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- [00:11]
A
Hey, what's up? Jeff Zimfer, thanks for tuning in to this episode of the Mortgage Marketing Radio podcast. Hey, if you're a longtime listener, thanks for coming back. New listener. Hope you're enjoying the content at whatever point you feel compelled to leave us a review. Wherever you're listening to this on Spotify or Apple, please take a moment. Leave us a review. We'd love to know how our content is impacting you and helping you in your business. You know how to do that? Just follow the prompts. Somewhere in the show notes it says like the podcast, leave us a review. Appreciate that before we get into this special week, this guest for this week is another success story coming at you from the mortgage professionals within our my agent classes community. Guys, we want to reach more agents. We want to expand our reach and reputation. What's the fastest, most effective way to do that? Is it social media? No. Is it cold calling? No. What is it? You heard me say it enough repeatedly here. I've interviewed over 300 of America's top producers. Eight out of ten all have this. This is how the top 1% get agent referrals. They lead with education content in person and virtual events and classes. Why? To reach agents at scale. To move from being seen as a solicitor and vendor to a partner peer and solicit and driving conversations at scale. Case in point, Kevin Burjou. What's up? Shout out to you Philly man. He's doing two different classes. Today he had 83 agents register for winning strategies for buyers agents and tomorrow he has a live event database marketing for realtors. He's a busy man. He's reaching lots of agents, he's driving lots of conversations at scale and positioning himself to win, to capture market share and out value his competition. And he's doing it repeatedly. Just like you would be. If you want to get into shape, get six pack abs, right. Whatever those, whatever that goal is, it's the consistency that builds the momentum over time. That's how you crush it. And that's what we help originators do across the country. Done for you Agent classes. Done for you. Marketing turnkey, social media content posts, emails, text messages, weekly live coaching and community calls. It's all there for you. No wonder we've had members that have been with us for over four years. If you want to learn more, go to MortgageMarketing Pro. I'm opening up my calendar to a few calls willing to talk to some people who are looking for this type of solution. It's not for everybody. Ideally you've been doing loans at least three years and you're closing at least three loans per month or more. And you're coachable, you're trainable, you're willing to follow a proven system and willing to show up and that's it. MortgageMarketing Pro. Okay, this week, my special guest, I'm bringing back Dan Rauch on the program. If you know Dan at all, if you've been part of the mortgage coach RateWatch community for anytime, you know Dan, Dan is like the Yoda of interest rates. For years he's had this product called Rate Watch, which is a daily kind of, you know, Rate Watch forecaster. That's phenomenal. It's part of the Mortgage Coach trust engine community now. And you know Dan, he's got a very esteemed background in the mortgage space in lots of different ways. First of all, he is probably amongst the most knowledgeable people that I have ever run into when it comes to markets and rates and understanding what impacts them and communicating how, you know, grabbing his ideas to help you be a better communicator in talking about the market and things like that. So you can obviously sound intelligent when you're talking with people. So Dan's a longtime executive leader in the mortgage and real estate industry and he is founder and head trader at unit University of Options, which you're going to hear about it in part two of our conversation, which is all about this cool, awesome platform that he's been running for years that helps if you're looking to diversify and backfill the ups and downs in your income. I want you to check out and listen intently to part two of our conversation where Dan's breaking down how his platform with these amazing options trading bots and futures, you get to look over Dan's shoulder and invest in like forex trading, proprietary FX bots, futures trading and everything. It's everything that Dan is doing himself to trade the market and win and on a very low risk basis, by the way. And you're going to hear some of the success stories in this conversation. Part one is Dan and I are unpacking kind of what's happening with rates. Listen in and you'll talk about why Dan strongly believes that 4% range interest rates are in our future come 2025. So I think you'll hopefully enjoy this conversation and follow the links in the show notes. So without further ado, let's get into this week's show. Dan, welcome back to the show.
- [05:01]
B
It's been a while, Jeff.
- [05:03]
A
It has been a while since that I Don't even remember. It's been so long, I don't remember. And I should have looked it up, but it's been a couple of years, it feels like. Yeah.
- [05:11]
B
Since you've had me on the show. Yes, yes. Then, of course, we saw each other in Vegas and we ran into each other at the Dallas airport.
- [05:19]
A
The airport. Randomly. And prior to that, it had been a long time since we'd seen each other, but. Exactly. For those who aren't familiar with who you are and what you do, what do you want to tell them?
- [05:30]
B
So, currently I'm CEO of and head trader for a company called University of Options. We started that in about 2018, and it's grown really fast because of Mortgage Coach Trust Engine. I'm their chief economists going back to 08 and recorded, I guess, at this point, thousands of videos. And so lots of people got to know me, and I got out of the mortgage industry, I think, in 17, and then it's been just really fun since then.
- [06:12]
A
Well, for people who do know you, you have had for many years this product called Rate Watch.
- [06:18]
B
Right.
- [06:19]
A
Is that still in existence?
- [06:22]
B
Yeah. Really what that's come down to is it's an app which is actually owned by Mortgage Coach. I'm more like the spokesman, I guess. And then every morning I do the daily video which goes into the Rate Watch app, and also I post it on five or six different Facebook groups.
- [06:44]
A
Got it. And so you're looking at the market every day, both stock market, interest rates and all that kind of stuff, and kind of giving your forecast you. And I haven't prepared for this, as this is how I usually fly. So whenever I hear somebody talk about interest rates, that's a hard thing to forecast.
- [07:06]
B
Here it comes, here it comes, here it comes.
- [07:10]
A
How would you score your accuracy of that? You've been doing this since 08, you said.
- [07:16]
B
Yeah, well, there's a saying, a broken watch is right twice a day. So I've never been wrong ever, ever to make a forecast and wait for it to come.
- [07:32]
A
There you go, man. Yep.
- [07:34]
B
What's wrong with that?
- [07:35]
A
Well said, well said. It's a tough question. I apologize, but it really just makes.
- [07:40]
B
Me a fair question. In fact, usually I'll fall on my sword before you ask me. So, you know, recently I was. I was with Dave and Todd and I did boldly say that I. I actually believe fourth quarter to the first somewhere in that point. And I gave all the reasons why. And as a. As a prognosticator, you learn to be clear that there are Certain things that have to happen for your forecast to be right. So because I, we're factoring in gdp, we're factoring unemployment, we're factoring inflation, we're factoring manufacturing, all consumer balance sheets, money supply. So all of this stuff factors in to, you know, to our forecast. And so if a couple of things don't hit when you think they will, then you're gonna be wrong, at least for a while. And for me, the, the, the economy just doesn't want to stop. It, it's people, you know, we read that people are, are doing worse and it's harder and all that stuff for them. But basically, if you look at retail sales and GDP and job growth and all that stuff, it's continued well beyond any reason scenario. And now we're beginning to see it now, now. And jobs are always the last to go. So now we're beginning to see jobs slip. Consumer confidence is slipping. Deflation starts becoming a concern, believe it or not. So all the things that I feared would happen, they're coming. I was just early.
- [09:26]
A
What do you mean we feared to happen are coming? Give us some examples.
- [09:31]
B
Tighter labor market. Okay, so job losses, job losses for sure. Decreases in retail sales. Those are, you know, the big things. Consumer spend, those two primary. Tomorrow we get the consumer spending numbers which are big. They, they're called pce, which is personal consumption expenditures. And that's a number the Fed watches much more than cpi.
- [09:56]
A
Hmm. So, okay, so we saw the Fed do their first round of cuts about a week or two ago, 50 basis points. And then there's some chatter coming after that, such as they think inflation is too low. And then there's the chatter about like they're going to be more aggressive with their rate cuts, like what the hell's really going on? Can you like, you know, clear the air a little bit about what you think moving forward is going to happen?
- [10:22]
B
Yeah. So personally, you know, for, for all of my loan officer friends, I'm glad that he cut a half, but it in my opinion was too much. And my weekly video this last week I shared with all the reasons there the condition of money, like, like financial conditions index is the loosest it's been since the 60s while the Fed made a cut. So only one time, 60 years ago were the financial conditions that we deal with every day. And it's an index has a lot of stuff built into it. It has never, well, only one time has it been doing this well and the Fed cut really. So that was weird that he cut a half. There Were plenty of things that I believe he should have tempered that. And you're seeing rates are not doing well since the half cut. And so bond investors and bond markets short. The Fed can only control the short end Fed funds rate. And fed funds rate will influence like the one year and two year Treasuries. Fine. He has no influence up here on the long end of the yield curve like you know, 10 year and 30 year. The only way he's ever been able to influence that is qe. Remember that quantitative easing.
- [12:01]
A
Yeah.
- [12:01]
B
And he was buying mortgages and he was buying Treasuries. He realized no matter what I do here, these guys do their own thing. And so it right now bonds are clearly telling him a half was too much. I don't trust you. And I'm, I want higher rates right now. So.
- [12:21]
A
Really?
- [12:22]
B
Yeah, that. So a quarter would have been healthier. And that's what I had told people.
- [12:29]
A
Well and so you're only the second person that I'm aware of who, who has said the same thing. And yet there's all that external pressure. You know they say that, that it's not a political position or whatever. I mean but you know, we got affordability issues. Right. All that kind of stuff.
- [12:47]
B
Yeah.
- [12:48]
A
So that's very interesting to think that that was the wrong move. And so where do we go from.
- [12:55]
B
It was weird coming from him because Powell's never been a Fed to surprise anybody. You know, he's been known to be very slow and very methodical in his moves. So I have to. It was just a surprise.
- [13:09]
A
So some people, this is some of the chatter I read was like, you know, we, we didn't see a huge relief in interest rates because it was already kind of pre baked in based on the talking we heard. True. But then you saw them come out recently and talk about more aggressive cuts to come. So, so do. Are we expecting to see additional reduction in rates following future Fed cuts?
- [13:29]
B
Yes. Yeah. Because the, the Feds are seeing things that, that not every consumer can see.
- [13:37]
A
Sure.
- [13:37]
B
And when we come up to the next Fed meeting, if he aggressively cuts again, then we know he's really concerned whether he, he voices those concerns or not. He did definitely reference labor market slowing and that.
- [13:55]
A
But isn't they wanted. Right. They tried to break the employment market.
- [14:01]
B
Yes and no. Because the Fed's number one charter actually is monitoring and managing full employment for the country. That's like one of their main charters. So the problem is this is a really a challenge. The Fed, the Feds should stay out of Everything, like they really are the worst. It is. And I don't mean to be critical, you know, at the human level. Powell's a nice guy, I think, but they have always been too late to cut. If you look back in like 05 06, things were really starting to cook. The housing market was on fire and the Fed just decided inflation's a problem. So the Fed started raising rates before the market crashed. Really? There's always been, I think, a wrong, a false understanding that low employment and an active economy equals inflation.
- [15:11]
A
Wow. Sounds healthy to me.
- [15:13]
B
It never has. Healthy economy, good job market has never brought us inflation. Inflation comes from too. Too many people chasing too few goods. Right.
- [15:27]
A
Interesting.
- [15:28]
B
Yeah. That was like Milton Friedman, you know, growing up as an economist.
- [15:34]
A
Sure. Geeking out here on some. Friedman. Yeah, yeah.
- [15:38]
B
He's amazing. But it's very simple, right? Too many people chasing too few goods. Now look at what happened. We stopped making everything and then we locked people in their room and then we stuffed their pockets full of money. And now you have people like going crazy. Rage. Spending was. That was the word we used back then. They have pockets full of money, they're bored to death. And so they go out and they buy. But there's nothing to buy. All manufacturing shut off. All around the world, ships were stuck in ports and freight costs went through the roof. It was taking some of the ships like 812 weeks just to get to the dock. And then there was no place to put the trailers. So once they started trying to gear up, it was too late. You had too many people chasing too few goods. Or actually too many people chasing no goods.
- [16:41]
A
Right.
- [16:42]
B
That's what brought the inflation. And when Powell said it's transitional. Yeah, it is. It always has been. How long till the transition? That's really the question.
- [16:52]
A
Well, and that, that's like, you know, what we have in the housing market too as well. Right. Too many people chasing too few goods. There's no inventory.
- [16:59]
B
Exactly, exactly.
- [17:00]
A
And so that's driven up price, obviously. All right, so that's an interesting geek out conversation. I want to talk about the other thing you do as well, which I'm very intrigued with. Is so loan officers, whoever's listening right now, this is an opportunity. I believe in multiple streams of income when possible. Right. Like it's important to have focus. And yet we're in this business that can be cyclical. Cyclical. And I think we need to also consider, hey, how do I backfill those, those, those ups and downs or can. How am I adding to my total portfolio My retirement portfolio. Right. And I remember when, when I ran into the airport a couple of years ago. You're telling me about what you're doing with the University of Options, which, which is like Forex trading with proprietary FX bots. Like, what did he just say? Like, could you tell me that again? So let's, let's jam on this for a second. Tell me about what you're doing with University of Options. What is that?
- [17:52]
B
Okay, so the original product was we taught people how to trade options and then once they had enough knowledge, they could come into a live trading room with myself or with one of our traders. And literally we're calling out trades. So they're seeing my screen and I'm saying, all right, if the price crosses this, I'm going in. And I'm buying that. And so we say we're going in, member goes in, we say we're coming out, member comes out. Um, and it's been really a successful program. There's a lot more to what I just said than, than just the live, the live trading room. And then, and then we started teaching people how to trade futures. There are tons of leverage in trading futures. So for instance, for $500 account, you, you could pretty easily make a couple hundred a day. It just doesn't take much capital to trade futures. So then while all this was going on, we started building bots. So we have these auto traders that we tell people on the future side, the Forex bots are a different story, but on trading futures we tell people that use the autotrader as an autopilot. Don't just turn it on and then go away and leave it alone. That's not a best practice for what I'm talking about for the futures. Futures. When you turn the bot on, make sure you're sitting at your desk just so you can watch it, monitor it, et cetera. So then from the futures, we recently launched a product called Flight Paths. And we worked on this technology for like two years. And what the technology allows us to do is takes my trades. So you know, I've been doing this a long time, pretty good trader and places them in our members account. So literally the member can be doing whatever he wants and he'll see, oh, Dan just opened a trade on his account as if because it's his trade. So I place one trade with a daily goal of $100 with one contract. That's what takes 500 in capital. And that trade is executed across currently now about 300 accounts. And they can trade as much as they want. So for futures, you trade in what's called contracts. So just think of a contract as a share of stock. You can buy one, you could buy 10, you could buy 100. But you just need to know, for every contract you trade, you should have $500 in cash. So that's not much to prohibit somebody. So I'm trading one because it's psychologically extremely simple to wake up in the morning and know I just have to make a hundred dollars. Because the stress of doing this right now, it's unbelievable. Like, I didn't think I would feel this performance anxiety, but now that I have 300 people literally benefiting or not from each trade, I take. But the two. But the $100 daily goal is very simple. It doesn't stress me out. And So I trade one contract, they could trade 10. We have members that trade 50, so 10 contracts. If I'm making $100 and you're trading 10 contracts, that's $1,000 a day. And that's extremely realistic.
- [21:39]
A
And how much time was that would that take from somebody like me? Right. To do that?
- [21:44]
B
So this is the deal in theory, almost no time at all. You have to turn it on in the morning, and then we tell you usually to turn it off around 10am because we don't want your. Your bot running all day long. And I take trades that I don't necessarily want to take for hundreds of people. So we want people to learn some of the terminology. We want them to learn a little bit about futures.
- [22:11]
A
Yeah, Educated.
- [22:12]
B
And so we sell the Replicator with the futures trading program so you can start learning, learning the terminology, setting up your account, learn about how to set up your simulator accounts. Because we like everybody start on a simulator and then fire up the Replicator. So. But we're finding it's just a lot more fun all around if people first learn a little bit about trading before we just throw them in the Replicator. They're just lost and confused and scared otherwise.
- [22:46]
A
Yeah. So this is much more. Well, I mean, it's a combination of active and passive. Right. Because you've got these bots and things like that, and people are essentially executing the same trades you are. Sort of a pseudo look over my shoulder thing. But it's done for you, right?
- [23:01]
B
Yep.
- [23:04]
A
I'm reading your. Go ahead.
- [23:06]
B
I finally found the share button, so we can show you a couple slides if you want, about what we're talking about.
- [23:13]
A
Yeah, yeah. What I. I'm reading your testimonials and stuff, and I guess so there's two things we talked, we talked about options and futures, right?
- [23:21]
B
Yep, yep.
- [23:22]
A
So for those that need a quick comparison on what is an option versus a future. Right. Like layman's terms.
- [23:30]
B
So they're very similar. They're both sort of derivative products off something else. But options, options are cool. And the reason we started with options is the leverage. So again, if you buy, if you wanted to buy 100 shares of Starbucks right now, then you need to have is that 10 $97,000, just 100 shares. So with options you could do the same thing with probably $3 an option, $300 a contract probably and a contract. In options, world controls 100 shares of stock. So you just can do so much more with so little capital. And there's other byproducts of options that we teach that are really helpful for people for managing their longer term portfolios. So an option is like you take a stock and the stock usually has options that trade with it. So instead of trading individual shares of stock, we're buying an options contract, let's say for $200, and we're selling it for $300. And it takes very little capital. Futures are different because they're more like tied to the NASDAQ or tied to gold or tied to oil. They're not tied to a stock, but they still do trade in contracts. And the contracts do require very little capital.
- [25:14]
A
I don't want to confuse that with commodities. That's something different, right?
- [25:17]
B
Like coffee and commodities are closer to futures. For sure. Yeah. Like if you saw trading places horning the orange juice market, right. They're trading futures, they're trading orange juice futures.
- [25:33]
A
So as a mortgage professional listening, and I know you've got some clients who are mortgage professionals because I'm reading your testimonials on the website. Most of them are. Because that's a lot of people who know you. What, what? For those that are hearing this, they're like, hmm, that's interesting. How can I possibly, because I got to go originate mortgages. So how can I possibly add this to my investment strategy? What advice or direction would you give them?
- [26:00]
B
It's, it's more of an income generating strategy than an investment strategy. So the idea is to try to generate as much income as we can with as little as capital as possible. But when you're a member, like I, you know, I do a nightly market update. Not bond, but stock, you're going to learn so much about the broader markets and what drives things. And I just, I love it when I look at Our chat board, I'll say, I'll see something like, yeah, that was a liquidity grab. And like this guy didn't know what liquidity was, you know, three weeks ago. And that just makes me feel super good. We just, we're really conservative. We, we ask everybody to start on a simulator and start with just one small contract. We have a whole plan to gear up. So as you start trading bigger, remember I said I'm trading one. One contract to make $100. Let's say they want to trade 10 contracts to make $1,000, right? I don't want them turning on their computer day one and putting in a 10 contract, you know, size, it's, it's just too scary. So start with one contract and I'll, I'll make you a minimum of 500 a week. And then, so within, let's say three weeks, you'll have 1500 along with your original 500. Now add the second contract. Now you can trade two contracts, which takes a thousand capital, but you're going to make money twice as fast now. You're going to make 200 a day. So once you.
- [27:32]
A
And that's, that's something where I can, like I said, in terms of time requirement, yes, there's the initial learning curve and you want to, you want, you want to understand what you're getting involved in.
- [27:42]
B
Right?
- [27:43]
A
But, but are, am I executing trades actually myself or. That's happening through your system.
- [27:48]
B
You will be taught how to do that. You'll be given the bots that will do that for you, so many other components to that, and then you'll be a member of the Replicator.
- [27:59]
A
Right.
- [28:00]
B
So that's all you really need to do is let me run the Replicator for you.
- [28:05]
A
Well, you know, I mean, look at terminology. So the reason why I want to have this conversation, it goes back to what I kind of set up as we transitioned into this part of the conversation, which was income, right. And backfill and the cycles and the ups and downs. And you know, I'm definitely all, like I said, all one for focus on what, what you, you know, the key drivers, the key needle movers that are going to impact your business as an originator or a real estate agent, if you're listening to this, and we know what those are. And so a lot of you just need to go do that, by the way, I mean, right. Truth be told.
- [28:37]
B
Right, True.
- [28:39]
A
I mean, you know this as a business owner, I just came out of two days on site with Alex Hermosi where they do this It'd be a very interesting thing for you to check out. It's two days, it's intensive. You go through ltv, cac, you know, all this kind of stuff. And you know, the big question is, what's the main constraint in your business? And most business owners work on a lot of things in their business, but usually it's not the thing they should work on. Right. To grow sales and to, you know, be more profitable, et cetera. And so that's my message to everybody listening right now is, you know, keep the main thing, the main thing. But Dan's platform, which, you know, I've been following now for two plus years, and if you know anything about Dan, very intelligent in understanding the markets and all that kind of stuff, like, if I was going to put my trust in, yeah, man, I got some, I can play around with some money, you know what I mean, to create additional leveraged income. And it's only going to take me maybe a couple hours a day, if I'm following you correctly. Is that correct?
- [29:35]
B
Yeah, not even a couple hours a day.
- [29:38]
A
Yeah. So that's why I'm bringing this to the surface, guys and gals that are listening is, I think it's something that might be for some of you, not for all of you, but for some of you. And so we're going to put a link in the show, notes and all that kind of stuff. Go check out universityofoptions.com There's a lot of great content on there. But I, you know, I just want to make it clear that I'm not saying, oh, you should get out of originating mortgages or whatever.
- [30:02]
B
Yeah.
- [30:02]
A
You know, but I mean, if you can add an extra, like let me just read a couple of these. I was on here. Okay, so this one, a couple of testimonials here. And you guys can go read these yourselves. Like, Whoever this was, $27,000, like within two months, it looks like maybe three months. What else we got here? I'm up $700. You know what I like about this? Here's another one. Up a little of over a thousand dollars last week, up 3,000 so far this week. What I like about it is we're not talking crypto type numbers, you know.
- [30:41]
B
No, no, no. We keep it conservative and believable.
- [30:44]
A
Yeah, yeah, exactly. Believable and achievable. And so anyway, this is just. There's. I get nothing for this, everybody. Like, there's no like, you know, old money on the backside over this or anything like that. So I think you should Go check it out. That's all I have to say. Now, knowing that our audience is largely loan officers, before we close out anything else, contextually you would want to tell people who are, suggest who are considering learning more about this platform.
- [31:14]
B
Well, there's, there's a benefit here that, you know, we haven't talked about. But understanding the markets, it opens up so many doors. So let me give you an example. Oil companies, if they're holding a thousand barrels of oil, let's say for distribution, do they have any price risk by holding that oil? They do. You know, let's say they pay $80 a barrel and then oil falls to 40, they're hosed. They lost half of their net worth by the oil sitting in their, in their yard. So what do they do? They buy oil in the futures market. That way if oil does drop, they make a killing on their futures investment. That's a hedge. So just like your secondary marketing guy, he gets a loan and he hedges it just in case rates go down. That would be terrible. You know, they're sitting on a loan, they're having to pay you X and then all of a sudden the loan is worth less. So one of the strategies that I, that I've done and taught, think about the peak crazy of this industry was that 22, 21. Well, why was it so crazy? Well, it was so crazy because rates were so low. Now what if you were to have purchased bonds back when rates were that low? Well, it's actually, there's actually a security called tlt, which is a fund. It's like a stock, just like the stock, but it actually tracks with bonds. So TLT, back a couple of years ago was running like $147 a share. And we taught our members to sell short because when things are that great, it's because rates are that low and it's going to change. And so the more rates fell, the more wealth was built. And our members that actually had pre sold into the bond market, it's your hedging your career instead of just hedging your portfolio.
- [33:42]
A
I like that.
- [33:43]
B
It's just kind of an example. I know it's a little confusing. And then again, the community is amazing. I've never seen anything like it. Our whole team, every one of our teammates, I think we have 14 or so now, they've all come up through members. And so it sounds like almost trite and overused, but it really is a family. It's like the members really develop friendships and I love it. I'll hear that these two guys met up when they were in Vegas and, you know, they never knew each other.
- [34:15]
A
So look, at a minimum. Yeah, at a minimum. I think somebody should check it out. Right. Because if you're smart, you're always looking for strategies for creating income or assets.
- [34:27]
B
Right.
- [34:27]
A
And, of course, additional income helps fill in the gaps when there are some market cycles. So we'll put a link in the show notes. Once again, universityofoptions.com But, Dan, I know you're busy and it's going it's a little bit of a crazy day there. And I thank you so much for taking time out from your day. Hey, I hope you enjoyed this episode and got some education. Check out the links in the show notes and we'll see you on the next one.