Bridge Loans, Market Shifts & Real Estate Investing with Zalman Chayo

Zalman Chayo (00:00)
good example is just today I was speaking to someone that’s looking to get into investing into real estate and he shows me a specific three family home that he’s looking at and it’s a beautiful property on a beautiful block and needs very little renovations and the sales price reflected as such. They’re asking top dollar, rightfully so, it was great for an owner occupant to get…

to move in there with a small family and rent out one of the, or two of the other units, or an investor that just wants to rent out the whole property. And he’s like, wow, he’s like, with these numbers, because we’re going over how much he’s gonna need for down payment, what his monthly payments will look like, what the rental income will look like, and what he’s gonna end up cash flowing. And he’s like, wow, he’s like, this purchase price is really killing us. And I’m like, listen, if I were you, I’d tell him, walk down this block, find the crappiest property on it.

because this house that’s going to sell is gonna be your comparable. It’s gonna give you all the upside that you’re looking for. That’s all, you’re seeing a beautiful property and so is everybody else. That’s why they’re able to ask for that price. That’s all, find one that’s very similar to this, that doesn’t look so good, that scares you a little bit and be like, hey, what can I do with this? How can I value add and bring value to that? That’s where your biggest upside’s gonna be in the real estate industry.

Quentin (02:48)
Hello everyone. Welcome to the real estate pros podcast. I am your host, Q Edmonds. Super excited to be with y’all today. Super excited to have my host, my host, my guest here. I’m trying to give him the hosting duties. My guest here today. This and this guy is making moves in the residential lending space. He got two angles to his business. I’ll keep it, let him know if you want to share both angles with you. But I’m super excited for you guys to get.

to peek into his lens, his expertise, how he does things. And so I want to introduce you guys to Zalman Chayo. Zalman Chayo. Why do do that, man? Why do I do that? Zalman Chayo, how you doing today,

Zalman Chayo (03:27)
I’m doing great, thanks for having me here.

Quentin (03:29)
I feel like I still messed the name up, bro. Did I say it right? Zalman, ⁓ man, Zalman. Bro, listen, man, please forgive me, man. Like I always say, I like to put respect on people’s name. I think my mouth is working faster than my brain. So I’m looking at it, but my brain just didn’t catch up to my mouth. So I apologize about that, But you said you’re doing well today,

Zalman Chayo (03:32)
Zalman, Zalman , all good. All good.

That’s all right.

Yes, thank god things are going good.

Quentin (03:51)
Good, man. Good, Listen, I’m excited, man. I’m excited for our listeners to be able to look at things through your lens. And so, man, do me a favor. I want to dive in. know, people may just be getting familiar with you. I want you to take this into your world. Like, what is your main focus these days and what markets are you operating in?

Zalman Chayo (04:10)
Yeah, so I deal in two different sides of the real estate market. There’s a lot of end users and consumers that help with their residential mortgage needs, whether they’re buying their first time home, whether they’re buying an investment property, one to four units, condos, co-ops, or vacation homes, second homes out in Florida and Georgia, all over the place.

Yeah, and then the other side of it is where I help investors secure financing for niche or interesting types of scenarios, whether they’re buying a property that needs significant renovations and construction money, or also dealing with bailouts. There are people sometimes in tight situations where a bank will not finance them based on the situation that they’re in. But as long as a property has equity in it and there’s something to talk about, then we’ll be able to give them a bridge loan.

for 12 to 24 months until we’re able to put them into a long-term mortgage. ⁓ In regards to market-wise, I’m based out of ⁓ New York. My office is in the city of Manhattan. And yeah, we do all of the Southeast. We have sister companies out in California, Manhattan Beach specifically. And over there, have,

Quentin (05:06)
Absolutely,

Zalman Chayo (06:13)
We’re able to cover the West Coast as well, but New York, New Jersey, Connecticut, Texas, all over the place, Florida. So yeah, we’re pretty busy.

Quentin (06:22)
Absolutely, man. I love it. I love the fact that you guys got two angles, can come at it from multiple different ways. And I know in this climate, that’s not always easy. So what’s been the key to keeping that machine running smoothly,

Zalman Chayo (06:34)
Yeah, so mean, a lot of people are experiencing issues lately with appraisals coming in low, say they’re refinancing their property, they’re to take some cash out to make another investment or to pay down high interest debt. So we seem to be coming into some of those issues where property values were extremely high over the last 12 to 24 months. But now because of the market being stagnant for so long, property values are starting to come down, being that

properties that are listed for sale are sitting on the market for so long. the values are starting to adjust. And then other people are having issues with their credit. Interest rates are high, taking out different types of debt, and it takes a toll on their credit. And our goal is to help them on both of those issues to see how we can angle it. We have credit repair options. And so yeah, that’s what we’re really working hard on lately.

Quentin (07:22)
Yeah, man, absolutely love it, man. Let me ask you this. I know every operator has a moment right when things get real. Maybe a deal goes sideways or a time when you have to pivot fast. You mind sharing one of those stories with us,

Zalman Chayo (07:37)
Definitely. I’m just thinking which one I gotta pick. Because, I mean, if you speak to anybody that’s in the real estate industry, they’ll tell you, you know, it’s all about navigating those ups and downs. That’s why there is success and money into it, because if it were easy, everybody would be doing it, and wouldn’t be making the money hand over fist. It’s all about finding, and people go specifically into deals that are messy and have issues.

Quentin (07:40)
That part.

Zalman Chayo (08:03)
Because that’s where the profit is at the end. If you’re able to navigate that problem or fix the issue that other people cannot, that’s where you’re going to make the money. That’s where the gold is. Whether it’s properties and dealing with a client right now that has a bad tenant, so eviction’s been dragging on for over 12 months now. You speak to any investor that works in New York, specifically even in the five boroughs, it can be very challenging.

What else? Stop work orders. You permitting is a big one. Trying to think of a specific story.

I’m gonna have to get back to you on that one. ⁓

Quentin (08:39)
Gotcha. No, no, no. Understood. But man,

you gave us enough, man. There’s always going be an obstacle to overcome. And I think that’s the main thought behind that question is let people know there’s always going to be an obstacle, right? And so we share these stories because we can overcome by each other’s stories, right? And so, no, man, I get it. There’s different angles. You always want to have something that you have to overcome. And so I heard you when you said it, and I’m probably going say it a different way, but this is kind of what keep people

I’m kind of separate people from just dabble in those that’s kind of in it and learn the long term is when you have the perspective like, hey, you know, no matter what’s in front of us, we can get over it. You just got to be willing to pivot, got to be to adjust. And so now I absolutely get it, man. So let me ask you this. Yeah, no, go ahead. You got it. Yeah.

Zalman Chayo (09:19)
So a

good example is just today I was speaking to someone that’s looking to get into investing into real estate and he shows me a specific three family home that he’s looking at and it’s a beautiful property on a beautiful block and needs very little renovations and the sales price reflected as such. They’re asking top dollar, rightfully so, it was great for an owner occupant to get…

to move in there with a small family and rent out one of the, or two of the other units, or an investor that just wants to rent out the whole property. And he’s like, wow, he’s like, with these numbers, because we’re going over how much he’s gonna need for down payment, what his monthly payments will look like, what the rental income will look like, and what he’s gonna end up cash flowing. And he’s like, wow, he’s like, this purchase price is really killing us. And I’m like, listen, if I were you, I’d tell him, walk down this block, find the crappiest property on it.

because this house that’s going to sell is gonna be your comparable. It’s gonna give you all the upside that you’re looking for. That’s all, you’re seeing a beautiful property and so is everybody else. That’s why they’re able to ask for that price. That’s all, find one that’s very similar to this, that doesn’t look so good, that scares you a little bit and be like, hey, what can I do with this? How can I value add and bring value to that? That’s where your biggest upside’s gonna be in the real estate industry.

Quentin (11:10)
Absolutely, man. Now you’ve won it, man. That’s good advice. That’s a good nugget, man. So I absolutely thank you for sharing that. That was a good way to come back around and give me that one. I appreciate that. Let me ask you this. What are you most focused on solving or scaling next? Like, what’s the next real goal?

Zalman Chayo (11:25)
The next real goal is right now we’re going through a time when investors finally have their chance back at the market. Prices have been really high for really long. Interest rates have been really high for really long. And now sellers are finally coming to terms with the market, either because they cannot hold on any longer and they have to sell, or because they’re like, OK, this is the new market we’re in. This is the new normal. I’m going to adjust my prices accordingly. So investors are now

dipping their toes back in and getting more active. So it’s really being able to serve that need of a lot of, like I mentioned, bridge lending that we’re helping people with construction financing, getting properties cleaned up and turned over, and then putting them into long-term financing as well, which we have plenty of banked relationships where we can give them long-term, very competitive rate programs.

Quentin (12:11)
I love it. Yeah, that market is starting to come back around. I love it. I mean, you know, as you reach out to people, of course, you know, the next move, can either compound things or create chaos depending on how you play it. Right. And so as the market keeps shifting, I mean, you keep doing your thing. But of course, you know, sometimes there’s going to be chaos and all of this and you got to find the beauty within the chaos. And so I absolutely love it. I love the mindset. Yeah, for sure. Yeah, for sure.

Now, know, lot of people that are listening, they’re either early in their journey, they’re looking to level up. And I think they have benefit from hearing this. When it comes to building your relationships and your network, what’s made the biggest difference for you?

Zalman Chayo (12:49)
biggest difference is definitely stepping out of your comfort zone, having conversations and really, especially if looking to grow, about listening. You have to listen to what people are telling you, whether it is your real estate agents, whether it is your mortgage professionals, accountants telling you about how the numbers are going to be looking, because people can get very excited to just get involved, but then you can…

It’s one of these types of things where you can step into a mess. can step into a really big problem. did say before to look for the messes and look for the problems, but it’s got to be an educated guess. You gotta be like, hey, this is my plan. This is what I think I can do. And you know what? Let me run it by this real estate agent. he really, does he think, you know, cause at end of the day, you’re using these professionals for their expertise. So why not have just an earlier conversation and be like heads up and planning ahead of what your plan is, what your goal is. Just like, for example, the other day,

This investor actually a national brand I’m leave the name out for now national brand is sending around Sending around a whole portfolio of properties that they’re looking to unload to sell it’s actually a big-time builder in the country and There I just started looking around different markets that I’m very familiar with and I’m looking at these prices And I’m like wow based on these numbers. I’ve just filled up a cart here about six to ten properties

that I personally will get involved in and buy, right? But because I know these markets very well, I was like, you know what, I’m gonna put these aside, I’m gonna write these properties down in my notes. I call up two of my local real estate agents in the area and I go, X, Y, and Z single family properties. I’m seeing here rents for about $3,000 a month on average. One of them didn’t even let me finish my sentence and he said, $3,000? He’s like, BS, he told me. He’s like, I don’t think you’re getting close to that. He’s like, if you get…

2200, you’re lucky. So again, it wasn’t a malicious advertisement. was just because they’re a national lender, they don’t pay attention and they miss these details out. But that’s exactly what ⁓ investor’s job is to pay attention to these details, to plan for your returns and what you’re going to be getting. And yeah, do your due diligence, do your homework.

with a simple phone call, I was able to confirm and verify what the rents of these properties were, which makes or breaks the deal. So that was a big factor.

Quentin (15:02)
Absolutely.

Absolutely. Listen, man, you in Brooklyn, I’m from Baltimore. You know sometimes you gotta keep your ears to the streets. And sometimes these big old companies that is not to the streets, man, they can’t go to the same avenues we can go into, you know?

Zalman Chayo (15:57)
100 %

Quentin (15:58)
Absolutely,

man. Yeah. So listen, man, I really, got two questions and this question, two questions left before we wrap, but this particular question, hopefully it’s not putting too much on the spot, but I always like to give sometimes the opportunity to people if they want to leave like an encouraging word or an inspiring word, you know, based on your experience, you know, I’m sure you had, talked about stories about ups and downs, things you have to face. And sometimes I would just like, I’ll do is just to get an encouraging or inspiring word from your perspective as your lens.

And so, I just know, I’m not sure if there’s something you’ve been thinking about lately, something you had to pout through, but I just want to open up the floor if you just wanted to give an encouraging word, man, to the people.

Zalman Chayo (16:36)
Yeah, so from an investor’s perspective, it can seem bleak right now. It can seem very tough. But I have to tell people there is a lot of promise coming up in this market. There’s a lot of changes we’re seeing. And with the volatility comes opportunity. So you’re going to be able to grab something. It’s just about knowing your numbers very well, continuing to calculate them, continue to reviewing deals. Because the more deals you review, the more opportunities you’re going to find in between the lines.

A second thing if I can add is that do the right thing. The real estate industry and the world in general now is beginning smaller and smaller and smaller and doing the right thing really pays off. It will come back around. All the real estate agents know each other. All the lenders know each other. And if you build your reputation as you doing good by everybody, you will continue getting opportunities. You’ll have professionals reaching out to you, hey, I have a property. I think it’d be a good deal for you.

⁓ Yeah, it’s just a very small world and do the right thing, do good by everybody and it’s going to pay itself back tenfold.

Quentin (17:36)
Absolutely, man. You brought it back around relationships and everything in this space. And so you’re like, listen, do right by people, make a proper connection. And so I love it, man, because it’s going to come back. One way or another, it’s going come back. It may come back now, it may come back later, but the comm is going to come back. And so I love that, man. So on those C’s out there, so they come back to you in a good return. So listen, man, before we wrap, if someone wanted to reach out, connect with you, or maybe collaborate with you, learn more about what you’re doing, what’s the best way for them to get in contact with you?

Zalman Chayo (18:05)
Yes, you can reach him by email [email protected]. on all the social platforms, LinkedIn, Facebook, Twitter. It’s all the same handle, @zalmanchayo. You can just DM me, email me, and yeah, I’m pretty quick to respond.

Quentin (18:19)
There you go, y’all. Zalman Chayo. Sir, I appreciate you, man. Thank you for your time, your story, and your perspective. Thank you for being a real person doing real things within this space, man. I truly appreciate you, sir.

Zalman Chayo (18:29)
course, my pleasure. Thanks for having me.

Quentin (18:30)
Absolutely. And for those tuning in, if you’ve got value from this, please make sure you are subscribed. want them bells and notifications going off on your phone every time we drop an episode. So listen, I promise you, we have incredible conversations to come just like we had today. And so thank you again, sir. And for the rest of you, I will see you on the next time.