Shawn Brown’s Blueprint for Success in the Mortgage Industry

Dylan Silver (00:00.65)
Hey folks, welcome back to the show. I’m your host, Dylan Silver. And today on the show, have Shawn Brown in SoCal, Southern California. And Shawn is the founder and CEO of California Lending Group. And his new startup, Mortgage Maker AI, leads a team dedicated to equipping mortgage loan officers with innovative software tools. Shawn, welcome to the show. Absolutely, at the top of the show,

Shawn Brown (00:26.254)
Dylan, thanks for having me.

Dylan Silver (00:29.908)
I typically ask my guests how they got into the real estate space. Was it in your blood, Shawn?

Shawn Brown (00:35.596)
Absolutely in the blood. So I come from a family of entrepreneurs and I started doing real estate. My mom was a real estate agent actually when I was a teenager. And so I got to shadow her a lot and see the business. But I had the opportunity to work at a real estate law firm when I was 20. And I scaled up there to become a manager of the firm. Eventually we did default servicing work. But I wanted something for myself. I think we’ve all been there and a lot of real estate professionals.

And investors also can resonate with this. When you’re working for someone else, it’s hard to be passionate about that. so I knew that it wasn’t for me, but I gained a ton of knowledge about the real estate space at the firm. And then I spent about a year deciding what the heck to do. And we used to send business to a gentleman called Dino, his name is Dino Cazzi-Mettis. He owns a mortgage lending company.

And I just, I love the guy. I loved speaking with him on the phone. I was really interested in what he was building. And so I called him one day after, you know, a few months after being out of the firm and I said, Hey Dino, you know, I’m looking for a transition. I’m interested in mortgage lending and I’d love to come work with you. He had just started his own firm and he said, yeah, look, you know, it’s great. I like you, but you know, I can’t, I can’t have you here. We’re too busy. We’re not really set up for it yet. And

And I wouldn’t take no for an answer though, right? So I had someone mentor me that, you got to go find somebody at the top that’s doing big business and shadow them. And I just banged down Dino’s door, man, for like the good month. I just kept going back and back. You got to have something. Maybe somebody else can work with me or, and eventually he told me, okay, you can work with this other guy at the firm and you know, go ahead and shadow him. And I was there for about a week trying to shadow and the guy, the other guy was busy and Dino and I start to build a relationship.

And eventually Dino agreed to let me shadow him. So I was by his side for six months straight, just learning every aspect of the business. And that’s what then catapulted me into where I am today.

Dylan Silver (02:40.458)
So Shawn, interesting background. Did you study law or did you go into this field with a unique interest in that area of things?

Shawn Brown (02:50.954)
No, I didn’t. It was a referral. Somebody had mentioned that there was an opening at a law firm. was actually my mom knew somebody that was at the firm and I was looking for something in the real estate industry and the stars just aligned and I got hired and I just fell in love with the real estate industry.

Dylan Silver (03:11.84)
So curious and maybe selfishly on my end, I’ve heard about real estate law firms. are so many different areas. And then you also have some firms that are general practice, but that also do real estate law. Was yours, you and were the attorneys at the law firm that you were originally working for and managing, were they in court all the time dealing with tenant issues or was it creating trusts? What were they doing at the law firm day to day?

Shawn Brown (03:37.72)
Yes, some. when I started, we were a consumer based law firm. So we were handling helping folks, litigate foreclosures, short sales, bankruptcies. we were helped facilitating deed and lieu. This was back in the eight crisis. So there was a lot of default servicing work that was going on. Interesting though. I worked on the consumer side with the firm, but halfway through we pivoted and went back into default servicing. So we worked for all the big banks.

processing foreclosures, short sales, litigation, deed and lose short sales from the legal side. But yeah, attorneys constantly showing up in court, appearance counsel needing to be there for the hearing, but it’s kind of boring, right? There’s not a lot that goes on in those cases.

Dylan Silver (04:20.726)
I have a lot of respect for any type of attorney that shows up in court. It can be kind of brutal, right? Something like most of the attorneys, I spoke with an attorney yesterday or the day before who does trusts and he was telling me most of the attorneys that graduate law school don’t usually go to court. They’re not going to court, they’re working corporate, they’re doing contracts, they’re working through other issues other than showing up to court. A lot of respect for that. So you’re doing that and at some point in this time period I can imagine

you see the foundation you see OK I really understand just from osmosis real estate contracts. I understand kind of the intersection between law real estate and how people are making money. So you got the bug from from the real estate bug from from that exposure. And then from there you go to your friend who’s a mortgage broker and you’re saying hey show me the game here. How do I how do I get in. And you’re basically willing to do whatever you have to do to go to go work over there.

So then you get over there, you have your experience in the law firm, you’re brand new to this mortgage space, and what’s the next three to five years look like for you?

Shawn Brown (05:30.328)
So, so yeah, you nailed it on the head, right? When you’re mentoring with someone, you do whatever they say. And part of the mentorship was, Hey, you need to go build a business, a book of business and a referral based business. And so he had me cold calling and, and, know, time blocking my entire day out. So every hour was accounted for amazing things for business growth. and, and so, you know, it’s funny though, all of the, looked back, all of the cold calling that I used to do to try to go get drum up business.

never really led to anything, but it sharpened my skills. And this is something that I share a lot with folks is it’s not always the activity and the effort that leads to the immediate result, but sometimes it’s downstream effects that come. so, sometimes people get discouraged by not having an immediate result, but if anything, you’ve just sharpened your skills a little bit so that when you do get the at bat, you’re stronger.

Dylan Silver (06:03.222)
Mmm.

Shawn Brown (06:25.806)
And so there was a lot of that in the first six months, but eventually things started clicking and I started growing organically in my market. And so the position was that I always wanted to own my own lending company. And so, he knew that. so eventually probably about four years in or so I came to him and we had a meeting and I decided that I was going to go start my own entity. And so I split, we’re still best friends. I love Dino.

I owe a lot to that man actually. And so I started my own lending company and based off of everything that I learned and then we’ve now just continued to grow year over year, doubling every year, even in these harder, these past few years have been difficult, but we’re still continuing to scale and doing big things.

Dylan Silver (07:13.76)
So you’re going from one industry in law to mortgage. Is it a totally different mentality that you had to have at that point in time or because growing up seeing your mom in the real estate agent, you had all the skill sets to prospect and to be successful from a sales standpoint?

Shawn Brown (07:34.2)
Yeah, so interesting before that career, when I was a teenager, I used to do car sales and did a ton of sales training. And that’s where I got my foundation for.

Dylan Silver (07:40.214)
Okay. Which, which, make? I worked in sales too.

Shawn Brown (07:44.632)
Did you, was a company called Tustin Chevrolet. They were out of Orange Court. Yeah, Chevy store. Yeah, I loved it. I was just built, I was built for it. And so.

Dylan Silver (07:47.892)
Okay, Chevy store.

How long did you- how long were you slinging whips for?

Shawn Brown (07:57.164)
Man, probably, gosh, a good three years. Yeah, a good three years. And, you know, as a kid, right, I mean, I was able to make, you know, five, $10,000 a month consistently, you know, and I’m a teenager, right? I mean, it was like, I was blown away. Yeah, so.

Dylan Silver (08:01.536)
Yeah.

Yeah, that’ll teach ya.

Dylan Silver (08:14.262)
Crazy. Yeah, I had a similar experience. Ultimately, my last stop was Nissan. That’s when I decided to get into the car business and I decided, excuse me, decided to get into the real estate space. And it got to a point where I was maxing out as much time as I could possibly spend on the dealership. Profits were, margins were getting slimmer and slimmer and then it became a survey-based business. People were getting, the salespeople were getting paid based on the survey, not so much the car itself.

And so for me that was kind of when I realized I don’t know if I can do real estate at all while working 12-hour shifts here so any car dog ShawnI have a soft spot in my heart for so I always love to hear people come from the car business, but Fast forward you have that you’re you’re at the mortgage broker working with your your buddy You have the the car sales experience as a backdrop you have the legal

Shawn Brown (08:55.81)
Yeah.

Dylan Silver (09:11.21)
and real estate as a backdrop as well. you think, okay, I’ve seen and I understand contracts, I have the sales experience, I don’t necessarily have the experience with finding mortgages for people, but let me see how this process works. In the beginning, was most of your day-to-day about prospecting and reaching out to people, or was a lot of it about learning all these systems that are in place as far as finding and securing the best loans for people?

Shawn Brown (09:37.962)
It was 50-50. Yeah, a ton of it was, and what, you know, one of the benefits of having a mentor is you have a point of contact that you can go to when you get into a tight spot. Realtors could relate to this by having a broker, right? They’ve got a broker that they hang their license on and they can go to for help. And you hope that you get a good broker because you’re going to run into a lot of pain in the first one, two years. You know, you’re getting your sea legs about you and you’re learning. And so there was a lot of that. remember it was a lot of

I shared an office right next door to him. And so I’d opened my office and I mean, God bless this man, right? He opened up his office for me and allowed me to have that contact with him. And so anytime I hit a roadblock, I’d put the call on hold and I’d go, hey Dino, know, what did I do here? And he would walk me through and so it was comical and a very patient man. And I’m very blessed that he allowed me to do that. But you know, had all the, also the foundation from the real estate law firm.

Dylan Silver (10:11.2)
Yeah.

Shawn Brown (10:35.446)
It was incredible and it has allowed me to become an incredible advisor for my clients because I understand the real estate arena from end to end. And I can give them guidance on many different areas. so it creates, I’m a trusted advisor in the industry and a lot of folks can lean on me for help if they ever experience any issues regarding real estate.

Dylan Silver (11:00.298)
What was growth like working with Dino? At some point, you’re getting more clients, you’re building a book of business, just like you would in any avenue. At some point in time, are you realizing, okay, I’m doing well, I’m going to go, I’ve outgrown what I can do here, I need a team underneath me, let me go and make my own team. Was that the thought process? And also, working under a broker,

I’m imagining sometimes you have the ability to have teams underneath you. Was that something you thought of? Hey, let me just make a team underneath me. And then you decided to go your own way.

Shawn Brown (11:36.61)
Yeah, 100%. So it felt similar to what I had at the law firm, right? That feeling of just wanting something that you own. And there’s all these benefits that come from being the owner of the lending entity that you can’t really see initially. there’s a lot more, there’s many more relationships that get created. There’s a much more greater opportunity for relationship building when you own the entity.

Dylan Silver (11:42.805)
Yeah.

Shawn Brown (12:01.577)
And so there was something of that that I desired that I didn’t have. I operated my own business inside of his business essentially. So it was my own, but I wanted something more and that’s why I pivoted.

Dylan Silver (12:14.868)
Okay, so you’re at this point a brand new business owner. Had you owned businesses prior to this? you had your own ventures?

Shawn Brown (12:21.528)
No, no, I had not even little odds and ends, but nothing serious. No, no corporations.

Dylan Silver (12:27.432)
Okay, okay, so this was a huge, huge step up. At this point in time, what was, what were you feeling like? Did you feel like, okay, I was in triple A now, now I’m, now I’m in the big leagues, now I’m fighting with the big dogs. Or at that point in time, were you like, look, I’ve been doing this already, I’m just, it’s just my own thing. What was, what was your, your, your sentiment, your, your, your mind state at the time?

Shawn Brown (12:48.088)
Yeah. Well to become a lender, takes about six to 12 months. So it was just paperwork for the, for the initial, you know, yeah, good, a good eight, six to eight months of just constant paperwork. They, they look you up down in sideways if you want to become a lender in the United States. so that, that was pretty intense, but I am a tenacious, individual. I’ve got a ton of grit and a high level of work ethic. And I was built to do this business.

And it’s not easy. takes a lot of, know, if it were easy, everybody would do it. And there’s a huge barrier to entry from that standpoint. What was your question? Go back a little bit.

Dylan Silver (13:25.396)
No, yeah, so when you are, when you were starting to develop your own business, right, were you feeling like this is a totally new pursuit for me, in a sense, both because you’re a new business owner and also because now you have to do everything on your own. There’s no one else who can really bounce ideas off of directly within the office. Or was it like, no, this is old hat, I’m just doing it on my own now.

Shawn Brown (13:52.856)
Now it becomes exciting. So there was excitement because now it was something that I owned and I could stand behind. you’re in an organization, you have all these ideas about how you can improve and how you can make it better, but so does that entity. so, I now could unleash all of the creative ideas that I had in my head on how to operate a next level business. it’s not to take away from anything that everybody else is doing.

It’s just that we all have our own unique ideas on how to run a business. so that it was, it was excitement. Now it was something that I could own and control and scale and start to test some of these ideas I had about what the market was looking for.

Dylan Silver (14:38.23)
Yeah, I think it’s a really unique experience to be in charge of your own destiny, Now, when you were working in the other capacities, I’m sure some of your pay was based upon how the goals that you met and so on and so forth. being the owner and then talking with people who are owners of businesses on this podcast, there’s just a different level to it, right?

the buck literally stops with you so you’re there’s no space and no time for you to be like I’m not going to pick up this phone because at the end of the day that’s your client that’s your that’s your rep you everything everything the buck truly stops with you at the same point in time that comes with an added level of pressure and a big one because you know what do you do when the quote-unquote leads are bad right you know you’re you’re the source of these so

in order for everything to flow, stops with you. When you’re going from now, the first couple of months to a year, two years in, what type of growth are you experiencing as a company and then also personally and mindset wise is your eye opening, okay, I can do this now, boom, boom, boom, putting things in place where previously that might have not been your role.

Shawn Brown (16:03.586)
Yeah, so it was steady growth and I’m thankful for that because we have an incredible reputation in the industry and it’s been growth organically. We’re 100 % referral-based business. So all the business that comes to us is referred by CPAs, financial planners, real estate agents. And that has allowed us to have the slow growth.

You grow too fast and if you have cracks in your foundation, you’re not going to be able to keep up with the flood of volume coming through the door and you’re going to do a mediocre job and you’re going to get a bad rep in the industry. And so that was my preferred method of growth. it’s, we still continue just slow, slow and steady growth. We continue adding team members and continue to build out the process. and, and so yeah, that that’s been our strategy is slow and sustained.

Dylan Silver (16:51.056)
In real estate investing, people talk a lot about lead funnels and where they’re finding deals from. I don’t really know anything about how people are acquiring clients typically in the mortgage space and the lending space. Is it a lot of pay per click, that type of funnel? Is it a lot of referral? Is it a fair mix of both? And how are you finding your customers and clients?

Shawn Brown (17:17.452)
Yeah, there’s two methods in mortgage lending. It’s one lead gen, where you’re going out and you’re buying leads and then calling on them. And the other is referral base. So you’re being referred business. And we’re doing the referral base, but both business models work. The differences are the conversion rate. You need to speak with 50 leads in order to get one that’s qualified or interested to work with you.

Versus, know when we have somebody referred to us, we’re going to bring them to close. It’s very rare that we don’t. Because there’s already an established relationship. They trust us. And so, you know, it’s the preferred model. We’re not, we’re just not set up. We don’t have a call center and we know we’re not taking in, you know, hundreds of leads a day and then cold calling on them. We’re just not set up for that. And it’s not a business that I was interested in.

Dylan Silver (17:51.765)
Yeah.

Dylan Silver (18:08.33)
Yeah, it’s an interesting topic of discussion for me because my day to day outside of here is I’m a wholesaler, right? And so I do a lot of cold calling, but I’ve also spoken and I’m also a real estate agent in Texas. I’ve spoken with people who have 30 funnels, 30 ways that they’re reaching out to people. spoke with one gentleman talking about how he finds distressed real estate. He partners with

trash and junk removal companies. And then when these people are getting their junk removed, and if they mentioned, hey, you know, we’re leaving the home, you know, we don’t have anybody to take over the home, this junk removal company then sends that information with of course their permission to this investor. And at which point you can either wholesale it out, assign the deal or take the deal down himself. And

I’ve been curious about this for a while now, but specifically now that I’m hosting this podcast, I run into these unique funnels, whether it’s that with the junk removal, I run into people who specify or who’ve drilled down into land wholesaling and how they’re generating leads that way. But it’s a different process for every avenue. And it sounds like in mortgages, it’s not so much of that, but more of nurturing a network and then

creating a brand and a reputation where people seek you out based on the referrals from other folks who’ve had a good experience.

Shawn Brown (19:44.084)
Absolutely. Yeah. And, know, there’s thousands of different models for lead gen inside the referral based model. And yeah, there’s all kinds of strategies that we deploy to help build value in the community so that we can continue to bring in new business. But something that, you know, was that I observe a lot in your field is there’s all kinds of lead gen activity that happens. And then you’re doing all the work.

It slows down and then lead gen, you get a bunch of work and it slows down. And I observed that in my own business. And it wasn’t until I started hiring around me that the real growth started to happen. And so somebody to take over the calendar and email and phone calls, and then someone to handle production and fulfillment and then marketing and then sales, you know, and at the sales point, you start to remove yourself. But once you create that flywheel, I mean, watch out, right?

Dylan Silver (20:14.262)
Yeah.

Shawn Brown (20:42.328)
Sky’s the limit.

Dylan Silver (20:43.222)
the sky truly is the limit. And I forget exactly the number, but I want to say it’s 8.1 to 12 contacts in a lot of these sales cycles that people have to be spoken with before they’re able to come to a decision. And so I think the mistake that is certainly made by a lot of people who do what I do in real estate wholesale is they think, it’s a dead lead. I’m not going to discuss it.

this with my team or with them any further. But that could be a hot lead a year and a half from now. It’s just how you’re to hang on that long. And certainly it sounds like in lending, people could be deciding what they’re going to make a purchase. Lots of different life circumstances could come up. So I can imagine you’re seeing a lot of that too and the heightened importance of that sustained follow up.

Shawn Brown (21:35.182)
Yeah, yeah, very similar, suppose. Yeah. And not just follow up during the transaction, but after the transaction. We’re really big on staying in touch with our clients. It’s loans under management, we call it. And so we’re touching base. We’re watching all of their loans. And any time we can save the money, we’re contacting them. But there’s also life events that come up that we need to be in contact with them for and know that they can come to us if they experience these life events in the future. And so they’re very similar. Yeah.

strategies that are used in both. for wholesaling, you do wholesaling, there’s a, I think the version that I understand of wholesaling is contacting the consumer that may be interested in selling their home and securing a contract to sell for let’s say $500,000 and then going and selling that contract to somebody else for let’s say 550,000 and then you take the spread difference, right?

Dylan Silver (22:31.136)
That’s exactly right. Yeah, you place an executory period on the contract or you already have a buyer in mind. And then during that executory or that option period, you then assign your purchaser rights to the year end buyer. You remove yourself effectively from the transaction and then the end buyer effectively pays you in a way.

Because you’re getting the spread between whatever you got the property under contract for and whatever you bring the end buyer. Now some people will say well why wouldn’t the end buyer just go straight to the seller? Well they had to find the seller and you have the contract which can happen and specifically I’ve been told if you do these commercial deals they will find a way to go around the wholesaler no matter what because the deal is just so big right? I spoke with a guy yesterday or the day before

Who I believe is in California as well He had a deal come across his desk where there was going to be a one million dollar assignment fee to a commercial wholesale and he’s like that’s just too much so he Basically dropped his offer price down To a certain amount and was going to pay the wholesaler eight hundred thousand for a commercial assignment and the wholesaler said I’m gonna pass on that. I actually have an offer at

the amount that I was asking for within a million dollar assignment on this commercial deal and the guy ended up losing the deal. Now I’m nowhere near at that level. But in the long and short of it, that’s the wholesale game. Pivoting here, Shawn, Mortgage Maker AI. Mortgage Maker AI, super interesting name. Tell us about that.

Shawn Brown (24:23.054)
Yeah, so a few years ago, I was disappointed by the tools that were available to mortgage lenders in the industry, and I set out to build our own. And so we are a loan presentation software. so a mortgage loan officer uses Mortgage Maker to build customized loan presentations to present loan options to their borrowers, but also to

educate them on what it means to purchase the home, long-term investment numbers, income tax savings on the purchase, break even point on paying points, rent versus own. There’s so much built into it. And also we’ve built it with a ton of data. And so the loan officer is able to plug in a report or the consumer and all the data they need to make a decision automatically loads in. So it’s extremely powerful tool and very proud of what we built.

Dylan Silver (25:19.476)
Wow, how long has this been a project for? How long have you been doing this? Okay. Wow, so where can people go to take advantage of Mortgage Maker?

Shawn Brown (25:24.142)
About three years. Yeah.

Shawn Brown (25:30.754)
For MortgageMaker, it’s mortgagemaker.ai.

Dylan Silver (25:33.758)
Okay, that’s simple, I think these tools are, we’re going to see an abundance of them. I was just talking with another gentleman about a wearable device that records conversations and then puts it into a mind map. And there’s one that goes with your phone, there’s one that you can kind of go around your neck or on your wrist. And then it also, it’s compatible with ChatGPT so you can download conversation.

Shawn Brown (25:35.436)
Yeah.

Dylan Silver (26:00.98)
And we were just batting back and forth like what’s the use case of this other than just you don’t have to take notes any longer. And there was so many different things that we came up with. So I’m imagining you’re seeing this in Mortgage Maker as well. There may have been an initial, hey, this is what we’re going to use this for, right? Presentations. But then you’re saying, well, actually it can do all these different things and it’s expanding even to ways that we didn’t see initially. This is, you know, really the sky’s the limit.

Shawn Brown (26:30.176)
Absolutely. Yeah. You know, it’s funny. read a quote recently to be careful, to be careful what you set off, set out building because you can, you can optimize to infinity. And it is so true, right? You, mean, we have a roadmap that’s miles long for what we intend to build the product into. And, you know, you want to make sure that you’re, that you’re pointed in the right direction before you set off on your path.

because you can optimize to infinity.

Dylan Silver (27:00.212)
I certainly think that’s true with AI. certainly think. And, Mortgage Maker, is that ava- I’m in Texas. Is that available to folks in Texas right now?

Shawn Brown (27:08.17)
It is, yeah. Mortgage makers nationwide. Yeah.

Dylan Silver (27:10.718)
All right, there we go. Shawn, we are coming up on time here. Where can folks go to get a hold of you?

Shawn Brown (27:17.698)
Yeah, so see lending. So see us in Charlie lending group.com is is our website for California Lending Group. are a mortgage lender based in Southern California and then mortgage maker dot AI and then social channels. We’ve got California dot lending dot group and then same for mortgage maker more. Our handles are our business names.

Dylan Silver (27:41.302)
Shawn, thank you so much for coming on the show. Gave folks lots of value. And I had no idea, but now I do know, AI is everywhere. Shawn, thank you so much for coming on the show.

Shawn Brown (27:53.198)
Yeah, thanks for having me, Dylan. Take care.