The most important strategic asset we acquired was mindset.

[03:35]

"Do it, do it right, never break a trade, never lie, never go back in the order. And those kinds of things is what kept us going and also what saved us in and the financial crisis, you know, like if we were down to the last $50,000."

[11:43]

"Dad was very old school, right? And if you spend a dollar, you got to be 100% sure you're going to make 100, right? Right. And they you know, really old school. And that builds a stable business, but doesn't scale a business."

[10:42]

"So going from the mindset of a small local company and to a mindset of you know we need to take this dash we can do something a little bit big with this and it was literally was just you flip that mindset and you believe it."

Full transcript

He's a visionary, investor, entrepreneur, and banker trans real estate and finance bless through innovative AI technology from running his first AI program in 1985 uh to growing his family's mortgage company, Sunwest. West Mortgage into a multi-billion dollar national lender. He's blended tech and finance from the start. As a first generation immigrant, he's built Angel AI, the world's first fintech AI companion to simplify and humanize the penalt to ownership.

With Angel AI's true approval, Sunwest fully warrants AIdriven lending decisions, extending fairness and access to all. Featured by Forbes, Fortune, and Bloomberg. His mission is to make financial opportunity and cult ownership available for every American. The thing that um I really loved about reading his background and really excited to have him with us here today is I think that the winners in AI are the ones adapting it to what they've been doing for 30 years and he has technical capabilities behind them because it doesn't matter if you get the sharpest nerd in Silicon Valley, they don't have his three decades of experience in the mortgage space.

If he knows every little crook and crevice we want of approving things for lending, mortgages etc. Then that can't be replaced by some super nerd that's backed by a big Silicon Valley company. So the people that have technical capabilities implement and they know the industry cold I think are the ones going to win with AI implementation. So uh welcome.

Thank you for being here. Thank you. And what would you add to your bio? We only have one microphone to say by the way. Uh, but what would you add to your bio that maybe I miss and is really important for everyone to hear? Um, I love super nerds and you know I wish I was one.

This is uh you know it's um in there's really a lot of bright people very bright people out there doing um working in the space and creating massive intervention. Um, and you can go to see and so you know the world's changing like and what the $15 trillion by 2030 and that's if you do the math that's 3 trillion um a year the next couple of years that's just a 2030 right so we we need we need more super energy great um yeah I saw one stat the other day that um open AAI was doing 13 billion in revenue uh last year or recently but they're spending 1.5 trillion. And someone on the podcast was like, "So, how's that possible?" Like, a little bit of a critical question.

And Sam was like, "If you want to sell your shares, I have plenty of people that will buy them." And so, that just shows like how fast the industry's growing, right? Like unheard of numbers. Um, how did you go from a startup? We look back to the mortgage company. How'd you go from a startup to a breakout growth company?

Because your mortgage company has won lots of awards, top 10 this, top 100 that. It's one of the largest, most successful mortgage companies out there with dozens and dozens of offices in different locations. So, what were the one to three things you did to really scale up massively? Um, yeah, I like to take the credit for that, but my dad was all the hard work.

So, okay. Um, second generation. Um, and I worked by his side since I was a kid. And so, we he started it with less than $100,000. Uh, and it's just oldfashioned oldfashioned businesses. Do it, do it right, never break a trade, never lie, never uh go back in the order.

Um, and those kinds of things is what kept us going and also what saved us in and the financial crisis, you know, like if we were down to the last $50,000 and and the traders that we've worked with last, you know, 20 years prior to that, they they they helped us out when they could have they could have margin call us and put us under. Um they said, "Well, you you know, we'll take your word for it." And they and and we got through it. So, um yeah, that's awesome.

I mean, it's not far away from what I was just saying about the Home Depot founders. Uh the apartment complex we acquired last week that was distressed. It's 37% occupied. We came in, had to clear out a private equity owner. We had to clear out um a hard money lender. And technically, you know, the hard money lender, $740,000.

And we said, "Hey, no forever. Turn this around. We don't have 740,000. We only have the 540,000 we owed you last month before we pass the deadline. You give us a break, we'll pay you off in the 540. They said yes.

And I think many times companies are saved or vacant based on integrity, trust, and somebody needing to take a little leap of faith because technically based on the contract, they could turn the screws on you really hard when it hurts, right? Anything else you want to add to that? Yeah. So, you know, when with our trading partners, we I I see a lot of people when they go to trading partners and then they they try to bluff their position, right?

Um and you know, you don't, you know, sensei, you know, said, you know, be strong when you're weak and be weak when you're strong, right? Uh that doesn't when you're weak, don't try to go love your training partner, say you're strong. Uh just go be straight up with them. Like here's my situation, right? And and especially people you've had long relationships with, they just want honesty, integrity, right?

To just just just be real, right? And and if you've had a long relationship with with them, trust them, right? That they're there's a reason you've had a long relationship with them and and trust them to the right thing. Yeah. You you you try to um uh oversell your your hand to people that you've been working with for a long time.

They're deep. They'll figure it out. And then and then you've just torched, you know, years and years of carba uh trust building. So So you know you at the end of the day like I just um I'm first I'm really bad at poker and I I can't I'm a terrible ability to buff and so it just works better for me.

I just say it as it is and and pray the other person doesn't take advantage of it. Awesome. Yeah. Uh Warren Buffett likes to say when the tide goes out, you see goo is swimming with no swim trunks and sometimes like in an economy like this you look over and you know person's different gender and they're standing on stilts the last 10 years right they they're super overleveraged their business doesn't even exist you know uh so we're seeing a lot of that and I think it uh people that can make it through multiple downturns uh are the ones who it obviously builds trust right so um so what would get your attention then like let's say someone wants to work with you and approaching someone like you of your caliber and they don't have a lot to stand on.

They don't have a huge fit. Do they just lean into how unique and valuable their idea is and find a way to add value to your f to you first or what gets your attention when someone approaches you relatively cold and they don't have a big balance sheet behind them or big track record. Uh I I you know we didn't have a good balance sheet the big fat liquid when we started right so is is are they willing to work right because the your biggest asset is good is your brain all right and and your heads and if you have those two things the rest will work it could work itself out so um I don't know maybe you had a more specific question in that um no I think that's it there yeah um Paul Hutchinson and uh was the producer of The Sound of Freedom. He spoke at a couple of our events.

He saved over 6,000 children from human slavery. And um when he spoke on stage, he said he had raised $10 billion for real estate, but the most valuable real estate in the world is the 6 in between your ears, right? And you said the most valuable thing is like you're working hard. It's your mental capacity. Uh when it comes to your own mental models and strategies that right now are helping you make big progress in AI which is a little bit uncharted for a lot of business owners um and help you keep your money and invest your money.

What would you say about either managing mental state or mental models that might help those here at a big question? Um I like what you said earlier about the weights. Um and and you know with AI um I think I I would look at AI like it's it's not it's not a wave it's an ocean and there are a lot of waves on that ocean and I see people right now chasing specific waves on the ocean right and similarly during the com era people chase decoys and this and that those are waves on the bigger ocean of internet and that was the way anywhere those stayed true to what is technology, where in my head it went with technology, they they did well. They survived the the do uh downturn.

So, I think it's the same thing with AI. If you if you focus on the fundamental, what does it what does it really do? What does it does it do? And uh and you build a product that's looking at the long-term vision um and you and you run it, you manage it. U you know, you got to can't ignore the waves.

And if you can catch one of the waves early, uh it'll give take you on for a nice to have some fun, right? But but you still hopefully you get deeper into the ocean. Yeah. This these are way that you want to get deep burning. You want to get get a broader reach, right? That's a way.

Right. Right. Yeah. Got it. And uh I saw recently that um your AI portfolio was valued over hundred billion dollars. Um, how much of that do you worry about having patents in place?

How much of that is protected by patents to patents don't apply in many cases or for sure do when it comes to AI? Um, it's something I'm personally curious that your take on Yeah, that that was a third party valuation of specifically our patents. Okay. So yeah, so but they haven't we haven't actually valued the actual business uh intellectual pocket after and then along the way with the AI development or with the mortgage company was there one strategic asset or choke point that like once your father acquired that asset you grew nationally or once you acquired a strategic asset it gave you such massive distribution that everything exploded or something that your AI business you could comment on related that uh the most important strategic asset we acquired was mindset.

So going from the mindset of a um small um local company and to a mindset of you know we need to take this dash we can do something a little bit big with this um and and it was literally was just you flip that mindset and and you believe it and say this is what we're going to not we're going to do we we are this and we will accomplish this that that's that's and all. So if we uh if we try to make it more tangible, did that mean an action that like some of the first actions from that was like okay, we need to figure out how to franchise locations or we need to bring on a full executive seuite or we need to get institutional investor like what what were some of the couple of actions that drove that uh that resulted from that change in mindset? Um was starting the marketing, investing in nationwide marketing uh and instead of and taking a risk hence uh uh dad was very old school, right?

And you you spend if you spend a dollar, you got to be 100% sure you're going to make 100, right? Right. Um and they you know, really old school. Um, and and that that builds a stable business, but doesn't scale a business. I like, okay, maybe maybe let's spend $100 and make $100. Maybe if we break even, we're going to be okay.

Let's try it. But we're going to we're going to expand spend our perspective, right? So, um, and thankfully he he he liked he liked that aggressive um bits more risk takingaking approach. Um, and he says, "Okay, well, you you do it and you're young enough to handle it. Take you're young enough to handle the D." He's like, "I'm not going to do it because I have to train up on that side."

But that's back when he was just a little bit older than me. So, um, uh, than I am right now. So, um uh it's like why I got lost my thoughts. What was No, it makes sense. Yeah, that but yeah, in my experience, like sometimes you might um spend that $100, whatever the amount of money is, and it might make up five experiments.

And so, it's like, oh, well, you broke even or you lost 5%, but out of those five experiments, two worked really well, three you'll never do again, and now you do five more actions, and only three of them are risky and just goes from there, right? Um, looking back to what you know works now though, when you look at how you've developed these AI solutions that are massively valued now, and when you look at the mortgage company, what would you tell your younger yourself or what would you tell people here that maybe are in the first half of their career that think and um that would make make things go faster that you wish you knew 20 years ago? Um, yeah, I say this all the time. I mean, I would tell my younger self, listen to yourself.

Um, and there's like the stuff that I was thinking about it doing was univers back in the 80s. Um, and there was a lot of doubt, right? Because you see other companies doing doing things differently. Be like, well, they're a big company. They're doing all this way bigger mortgage companies and banks doing all the things. And and you start questioning whether you're on the right track or not.

And and all I did in the end was to slow it down. Like I mean I going to finished where I have right now you know decades earlier and I'd stay the horse as opposed to um cheesec that someone previous to rates that makes sense we and then just so everyone knows exactly the core of your AI technology is it around uh vetting borrowers is it around is it helping lenders automate processes is it it's probably doing hundred things uh because automating things but can you explain like the core of it just so everyone gets an idea Is there some way to help you or or for you to have them use your software etc? Uh yeah. So I'll I'll start with a little bit of history about it.

Um like this uh what could never have been built beside a uh public company because it took so long to build diamonds. Uh it was done in sections and done in parts. Um and most public companies would have um would have looked at looked at the balance sheet or looked at the department said well this is costing us too much right cut that especially when times can lead uh and you know the public industries it's the good times or bad times very typical uh so um the so what we so over the decades we developed it we we developed decisioning right uh decisioning technology for different parts of it And then it all combined and grew together, right? So we kept adding them on and then they it it got to a point uh it completed in 2019 where all of this came together and worked as one cohesive engine.

Okay. And and along with a a conversational interface um you know in 2019 it was chatting to you 1 1.0. Um so we we had a conversational engine um and it wasn't good enough at that time to be used by consumers right u so but it was good enough to be used by our internal staff so so we had our internal sales team and and supports team using the conversational engine um to get immediate answers on very complex decisions that would normally take uh veteran expense currently do it very expensive. Uh and then from there uh where we are today is now a fully conversational um um interface with consumers or anybody in the industry uh for mortgage banking um or credit repair or insurance or you know any any at this point with the foundational model completed we could add uh and we are adding the full spectrum of uh financial services uh including you know prepare your tax returns uh you know like when you get a mortgage right um you know the word mortgage is you know it's a life contract mortgage mortgage is life and gauge is contract so you you're you're at the closing table you you're young family just got your first house at the closing table you sign a life contract but uh should that be the right time for you to do a will and and set up the your trust right that doesn't happen but now with now the AI will be able to suggest that to you and offer those those three additional services um and and take those take those contracts take take your future wealth planning and estate planning right and save it on chain inside the angel wallet that's um part of the the platform.

So, so with that step by step as we we start off with your biggest financial investment and we provide ecosystem for the um the rest of your financial life and all that information stored in a single onchain wallet, right? Which then all that data combines together and it becomes your personal AI too. So, so the the ultimate goal is for every single human being on the planet to have their own own Jarvis. Got it.

So, there's a part of you on like, oh, we use this to analyze someone and look at their credit score. It's like not like one single function tool. It's not even a collection of tools. It's really creating that um relationship point so that you are kind of at the center of their financial world and helping them with navigating legal, tax, planning, etc.

So, awesome. Um, what would you say is the number one mistake that you see investors and founders make all of the time? And we talked about not thinking big enough. Talked about not listening to yourself enough or having confident your confidence in your own vision. But what else would you say is like a really big mistake you see people that are struggling to scale are making.

Yeah. I mean it's it goes back to what you're saying about JC Wakes. Um and and you you have to it's like like I'm an engineer. So in engineering the good engineers start with the foundation like they have really good foundational understanding of about mathematics and physics um and aren't chasing the latest trend in coding for whatever right um and I think the same thing apping business like if you have a good solid understanding of the business you're investing in right you you you know just like in in trading you you can never time sell at the top or or buy at the bottom.

You can never time that right. Right. But if you if you understand the fundamentals of the market that you're trading, right? And you and you decide whether you're in or you're out and these are long-term plays and if you if you can and if you have patient capital and you can and you have that you can take a long-term position and and stick with it.

And if you you miss away, if you lose some money and time wrong, you know, my best advice is is if you believe in the fundamentals, stay with it. Right. Yeah. Makes sense. In uh Howard Mark uh the billionaire founder of Oak Tree Capital in his book um the most important thing he says that even as a multi-billionaire hedge fund manager he doesn't try to predict the future and you see people going around trying to say oh I predicted every crash this what's going to happen next right but he doesn't have the hubris to do that he said but you should be able to hang your head out the window of the car and kind of see what direction things are swinging at least get a general like idea all right it looks like a swell coming wrong but this is where seems like we're going um what else would be you know Today's topic is family office formula.

You know, how do family office level ultra-wealthy investors think, grow their business, protect their business, uh focus their energy? What else would be a unique strategy that we have not talked about at all yet in this interview? I didn't want to share with the room. Uh unique strategy I'm not sure like negotiation strategy or scaling strategy. Um I just tell you what I do.

Sure. About that. I mean, I love real estate. Um, I think it's uh this consistent predictable one returns. Um, and if you have a big enough real estate and across the uh diverse idea, you're going to going to always always do great. Um, and and uh in in fixed income, there's there's so many ways to make money at fixed income, but you got to dig in you got to dig in deep thought on that and really understand that.

Don't just buy bond just because of his AAA rating or something. I so many people um I I I know of a trader who who who did a carry trade between two AAA or double A bonds. One had a higher yield, one had a lower yield, right? And say, well, they both double A. Well, wait a minute.

There's a reason one has a higher yield, one has a lower, right? You got go to the fundamentals, right? So, uh, there's some amazing quick fix strategies out there because, uh, and arbitrage because so many traders and to this day still just trade on the on the rating and not look at the look at what's underneath. Right.

Right. Um, and and then of course in in tech, uh, I think the the great opportunities in tech are um, uh, there's a there's this huge arbitrage because there's a lot of startups out there with great ideas, great tech, but they can't get funded. Right. It's massive opportunity to make money. So if you have cash and and you can and and you understand technology, you're willing to be patient with it, this just should be just buying up Star Wars, right?

And makes sense. Great. Um, any last words before we end on um, ways to help you, ways to keep you in mind if someone's connected to a large company looking for AI living solutions or it could be strategically helpful to you or if you're looking for something super specific like data center investments in Texas or something like that like any last words on on keeping in touch with you being helpful to you? Yeah, just follow me on Instagram.

Um just by name_i u or um they can be on LinkedIn um and uh you know just any I mean I look to meet and talk to whatever you're doing um and I think if I could make you know there's about 40 people here if I can make 40 friends it's would be success a very successful day it doesn't matter if we if we do a trade together now great thank you. Um, let's give a big round of applause.