningful symbol.

Mordecai Rosenberg  15:57

Yeah. So now you could say you endowed a chair, you know, that way? 

Alan Litt  16:03

Perfect. 

Mordecai Rosenberg  16:04

Yeah. So, Alan, so I want to go back to the the shirt sales experience, because you said that people didn't want blue and pink and beige shirts. So can you walk me through how that works? So yes, I walk into the store, say, hey, maybe you come up to me and say, hey can I help you? Or walk me through? Like, what was your approach? Would you come up to everyone? 

Alan Litt  16:33

The typical sales process is Hi, I need a shirt. Yeah, what I did at the time was I realized that blue and black suits were not as popular in the 70s. And Tom, and I can comment on this. Colors were changing. So what I did was I ran to the suit department and I got ties. And I know nothing about fashion, I am the least fashionable person more than you'll ever meet in the world. I know nothing about clothes. But I put it all together as like a group. I said, Look how good this could look with this new suit. So not only could you be buying a suit, but look how this all fits together. It's just providing a solution. I don't know anything about fashion. But I knew that they couldn't see the fact that a beige shirt really worked, because it was outside of their comfort zone. So what I try to do, I created these suits here, look at this looks with blue. And I put the tie and today everybody does that. But back then I had no choice, I needed the dollar 25 shirt. And so the concept was everybody said, No, I just want a white shirt. But then I showed them what it could look like. And remember, every time you unbutton the shirt to let them go try it on, I had to be the one to fold it. But it was a pain in the neck. And the next concept is is that the customer's always right. The customer doesn't always know. But what you have to do is explained to them by creating a relationship, me showing them all these different combinations was the relationship building. You could look good in this. Of course, I'm selling a shirt. But you could look good in this. And here. Here's why. And here's how I think that you could upgrade your look by buying this beige or we had so many pink shirts. I swear to God, you went in the back store drummers like there was pink shirts everywhere. The buyer must have gone crazy on pink. And we sold shirts of all colors when we didn't have white. 

Tom Lally  18:31

So one thing I would ask to that on Mordecai going back to shirt sale, did you then get paid for the ties you sold with the shirt? 

Alan Litt  18:40

So the suits were a separate department and I and the tie salesman became a friend of mine, because he was the one who helped me put it together. But ultimately, it's the same concept is know your product. Stick with your knitting, keep your head down. Don't do it. Don't be a wise guy, and try to create solutions for people. What we what Tom and I do every day. Something comes into our office we look at okay, what's the solution? What's the solution for our investors? And what's the solution for the client, our jobs that just were the guy in the middle, trying to figure out how to keep an investor happy and showing them a safe, good return something durable. And at the same time, we have a client who needs money, and we have to show them a solution. And the solution could come in many different parts or structures. It's not always the same. I would I would say the Tom and I've looked at 1000s of deals over the last seven years 1000s And everyone is different. And whether it's a blue shirt, a pink shirt, a yellow shirt or white shirt, that combination is what you call just effort. It's easy to sell white shirts, anybody can come do the same thing every day. What we want to do is be the ones who are creative and that's what makes it fun for Tom and I and my brother And Joe and all the other people that work in the company is this is creative. Okay? We came up with this, there's a problem, what's the solution?

Tom Lally  20:09

So, Mordecai as Alan, and you were talking about Alan selling shirts, it reminds me, the first person whom Larry had me work for, for the next 10 years, turned out to be my mentor. And as he called, himself, my rabbi was a fellow Steve Sokol. And Steve is considered sort of the grandfather godfather of securitizing commercial real estate. And the first lesson Steve taught me was Tommy, you know, when my position is full of brown suits, and somebody comes in and is looking for a gray striped suit, you got to sell them a brown suit. So figure out how these brown suits, get out of your position, and then fill them with- go out and swap them or do anything. And so that was one of the first concepts I learned on a trading desk was when you have a certain position, how do you get out of that position, and learn how to sell yourself either by selling it outright, never discounting it, according to Steve, but then coming up with solutions, and the solutions on a trading desk at that point, was always swapping one item for another item. And so you learn sales, and you learned, knowing the asset that you owned and getting to know the asset that you were swapping that asset for.

Alan Litt  21:42

One other point, because you call around Wall Street, and I say, Well, my partner's Tom Lally, everybody knows who Tom is because he created these relationships. And it- Tom has been in the business 40 years, over 40 years, people have come and gone retired on but there's always people who know who Tom Lally was based on a relationship. I think people go and try and do things too quickly. And they're not willing in sales, to build a relationship to have the durable friendships and go out for some beers and play darts or whatever it is. Because when you're out there selling a bond or selling a shirt, it's all the same thing. You have to create that relationship where the person feels trust feels safe. And that feels like this is a fair trade.

Mordecai Rosenberg  22:29

Yeah, I agree. I just posted something on LinkedIn the other day, there was a Wall Street Journal article over the weekend about how to hire a repair person. Yeah, it's impossible to hire a repairman because they're in such high demand. So the article said, well, yep, you have to think about this, like trying to get a date with the prom king or prom queen in high school. You know, like, you're like the nerdy you know--

Tom Lally  22:56

We all know that position. 

Mordecai Rosenberg  22:59

Yeah, exactly. I was like, it's like, yeah, you know, the resonates with me. And they said, start by becoming friends with them. Right? If there's a repairment that you want to develop a relationship with, where do they hang out? Right? Do they golf at a particular club? Do they go to a particular restaurants, right, but like try to develop that relationship. And don't talk about what your needs are, right? Just develop a friendship and then you have the basis for doing work together.

Alan Litt  23:32

It's funny at my house, I invited my landscaper and his whole family over for a barbecue. Mm hmm. And I'm kosher at home. So I said, okay, and the sun set. Oh, I want to have cheese on my hamburgers. Oh, we don't do that. The father explained that. And what was interesting is I said to myself 30 years ago, but I've had my landscaper over for a barbecue. But I need to, I need this guy. He's very good. And he takes care of everything for us and my family. And that's true. It's always about can you not be a phony and build a real relationship with someone, you know, his wife got to meet my wife, my kids got to meet his kids. It's more durable than, "Oh, you're my landscaper, cut the grass here is a bit of money". No one cares. No one cares about that they care about: Does Alan and his family care about me and my family? And I think this is the core of what you're talking about. It's not about the trade or the deal. It's about developing durable friendships and relationships and respect.

Mordecai Rosenberg  24:29

Right. The other thing is that in some ways, it's not even about the products per se. Right. Because you said it was interesting. Alan, you you said that people would come back to the store and they want to find you. Yeah, so it's not that that they were so thrilled with the with the shirt, maybe they were but they were buying you you know and Tom, you mentioned the first interview with Larry Fink. Right? And the truth is right on a job interview, clearly you're selling yourself. Yeah, what I think a lot of salespeople don't realize is that in any sales call what you're actually doing. You may be talking about a product, but you're actually selling yourself. Yeah, the prospect or the client, they need to- they're buying you, right? It's not yes you have, there's a product, but really what they're doing is they're buying buying you.

Alan Litt  25:34

What's interesting, I used to keep a picture of my baby daughter on the glass countertop. And people would come back and say, Oh, how she doing, it was like they connected with, I had to come up with a way to make people remember me. And they remember Alan and I used to go with my picture to the store and put the picture down. And Tom cleaned the toilets in the bar. I mean, it's you do what you have to do, but you want people to remember you. And you could call around Wall Street. And everybody knows Tom Lally. Yes, everybody knows. And that, you know, you can call around Gimbels. Everybody knew me, but they don't exist anymore. But if you think about this as a one time shot, you're not going to be very successful in sales. Right. 

Tom Lally  26:22

So Alan, that brings up a good point about when we renewed our relationship with a certain Steve Rosenbark. Yeah. What did we bequeath Steve, to keep ourselves as a reminder to Steve? 

Alan Litt  26:39

Right. So when we started talking to Steve about coming up with some ways to work together, I said, the Tom and I and Jonathan we're family. And we sent Steve, a picture of Tom and Alan and Jonathan, that we hoped he kept on his mantle. And he understood the metaphor, right? It's just not about doing a business deal, is that we have to be considering ourselves. In a relationship, we're family, we have to help each other, support each other in things that are important to the different parties involved. It's just not a deal. People that look at things as just a deal, go to the next Oh, in life, maybe they make more money. But ultimately, I don't think they feel that the feeling of success and a feeling of enrichment. To me, if you do more deals, okay, that's financially rewarding. But do you know that like, we have a bunch of customers that we go out, we don't even talk about business it's just hanging out, just talk. And that creates more business, but and trust. But you don't do that by looking at it as I'm just selling this guy pink shirt. And I don't care if he likes it or not. No, that's not the point. You take it home, your wife doesn't like it, you bring it back, I'll take care of it, give you all your money back. And back then everything was cash, right. So you get the cash back, get a receipt. And so but the concept is still the same. When Tom was selling brown suits to a bond sales on the other side. He was trying to create that relationship. This is a well structured bond, you should buy this from me. And the guy said, Okay, it's Tom Lally. I trust that relationship. Yeah, they're a bond salesman on Wall Street, who still are there, like Tom and I are, who will tell you trades they did with Tom 30 years ago?

Mordecai Rosenberg  28:28

Yeah. So, you know, when you said that, Tom, about, like, when you have brown suits, you got to sell brown suits. So one question that in my mind was, well, what if like, a brown suit isn't the best thing for this for the customer? I think, Alan, when you were talking about your strategy of creating a vision, great putting it together with a suit, and a tie, and showing how it looks together. Really, like, is there anything better than is a white shirt better than a blue shirt? No, it's just that they didn't know how to think about a blue shirt. They didn't know how to create a picture of themselves correctly in it. So really, what they were doing is they're, they're buying you but what they need to do is you need to get them see a vision of themselves right with that other you know, in that in that student shirt, and I think the fact that you were a visual learner really helped with that. But Tom what are your thoughts? Because I think people have had 40 year relationships with you because they trust you and I know you for a long time. You're the nicest most sincere person I know. And so what are your thoughts like in terms of selling the right product, like the customer need versus like the product that you have?

Tom Lally  29:53

Well, one of the things like when Steve said Tom, we have brown suits go sell. He wasn't telling me to Rahm a brown suit down a buyer's throat who didn't want a brown suit? His task to me was Tom, go find someone who needs this brown suit. Yeah. So that's the first thing I would give to that as an actual part of reality. A metaphor is would be okay. All right, you don't like brown suits, but I can swap you this brown suit, and buy something from you that at a price that's much more attractive to you, such that the trade itself became attractive, whether he likes brown suits or not. I would be remiss, Mordecai if I didn't bring up the Latin as Alan will smart because, you know, the main word I've heard through this past, like five or 10 minutes is trust. And trust comes from the word credo, or credibility, and credo, and an ancient Latin means, I believe. So trust, credibility is I believe in you. And so once you've established that, and that reminds me of a story that your father and I had probably 20 years ago, after we probably, I would say, we did dozens, probably 100 deals together. And Steve turned to me, and he said, Tom, you know, we're looking at the documentation on a particular deal. And Steve turned to me and said, Tom, you know, lawyers, no matter how good they are, will never, ever be able to paper, the possibilities of what may happen in the future. So I always, you know, I'll go through the documentation credibly and thoroughly. But I always asked myself the question, when something goes wrong in the future, and the documents don't visualize that. I always ask myself the question, is my partner going to handle themselves correctly? Yeah. And with you, Tom, are as well with your father, or as well as with anyone, the person whom you're selling to? Is asking themselves that question that, you know, is this person going to conduct themselves correctly, in good times, as well as in bad? And I, that's the kind of relationships we try to forge with people, we want to make sure people come away with, hey, these guys are gonna conduct themselves correctly.

Mordecai Rosenberg  32:53

Yeah, yeah, that's a great point. People think that origination is just about getting a client to sign the application. Right? But really, that's just the start of the, their experience with you. Right, then goes to, they have to get through underwriting and closing and then living through servicing and asset management. Alan, when we spoke the other day, yeah, it was very clear that you understood customer experience, and how important it was for them to, for speed and efficiency, and just making it easy. If I asked both of you, but we'll start with it with Alan, what do you see a lot of salespeople maybe get wrong, that they most people believe X, but really y? And specifically relating to, like customer experience, and how to handle things kind of post that sign up.

Alan Litt  33:52

So I would say that, Tom, and I've been doing this as lenders for, you know, seven or eight years, and we've learned a lot of lessons. I think at the beginning, when we started, we weren't that good at the customer experience. I don't think we were thoughtful about it. I apologize to customers for how it went. I don't think we were as good as we could have been. And we've learned our lessons and fessed up to our mistakes. So we've recognized that there has to be a customer experience on the beginning, the middle and the end. Look, it's very simple. In the beginning, everybody's happy they're signing a term sheet, it's all good. In the middle, it's very stressful because the investors are nervous and the client is nervous that they're gonna come to the closing. And then at the end, it's like how do you manage through it? So I think by experience, which we have, you learn what is fair for all there has to be some medium in this customer experience that works for everybody. And you have to realize that the operators are out there and the, the entrepreneurs are out there really taking risks and working very hard. And we have to be as lenders sensitive to that. But it takes time to learn that it took us years to learn that. And then as we've learned that we become better, we're not perfect. But at the end of the day, we believe that the end customer experience is what we're really focused on now, for the next three years is one of our major goals is employee satisfaction and customer experience. And could we admit to ourselves that we weren't perfect about it at the beginning? Yes, this is true. But we also are human enough to realize that we could fix things and create a better experience without putting the investor at risk. And without having the customer be upset. It's there's a medium there. And I think it's it's a learned experience every day. Because we all make mistakes, we have to like, look back and say, Wow, how could we have done that better? Because people that think they know everything? Or do it all right, the right way, aren't on our opinion, aren't right. But what we have to think about is Let's be good listeners, take a second to listen to what the customer has to say. And take it don't take it personally, and then move forward in because you have that relationship.

Mordecai Rosenberg  36:20

Yeah. Yet, I recently heard an interview with it was with a number of doctors. And one thing that they said was that, like if you're a surgeon, right, you're going to screw up at some point, right? You're going to screw up and it's going to hurt the other person. But they what they found is that the doctors who take accountability, and come in and say, I messed up, right? And here's what we're gonna do. But this is not, this is on me. Right? They don't get sued for malpractice. It's the ones that tried to pretend like they did everything right. That end up getting sued for these big mount malpractice suits. Right? So it's very interesting that look, not everything can be perfect, right? But if you take accountability, right, and responsibility and as a salesperson that the buck stops with you, right? It doesn't matter what that it's your credit committee, or it's your investors or, you know, the Fannie or Freddie your FHA, right? They're buying it, right. And so if you take accountability for those mistakes, I've found that you can, not only can you not let those mistakes hurt the relationship, but they can actually deepen the relationship. 

Alan Litt  37:42

I see it all the time. And I see where people if they aren't sincere, and say, I made a mistake. And I need your forgiveness, people will generally give forgiveness. But it's hard to say I made a mistake. It's hard for me, it's hard for Tom, it's hard for you, it's hard for everybody, because you have to get your ego out of the way. Tom will tell you the Latin for ego next. So you know, and if you become more of a we person, where we are working on something, and you collaborate with the customer, and we've learned from one of our key people about we versus AI, I think it's a really big thing in sales. And I think it's a very big thing in running a company. Because if you really think about it, we're we are in this together, the minute they sign that term sheet, we're in it together, guys, we have to work together, we it's not about what I need, or what you we have to work together. Sometimes I'm going to feel better, sometimes you're going to feel better. But we have to get us through this. And then we have to service this. So yeah, you know, we've sort of talked through that with some of our key clients and saying, Look, we need you to help us in sending us this data every month, every three months, or whatever it is. And if you ask them and explain why you need it. And then when there's a problem, you help them solve the problem, because you've been so ahead of it, because you have the information. I think that's where our most durable relationships have occurred. Nothing, as you said works perfectly. But we because we think that and Tom and I, John have learned about this over the last few years. We think that if we look at it as a we versus an I, it can't just be about the salesman. It can't just be about the customer can't just be about the lender. We are we are hung together as a group. And if we work together, we'll do more business together. We'll feel better about it. And we will all make more money and have feeling of more success and satisfaction.  

Tom Lally  39:44

Mordecai, I was glad to hear in your talk, that the doctors who fess up are less likely to be sued. Yeah, you know why? I think because once they fess up, they probably have a solution, or they probably have a suggestion as to how to move forward. In a similar fashion, I would just ask anybody who's listening, your best friendships probably weren't formulated in great times. They were probably formulated in difficult times. And that difficult experience forged your friendship.

Mordecai Rosenberg  40:28

Yeah. Yeah, I think that's right. And, Tom, so I don't know where the line of questions will go. But one thing that I've always been amazed with, as far as, is the way you see the world? Yeah. And you seem to have, yeah, there's certain people who are just great macro thinkers. And they just see where the where the puck is going. Right. So there's, you know, there's always in any given market, I mean, we were working together, you know, in right after the Lehman Brothers collapse, right? And there's so much noise coming at you, right? And there's so much information that's coming. Right. And Alan, you probably you probably think you grew this, that Tom has like this way of just kind of quieting that noise and saying, look, here's what's happening. And here's what and here's the opportunity. If someone wanted to, I mean, it, sometimes you're just born with an ability, and it's, you can if you don't have it, you don't have it. But you know, what do you what do you pay attention to? Let's say like in today's market, you know, where, like, what are you? Sure, how do you read the news, and not get lost in the noise.

Tom Lally  41:49

It's not that I know, more than others, what I found in my own life's experiences, and I couldn't have told you this 30 years ago, or 20 years ago, but it's an accumulation of experiences. So sometimes it's better to listen to other people given their experiences. But what I've learned to ask myself is, if I'm going through this, is it particular to me? Or is it part of what's going on all around me? And so I've learned over time, just to ask myself that question. And as a result, to try to see the bigger picture. This is why, you know, when '07 happened. A lot of us wound up stop lending in '06. You know, I remember at UBS, they told me, at the end of Oh, six as part of my bonus, they said, Okay, now quadruple your possession, Tom. And I said to him, what the fuck? Excuse me this is not what I want to be doing in life. I was fighting with management for 10 years, when product was at LIBOR plus 1000, to quadruple my position. And when did you BS management? Tell me to quadruple by possession? When product was at LIBOR plus 50? Hmm, it made zero sense. So what I did was just like, Okay, I'm putting my cards off the table time to leave. So what I've learned, and the same thing is in the COVID crisis, alright, let's take a step back. Let's see what's happening. If what's happening to us? Is this an opportunity to buy stuff on the cheap to learn stuff on the cheap, in, bond language, not in real estate language, and see if you can take advantage of it. I've just, to me, the one thing I think the common thread through those 40 years, is just to ask yourself the question, is this just specific to me? Did I buy something at the wrong price that I lend at the wrong price? Am I selling the wrong product? Or is this part of the whole? And if it's part of the whole? What does it mean? And how can I take advantage of the situation? 

Mordecai Rosenberg  44:23

Yet, I think that can in some ways, it gets back to the shirt sales, because when you're in the middle of a crisis, it feels like it's gonna last forever. You know, it's you're reading now about, you know, the New York City Art record levels, you know, just like two years ago, they were talking about that less than two years ago, that that New York City like Is it dead? Right? You know, that people for the first time people were just moving out in droves, you know, are they never going are they never going to come back and it felt like that right? And now you look back and you think, God, if only I would have like, bought something, in that market, right? So with your, with your clients as they are nervous or, they have their own idea and they hear their own noise, right? And if you can help them see themselves in that brown suit, right? And say like, look, here's the yes, there are certain stresses, right. But in the example of New York, New York is resilient, young people are gonna want are human beings are social creatures, and they're gonna want to be together, you know. And so you have in the healthcare industry, you know, that you guys specialize in I'm sure there's, there's a lot of that because there's, with regulations and your reimbursement rates, yeah, there's just, you probably have to be a bit of a therapist, to be a sale, you have to be a salesperson in that industry as well.

Alan Litt  45:57

Well, during the COVID crisis, Tom and I, and John started a weekly call with all of the lenders in our industry. And we brought on industry experts, lawyers, consultants, insurance people. And every week, we had a different speaker, and it was two hours on Thursday, and everybody got to talk about like, what they're concerned about, have you heard this, we collaborated, we were competitors. But we collaborated on the industry, and where we have vision to certain things. And it really helped everybody. And this created very good and interesting, durable relationships that continue today. And people look back like that was like Lehman Brothers kind of crisis that was like, we went through it together, we  dealt with it, we talked about it,  we were all a little scared. And as was everybody else, we had operators come on, we had different people come on giving different points of view, and what our job was just to be good listeners. And, you know, Tom says, just listen to what they have to say, or we go into a meeting. And we'll, meet the team. And we'll say, you know, where's Where are you going? What's your vision? What's your plan? It's not always about the building or the numbers. It's like, what did that's what we're specialists and it's figuring out what the vision is. And it's the same thing, putting the brown suit together with a pink shirt. It's where do you want to take this suit, and tie and shirt. And I think those are skills that Tom and I and Jonathan have, and that we're not a traditional lender, but we're a creator. And what we realize is that the people that are doing this work in the industry worked very hard. And they're taking tremendous risks. And our job is just to be supportive of that.

Mordecai Rosenberg  47:41

Yeah. Yeah. I think that that's great. So I know, we're just have a few minutes left our time. You know, there's one other point I wanted to highlight, you're getting back to the shirt, at sales experience. And it's funny, because when you know, people think, oh, you know, that's just kind of, they'll bring up these experiences and not think that there's relevance, and then all of a sudden, you see that there's so much that's been actually common themes to how they've approached relationships and sales in the rest of their careers. But you said, you just you mentioned just as a side point, the that you developed a very close relationship with the tie sales guy. And that, you said, without even thinking about it, you said it, right. But if you think about it, that's a the idea of, working with your he wasn't competition, per se, but looking for opportunities for collaboration, you know, is really, I think it's it's too rare in our industry, you know, salespeople tend to be lone wolf. And it's just them against, it's just them. Right. And you don't have a lot of collaboration. But it's interesting to think about, well, if I'm selling shirts, you know, so to speak, right? Who is the Thai salesperson in my industry? Right? Where that we could you know, that we could collaborate with? Yes, I thought that was also very interesting.

Alan Litt  49:13

He was a good friend, because I have no taste. Yeah. And I still don't have any taste, but it's true. It's the today people think of it it's me against you. Here at Greystone Monticello, we talk about it this way. A lot of the people that work at the company are division one or division three athletes. And they are great leaders. Our people are great leaders. And we have a concept of you get in the boat and you row and you rows as a team. And my brother, my younger brother used to be the Cox Bennett College where he was in the back cheering on the team in the boat. And I will tell you that when you get people to work together, you go much faster, and you and it works better. And sometimes you win and sometimes you lose because Not everybody can win every time. But those that work together as a team, and I will tell you that there are many sales people at Greystone that we work with that we consider our teammates. They work very closely with us, they collaborate, they say, how can we do this? What's the structure? Let's think it through, let's talk about it, let's work together. And I think that that creates the most success, because everybody has to eat, right. But ultimately, everybody has to get in the boat and row. Because if just one guy is rowing on the right, you just go in a circle. And we're our vision with this is to get in a boat and row as a team. And it's whether it's the Thai guy, or it's Steve Sokol selling bonds. It's you work always better as a team. And if you have people who work with you, who are used to working as a team, our basketball team, by the way, is three in one. So great. So Monticello has a basketball team that 3-1 but they know how to work as a team. And I think whether you're a salesperson, yes, you don't always want to team up with someone else. But sometimes teaming up gives the customer a better experience. You might not have the expertise, and you bring in a person and you share a little bit. But then ultimately everybody does better as a group.

Mordecai Rosenberg  51:16

Yeah. 

Tom Lally  51:17

I always asked myself two questions. Mordecai, would you like to make a point on 100 million? Or would you like to make a half a point on 500 million or a billion? Right? If that goes to the motivation of incentives. One of the reasons why we started our joint venture with Greystone was simply the answer to that question. And Alan brings up, I've always found, as you venture into new products, you can take what you've learned from the past and apply it to that new product, but you'll never know the intricacies of it 100%, you'll probably be able to get to 70-80%. But you will always need that expert in that product, as you partner for you to make sure you don't get sideswiped, or hit from behind, and that you make the proper decisions in that new endeavor, with 100% confidence, rather than 75. And opening up and collaborating with that new partner, only I think expands your ability to do business in the future.

Mordecai Rosenberg  52:31

I like it. Well, gentlemen, thank you so much for your time. And I'll leave everyone one thing let's look for opportunities to create a bigger pie, but this has been great. And really appreciate it.

Alan Litt  52:41

This was fun. Thank you. 

Tom Lally  52:43

A lot of fun, Mordecai. Thank you. Very nice. I really enjoyed it. 

Mordecai Rosenberg  52:46

All right. I'll sleep better tonight. All right. Thank you guys. Have a good one.