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Using Debt to Build Wealth Without Losing Control with Phil Ganz · Brick by Brick - Wealth Building Conversations

• Loren Wernette: Welcome to the episode of Brick by Brick. Today I have a really exciting guest, Phil. Phil is ⁓ the senior mortgage consultant for Nextwave Mortgage. He is a resident of Florida and from talking to him before the show, a huge sports fan. And I'm really excited to talk to him today because I live in the world of loans and real estate investing, and that is also the world he lives in. So I'm excited to talk to him, hear about his 26 years of experience, ⁓ how he's built himself up to where he's at. and some of the interesting stories from borrowers that he's had over those years. So Phil, thanks for joining us today. Philip Daniel Ganz: Hey, is this such an honor to be here? And I'm excited to give back to the real estate investing community. Loren Wernette: Well, we're excited to have you. So Phil, I mentioned you've been in the industry for 26 years, which, you know, most of the people I talked to haven't even been out of college for 26 years. So you have seen a lot of things in the real estate industry. Can you tell us a little bit about how you got into it? Some of the things you've seen over 26 years ⁓ and just, you know, what is your general premise on the industry as a whole? Philip Daniel Ganz: Yeah, you know, I started May 7th, 2001. Um, you know, originally I was going to go to the Peace Corps, but yet nine 11 in September. Right. And then I graduated in December and I couldn't find a job. you know, I got in, uh, you know, as a glorious telemarketer, but every job I take very serious and I try to like learn as much as I can. So, uh, wow. That title wasn't good. I was just adamant on putting my head down and just learning as much as I could and go like work, you know, work like a machine. That's the age where you really want to develop the skills. So I'd work it almost 24 seven at that point. And look, and then from there, you know, you go from loan officer to branch manager, you know, which was a journey and then the mortgage broker and that the, was able to build up a really big business and And now I'm the, you know, I, I I'm the president of next wave mortgage, but I will say to anyone younger, you know, you want to take every job seriously, you know, the industry is always going to evolve, but your work ethic cannot. Right. Your focus and work ethic and wanting to be able to get better every single day cannot. And that is something that I've taken when sometimes you'll see someone that maybe have gray hair. You're like me, you're like, Oh, he isn't like great with like. Technology, but I'm the best of technology because I have a young mind, a young mind where I want to be the best and I'm all in and every day is the first day. Like in my mentality, I'm trying to today was, it's not Friday for me. It's just another day, you know, and I don't like label like that because, know, ultimately I want to win championships and that drive is, is just really just want to keep on. Loren Wernette: Mm-hmm. Philip Daniel Ganz: keep on winning and grinding and improving everyone around me to be as good as they can be. Loren Wernette: Yeah, I mean, you mentioned something that really hit home for me was like the constant drive to improve and the work ethic. And I think that the reason I have been as successful as I have been is because I constantly am looking for how can I learn something from this experience, whether it be good or for bad, and then apply it to the future? I I had a job for five years as a digital project manager and then moved to real estate. And you think, ⁓ those aren't really related. But there's not much difference between a digital project manager, which is basically a general contractor and managing a project, you know, for a new construction build or a flip or, you know, a loan book. There's just moving parts. You have to manage the people. Philip Daniel Ganz: It's a skill set. That's what a lot of people don't realize. You're building up a skill. That's the reason why if you look at peak performance of kids, right? Kids that have peaked early, say in one sport, seldomly achieve high later. Not always. Like obviously like LeBron James, but most of them actually flame out because they don't develop all of their skills. Right. And if you have a more diverse skill set later, that will. Loren Wernette: Mm-hmm. Philip Daniel Ganz: ⁓ help you achieve and continue this great, you know, trajectory, you know. Loren Wernette: Yeah, I was actually just reading an article not too long ago just on that. My kid, my oldest son plays travel baseball and they were talking about early bloomers and 11 you 12 you the early bloomers just dominate right? But it's the late bloomers that end up doing better. And if you look at players like ⁓ Scoobal or Paul skeins like Paul skeins, then he would start pitching until he was 26 years old. And now he you know, he just won the Cy Young and just dominating and. They don't learn that work ethic early when they're early bloomers, but the late bloomers learn it early and then get the size. Philip Daniel Ganz: And then learn good behavior and how to win the day. See, this is the big thing. If you're going to win the day, then like you got to win the days because they stack up. Right. It's about doing your daily disciplines and there are no shortcuts, right? Shortcuts are long cuts. Right. So you got to win the day. You got to be like the same every single day. Right. Like keep going Monday, Tuesday, Wednesday, everything got to be the same, you know, to, you know, to really win. And if you're like, you know, you go through your daily disciplines, then you could really start the stack. You could really start to build your emotional intelligence and that matters more experience matters more. Right. In fact, the number one predictor of success from college quarterback to NFL isn't completion percentage. It's not 40 time. It's actually nothing you can measure the combo. It's starts. That is it. Right. In fact, There, you know, Bill Barcellos had this rule that the, ⁓ you know, he wanted a quarterback with 24 starts, right? Or two years of starts, whatever it is, but the seasons are longer now. And the last, almost every quarterback in the hall of fame, except for two, right? There's only been two Superbowl winners that did not have 24 starts in college. You're like, well, what are they? The last one, which is Sam Darnold, who had a miserable career up until recently because He probably didn't have the experience. If you look at it. And then the other one that will people point to is a little different. It's Tom Brady. But remember Tom Brady sat for a year. He wasn't thrown into fire. That was an outlier. That wasn't the rule. The rule is you're to want the experience. You're going to want to do your daily disciplines. And that makes a, you know, a big difference. In fact, if you look at Tom Brady's career. There, I think it was his junior year. He was rotating. We'll another quarterback. And he said, why is that important? Because it always puts the sense of urgency in and like he, if the team would be down, they put them in all of a sudden, they're making a comeback. Right. And you think about that. He's almost getting trained, trained to like, and he's unique, like situational how to win. And I think that is a big thing is that sometimes. And that is actually why I think, you know, when people celebrate these trophies, it's actually like a disease. I do not celebrate any trophies, right? Anymore. Like I learned that, that rule. If you get a trophy, just, you know, be nice, but put it to the side because that can be a complete distraction for you. And because it'll stop you from doing your daily disciplines, right? That is what will give you. Loren Wernette: Mm-hmm. Philip Daniel Ganz: Your ultimate victory is your daily disciplines. Loren Wernette: Yeah, yeah, you, learn far more from losing than from winning. Uh, that's for sure. So let's turn this to real estate a little bit because, know, if we're talking about doing our daily disciplines as a real estate investor, I see a ton of investors. Oh, I'm going to buy a house, right? I'm going to buy a rental property, but I don't have the 150 or $200,000 I need to buy the house free and clear. Right. And so. Philip Daniel Ganz: 100%. Loren Wernette: There's two lines of thinking when it comes to people that maybe don't have money to buy it is I need all the money or I'm going to buy it with a hundred percent leverage. So as a mortgage, you know, someone that's been in the mortgage industry for 26 years, talk to me about those two lines of thought of I need to have all the money to buy the house. I want a property that's free and clear just so I don't have to worry about ever losing it. Or I'm going to use private money. I'm going to use, you know, second position money and I'm going to fund this property 100 % so I have zero dollars in. Philip Daniel Ganz: Well, yeah, I would say this. One, you definitely don't want to be over leveraged, right? 100 % is bad, right? It puts all the stress. And ultimately, even if it works, a lot of your profits go away. You'll end up thinking like, it's just not going to work out. It just doesn't. And it puts this like stress for you to be extra creative. And that's the best case scenario, is the extra stress to be creative. Worst case it just, you lose, you lost because your day can always get worse. This is something I can always tell you. Your day can always get worse. Right. And so do not, ⁓ I would never recommend the same time. If you're like, Hey, I want like a hundred. I want to use all my money. Right. One, you'll maybe moving too slow. Right. Two. Loren Wernette: Mm-hmm. Philip Daniel Ganz: You might be a little too cautious, right? And three, may not even have checks and balances. One nice thing sometimes of actually getting the loan is, is that you're involving other people's expertise, right? And you're to see what they think. If they're going to lend the money or part of it, they're going to want to make sure they do their due diligence, right? In fact, sometimes there's maybe certain companies that will get, you know, they're, they're bored, you know, they'll get some. Some people are under board with more experience, you know, just have a sounding board, right? So it's good sometimes, you know, to get a loan. You don't want to be over leveraged, but you do, I would always recommend for someone to get some loan. It's usually good, some good idea, you know? Loren Wernette: So where do you see that sweet spot? So don't want to be 100 % because at 100 % basically most of your profits are going to either your investors or they're getting chewed up. And also anybody that's listening, what your Excel sheet says your profit is going to be on a monthly basis almost never happens when you actually own the property. The roof gets a leak, the HVAC goes out, the tenant turns, something happens and that number drastically shrinks. And it puts you in a really bad position where now you basically aren't making any Philip Daniel Ganz: If I had to recommend for someone, I would say 25 % typically, 20 to 25. That is like a good spot. Loren Wernette: ⁓ but. Okay. Got it. So 75 to 80 % LTV. Philip Daniel Ganz: That's it. I go to 85 customers want this. Can you go 85? Yeah, I can. But I would say 20 to 85 takes away the like the edge. Loren Wernette: From a mortgage standpoint, how do you feel about 85 % LTV? Philip Daniel Ganz: Right, you saw my reaction. It's a lot. People want it. I don't like it. See, this is the thing about being a mortgage broker. The good news is I can do every product. The bad news is I can do every product. Loren Wernette: Right. Philip Daniel Ganz: Right. I guess horrible. Like I have to, like sometimes I'm the worst salesperson. Why would you do this? Horrible. I'm all in. I'm scaling. Right. The thing is, as a lot of these people that are going max leverage, they've never seen people really lose. Right. The whole goal in life is if you're winning, right, do not be the Elena Falcons. Okay. You're up 28 to three in the Superbowl. I have an idea. Run the ball. Right? Like it's the same thing. Like just don't make mistakes. You don't have to make, right? Do not make unforced errors. Just like sports, just, just put down your 20, 25. Because the reason why there's a commonality, the people that want to put down 15%, a lot of times they're trying to do two deals at once. This is what I find. They already have their eye on doing multiple different things. Not a great idea. This is because. Loren Wernette: They're trying to go too fast. They're trying to go too fast. Philip Daniel Ganz: It's also that not only they didn't have the money, they're also doing the reverse. And I think that's a ⁓ big mistake, you know? Loren Wernette: Yeah, and so from a from a mortgage standpoint, what are the risks that you see of going up to 85 % like we have we talked about a little bit about the bar. Yes, please. Philip Daniel Ganz: Your debt service ratio. Let me explain this. I really want to get into this. So what debt service ratio means, and I to really go slow on this, is that we look at your taxes, insurance, PMI, if you have it, and your mortgage, right? So you got your complete housing expense. If that is equal to your rent, that's a one. And I say this because on conventional financing, if the rent is say a thousand, the bank says we're going to minus 25%. This is not the case in this situation. So if your housing expense equals your rent, that's one. We want as the rent exceeds the housing expense, it exceeds one. One, one, one, two, one, three, one, four. So for instance, If your rent is 1500 and your total housing expense would be one, then you're at one and a half. And typically banks at a minimum one to one, they like one and point two and the higher the better. Right? So when I see these, you know, these leverage situations, I don't like them. Right? I like when people, the more money you put theoretically down, the better your expense ratio is. This is something really important. And this is really hard for first time investors because they're used to a conventional underwrites. They're thinking about, the property's not performing. And now I'm going to add in my job as an engineer and I can kind of make it work. No, this is bad thinking, right? Here's the thinking. It's a business. This property is it winning? Loren Wernette: Mm-hmm. Philip Daniel Ganz: If it's making money, if it's in the block, it's greater than one. If it's less than one, it's losing money. That's called, you know, in the red, right? You do not want to have a business in the red. This is bad. Red is bad. Black is good. So, you know, in fact, I'll tell you a funny story. My first account, he had his company, it was called In the Block. What's black? Why in the block? He says, because everyone I work with will make money. Right? mean, imagine you had a company that was called indirect. Like imagine you posted on Facebook, I got a business and we're going to lose money in the beginning. We're just going to lose. We're just like, you're not Amazon and Jeff Bezos. Right? Like this is real estate. You got to win day one. You got to try to win. There is no margin for losing. Right? You're not going to inflate your way out of this and then hope for luck and prayers. Loren Wernette: Yeah Right. Philip Daniel Ganz: You know, church will not save you in this. You need a good deal right in the beginning. And if it's not, then you do have to pass on it. Remember an incomplete pass is better than a turnover. This is really important. Just like in sports, the number one predictor for success of an NFL team is turnovers. If you have more than two turnovers in the game, you lose like 92%. The turn over differential. does that? Because if you lose tremendously on a deal for being over leveraged, it takes a long time to recover. Right. And so you don't want to be one of these people, the biggest, the bigger the setback, the bigger to come back. Let's not have a setback. How about we win from the beginning? And that's why having the right team around you, whether it's the lender, the broker. The realtor, it all matters. You don't want your friends. You don't want just yes people. In fact, the biggest loss I ever took ever was with a friend of mine. Like why he was a yes person. He's like, wouldn't have I was going to buy with him no matter what. Right. But yeah, you know, you don't want always. Yes, people you do want. I think that's where people get go wrong for hiring people is that they they go with all the Loren Wernette: Yeah. Philip Daniel Ganz: They go over the yes people and they have a poor time hiring, right? And I think because they're not getting objective advice. Loren Wernette: Mm-hmm. Yeah, I think it's also important to note as a borrower like the IC borrowers all the time they get mad like ah the the DSCR is you know one or point nine like but this property is gonna do so great there's an emotional component to it and they're like I just need the loan I really I want the six or seven percent mortgage. Let's just go for I'll fix it figure it out Well as a borrower you really should be looking like I need 1.1 because you're talking about just the mortgage and just those expenses. You're not counting capex. You're not counting repairs. You're not counting any of those other expenses that will happen. They 100 % will happen. And if you're already threading that thin line of profitability and now you have a $4,000 turn event, like you might not have any profit for two years. Philip Daniel Ganz: Yeah. This is all situational, you know, people have missed this. There's no margin. When you go less than one, you are going to lose situationally like every single time above one. You can, you can, you can like get your way out of things. Right. When you're a one, you are you like, that is not good, you know? And it's just like, you're like, what would you do? You know, this is my only chance. Like live. to fight another day. Right. It's not worth it. You know, it just did not work. That kills people. Right. And if I had to give anyone any advice on this, just this is better. It's better to live another day to continue on. You know. Loren Wernette: But Phil, if I don't get a one, then I won't be able to get the perfect burr and I won't be able to pull all my money out of the house. Philip Daniel Ganz: Yeah. Complete nonsense. There's all the, it's like complete delusional. You know, the facts, you know, facts don't have feelings, you know, and I've realized, think, especially when you, you're older, more experienced, you've seen like unnecessary losses, right? Where people easily could have won games, whether it's Duke Yukon that we just watched little things when you're just up. Right? How do you make a comeback? Force team to make turnovers. How do you lose when you're up big, make unnecessary turnovers, right? Like it's just, it's unnecessary. Like every comeback starts of bad coaching on the opposition, right? Like you're already up. You want my advice on this pass. You don't have it then like it just, it's the start of something bad and it's a disease that people get. because the worst thing that could actually happen for you. I'll tell you, the worst thing is that you actually get lucky and it works in the beginning because next time you're going to this is why people get addicted to gambling. Not because they lose. You get addicted to gambling because you win. And so God forbid you got lucky once or twice. I'll tell you what will happen next time. You're going to go three and four. You're going to go. You're going to really push. You're going to keep pushing. Because you're going to think with it. And this is what happens is why people get in trouble. Even in the law. Look at Tiger Woods, right? You know, guy like that is on top, you know, they're just, you know, I got six cars. I just want to drive. People don't understand it. It's like the Eagle that gets these people, your Eagle will eventually get you that will cause you to make these like horrendous mistakes. And that's why sometimes you see these big people like fall. Like how did that smart person completely fall? I mean, it's horrible mistake because he's surrounded by yes people and he got lucky. That was like the worst. It's something better to like actually lose a little and survive than the completely get lucky in these situations. You lose everything you have. Loren Wernette: Yeah, and wins are so much smaller in most cases than the losses. Like if you have a grand slam project, maybe you walk away after a couple of years with 30 or 40 K. If you have one typical loss, it could easily be 3040 K or more easy, right? And so you have to really protect against those losses because they can eat up years of your wins. Years. Philip Daniel Ganz: You know, I'll tell you a crazy story that like what changed my mind, like, like a lot of things, right? So I w I worked at this company and there was this employee there that, just to let people know in mortgages, you need to be able to get your mortgage license if you're a lender. Okay. Or a broker, not for a bank. want to be very clear with this. Okay. And I knew an employee that I'm still friends with and At one of his companies many years ago, he was actually the guy that hired Jordan Belfort for Wolf Wolf of Wall Street. Right. And then you're like, I'm like, dude, why am I doing mortgages with this guy? By the way, what happened to this guy was he had eventually had to leave the company I was at because he needed a mortgage license and he couldn't get a mortgage license. So banks hire you. So it's an unbelievable thing. What happened? Yeah. He had like $30 million. So he bought like all of these properties like in New York. Now think about it, you have 30 million. You don't even need like rate of return. You can just do like 0%. And I don't really care because I can't spend 30 million in a lifetime. You really can't unless you have a spending problem, right? But like what ended up happening was he took his like $30 million and he bought like a lot of properties in New York. And then when the market crashed in 2007, and this is like a really crazy story. So like on commercial loans, they used to make like, tax returns. This is like a really big thing. Like you submit tax returns every year. Like I have a commercial loan. It's a DSCR. I, as a mortgage broker, I don't do this type of commercial loan, but properties have to sometimes submit tax returns every single year. And basically when the market crashed, the tax returns and the values went down so much that the banks said you got to put in extra money and they couldn't. So the banks just sold the properties to get their money back and he lost everything he had. And that was the end of it. He survived. Like he survived the whole era of Wolf of Wall Street. He survived the federal government. He survived everything that 30 million. And then what do you do? debt to income ratio over one. That's what happened under one. That's what happened. Right? This is what happened. You want to know? 30 million. He had won so many times. He had defeated everyone. Right? He was up so much. 30 million is like the, the, the, the, the Falcons being up 62 points. I mean, this is the reason why this is what actually inspires me to like be like on a podcast to like help people. Right? Because eventually you're just going to keep on going. It just doesn't stop. Loren Wernette: Bye. Philip Daniel Ganz: This gambling gets addictive. You can keep going, going, going, going. We need to end it somewhere. And the somewhere should be here that be conservative on stuff. There's always, you can always build up over time. Wealth happens in the long run. Warren Buffett was not born rich. You know, he didn't become like a billionaire, like 50 anyways. Right. It just, just do it one step at a time. Loren Wernette: Right. Yeah. And too many people think that I've got to go from nothing to get out of my W2 in two years. And so I have to leverage everything to the Hill. And to be blunt, I was guilty of this at the beginning too, like go, go, go figure out what you can do to get as many properties as you can, because that's the cash flow is going to make you, you know, get you wealthy cashflow is not going to get you wealthy. It's the appreciation on the property that's going to get you wealthy and what Philip Daniel Ganz: No, I got a question for you. You hit it perfect. Right. You hit it. Boom. COVID, right? Everything got great. Right. You ever say to yourself, and this is an honest question, you ever say to yourself, okay, you hit it perfect. What if it was reverse? I'm older. What happens if you had done this in 2007? Same thing. Like you had like two versions of like lore and like alternate universes. Loren Wernette: Yeah. Yeah. Yeah. I mean, my entire, entire investing career has been pretty much all in good. Other than last, maybe you could argue maybe the last nine, 10 months, but, ⁓ yeah, I was in a perfect, perfect storm for it. If I'd happened in 27, the way I initially started, I would have been wiped out immediately. So, and what I had to rebuild. Philip Daniel Ganz: That's exactly right. You know, and I want to let people know that that's the thing. And I'm not here for people not to take risks. Right. Because a lot of people may be sitting here, but there's a smart way to go about it. Right. And the reality is, is I can be honest with people like I'm awful at picking properties. Like if you want to lose, like personally, I can I can walk you through it. Right. Like about my first property was in West Roxbury. I passed on a property in Brookline today to property in Brookline is worth like a million dollars. My property in West Roxbury that sold is still worth like, I bought it for two. No, I bought it for 180 and I think I sold it for like 280. So I made a hundred, but then I, uh, I bought a property in South Boston for like 250 and that did go up in a year to like 500, but then I took those and I bought a three family and then, you know, for 900 and that's worth about two and a half million. But about other properties that like lost on like, many cents, but like that one property, right? Did I hit on, I said it like a 15 year mortgage and I'm making cash flow. I'm just paying off that damn debt. Right. Cause I said, you know what? I got old as first time father 47. I'm paying off this mortgage. This mortgage is going to be paid off. Right. And I think this is like something to it. There's no shame eventually in like paying off your mortgages. You know, if you're up, you know, take some off the table, get a little cash flow, you know, live a good life, you know, take away the stress. Loren Wernette: Right? When you get to that position, it really just depends on what your goals are, right? Because there's also the concept on return on equity. And if you're actively still trying to grow your portfolio, it probably makes sense to, you know, refinance some cash out and not take it personally, but take that cash and put it in other projects. But if you're at a stabilization phase, it probably makes sense to pay that down and get yourself cash flow that stable and have a bank account house that If worst case scenario happens, you can sell it for cash and, you know, get yourself out of a hole or buy some big opportunity or do a transfer of some sort. Philip Daniel Ganz: You know, I agree, but there's one caveat to that. Before you start, like when you have an LLC, you have an operational agreement, right? And even if it's yourself, right? You write down, there has to be an exit strategy for your complete business, a sellout number. So if you're going to like say you need a number that you're going to stop doing this, there has to be a number. Like I got a partner and Ryan scared and we have a number that We have the option, either one of us, to just like sell. Now, I love what I'm doing. I can't envision myself, right? But there's a number where someone can, right? And by the way, our number is ridiculously high. It's kind of ridiculous. But what I'm saying is, is that you need a number where you can eventually walk away, right? There has to be at some point, right? Where, or where does it say not walk away, but I would say your risk goes way down. Loren Wernette: Pivot. Philip Daniel Ganz: Way down. Like if I'm way up, I'm not even doing, forget 1.1. Right? Like maybe I say, I don't do anything under one and a half. So there's not many deals. You don't have to do deals. Right? I would just, I think over time, reduce my risk substantially. Loren Wernette: Yeah. Yep. Yeah. I mean, and that's what people miss about money is it's not about how much money's in the bank. Money is just a gateway to opportunity and to be able to have the opportunity to de-risk your lifestyle is incredibly freeing, right? To be able to say, I don't feel like doing this loan because I just don't feel like doing it versus you have to do it because you need the flow through the business to keep the wheels turning, right? Philip Daniel Ganz: Yeah, I totally agree with you, you know? So I like, uh, you know, I just want people to be safe. want people to win, but I don't want people to just make interceptions, you know, in their life, you know, life goes by quick. You don't have to do that. I think people don't realize how many opportunities there really are. Everyone feels like it's the last opportunity, right? It's like, you know what it's like? It's like, you're in the ninth grade. Oh girl broke up with me. Life's over bro. You got like 10 million or more opportunities. Loren Wernette: Right. Yeah, that's it's so true. I can't remember how many different deals is like we have to get this deal like it's the best deal blah blah blah and then either whether we get it or not. Three months later there's another deal. You know there's always another deal and it's always better to not do a deal than to do a bad deal. Always. Philip Daniel Ganz: I agree. You know, I agree. I totally agree with you, you know, and I just, I wish people just take a time to pause and build up, you know, the people around you. And if you find out you're getting too many yeses, that's not good. You know, you need a sounding board, you know, and I know the frustration of getting notes. I get it. Right. You know what I will say? I have lost. Right. I'm proud to say I've lost. I've also gotten sued for things in my life. uh, you know, and I think looking back, you know, I'll tell you a story that, you know, I mean, that, you know, I remember once I did something and, uh, you know, whatever to tell people is, is that it's okay to say no to things and it's better, like, it's better not to do things that are unnecessary. That's a good way to put it. You don't want to take unnecessary risk. It's not needed. Loren Wernette: So I'll give you a good example story of that. So I was doing flips with my business partner. I really wanted to do a flip with my friend. Okay. And so I found this house, ⁓ walk the house, looked like a pretty good project. Didn't do a great, like I didn't crawl through the crawl space. Didn't look at, were basically just going to flip it. So we had a budget of $70,000 to renovate the house. We started ripping it apart after we bought it and we found termites galore. just everywhere. We got a stop work order. We had to rebuild part of the foundation. Our $70,000 budget turned into $140,000 spend. the blessing was we sold it for more than we originally thought. We ended up losing about 10 grand, which isn't terrible. But the moral of this story is don't want to do something so bad that you don't do your full due diligence. And we would have lost way more money if we hadn't had cash. Because we were able to sustain that additional $70,000 of renovation costs, we were able to get out with only a 10K loss. If we had had to sell it because we were just straight up out of cash and it needed all the work, we would have probably taken almost $100,000 loss. Philip Daniel Ganz: Yeah, your friend's lucky that he had you. Loren Wernette: Well, he had money too, but because he was he is actually a more experienced flipper. Yeah, he we we both had experience. We just hadn't worked together on anything before, and I wanted I wanted the experience of working with him on something. ⁓ And so neither I mean, I found the project. I should have looked at it closer, but we were together able to work it out and get it done. And I don't think that would have been successful as it was successful without both of us involved. But. Philip Daniel Ganz: Yeah, you're the experience, I assume, right? ⁓ okay. Loren Wernette: We wouldn't have been able to guess, well, he didn't have money. You know, he had some money, I had some money, we were able to figure it out. We haven't because one of my other key lessons I learned was when you have a system and a process in an existing business, it's so much easier just to main stay in that system than try to do something outside of it, you know, kind of out of the one-off because you don't have the CRMs, you don't have all the other tools that you're used to and it becomes just hard to manage. Philip Daniel Ganz: Do you have you guys done deal since? Loren Wernette: And it takes your focus off of the things that you're actually driving the ball for. Philip Daniel Ganz: I agree with you. I totally agree. Loren Wernette: So. That was my biggest, that was my biggest learning in 2024. I had a wholesale business, a flipping business, a rental business. I had a W-2, four kids, and basically everything was growing just a little bit, but not much. And so once I shut down the wholesale business, the flip business, sold the rentals, just focused on the lending and got rid of my W-2, the lending business just skyrocketed. Philip Daniel Ganz: You know, I'm like, the same way. Loren Wernette: And it's that dedicated focus is what drives things forward. And when you're spreading yourself out too thin, nothing can. Philip Daniel Ganz: Dude, I totally agree. When people want to do everything, they usually do it kind of crappy. You're better partnering than you are with a lot of things than like trying to do it on your own. It's like real estate companies that want to do mortgages. They're better off just partnering, right? The minute they do these things, it doesn't necessarily work, you know? And that's what I've learned. Loren Wernette: Yeah. Philip Daniel Ganz: You know, and I've been able to like grow the, you know, the mortgage company with my partner Ryan substantially. And that's been really good. And we've been able to like, because I've been able to focus in on unlike the marketing ends and just have a laser focus. We're like, you know, we, we, have over 200 websites that generate us like right now over 1500 leads. I was complaining to my partner. Loren Wernette: Mm-hmm. Philip Daniel Ganz: Did I have an appointment like every 30 minutes of a new client? Here people are, can't even get deals. And I have like, like, I'm like exhausted from like, you're like, why? Because like I'm able to focus in on, you know, and we do something, you know, there's people that own businesses, but I'll just explain it quickly. We do something called domain matching. So like the number one program in Florida for down payment assistance is hometown hero loan program. We own that domain, right? In fact, we're so good at it. I'll tell you really funny story. We had a company that went to us and I said, you know, you have a trademark violation. They came to me and the CEO wrote me this like letter and I thought like he was going to shut me down or whatever, like sue me. But no, he's like, let's hop on a zoom. We just started talking and yeah, we're going to partner. He's like, dude, you're so genius of the way you do things. Loren Wernette: Nice. Philip Daniel Ganz: Right. He's like, you're, you know, I think he was more impressed than me than his own marketing department. had his own marketing department on the second zoom and we were laughing. Right. And I'm, know, because I was able to focus in on one task, right. Grow marketing. Right. And I think also people in their business needs certain roles. Right. That's why if you're trying to win a championship, everyone has to have their own role, right. Of exactly what you do in your operational agreements. Right. Loren Wernette: Yeah. Philip Daniel Ganz: Don't get distracted. Mine is marketing. So it's not like I don't take other marketing ideas from other people. I always like vet things out. Right. But at the end of the day, the, you know, I'm in charge of the market. It's in our operational agreement, right? I'll make the final calls. think this is really important when you run a business and even if it's homes, coffee shops, whatever it is, everyone has to have the same role. Once that one person does too much, it is not going to work. And the same thing. Loren Wernette: Mm-hmm. Philip Daniel Ganz: In sports, right? If you have an offensive coordinator and you're the head coach back off what your offensive coordinator, you know, ultimately come up with the right place to win you the game or your defensive class. Why you hired the guy in the first place? If you don't trust them, you shouldn't have hired them. Right. You got to trust the people you hired. That's why you hired them. I know ultimately that's a bad mistake that people make, right? As an operator is not trusting your people. Loren Wernette: Yep. Yeah. Philip Daniel Ganz: And this is actually one of the things I learned. I'll tell you a quick story of why you need to trust yourself. That my, my ex father, not great guy, his best friend had one of the biggest, uh, uh, what do you call it? What do you call them? A restaurant near? don't know what you got. He owns a lot of restaurants and a lot of real estate. Yeah. Yeah. And I said, Oh, is this guy like, and by the way, he is a hotel. That's the number one hotel in new England. Loren Wernette: restaurateur. Philip Daniel Ganz: I won't say what it is, but it's the highest rated. It's not even close for many years, right in Boston. And I said, is this guy a great like cook? Could he, you know, is he a great cook? Is it much fun to go out with him? He's like, what is he? He's like, no, I can't do like any of this. Is he a great accountant? No. I said, well, what is his best skill? What is his superpower that he could do better than everyone else to build up this real estate, real estate and restaurant and now potato chip empire. Right? Well, what does he do? Hire people. He's the best at hiring people. He can't even cook a grilled cheese, but he can hire people and he probably is also really good at trusting the people he's hiring. But it's like, it's funny. You see people like that. So how does that apply to you? When you're if you're going to hire them, you got to like, you can't like overmanage and ruin and step in. Right. You got to sometimes trust your people to do the job. Loren Wernette: Hmm. Philip Daniel Ganz: Right? Obviously someone's failing, but I feel like people make bad hires and you know, if you hire correctly, you got to trust your people because you're going to, you know, you're going to overstep. Right? And this is the big thing. You got to trust. You know, you got to trust your people. Right? In fact, I think this is the hardest thing with, you know, in sports is that all your good people eventually get taken from you. Right. Loren Wernette: Mm-hmm. Philip Daniel Ganz: I mean, if you like, go look at Indiana football, signetti was what coordinator for what Alabama, right? And where was Nick Saban originally? Michigan state. Well, she's very, very good. should have hired signetti in Michigan state wins the what big 10 championship. It all comes full circle higher. Good. And it will solve a lot of problems. Loren Wernette: Yep. I think so I 100 % agree with you. I think the challenge comes in is easier to say than do, especially when you're starting a business. And I will back up with this. When you start a business before you can hire anybody, you have to be good at, know, at least kind of good at most of the things, right? And so what gets you to the point where you can afford to hire someone is the same thing that will hold you back from being a good manager of people because You were good at doing all the things and now you don't want to let go of those things and give them to someone else, which then stifles your business and makes you a bad employer. And so what got you here is not going to get you to the next step and making that transition is something that a lot of entrepreneurs really struggle with. Philip Daniel Ganz: Well, you got to trust people. I'll tell you this, you know, I'm dyslexic. So I know I can't do certain things. So I got to like sub out certain things. That's a great thing about being dyslexic. You know, this is why a lot of actually entrepreneurs are dyslexic and can do really well. It is, it's like counterintuitive because you'd like, dude, you know, you're getting things like mixed up when you're right or your things are backwards. Well, you know, you can't do something. So you got to like sub let that thing out. Right. But you have to let it like rip. Right. And I totally get that, right? You got to be able to trust and you got to be able to let go, right? But you got to be able to get the right people, you know, I'll tell you this when it comes to hiring, the one tip I will say the one thing I really like where I'm like right on it, right? I can tell my partner right away if someone's going to be great. Would I look for right? Would I know someone's going be great? I'll tell you what I look for. That'll be awesome. I love people that are annoying. This is actually the biggest thing. Like you're like on it. Like this person's like on it, like all over you. Right. I love that. They're going to be really great. Even if they don't know much, overwhelming with questions or whatever, people that want to learn, people that want to figure things out, the real go getters, they're going to be like glue all over that person. Those make the best sales people. can be like, ⁓ they're not going to allow that space. They're going to press that person. That's what I look for. We were going through like. Loren Wernette: Mm-hmm. Philip Daniel Ganz: who I thought of the new hires would be great. I could tell my partner right away. He's like, how do you know? Like, boom, that guy great, this guy great. Nope, nope, no. You're like, why? They don't have it. It's obvious to me right away if someone's going to be, I could go through right away. I'm not even going to miss. I'm going to be like at 100%, 99.9. It won't take me long because that skill is like obvious for success. And mortgages and real estate you want that person to go get it It's all over because you're be there'll be a sponge and you're gonna pick it all They'll pick it all up and you're gonna be into the daily activities in the grind So they're gonna really succeed very quickly, right? The person that's not all over things is gonna be terrible not terrible, but they're not gonna be the overachiever I'm not gonna be interested in that type of a person. That's how I know right away when Loren Wernette: Mm-hmm. Philip Daniel Ganz: I know someone's going to succeed. know right. It doesn't take me long. This is very quick, right? I just see a little bit of the person and you know, as we hire people who I think will be good or bad. I know there's no, there is no mistake. Like I'm not, you're are you wrong ever? No, never wrong on these things. I might hire wrong originally, but for me to identify if they'll be great, even if they're not great right away. I'll be right a hundred percent. In fact, in my career on this, I've been told with other managers to go fire people. And I said, no, they're annoying. They're going to be great in my mind. And I kept them on even sometimes when I was ordered to fire them or let them go, I kept them on and I was proven right. I've never been proven wrong by this strategy of like, that is to me, like the biggest telltale because there'll be a sponge. Loren Wernette: Hmm. Philip Daniel Ganz: And you're like, you know, also you're not going to have to eventually like babysit that type of person that will allow you to scale. Loren Wernette: Right. Yeah, it makes it makes us do you think that applies to all roles or just the sales type roles? Philip Daniel Ganz: All roles. I want people that are all over it. Like I'll give you an example. My dad's a cardiologist. I feel, I know what he's like. He's all over people. You want to win a championship? You're all over. Kobe Bryant, he's the same thing. Annoying. Michael Jordan, annoying. Now Michael Jordan, like punch someone. What do you think he punched someone? They were, was all over them. He knew their role better than them. Tom Brady, all over them. You give me someone that's these, best people are all. Loren Wernette: Mm-hmm. Curious. Philip Daniel Ganz: Like you find like someone that's going to be all over that person. Like that's what I'm looking for. That's going to win in sports. It's going to win in business. It's what I look for for new people. I don't want people that are not all over people. want someone all over. say, go do something. You're to be like all over full court press the whole way. Loren Wernette: Yeah, yeah. I I like all intense and curious versus annoying, but I definitely get the the draft. Right. Philip Daniel Ganz: Intensive, whatever you, want to put it, right? You could rewrite it different ways. We'll put it through Chad, GBT, make it nice and whatever, but like curious, nice. Okay. We're going to fluff it up, but it's the same thing. It's going to be the, it's going to be the person that hustles that dives through the ball. It's going to be the person that wants to know every rule and question it because there's two types of people, gatherers and interpreters. I'm ultimately looking for interpreters. Loren Wernette: Right. Philip Daniel Ganz: Right. want self motivating interpreters, right? People that can, that want interpret, let's see the data that can interpret it. Because even if you're trying to cheat and you said you'd your Gemini input in, I'll input out. Right. You know, it's only as good as the, you'll just get the wrong garbage. Right. I see this all the time where people write wrong things. Right. So like, you know, you're like, well, what do you think? I don't know. Right. Like I would definitely. Loren Wernette: Right. Philip Daniel Ganz: Right? Like that's what I look for. And I think that's what ultimately like, and you're not going to have to like bother those people. Like they're going to be already over it. So when you're on vacation, there, you know, that there could be, they're not going to want to see anything fail. Loren Wernette: Yeah, yeah, I 100 % agree that so we skipped over something and I want to go back to it. You mentioned that you have 200 sites that you use for lead generation. Talk to me about because most people have like struggle to get one site. Talk to me about the precipice of hey, I'm going to start generating all these micro sites. Why did you start doing that? What did you see that made you want to do that? And how are you managing that many sites? Philip Daniel Ganz: Yeah, it was an accident. You know, we had a major site, Make Florida your home. And then Google started to change the way they were doing things, the way they were doing search. Right. So we quickly realized you cannot beat Zillow straight up. I'm going to be honest with every single person here. Like if you're a coffee shop owner, you're not beating Starbucks straight up. Not happening. Right. So we knew we couldn't beat Zillow straight up. OK. So we're like, huh? What are our best performing pages? Where are we getting our traffic from? Right? And, and we discovered that, like, I'll give you an example. What our bit where first hit was hometown hero loan program was the hometown heroes loan program in the state of Florida, number one program. So we got the domain, we domain match. And that's exactly what we discovered of how it works. It works so well. Right. In fact, it works so well. I got, I got a private jet company that wanted to help me get free trips around wherever it works in any industry. If you wanted me to be the number one coffee shop, I easily could. You're like, because our ego will say do Phil Gans.com. No one is searching for Phil. That's not an answer. That's, that's my ego. Right. Google works like this. Type in a question, you get an answer. Chuck EBT, you get a question, you get an answer. Question, answer, question, answer, be the answer in life. Domain match the answer. If you took your top hundred answers and you own the domain as that, then obviously Gemini, Google will just make that come up. And you're like, does it work? Bro, I can't even keep up as we're going on. We're on this podcast. Lead, lead, lead, lead, right? Appointment, appointment, appointment, appointment. Just doesn't stop. Right? Like I can't be stopped. In fact, it's led to you. go, what does it lead to? Number one, realtor partnership in Florida, LPT reality, right? They partner with Zillow regal. We've partnered with in Texas, number one in Texas, right? You know, I was on a zoom with these people. I'm a mortgage guy, right? What are the odds that you could be on a zoom of two people to do $500 billion? Right? It's like, because when, when you do something really well, the big people would want to start to introduce. Right. And this is the big thing. You're like, well, how would I beat Zillow in like North Carolina? Well, I, okay. Here's we're trying to figure out the real estate. You we might try to figure out the real estate, but I'd probably go like neighborhood city, not even the city. Like you need to win like the local neighborhoods and be the answers and cobbled those up. Right. If you had 200 websites, there were only like in a part of a city, you'd be like the number one realtor in a part of a city, which means you're probably going to make a lot of money, right? You're going to get so much because you'll be the answer. You'll be the authority. And that's how you do it. Right. That's how we did it. Right. And we're making things better. It's not about putting up crap either. Right. It's we have it. There's a method to our madness. I did simplify it. But my strategy is a hundred percent. Right. I don't need Phil Gans.com. You know, if you want to see, you know, like I said, it was Eagle make Florida your home.com. You know, ⁓ yeah, it was, it's a good site, right? But it doesn't get all the leads that we have. Right. It's just, I'd be out of business. It was make Florida your home. I'll be out of business for these websites. Loren Wernette: Mm-hmm. So I yeah, so I'm I'm not 100 % ⁓ understanding the domain matching. I'm not aware of that. Can you give me an example? What that is? How it works? ⁓ I'm just not. It's not clicking. Philip Daniel Ganz: Right, but I got 200. What? Okay, so the number one program in Florida is hometown hero loan program. I own the website www.hometownheroloanprogram.com Loren Wernette: Got it. Philip Daniel Ganz: So when the people of Florida put that in Google, I come up number one. Loren Wernette: Got it. Philip Daniel Ganz: And I have this 200 times. Loren Wernette: Okay, so it's the same website, just a different domain, but basically the answer to what's searching. Philip Daniel Ganz: Well, yeah, different content based on what that domain is, right? If I'm doing, you know, a loan program for down payment assistance, I'm going to try to domain match that program and then just write the information. Loren Wernette: Okay, got it. Got it. Got it. Okay. So if it's Florida bridge loans or something like that, then it's your domain dash bridge loans and then it's got content. Got it. Okay. Philip Daniel Ganz: Correct. And the more niche, the better. Correct. The more niche, the better. The big mistake that people make, it's counterintuitive. They go too wide. They go too wide. And sometimes what happens is, is that when I hit it the first time, like a lot of people, this is the big issue. A lot of smart people go by data, right? Like say you work at say bank of America, right? And you hired a marketing person. Loren Wernette: Hmm. Philip Daniel Ganz: That person does not do loans, right? Just take my word on it. They probably don't do loans, right? So they don't have intuition. They have none. So they go to SEM rush, which for people on the podcast, as like a data collector for like web, you know, so you can, you can like get all the hits of how popular websites are, right? Or, or, or keywords, right? Keyword tools or Neil Patel or ish refs, right? Loren Wernette: Sure. Philip Daniel Ganz: So some of our biggest hits that we have had is where the results have been zero. And this is the crazy part of the story is that it's so counterintuitive because think about the marketing people don't do mortgages. Right. And the mortgages people don't do marketing. They're not allowed the compliance. You're like, no way. Yeah. Loren Wernette: Hmm. Philip Daniel Ganz: Right? It's the wildest thing. you're like, dude, so like no one's doing it because the mortgage people or even the real estate people, they're, you know, if they ask their compliance people, they'll probably say no. Right. They won't be allowed to do it. It starts with a no. And then the marketing people, if you ask them, so what's the last mortgage you did? They're like, never. Well, you know, I got my masters at Harvard. You know, okay. Have you done a mortgage? No. Have you flipped a home? No. Have you done anything? No. But, but I went to a school that taught me and I got this fancy degree and I like Grey Poupon and Havarti cheese. Come on. They've never won. They've never experienced it. They don't have any intuition. So a lot of the hits I've had, no, I'm not saying like just go with the zeros or whatever, but a lot of the things that I've hit, right. And then like people will say, you ever wonder why, like you'll see some domain that sells for like $8 million or $6 million. And I go, why wasn't that bought before? Right. Because someone bought it with intuition. It's like, if you're Tom Brady, you throw it, a receiver will be not where they are. This is like a big thing where sometimes people miss and sometimes you do need to go with your gut. Where are they going to be? Loren Wernette: Right. Philip Daniel Ganz: Not where they are. If they just, and I'm not saying you just go with just where they're going to be, but that is the key. You know, the hit, the hitting, like if you're trying to hit a home run and you're trying to like do it. You know, if I was to do it, I, I, I did come up with some great ideas for my body. Did I private jets, right? Of how I would like totally dominate like this. And while most people would probably look at private jets. And, you know, just I would try to solve problems. Right. And like when like FedEx has an oil spill and it delays mail, I start buying microsites like, you know, finding solutions for people. want to be the answer in life. This is the key. All experts are the answers. And if you can be the expert on a microsite, then you will come up. And, and, and that's what I would say to anyone listening the answer. And it took a while and it took me to lose a lot of money. And I'll tell you the height of make Florida your home. You're almost at 60,000 clicks a month. And we were getting, and our biggest thing was we were getting so many leads. We couldn't stop. It all changed like this. Google took it all away. This is what I would say. Easy come. Loren Wernette: Hmm. Philip Daniel Ganz: Easy go and you got to change and evolve and maybe what will be around in the future won't be what I'm saying today. But if you're like, could I make someone number one? Like, yeah, am I thinking about trying to do this for real estate? Of course I am. Right. I'm trying to look if we all work together, we can beat Zillow. Do I think Zillow is going to get beaten? Yeah. Loren Wernette: Right. Philip Daniel Ganz: And I'm working on it, right? With the right partnerships. I am working on trying to beat Zillow. There's no doubt, right? But I can't beat them straight up. You think I can beat? No, but can they be, I can't beat them. Okay. I can't beat Zillow in 50 states. Do I think I'm going to beat Zillow in Florida? That's the goal. My goal is to beat Zillow in Florida, which is just a monumental task on its own. But what does that look like? That means partnerships with other real estate companies in Florida. in Texas and everyone coming together to try to accomplish this. This will not happen as one company. This is like a monumental task that will happen. Loren Wernette: Awesome. Perfect. Well, I appreciate the explanation. So if anybody's interested in finding out more about you, reaching out, finding about your loan products, where can they get a hold of you Phil? Philip Daniel Ganz: This old school while I'm on LinkedIn and Facebook and Instagram at Phil Gans. Here's my number. 617-529-9317 617-529-9317 Just send me a text. I'll be honored to help you and I'll get back to you right away. And you know, I'm here to help. Loren Wernette: Awesome. And I'll make sure those links and that phone number is in the show notes so that anybody can easily find that. So it's been a great conversation. I've really enjoyed talking to you. A lot of energy is a good way to start my morning. Anything you want to add before we kind of sign off that we didn't talk on or just some final words of wisdom? Philip Daniel Ganz: Yeah, view the pie as let's work together and get the pie bigger, right? When you look for partnerships, let's grow the pie together. It doesn't have to be just try to get the bigger slice. Sometimes in life, the best way to win is through collaboration and just grow the pie. Sometimes your slice can get smaller, but if the pie gets bigger, we all win together. And that's what I'll leave it with. Loren Wernette: 100 % better to have a slice of a watermelon than a whole grape. 100%. So, well, Phil, thank you for your time today. It's been an honor. And for everyone out there, thank you for joining Brick by Brick. Make sure you like and follow, and we will talk to you again next week.