Good morning. Welcome to another Motivational Monday. My name is Matthew Hodge, executive vice president here at LPT Realty. And if you could just give me a quick sound check if you can hear me okay. Give me a quick thumbs up in the chat. Fantastic. Dave, I believe I believe this is, like, ten consecutive shows with no audio issues for Hodge, so I'm super excited about that. Excited to be with you guys again this morning. It was a fantastic weekend. Robert is traveling. He's gonna be joining us in just a little tiny bit. I'm gonna bring on Louis Fermor, my co EVP, this morning to the show. He's gonna get us started, and Robert is gonna join us in just a few minutes. He is traveling, as you guys know, has had a very busy travel schedule over the course of the last couple of weeks. And, today, again, is out on the road, fighting for for all of our, shareholder interest. So I'm gonna bring on Lewis real quick. Lewis, morning. How are you? Hey. Good morning, man. How are you, bro? I'm doing great, man. I'm doing great. It's good to see you this morning. Happy to be with you today. Wanted to bring you on real quick because there was a few things that we've been doing over the course of the last couple of weeks and, on real estate first Friday with bringing agents in and talking about their stories and sharing some actionable items. And so real quick, before we jump into our kind of normal scheduled motivational Monday, wanna walk, you know, walk our agents through kinda how that's happening. If they have a story, they're interested in sharing their story, how they can do that, and kind of the special thing that's emerged over the last couple of weeks that we've seen happen on real estate first Friday. We had Long Doan come on this, past Friday. He talked about basically coming to the company country as a refugee at thirteen years old. And I don't know if you guys were on Real Estate First Friday or not. If you were not, definitely come back and watch it, but he talks about his struggles from coming here as thirteen years old and then, you know, running one of the biggest real estate independent re independent real estate companies in the country, doing I think it was, what, forty three hundred transactions last year, like, one point five billion in sales. Just absolutely amazing. So real quick, give me your take on kind of on on how that's been for our agents and how they can apply if they're interested in also sharing their story on real estate first Friday. Oh, man. It's it's been truly amazing. I mean, it's been very fun to tap our agent base on the shoulders. It's crazy because when we first started doing real estate first Friday, like, two years ago, two and a half years ago, you know, we were much smaller. So we did not have a lot of these, you know, types of stories in existence. And now that we've grown to, you know, the size that we have been able to grow to, you know, it's been very exciting to be able to tap our agents on the shoulders, bring them on to Real Estate First Friday to kinda not only share their stories, but also share their experiences and their strategies inside of the real estate space. We've had a very diverse, you know, group of subject matters from, you know, open house strategies. You know, a few, weeks ago, we had one of our agents join us talking about her open house strategies that she deploys to be able to grow a very successful business inside of real estate to different mindset programming, you know, in terms of creating a very much purposeful approach road map each and every morning to guide you through the challenges that exist inside of real estate to last week where one of our where where the conversation went long basically was how to stay resilient during adversity. You know. And in our business practices, oftentimes we are dealt with a lot of adverse adversity, you know, from inspection issues, appraisal issues, etcetera. And just being able to stay resilient during each and every one of those milestones in our businesses is very important. So it's been truly fun to be able to share in the experiences with our agents. We're excited to kinda launch our next schedule of agents who will be attending here in the next coming weeks for Real Estate First Fridays. But if you are interested in maybe being a guest on Real Estate First, please reach out to us. We would love to be able to interview you and and and see what week we can be available to have you on. Yeah. Awesome. Awesome. Yeah. And so, you can just file a ticket if that's something that you're interested in doing. Again, we've had coaches come on. We've had big team leaders. We've had solo agents, and we know that our agent base is really enjoying it because we see people talking about that and implementing some of those things that they're learning from real estate first Friday. And so the way to think about motivational Monday, you hear directly from Robert, you hear, you know, kinda like the macro that's happening at the at the, entire company level, and then you also get to hear market updates and interpretations of what to expect, and that's really kinda guide your business. And then real estate first Friday is designed to help you put actionable items inside of your business in terms of strategies that are working in today's market because we know what was working even six months ago to a year ago is not working today. So looks like Robert is in position now, but, Louis, thank you so much for coming on this morning. We very much appreciate it. And I'm looking forward to seeing you this Friday again for Real Estate First Friday where we'll have, some team leaders coming on here. And it'll be kind of like a community session where we'll have multiple team leaders coming on talking about what they are doing to run their teams and what the individual agents are doing on their teams to be successful. And so it'd be a great real estate first Friday this week. Alright. With that being said, let me go ahead and bring in Robert Palmer, founder and CEO, who looks like he is finally in position. I know you are probably just arrived to the airport and are about to take off. Good morning, brother. How are you? Yeah. Shout out to millionaire for letting me use their conference room with this beautiful black backdrop here so I could jump on for real estate first Friday. I had some technical difficulties. Wasn't able to use the Wi Fi on the jet while we're on the ground. So here in in kind of plan b position. Good morning, everybody. Lewis Hodge. Thanks for carrying the water for those couple minutes while we got set up. But, yeah, excited to be here, you know, heading up, to some more investor conferences today. We continue this March, with our Wall Street story across the country for LPT Realty and LPT Holdings. And, you you know, again, happy to be joining our LPT family here before we get back on the road. That's right, man. Awesome. Well, we'll go ahead and jump right in since we're a few minutes behind. You know, I wanna talk about a market update. It's been a little bit since we had the opportunity to do that with the Ascend Marathon that we had over the last couple of weeks. And so wanna talk real quick. I know we had an employment port an employment report on Friday, and, we have a Fed meeting this Wednesday. And so I wanted to kinda get your thoughts on, you know, what what do we take away from that employment report and maybe what should we expect coming this this Wednesday? Yeah, man. I expect the unexpected. I I a couple what is it was? Two, three weeks ago, I called this idea of uncertainty. This is one of those windows at time where no one knows. Anyone who's making a guess or talking about where they think things are going, even the reactions to the reports that are coming out aren't necessarily what we would have expected. We got another great head fake from the tenure. It was back to really great levels on, like, Wednesday and Thursday. And then Friday, the reaction of the jobs reports sent it into a massive sell off. We saw that that selling continue, into this morning and the kind of morning sessions last night, overnight sessions. So, again, rates are just chopping around, and and we're just gonna have to deal with that until we start to get some direction. There is uncertainty around tariffs. There is uncertainty around the direction the Fed will take. There's uncertainty around the the employment situation, uncertainty around the economy. So we just continue to keep our head down and keep doing what we do. We keep controlling the things we can control. That's where I think the Ascend Marathon was so timely. You know, when we planned that a couple of months ago, we had no idea it would be in the middle of what was gonna be a choppy spring buying season, thanks to all this uncertainty around mortgage rates, ended up being exactly perfect time for us to all get together and take advantage of that momentum creating, income producing, getting out there and making things happen in our business strategies that we spent two weeks going through. So we sit here again more uncertainty. I'd like to say hopefully that the Fed meeting, you know, this week is gonna give us some level of idea of what direction they're going in, but I think the Fed doesn't really know yet. So I'm, I'm personally in the camp of we're not really gonna have direction. Maybe we get lucky. Maybe we do some pull pull some direction out of of the Fed meeting this week. If we do, we will absolutely share that with you on Motivation Monday next week. But as we sit here today, just more uncertainty. You know, rates were really good Thursday, Wednesday started to get bad again. Friday, Monday, I mean, it's just really been bouncing around. So continue to counsel your clients. Here's one thing I would tell you. If your client sees a rate they like and they are able to lock it in, lock it in with your preferred lender. I mean, that's the best the best advice I can give you in a period of uncertainty like this is when when the rate's right and the payment's right and everything feels good, lock it in. You can always refinance later if rates come down. No guarantee they will. But if rates come down, you can always refinance later. But I've seen too many deals explode over my twenty year career because someone didn't lock that rate in when they had the chance to, and then all of a sudden the rates go the wrong way, the payment becomes unaffordable, and we see deals cancel. We see approvals turn to declinations, and and it's just not a place we wanna see our customers in. So uncertainty remains as the word of the day, the word of the week when it comes to mortgage rate volatility. Yep. That's, that is so timely said because I remember, you know, you kinda called it right before we you know, a couple of weeks ago, you said, hey, man. Guys, listen. Right now, if you're advising your clients, just let them know that uncertainty is going to be the thing that they're in. And we've seen exactly that. The stock market was going, you know, a thousand points up and down, you know, and that's not normal to see such volatility, even in a period of uncertainty. And so, I know that we probably really appreciated that advice at that time. Now, you know, the other thing is is that as people really what they're saying is they're concerned about the uncertainty, they're thinking, is it really a bad time to buy? I mean, that's ultimately at the root of it. Right? Like, am I gonna buy then all of a sudden my house is gonna be worth less? I remember last time this happened, the market was going crazy. You know, home prices dropped forty percent, fifty like, are we back in an environment where someone could potentially purchase? And while I'm not holding you to anything, this is, of course, just your opinion. But do you believe that we're at a place where someone could purchase something and then all of a sudden we see a massive, you know, re you know, retraction in pricing, or is it just something different going on? Yeah. Look. I don't think we're there. I mean, the big difference between this and past market corrections is the number of folks that have super low rates and are locked in. And and while we have seen inventory increase, most of that inventory is unwilling to negotiate heavily because those homeowners have these ridiculously low rates. And they're basically saying, hey. If you want me to give up my two and a half or my two seven five, I will do that at the right price because I know I'm gonna take a six and a half or a seven at the new home. And so they're not motivated to to really have price reductions. They're not motivated to negotiate heavily, and that's what causes a retraction in price. So we have seen inventory increase. We have seen price reductions happen for those sellers who have no choice. But the way I look at it, most of today's inventory, most of today's sellers still have a large amount of optionality. They can stay if they need to. They can convert that home into a rental property at a very nice gap because of that way below market rate they were able to lock in during the the pandemic. And so I'm not in the camp that we're gonna see any massive retracement. Now, again, there will be some markets where home prices will soften. There will be markets where the perceived price, which was never really a real price. Right? Just because a bunch of homes are listed at a certain price but don't trade there doesn't mean we fell from that mark. It feels that way to some consumers to say, wait a minute. Everyone was listing at a million and now they're selling at eight or nine hundred thousand. They may have never sold above that eight or nine hundred thousand. There were just people out there testing the water, seeing what they could do. And so when you when you boil it all down, I don't think we're gonna see any massive retracement from the prices that people actually pay. And look, one thing you know, I don't know if you you noticed this weekend, but Warren Buffett announced that he's gonna be, you know, stepping down, here at the end of the year. One of his most famous quotes, and I'm probably gonna get this a little bit wrong, but it's it's when others are fearful, be greedy, and when others are greedy, be fearful. And so I I think we see a situation right now where there are opportunities because of the uncertainty. A lot of people aren't sure what to do, how to move forward. And so on the flip side, you are going to see some buyers who find that amazing opportunity. They find that seller who is needing to move immediately, who doesn't maybe have that great low rate locked in from the pandemic or maybe they paid cash in the pandemic, so that's not a situation. And so they need to make a move. And if that buyer is there in the right place, when other buyers are being fearful, if that buyer steps up and takes advantage, I think there is opportunity in this market right now. But, again, I'm not in the camp that we're gonna see any type of massive drop in home values. And when we look at the economic situation behind it, right, because the the choice to sell a home for below market, for below what you pay, to to let home prices retrace really comes down to economic need. Right? Like, I I have no choice. I have to sell this home for less than I paid for it. I have to sell this home for less than it's worth, and we don't see a ton of that right now because of all those below market rates that are locked in. So, again, counsel your clients through it. I think this isn't a very interesting time. It's a great time for people who are able to thread the needle. People who are locking those rates in at the right time are getting a great payment. I think there's maybe a little more buying power right now than what we've seen before, but I don't see that leading to any type of massive reduction. Now that's across the country. There may be some pockets where there is a different level of economic stress. Maybe, you know, we saw this happen, during certain economies before even the crisis or the pandemic. You know, a massive shift in jobs, a plant closure somewhere. Like, those types of situations can always lead to a need to sell that is financially driven that can lead to some price reductions, but I think we will see that be isolated in small pockets across the country where overall, we're gonna see inventory increase. We're gonna see a lot of those sellers hold firmer than they would have otherwise because of the lock in effect of those super low rates. And then our hope is if rates come down, now you'll see more buyers come into the market at the same time that those sellers can give a little something up because they're able to get a better rate on their next purchase. And that's the dynamic we're hope we're hoping for. We talk about it internally in the boardroom as being coiled. That we're coiled like a spring. The entire market is coiled like a spring to rebound as soon as this confluence comes together and we have the inventory, the rates, and the consumer sentiment because that's important as well. And look, I think our sentiment as an industry is important. As real estate agents, we set the sentiment for our clients. And so if we go out there and we're woe is me and we're we're feeding into the uncertainty, that's going to lead the sentiment of our consumers because we're the experts. They view us as the pulse on the industry. And so I think it's important that we are educated. We understand what the dynamics are so that this the spring that is coiled that will rebound at some point in the future. Right? There's a point where rates don't even have to come down and the spring will start to to recoil because people have to make a decision. They have to make a move at some point. We're hoping that everything comes together and we see this massive launch of the spring. And what we're most focused on is how do we make sure that LPT as a whole? How do we make sure that our LPT agents, our LPT family, LPT as a company is in the best position possible to maximize the opportunity when that rebound happens, when that spring starts to explode outward and the market starts to shift and all these different pieces come together. And again, that's what the marathon was about, helping you position your personal business for that recoil. Right? Why did we show the power pack to sixty people who aren't thinking about buying and selling real estate? Because we know when the spring expands, that will change and a lot of those people will become sellers or will become buyers, and and we wanna make sure you were top of mind. We wanna make sure that you had that opportunity to present the power pack, present the marketing tools, present your skill, your expertise, your leadership in the industry to those consumers because when it starts to expand, those that are prepared will take the most market share and will have the absolute best result, and that is what we are focused on as a family here at LPT. Yeah. So so well said, man. And, you know, it's it's the way that we all think. Right? We all wanna go to the person who is selling today. Like, hey. You wanna sell your house? Pick me. But we all know that they have already made the decision. They have already been working with someone or there's a relationship that's already in process at that time. And so to your point, doing the work before you can see those things, doing the work into the coil spring, you know, before it launches off, before it expands, like, that is where you're going to get that that elevation from. And so particularly, like, going back to the phrase that you talked about with Warren Buffett where he basically talks about going against the grain. Right now, there's not a lot of people out there advertising because, hey. Market's tight. Budget is, you know, con constraining. And so they're like, hey. I don't wanna go out there and do that. But the agents who do that, the agents who are putting in that work are the ones who are gonna benefit from it. Right? But it's contradictory to what most people want to do. And it's similar thought process thinking about how LPT was birthed, you know, the the the origin of LPT. It was into probably the worst market conditions that have been, you know, in existence for for probably the last thirty years. So you would not have thought, hey. This is a great time to get inside real estate to launch this brand, but it's exactly what was needed to have Max's success. And so I would encourage everyone to think about the same thing. Just like Robert said, do not get caught into the narrative where you think that transactions aren't gonna happen or you allow those things to start making excuses for yourself, which ultimately slow you down. There will be people who are successful right now. There will be transactions that still has to happen, and there will be people who the impressions you make today will carry to the future transaction that they do in a couple of months when they are ready. You may not see it today, but that doesn't mean you don't do the work because the winners of tomorrow are the people who are doing the work today. So just wanted to kind of echo that because, you know, it is it's so hard, but it it is it is absolutely what is needed. Yeah. I wanna jump on one more point. I saw in the a great comment here, from Devin. He says, what about what about consumer debt, people living on credit cards? And I think this is a really interesting dynamic because we are absolutely seeing that in the data. The big difference I see there is that in past markets where as consumer debt increased and consumer delinquency started to increase, the problem we saw was homeowners were actually at a disadvantage to renters. Right? If we go all the way back to two thousand seven, two thousand six, the mortgage amounts. Right? A lot of people bought mortgages on these creative financing options where they had a very low payment for maybe the first year or two, but then eventually that that rate blew up, that payment blew up, and they found themselves paying more than what they would have paid in rent. And so when they went to a bankruptcy attorney or they went to a debt consolidation counselor, whatever they did when they ran out of rope, when they ran out of the ability to live off of those credit cards, the first piece of advice was give the home back because you can save money monthly by going into an apartment, by going into a rental home, whatever that dynamic was. And this was one of the pieces that caused a big wave of selling during the financial crisis. If we look at today's advice, if we look at today's situation, if a consumer finds themselves in a situation where they may need to file bankruptcy, they may need to reorganize, they have maxed out those credit cards, they've lived on consumer debt, and they can no longer keep up with the payments, The advice today is keep the house. Right? Because they have the below market interest rate, because a lot of those mortgages that were written during twenty twenty, twenty twenty one, twenty twenty two, early twenty two before rates started going up that first quarter, their mortgage payments are so low that the advice is keep that. So you can file bankruptcy and say, hey, but I wanna reaffirm the mortgage. You could do a chapter seven and keep the mortgage in place. And so what I believe is gonna happen with this, if we see this type of economic stress and crisis, you're going to see more people holding on to their houses than before because the home is a financial tool right now for people who locked in those below market rates. So, yes, they may have to file bankruptcy. They may go delinquent on all the credit cards and the cars. They may have to give some of that back, But we're going to see a situation where more homes than ever would survive that transaction because someone who bought, you know, maybe in twenty eighteen, twenty nineteen, and then refinanced at a lower rate in twenty twenty, twenty twenty one, twenty twenty two, their mortgage payment is very, very low compared to today's rental rates, compared to today's housing market, and so they need to keep that house. And so I believe we're gonna see a divergence between the two as you start and this is how it used to be. It's interesting. Like, when we used to talk about this, you know, I've been in the mortgage game for a really long time. You go back to before two thousand seven and two thousand eight, the industry really believed, hey, they'll keep paying the mortgage. They're gonna let the credit cards go because there's no collateral. They're gonna let the car get repossessed, but they're gonna keep paying the mortgage because you have to have a roof over your head. You have to have a place to stay. You wanna keep your kids in the school district. You wanna disrupt their life as little as possible. Right? Having to move out of your house is very disruptive. Having credit cards go to collections is much less disruptive. But then because of this dynamic in two thousand seven, two thousand eight, maybe a little back into two thousand six, where mortgage payments were so much higher than rent that that dynamic flipped because the idea was, I can put a roof over my head for half the price if I let this home go and I go get into this apartment over here or I go rent someone else's short sale or foreclosure that just re hit the market and went to an investor. That is not the dynamic in today's market. So I believe we are much more back to prior economic cycles. Prior to the two thousand seven cycle where as we see delinquencies in consumer debt, as we see delinquencies in all other types of debt and credit, that the primary residents will survive. And the reason the primary residents will survive is because of that super low locked in rate. Now who doesn't have that protection? People who bought their homes in the last two years. Right? So you may see some short sales and some foreclosures start to come back from folks who bought their homes in late twenty twenty two, twenty twenty three, twenty twenty four because they don't have that protection. But if we look at the percentage of the market that they represent overall, it's a very small piece, and that's why I believe the housing market is overall protected from a massive correction even with the deterioration in consumer credit. Thanks for that comment, Devin. Great question. Yeah. That fan fantastic. And, you know, I was just doing some, local research, and this is not a national, so this won't apply to everybody here. You know? But I was looking at here just on our local market, and rent was a hundred and thirty times percent ownership. So that means if it would cost you two thousand dollars in mortgage, it was twenty six hundred in rent. That was just locally. And I was kinda looking at those trends just to see what was happening there. So to your point, there is no easy escape. Right? Like, there is no, you know, alternative that is gonna be financially, like, easing if in the event that you're feeling some pressure there. So, to your point, I I totally agree with that, and I just happen to be looking at that over the course of the last week. Like, I wonder what's happening, you know, on the rental side because I know that that was an area where people retreated to, and sometimes you can feel an early early indication of a market kinda decay, when looking at the rental. So alright. So I know you are, traveling. So, is there any final words that we've got? We are, you know, squarely into to q two. We are starting our most the busiest season of the, you know, the real estate cycle. What should we be thinking about, you know, going into the month of May and and into the summer months? Yeah. Look. One more great one more great comment I see floating around the chat is this idea of assumable mortgages. That is a great market. We've seen a lot of our mortgages at RP Funding being assumed. We've really we've really tried to make that process as simple as possible where some mortgage servicers try to make it overly burdensome. Like, we took the approach of saying, hey. We wanna help that transition happen. And so we've really tried to push forward and be, I think, one of the examples, in our servicing portfolio for all the folks that make their payments to RP funding to make that assumeability process as easy as possible. We still have rules we have to follow. We can't just rubber stamp it, but we're trying to make it as friendly as possible. So if for someone who has a VA loan or USDA loan, or an FHA loan, the the Ginnie Mae loans, those are assumable, which means that the new buyer can take over the old buyer's mortgage and interest rate. Now the problem is they have they probably need a big down payment. Right? Because if you go back and you think, well, someone who refinanced their mortgage, maybe they already had twenty or thirty percent equity back in, you know, twenty twenty, twenty twenty one. The home has now appreciated in value even more, and so it usually ends up creating the need for a big down payment. We've seen folks try to fill that with a second mortgage. We haven't seen a lot of success there. But if you have a consumer with a large enough down payment so that they can bridge that gap, because that's the problem where today you can go out and you can get a new mortgage with five percent down, you know, three and a half percent down on an FHA loan. If someone can put thirty or forty or fifty percent down, they now find themselves in a really great opportunity to take advantage of those assumable mortgages. And, you know, you can go out and find these in public records. I know there were some niche companies trying to come on the scene who are gonna specialize in trying to facilitate these transactions. But, again, as you think about weapons you have to use, if you have that seller with a big down payment, it is it is a great potential. One of the problems we've seen is the timing of a second mortgage. So if they have another property, they could potentially pull more equity out of that and then use that to bridge the gap. But then when they sell their house, that'll get paid off. They gotta find the money somewhere, and we just have not seen a great way to put the second mortgage on the new house because the second mortgage lenders don't wanna do the deal until after the transfer, and then they usually wanna wait a year to go off of value. There's just a lot of interesting dynamics there. If somebody has solved for that, let us know. Like, I'd love to be able to put our our agents in touch with, you know, folks who have figured that out. We've seen a lot of lenders struggle. So really my my, my suggestion or my recommendation is focus on the consumers with the big down payments who are able to bridge that gap. Yeah. They can pull that money out of four zero one k. They can pull that money out of other investments. It really doesn't matter where they get the funds from as long as they have them and are ready to go. But but using the new home as the collateral for that that bridge mortgage is where the problem comes in. And so if they can if they can get their hands on the cash to bridge the difference, then it is a great way to go in there. Again, there's different qualification levels between USDA, VA, and FHA. They all have a little bit different requirement, little different program for how that works, but there are opportunities there as well. So I just again, I love this. You know, kind of being in front of the laptop here versus on the stage. I can keep up with the chat a little better. Love the feedback from the chat, guys. Keep it coming. Keep doing what you do. Stay in your community. Stay top of mind. I want you to mentally picture that spring. I want you to recognize that we are we are this coiled spring right now as an industry, as a company, as entrepreneurs in your own individual businesses, and and we're coiled right now. And and the the spring can't coil anymore. And so the the feeling is, well, I'm doing all these efforts and nothing's moving. The spring is loaded. Right? You're putting more opportunities on top of that spring. And when things do finally expand, when the market does finally start to shift, which is gonna most likely happen a dramatic fashion. The longer we stay in these low levels, the longer we're at four million annualized home sales, the longer we're at thirty year lows in number of transactions, the more business is being stacked. The more consumers That's right. Who need to move, who need to buy, who need to sell, but they're not doing it because of the economic circumstances, it just continues to load and load and load. And so I'm focused on making sure that all of us are prepared so that we as a family are ready to take advantage of that that coiling, that explosion, that that market coming back to bear. And the longer we stay here, the more nuclear the market is gonna go and the more nuclear LPT and all of our amazing agents are gonna go with it. So stay focused, guys. Even though the Ascend Challenge is over, keep having those meetings, keep demonstrating that power pack, keep holding your Zooms, keep doing whatever you have to do. Stay in front of consumers. The more customers you can touch and get in front of and remind them what you do and show them your expertise and position yourself as the expert during this period of coil, the more results you will see when the market starts to expand. And I'm telling you, when it expands, it's going nuclear. So stick with it. Keep doing the hard work. Keep eating those frogs. We're gonna keep doing it right here alongside you at LPT Realty, and I'll see you next Monday from somewhere somewhere in the United States on Motivation Monday. I think I'm actually out on the West Coast next Monday, but we'll see you guys then.