John Corcoran 13:25
by generals or with
Jon Maddux 13:27
Yeah, with Indiana was the only one we didn’t, we didn’t end up staying in that state. So we were like, we don’t really do a lot of business in Indiana. So we just took that off our state list. And that was the only one that we just we still settled with them. But it wasn’t like we, in the settlement. We couldn’t continue doing the business in that state.
John Corcoran 13:45
What about else? What about the lenders did the lenders who also never had a lawsuit by a lender?
Jon Maddux 13:49
They were busy with so many other things? I’m sure. The right, you know, at the end of the day, I think when you look back on it, and we kind of knew this when we were in it, but it was the interesting thing was the lenders, you know, their worst nightmare was when someone just trashed the place took off, and then there was criminals coming in and stealing copper wires. And so what actually happened is, is with our foreclosure timeline, these homeowners knew that they they stayed in their house, they knew exactly when that foreclosure sale was going to happen. They knew exactly when you know everything was gonna happen. So they had like a peaceful kind of transitioned out of their home. And we actually would give them like when we got real time intel from from things that because our finger was on the pulse of the foreclosure stuff. So like when we found out that they were giving Cash for Keys, like we would pass that information on to the borrower say look, if you sweep the thing clean, you make it real nice and you leave you leave and you exit peacefully. You’re gonna get you know, 15 or bucks, whatever it was they were doing at the time. And and they were like, Oh, great. Wow. So it’s like basically free our service was basically free because the lot of them didn’t know that they would in the middle of the night, you know, leave the house. And it just that was never good because the lawn would grow. And it looked like this terrible, you know, situation. So I think end of the day that the lenders probably were like, We don’t like that you’re saying it’s okay to walk away. But we, you know, we prefer a peaceful transition than a hostile kind of foreclosure situation.
John Corcoran 15:22
Yeah. Now you did a good job. You mentioned in 2007, use kind of forecast you saw, like, all these loans are going to adjust and people are going to be in a tight squeeze. So you forecast you saw that coming? Yeah, I’m sure when you’re doing you walk away, you anticipated? Because I was thinking this other people are thinking this, like, this isn’t gonna last forever. So even if the business was doing really well, I’m sure you knew, you know, this is gonna be a phase. So how do you prepare for that?
Jon Maddux 15:51
The second phase was something called after foreclosure.com. And so we had a website called atropurpurea.com. And that was, luckily, being in the news and all that we had so many inquiries of the walkaway thing we had, I think over 50,000, names, emails, information, we ended up having over 10,000 paying customers during that those three or four years ago, it was it was booming. So after foreclosure, really, because you know, being in the mortgage business is like a curse, you can never get out of it really like you can try. But you’re you know, the money’s too good. It always brings you back at some point. But so we went and did after foreclosure.com, which really was like a lead service. So like, we gathered, you know, we would mark it the current 50,000 people we had in database. And then we would, we would tell them, like, look, here’s some mortgage programs or products, like there was an FHA product that was three years after foreclosure, you could you could buy again, there was a VA product was two years after foreclosure. And I’d remembered that, you know, even Chase Bank back in the day, like in oh, five and six, they were fine with one year out of foreclosure. So at some point, I was like, these lenders are going to, they’re not going to permanently put these people in foreclosure jail, they never can be homeowners again, which some people probably legislated for, but I think that, you know, I was like, they’re gonna come back. So I started preparing for that transition of what they call boomerang buyers. So people that had walked away or foreclosed went through the crisis, eventually, we’re going to come back and buy again, you know, at a different time. And, and that ended up being a really great lead transition into launching a new mortgage company, which we did. Yeah.
John Corcoran 17:33
And so you kind of transitioned out of that transition to a new mortgage company was that was that Drop Mortgage? Or was that something else?
Jon Maddux 17:43
Yep, that was Drop Mortgage. And that was a trust. It’s not like I said, it was I tried to not get back into the mortgage business drop was a name that I had for a startup idea, drop valet that was gonna be like Uber and valet, but in when that didn’t really go anywhere in the mortgage business started, like coming back, I was like, Alright, I’m gonna make Drop Mortgage. Because, you know, it was like drop mortgage stress, drop your mortgage payment, drop your mortgage insurance and stuff like that. So there’s some different niches that we wanted to launch into back in the mortgage business. But yeah, Drop had a good run. I mean, we we grew quickly, because the product started coming back, not just FHA, but there was some banks that were like, you know, what, if you put down enough money, we’ll we’ll overlook the, you know, the foreclosure waiting period of three years, and we’ll do a year we’ll do case by case. So we tapped into this bank, and we’re able to, you know, with like, 25 30% down, you know, they were like, That’s a good risk, you know, these people, yeah, they had a foreclosure, but they’re going to be able to, you know, that much skin in the game, they’re not going to walk away from that. Yeah.
John Corcoran 18:48
And then FundLoans. How did that come about? What in how is that different from what you were doing with Drop Mortgage?
Jon Maddux 18:55
So the Drop Mortgage was like, kind of the start of non QM lending, which is, stands for non Qualified Mortgage, which is, people think it’s like the new subprime, but it’s not, it’s more about, you know, how you qualify for a mortgage, which, when the crash came in and legislate legislation and the Dodd Frank, you know, whole thing came in, which was the new legislation to kind of make mortgages harder to get and not so easy to get like fog a mirror and you could get a loan. But all those all those regulations really made it very difficult for some people who were entrepreneurs and business owners to get loans. I don’t know if you remember, you know, trying or, you know, I remember trying to do loans for people who have maybe a half a million dollars in the bank and they have you know, their tax return says that loss, but the lender when you know, when do it because they had to have the ability to repay. So, the foreclosure thing was the initial, like atrophic clusters, kind of initial non QM entrance of that product. But then what they really went into was the business loans are not business loans, but business owner loan Switch called bank statement loan. So we’re just looking at your cash flow and your bank statements to produce, to produce the ability to repay, or to prove your ability to repay. And that took off and like so we launched Drop Mortgage in, say 2020 13 ish, time. And then, you know, 2016 was really when we started looking at doing it wholesale instead of retail. And the reason I think, FundLoans, we thought like, this is a definitely a needed side of the business that mortgage brokers who our clients didn’t have a really great lender that focused on like the bigger loans, the jumbo loans were in Southern California, the most of the loans are big jumbo loan. So we our average loan is a million dollars. And what I wanted to create was something that was like a Nordstrom or like a higher end, where we really care about, you know, the brokers loan. So when you send a loan to us, we really like, you know, we focus on the bigger loans, we have more time and energy to put on each loan and given that white glove service that they were missing back then. And so I think that’s what’s helped us with our successes, like we picked a niche out of another niche and really focused on doing a great job and on one product. And so our retail, we wound it down, because we didn’t want to compete against our customers, we wound that down. And then we just really went full board into the into the wholesale
John Corcoran 21:25
side, if I can reflect a little bit not knowing you really well, but just on what you’ve told me about yourself. So far, it seems like there’s a creative side to you, after all, you were songwriter for a bunch of years. And then there’s a more analytical side to maybe the mortgage side. And I’m always curious how people scratch both those itches both those needs and their personality. And maybe maybe I’m reading into this, but it seems like starting new companies, innovating your existing companies has been a way of kind of expressing that creativity that you enjoy.
Jon Maddux 21:58
Yeah, I think you nailed it, because I’m not like, I heard something on another podcast a long time ago, it was it was I think for Uber is talking about Ubers startup phase and how they, and they call it a band of pirates. And you know, being creative, and you just, you know, anyone that will join you, they will wear any hats and like, and so like I feel like that’s kind of more of my skill set is like how to create something and launch it and get it off the ground. But then like doing all the and then it said you were then became over time, like a like a naval ship sort of abandoned pirates, and where you have like the top down, you know, like, structure and all that. And so I’m less, I don’t that doesn’t excite me the top down, like the whole naval thing I love appreciate it. I think that’s how you’d make a successful long term scalable thing. But it’s not necessarily my skill set. So that’s where my business partner Chad is a lot better at that kind of stuff. And yeah, but it’s underappreciated
John Corcoran 22:51
how challenging it is for, you know, the Elon Musk’s of the world, the Jeff Bezos of the world who can take a company from nothing to 100 grand, a million bucks. 10 million bucks, billions, and still run this company and be interested in fired up and do it for decades.
Jon Maddux 23:11
Yeah, that’s a special person, I’m sure. Yeah, sure is. Surrender.
John Corcoran 23:16
And so this it makes total sense that you’re sitting around you and you’re drinking tequila one day and tell the story but a friend of yours you’re drinking tequila with his wife was actually in the business of importing champagne.
Jon Maddux 23:32
We Drink Bubbles is their company.
John Corcoran 23:34
Got it? And so naturally settle it started tequila company.
Jon Maddux 23:39
Yeah, we were all just sitting around having I think it’s New Year’s Eve, maybe something like that. And we were all just having drinks and my wife and his wife, his wife is the one that runs in started founded. We Drink Bubbles, Shiloh, her name is and they were all drinking my wife and her, like close, close to best friends and they were all hanging out and drinking bubbles. And we’re drinking tequila. And and I think somehow it came out like We Drink Tequila. And we’re like, yeah, we have to do this. And so similar model of, it’s like a sister company or brother company, to the bubbles. It’s funny how champagne and tequila are so similar. Once you look at like, you know, champagne has to come from a region in France called Champagne. Tequila actually comes from a region in Mexico, you can’t make tequila outside of this region. Right. And so there’s a lot of similarities, you know, in a lot of different ways of you know, it’s distilling instead of, you know, you know, fermenting but it’s it the growers and the makers of this craft tequila are similar in a lot of ways. So we were just having a blast right now doing it importing and finding tequila that are rare and you know, that are not famous, you know, like Kendall Jenner and Clooney, you know, they’re everyone’s seems like everyone’s starting a tequila brand, when we’re trying to make the maker of the tequila famous and make their story told and bring their kind of like family generational story to, you know, kind of what, what, you know what we’re not seeing here like make tequila Mexican again, right? It’s like it’s now like become this very celebrity driven tequila. And now it’s like we’re like, let’s, let’s tell the story of the people that are making it. Yeah.
John Corcoran 25:23
So that’s a different kind of model selling people on a keyless subscription product versus selling loans, selling mortgages, that sort of thing. So, what are some of the challenges been around building that?
Jon Maddux 25:38
I mean, I think, you know, it’s chat, there’s always challenges. I mean, dealing with foreign foreign country, and importing has been challenged. You know, I’m doing the best I can to learn Spanish. I mean, I’m learning to live in San Diego. So I have some Spanish I can get enough to be dangerous, but I can, um, I got apps and tutors. So I’m trying to learn Spanish a lot when we, you know, when we practice condo, lots of practicing. And but the challenge I think would be, you know, trying to to carve out enough time to be able to make this business success while still trying to make you know, when when the mortgage business is very demanding. You know, we’re still trying to grow that and we’re still trying to. So just my time allocation, it’s been it’s been challenging. And then, you know, yes, it’s a brand new business. But luckily, you know, my partner’s wife has a lot of experience in the subscription, alcohol business. So that’s helped a ton. I mean, we wouldn’t be where we’re at now without that. So yeah,
John Corcoran 26:41
that’s always fascinating, I think is someone who starts a brand new industry in a completely new field that they don’t have any experience in. It can be disorienting, but when you have someone who can show you the ropes makes such a huge difference.
Jon Maddux 26:54
Yeah, my partner Preston, and that business is him and his wife, you know, he’s been with her the whole time she’s developed, We Drink Bubbles. So he’s really like taking the bull by the horns and running things over there. So it’s, it’s good to have someone like that, as a partner. That’s a really great partner to do. Yeah, do all that stuff. So
John Corcoran 27:15
I know we’re running short on time, I want to ask you my final question. I’m a big fan of gratitude, especially expressing gratitude to, you know, people that have helped you along the way peers and contemporaries. So who would you want to shout out? Who would you want to acknowledge? Just thank those peers and contemporaries for, you know, helping you on the journey?
Jon Maddux 27:37
I mean, I’d say for sure. My father, Bob Maddux. I mean, he’s, he’s always giving me that optimism and like, you can do anything in life, you know, so like, you know, having a great father’s has definitely contributed towards that success. My business partner Chad Ruyle, I mean, he’s, he’s so well connected. And he just, he’s such a solid, you know, business person that, you know, there’s no way I could be where I’m at without him too. So I’d say this to my wife, you know, like having a wife we’ve been we’re coming up on our 20 year wedding anniversary and you know, having a good partner behind you that lets you do your thing and you dream your dreams and you know, is behind you is priceless. So that’s very grateful.
John Corcoran 28:15
Jon, where can people go to learn more about you and connect with you and learn about all the various different businesses?
Jon Maddux 28:22
Let’s say LinkedIn or fundloans.com is like my main business but you know, you can follow us on Instagram we have FundLoans there, we have We Drink Tequila, is a check that to DMS. If you want to DM me, you can DM me there. Just at We Drink Tequila.
John Corcoran 28:38
wedrinktequila.com or Instagram We Drink Tequila. Excellent. All right, Jon. Thanks so much.
Jon Maddux 28:46
Thank you, John. Appreciate it.
Thank you for listening to the Smart Business Revolution Podcast with John Corcoran. Find out more at smartbusinessrevolution.com. And while you’re there, sign up for our email list and join the revolution. And be listening for the next episode of the Smart Business Revolution Podcast.