Is Now the Time to Refinance Your Loans? – Episode 59

Student loans, practice loans, real estate loans. Dentists and debt go together like presidential elections and economic uncertainty. With speculation of rising interest rates, many are wondering if now is the right time to borrow money or refinance existing loans. In this episode of Dentist Money™, Reese welcomes Wells Fargo practice finance expert, Kent Murphy, who lists a number of factors to consider when shopping the lender market. He explains how low-interest rates often lure people into bad loans and shares common factors dentists overlook before signing on the dotted line.

Show notes:
Kenton.Murphy@wellsfargo.com
practicefinance.wellsfargo.com/dentists/

What Dentist Can learn From John Elway about investing (article)

Podcast Transcription:

Reese Harper: Welcome to the Dentist Money Show. I am your host, Reese Harper. We are here in the studio with a special guest today who has just flown in from his high rise tower in Denver, Colorado. Mr. Kent Murphy, how are you doing?

Kent Murphy: I’m doing great!

Reese Harper: Kent is a manager at Well’s, and I have known him for awhile. He is one of my favorite people in the lending industry. He has a good temperament. I love the way he treats people. I think you have been at Well’s since 94’ or earlier?

Kent Murphy: Twenty eight years!

Reese Harper: That’s a long time, man. That is a couple of careers for these young millennial who swap jobs every few years!

Kent Murphy: I’ve been there a long time, but I’ve done a lot of different jobs inside of Well’s Fargo.

Reese Harper: We will let you give a little bit of background on yourself before we jump right in. Tell us about what brought you into the industry and your career evolution.

Kent Murphy: I started with Well’s after college. I spent most of my career in auto and mortgage lending. Five years ago I had the opportunity to come and work for Wells Fargo Practice Finance, it is a great business unit inside Well’s Fargo business banking. It has really been fun to learn about a new industry and help doctors succeed.

Reese Harper: That’s awesome. The political climate has changed, the stock market is moving a lot right now, interest rates have shifted a bunch. I think people are probably wondering about your perspective on interest rates and how that is going to affect financing over the next year.

Kent Murphy: Yes, as I mentioned, I have been with Well’s twenty eight years. No one has ever seen an interest rate environment like we have had in 2015 and 2016. They were so low and flat for so long. Since the election, rates have really jumped up, probably fifty to seventy five basis points since the election. That is all on anticipation of the Trump agenda of cutting taxes and regulatory reform and making it better for businesses. It has been a really incredible run since the election on the interest rate front.

Reese Harper: How does that affect the doctor’s ability to borrow? Does that affect them at all or the size of loan they can qualify for? How would that affect their decisions?

Kent Murphy: You know, rates are still at historic lows. I think if you have only been in business the last few years and you are used to this ultra low environment, rates are still super low. I think that you are going to be able to borrow money and it is not going to affect your cash flow, but rates are going up. The federal reserve is saying they will raise rates three times in 2017. Their goal is to get us back to a more normalized rate environment, but rates were 6-7% four years ago, and now they are still in the 4% range. It is still a great time to borrow and re amortize your debt and things like that to make your cash flow stronger in your practice.

Reese Harper: Do you get different personalities that call in that make the job easier or harder? What is it like to work with different doctors? Ever bump into someone who is just tough to work with? What makes a good customer?

Kent Murphy: Everybody is fun to work with quite frankly. Doctors, they know what they want, they are obviously educated and they’re trying to be small business owners which takes a lot of guts and you have really got to have that entrepreneurial gene, a fire in the belly to go out and market, and I admire that. Doctors are pretty fun to work with. You have got to admire what they are taking on out there in the business world, it is a challenge. I like all kinds. The biggest job that I have is, everyone can understand 4.5% is higher than 4.25%, but as you are going to pick someone to partner with there is more to the criteria that is important. I’m always encouraging them to expand their horizons because there is a lot more than an interest rate calculation.

Reese Harper: Totally. I don’t think people understand that quite as much and it might be interesting to hit on a few of those items really quick. I noticed this yesterday. We were doing some analysis on a repayment for a client trying to figure out how he could increase his cash flow towards debt and how much he should pay off. We have a power of attorney that let’s us go to the attorney and get amortization schedules to analyze things. We get back this Am. schedule that was spit out of a system that we couldn’t even understand what the doctor had. The customer service rep on the phone didn’t understand what was coming out of their system either. They couldn’t give us a re casted amortization schedule over the remaining period of the loan. They didn’t know how to generate that. We got a balance from eight months ago. They just couldn’t give us good data. It surprised me. Sometimes when I have a smaller community bank that maybe underwrote a loan on their own books, it is tough for me to understand how interest is being calculated. You would think that is an easy thing to figure out. Five years ago I would have never thought that was a problem, I just assumed go with the lowest interest rate. There are a host of other things we will go into about what is different, but that one area for me was kind of an eye opener. Where I can’t even get accurate information to recast my loan or understand what I really have with that bank. I don’t know if that resonates with you at all.

Kent Murphy: Yes, it does because sometimes I work with doctors where they come maybe to do a refinance or they want to do another project and they really don’t even understand the loan that they have. The bank or the banker they were working with didn’t understand the product themselves to put the doctor with the right product. The way we approach lending, and the way all specialty lenders approach dental lending, is that you want a customized loan product for that dentists needs. Sometimes when you are a small local or regional bank that isn’t a dental specific lender they have got a product and that is what they give to the dentist rather than customizing a product to meet the dentists needs.

Reese Harper: Ya, they didn’t build a product around the industry, they just sold the industry a product they had off the shelf.

Kent Murphy: Yes, absolutely. That happens all the time and sometimes you will get someone that comes to you and they are having an issue and they want to do another project, but they don’t understand what they signed. For example, I was working with a doctor the other day that had a real estate loan combined with their practice loan. That is a really poor way to set up your financing because every time you want to add technology or do another project you have to refinance your real estate, go through our appraisal, and your whole process. I am a huge believer in separating that debt. Lot’s of doctors get put into a product where their real estate debt and practice debt are combined and it is super cumbersome for them to do future lending and almost every doctor will need to do future lending! They will need to add technology or space and to be encumbered by a combined loan is a great challenge.

Reese Harper: A lot of people probably don’t realize how much that affects financial planning either. When we look at someone’s income we want to try to get their savings rate higher and we want to get their debt rate lower. The percentage of their income that goes towards debt and that goes towards savings. We want to make sure that those are at the right places. If all of your financing is budgeted into one large loan you can’t chip away at that in a meaningful way. You can’t knock out a small component and see your cash flow drop off. You can’t pay off the equipment and see your cash flow improve. You’ve just got this large million plus loan that is amortizing together. The real estate and practice debt and you don’t see relief on your debt to income ratio for what could be fifteen plus years. It makes it hard to do good financial planning when you have to eliminate all of your debt before you can even start building retirement assets.

Kent Murphy: Absolutely.

Reese Harper: Talk to me about what other things differentiate lenders. It isn’t just the interest rate. What are some other factors that go into selecting the right product for the right situation?

Kent Murphy: You know, I think things to look at are the pre payment structure. Is it flexible or does it really handcuff you. How does the funding work? Are you able to get the money? The other thing that happens sometimes is that you go to a bank and it is very hard to get the loan at all if you are with a bank that doesn’t understand your industry and understand dental. Those are things to really look for.

Reese Harper: Let’s hit those just for a second. Can we talk about pre payment penalty? What are different types of prepayment penalties that you see out there? Let’s talk about how to interpret that a little bit.

Kent Murphy: So typically if a prepayment penalty is on a loan you will get a lower rate. Sometimes I will be on the phone with a doctor and they will say, “I don’t want a prepayment penalty.” Well, if you are not going to pay the loan off early and you’ve got some flexibility to pay the principal, why wouldn’t you want to take the lower rate? There are some advisors and CPA’s who say don’t take a prepayment penalty. Well, if you are doing a start up and you are going to have a five year pre payment penalty and the structure allows you to pay extra but you can’t pay it completely off and you are never going to pay it off in five years why wouldn’t you want to take the lower rate?

Reese Harper: That is a great point. A prepayment penalty or any type of prepayment doesn’t necessarily mean that you can’t reduce the loan balance, correct?

Kent Murphy: Correct.

Reese Harper: I think that sometimes people interpret a prepayment penalty as the same as if I pay any of that loan down then I get that penalty against my cash flow. It is just if you pay the whole thing off or you have to re-finance it right? If I’m a bank. I’ve got two choices. I can charge a higher interest rate with no prepayment penalty or charge the prepayment penalty to make sure that if they do refinance I get my interest and then have a lower rate. You can take a lower rate with a pre payment or you can take a higher rate without a prepayment.

Kent Murphy: That is a really good point and now that we are in a rising rate environment, if you have got a low rate loan with a prepayment penalty but you can’t borrow money at that rate anymore your motivation to pay that loan off now is much less right? It is a rising rate environment. In the last three or four years we have been at a declining rate environment. That pre payment options you are going to want to really investigate and make sure you know what your path is with that debt. But now in a rising rate environment, I say lock in the lowest rate for the longest time that you can and if you have the flexibility to pay extra and reduce your interest costs that’s the best of all worlds.
Reese Harper: That is a good thing to take away from this brief segment. When you start doing financial planning and thinking about how to reduce your debt, as long as that pre payment penalty isn’t super extensive, if it is a twenty year loan and you have a twenty year pre payment or a five or three year or seven year pre payment agreement, as long as you are not going to refinance that loan over that five to seven year period it might be worth having that penalty on the loan just to reduce your interest expense. That is not an egregious, in my opinion, coming from someone who is not a lender, but I don’t mind seeing prepayment penalties loans because it usually benefits the doctor that does good planning. If they stick around and know that they can plan for five years to reduce their principal but not refinance the whole thing than the prepayments typically benefit the doctors that do good planning. They hurt the doctors who are just trigger happy and refinance every couple of years when they find a lower interest rate. It is not always a negative thing but you do hear that quite a bit. I won’t dive in any more. Let’s talk about the second thing you said. How long will it take to get funding done? Or the speed at which you can get funding. Talk to us about timing between bank to bank.

Kent Murphy: If you’ve got a bank that’s a specialty lender and can get the loan done in a timely manner versus someone who doesn’t, let’s say you are doing an acquisition and there are multiple buyers and you are trying to go through a local or community bank that doesn’t have a dental program and they can’t get the loan done on time, you might miss out on that practice. For example, a land loan, or anything that is time sensitive. I have had doctors that have called me that have been with a bank three or four or five months and still are not funded. That time frame is just too long for most of the transactions that a doctor is going to run into. They have to make decisions and move forward.

Reese Harper: Do you have any horror stories you’ve seen where that is the case with timing? I have seen a lot of situations where that is really a big problem. People underestimate it. One of the big pain points in seeing finance done is to see it done in a timely fashion. Have you had experience with that?

Kent Murphy: I was introduced to a doctor in August that had been with another lender.They were trying to do a ground up construction. They had a time frame on the land. They had to buy the land by, I think it was November first, and they had been with another bank since April. They still weren’t done and had been turned down once, revived in underwriting, and still weren’t approved after five months. The architect calls me and gets me involved to help. We literally had the loan approved, it was a four million dollar ground up construction with land and working capital in a little over two weeks. That is pretty fast. It was a little bit unusual but time is of the essence because if they didn’t know if they had financing they were going to lose their escrow money on the land! You’ve got to be with someone that can perform in a timely manner. That is really, really important especially on acquisitions or real estate deals where you have got sellers that have time frames that you need to meet.

Reese Harper: That is great insight. What about the amortization schedule that people pick. You mentioned cash flow. Do you think sometimes people opt for lower rates at the expense of having maybe better cash flow?

Kent Murphy: Ya, you see that a lot on equipment loans because vendors make it really easy to buy equipment and typically those are on three to five year terms. The rates usually a little bit higher. Three to five year term but it is really easy to buy equipment from a vendor. A specialty lender will always have a ten year term. So if you are just looking at pure equipment does it make sense to do it on a five year at 6% or a ten year at 4.5% and free up cash flow so maybe you can have more technology and grow revenue faster?

Reese Harper: Ya.

Kent Murphy: Equipment they do a great job, the vendors do, of getting you approved and delivering the equipment. Sometimes however, a ten year amortization is better for you on that equipment than a five year.

Reese Harper: If you were to give someone advice on which loan term to pick, how do you give advice? They probably say, “I don’t know which one, what do you think?”

Kent Murphy: A couple things to consider. When you are in a rising rate environment you should get the longest amortization that you can lock the rate for the full term of the loan. On a real estate loan, for example, a lot of banks will offer a twenty year amortization but the rate is only fixed for seven or ten years. If you can find another bank that offers you a twenty year fixed rate and maybe the rate is slightly higher, you are much better off. That rate is locked in for twenty years in a rising rate environment vs. it is locked for ten, but your payments are amortized on twenty. Then at then end of two years your rate is invariably going to be higher. In those cases, on real estate, my advice is always lock in your rate for as long as possible. That is where sometimes doctors get mislead because they know 3% is better than 4% but the 4% is fixed for twenty and the 3% for seven, than the 4% is so much better.

Reese Harper: It seems like that is a pretty big eye opener, in my experience, a lot of people don’t understand. They might understand but they skim over the details not realizing they have a balloon waiting on the other end.

Kent Murphy: Ya, I was working with a doctor the other day who was super slow to get me the documents. Finally he emailed me and said, “I am going with another bank at 4.75%”. I asked how long is it fixed for and amortized. He said it was fixed for ten and amortized for twenty. We had offered him 5% fixed for 25 years and really he thought the 4.75% rate was better than the 5% that was fixed for 25 years.

Reese Harper: He just didn’t understand the period of that rate lock.

Kent Murphy: Yes, for sure. I mean that’s not even close. That’s like the Denver Broncos playing their junior high football team, right?

Reese Harper: What about those Bronco’s huh? I just wrote an article in Dental Economics about John Elway, about an investment he made. I won’t got into that. I love John Elway, but this was a story where we used his experience as a teaching tool. Wasn’t a real positive experience. ESPN, however, reported on an investment experience he has had over the last fifteen years and it was interesting and we found some of the facts that we thought might not quite be accurate. I am going to check it out. I am a big Bronco’s fan, I know you are too. It’s been a tough year for us.

Kent Murphy: Ya, it was a tough year.

Reese Harper: Let’s talk a little bit about when it makes sense to re-cast debt or re amortize debt.

Kent Murphy: That is a great question. It makes a lot of sense when you can add technology to grow your practice. For example, I helped a doctor that had practice debt from four or five years ago, obviously rate higher, and had three or four equipment loans. Those equipment loans are on five years. We were able to take all of that debt and he only had six or seven years left on his practice loan. We re-amortized it all to ten and freed up enough cash flow that he could add a cone beam to his practice, which will drive more revenue. To me, I think that growing revenue solves almost all problems.

Reese Harper: Ya.

Kent Murphy: If you can invest in technology and grow revenue, I think that is when it makes sense to re-amortize debt. I grew up in North Dakota, if you have debt, pay it to zero mentality, but sometimes it makes sense to take that debt, lower your rate, and re-amortize to make your cash flow stronger so you can do something else.

Reese Harper: Yes, put some money to marketing or whatever.

Kent Murphy: Hire that associate you have been dying to hire, whatever it is to grow sales and grow revenue. The principle here is if I am at a 3% rate, and I’ve only got five years left I probably don’t want to refinance over ten at a 9% rate. I don’t want to increase my interest rate a ton and re-cast my debt, but even if I increase my interest rate slightly, but it allowed me to make important investments in my practice…could be worth it.

Reese Harper: What you have to remember is that lending and debt, in my opinion, is just a tool that you have to use in the practice. It is not minimize interest expense to optimize your retirement. It doesn’t work that way. Just minimizing your interest expense every year doesn’t make you a better manager. What makes you a better manager, or practice owner, is appropriately compensating your staff, having the right team, having the right amount of investment into your own retirement savings, reducing your debt in methodical ways and eventually getting out of debt and having a plan for how you are going to do that. I think what happens frequently is that people segment or compartmentalize all of this stuff and they say, “if I get my interest rates lower and pay off my debt, then I’ll finally be free.” Student loans and kids getting out of school, this happens all of the time. Doctors get out of school, get a practice, obsess over their student loans for two or three years, and they think about virtually nothing else. It is really much bigger than that. If you are a public company and you are starting a normal business you have debt on your balance sheet your entire life. That is just part of the tool set you use. If you don’t have any debt it slows your growth down, it actually makes you less efficient. Investors don’t like investing in companies that don’t have debt. It shows that they haven’t thoughtfully decided on where to put the money. They don’t have investment plans or a growth strategy. I don’t know, it is good to think about that a little bit and question your paradigm. Do you have any thoughts on that?

Kent Murphy: Yes, just as an example, this week we have a doctor that is absolutely ready to do ground up construction. He has the land available, and can move forward right now with land costs being lower, and unfortunately because he had been so obsessed about paying his student loans off he put every extra dollar into paying off his student loans. Unfortunately, he now has no liquidity. When you are going into a project, particularly a real estate project, liquidity is king.

Reese Harper: Ya, if you have zero liquidity and the lender is looking at you, you are toast.

Kent Murphy: You won’t get a loan! So this doctor actually paid $250,000 to zero over the last couple of years and has zero liquidity. He would get a loan easily from Wells Fargo, or really, any other competent lender if he had the $250,000 student loan debt and $100,000 in a bank. A bank wants to see liquidity. If you are thinking about real estate, particularly ground up construction, liquidity is hugely important. Don’t get crazy paying down low rate student loan debts, at the expense of not having liquidity.

Reese Harper: You know what we see typically is at the the expense… You are going to pay off your student loans eventually ok? You will be debt free and it will be great and you will retire early if you do this all in the right order. If you obsess over debt reduction what happens in those early years you end up missing out on other opportunities that you could have taken advantage of. It could have been real estate ownership. It could have been properly funding retirement plans and lowering your taxes, it could be having adequate liquidity that would have helped you take advantage of hiring the right office manager, or bringing on the right associate. You had a one month window to hire that associate and it closes. You don’t get to hire them when you want to, you have to hire them when they are available and it might be a bit before you are ready. It might be a little too late. Having liquidity allows you as a business owner to make wise choices and you just can’t do that if early on in your career you have tapped your liquidity entirely. Like you said, the hard part about that is that you have got to applaud that effort right? I mean the $250,000 student loan payoff doctor that did that in the first few years, good for him! He had the discipline to do something. The problem is that he didn’t realize that that would limit his options moving forward. He would have thought the bank will be clapping for me that I was able to show such discipline that I can eliminate $250,000 of debt. That is not how banks work, especially after Dod Frank and all of the lending requirements have been changed. It is not easy to get a loan without liquidity.

Kent Murphy: Ya, that is absolutely right. You are right, the intention was great. The result was not what he had expected. If your student loans are at a reasonable rate, I don’t know that there is much of a scenario that I would recommend paying extra on those. Especially if it is at the expense of all of these other opportunities you may come across your path.

Reese Harper: I guess, when you talk about the specialty lender concept, you’ve said that a few times, clarify the difference between a practice specific lender, dental specific lender, and a more generic lender. What is the difference and how does that play out for the dentist?

Kent Murphy: Some of the big differences are certainly how the underwriting works. A specialty lender will underwrite based on really two criteria: credit and cash flow. If you have good credit, which is really important, keep it as high as possible. The loan cash flow you will almost always get approval from a specialty lender. A specialty lender is also a lender who understands your industry and will be able to approve deals in a timely fashion or give you good advice in a timely fashion. A specialty lender will also be able to introduce you to other partners that will help your project. That could be an expansion or a ground up project from an acquisition, an architect, or a contractor. People that will help that transaction along. That is what a specialty lender does and they will customize a loan product for you. There is nothing wrong with local or regional banks, they serve a great purpose, but they are a one size fits all and they have their product and they will give it to you rather than a product that fits your specific needs as a dentist. The other thing that happens with a local or regional bank without a specialty lender component is that they may require personal assets or co-signer, or cash down, or things that a specialty lender typically would not.

Reese Harper: Talk to me a little bit about what your thoughts are on commercial real estate and owning property as a dentist. You know, do I lease? Do I buy? What are your thoughts on commercial real estate and how that plays out into their practice.

Kent Murphy: I am an absolute evangelist for doctors owning their commercial real estate. In the markets that I serve, typical lease rent is $6,000 a month. If you have an opportunity to buy the building you are in that is a million dollars over ten years so to me there is nothing a doctor can do that will benefit them more personally and business financially than to own your own property. Now, that is not always possible and I don’t want to say that is the only way to be successful, but if you have that opportunity to pay yourself rent then that is a great thing to try to do.

Reese Harper: That is good insight. What would you say to somebody who moves to a different location just because they can own it. Do you ever see that? Someone is so focused on ownership that at times they put their practice in a less than optimal area.

Kent Murphy: Ya, well, you would never want to pick a less marketable area for your practice, right? You only want to move to enhance revenue. Our data from 25 years of dental lending shows that when a practice remodels, relocates, or refurbishes, revenue goes up 15-20% after that doctor moves or re does their practice. Sometimes you can just stay in place and remodel and sometimes moving to a better location, but the numbers tell us that revenue goes up when you put money into your practice.

Reese Harper: Interesting. If you had to look back over your experience with working with dentists what are mistakes that really stand out to you. Maybe give us some of the big mistakes when it comes to lending. We might have hit some of them, but I just wanted to see what comes up.

Kent Murphy: I think the biggest mistake is being too focused on the interest rate and not on all the other parts of the loan. It might be fees, prepayment penalty, structure, etc. That is probably the biggest mistake doctors make. Then I think that at least have a specialty lender in the banks that you are talking to. You should have more questions than just what is the interest rate and how long is the term. How does the funding work? For example, I was just working with a doctor the other day that had been with a bank and they wanted to do an expansion loan. It was actually a large expansion loan about a million dollars. They had been with a local bank for their entire career and they had done a great job for these doctors. They had done a great job too, so no knock on them. But with this expansion loan, the doctors wanted to move into a building and get it done in 9-12 months. The other bank wanted to fund that whole million dollars up front right? So they start making the full payment and the full cost of the loan before the building is even occupied. Specialty lending makes you do project lending where you draw the project down and then you make the first payment 30 days after you have been in the business. Just the pressure of having to pay that right up is a big difference.

Reese Harper: Do you think people realize that’s how it is calculated? I would imagine that is a rather nuanced area of underwriting right?

Kent Murphy: Right. Funding is probably the biggest thing where I see doctors get into trouble where the funding either runs out or something that any bank should be 100% concerned about is, “are we going to get to the finish line?” Because if the project is 80% done and the bank has no more money and the doctor has no more money than that is a horrible situation to put somebody in and everyone is pointing their finger at the contractor or architect like how did we end up short? That is something that we never want to have a doctor go through. I have seen that happen. It is something you want to avoid at all costs.

Reese Harper: That is good insight. If I have picked a lower interest rate but my interest starts capitalizing on the entire loan balance day one, maybe in those first six months of funding my project I have just burned up the whole difference in that interest rate spread. Keep that in mind, some lenders when they do funding they are one charging you interest on the money you withdraw during building versus capitalizing on the whole thing. This might be outside your scope a little bit but tell me something that I just want to respond with what comes to first or top of the mind as we wrap up. That is if you had three pieces of financial advice about anything. This is the dentist money show. We like to get feedback from people on that there financial tips are. Even though you might not consider yourself a finance expert, I do. You know twenty or thirty times more than the average person about finance. What is the top of mind financial advice you would give out.

Kent Murphy: I will say always have competition when you are looking at lending. Have a couple of banks that you are working with and have them explain their product to you and understand it. Invest in your practice. I agree with you, I think having debt is the way to grow revenue . The only doctors we see get in trouble are the doctors that don’t grow. If you are growing and increasing revenue than you will have lots of options both to borrow money and enhance your practice and your own personal lifestyle. And if you have got an opportunity to upgrade your space, even if it is just going to a better lease location, certainly if you have the opportunity to buy and pay yourself rent than that is going to be huge. Just about in any scenario that is a million dollar benefit to you if you own your own space.

Reese Harper: That is good insight. How do different markets vary? Is there a difference between what I should expect in the East coast? I’m headed to Boston tomorrow morning. Is there a difference in what I should expect there from my practice and form a lending perspective? What are different markets like?

Kent Murphy: I mean, I think it is an awful lot tougher to own real estate in Boston or Manhattan than it is in Kansas or Colorado. I mean, sometimes you are just dealt the cards you were dealt with where your location is. But I just encourage doctors to explore that option. It is very easy to get a real estate loan on a twenty or twenty five year fixed rate that is essentially a rent replacement. So if your payment to the bank to own the property is the same as you pay to your landlord, why make your landlord rich?

Reese Harper: Tell me one other quick question, if we went outside of lending. This is where it is asking you to get a little bit creative with this financial question. What financial advice do you see that has worked with you in your life that may not have to do with lending. Three good pieces of advice.

Kent; Absolutely, you start saving and putting into your retirement as soon as you possibly can. Like, from day one of your career. That makes a huge difference in your financial well being.

Reese Harper: Have you seen that benefit you?

Kent Murphy: Absolutely, I have been with Wells, and I have had somebody help me, but yes. Take advantage of your 401 k, just invest in yourself and your retirement as early as you can. That is the best thing that anybody can do for themselves as they approach retirement age.

Reese Harper: Anything else that comes to mind, or financial tip, or avoid this, or this has worked for me or do this? Maybe something that is in your mind from great granddad or a few generations ago?

Kent Murphy: You know? I think it is really important to work with reputable people, right? You know, go to the people in the market and in lending that have a reputation that they will stand behind.

Reese Harper: Ok, working with reputable people is a good thing that people can take away that has been helpful. Outside of lending do you think that applies as well?

Kent Murphy: Absolutely. Everybody that I refer a doctor to has two things: expertise and integrity. If you have got that with the people you are working with in any part of your life you will be well served. I think those are the two most important things I look for to when I pick partners.

Reese Harper: This has been a great interview. We have covered so much. It has been a great interview. Anything you would like to end with or parting thoughts?

Kent Murphy: You know, I would just encourage to have a specialty lender in your portfolio for you own projects. I think that is the eye opening. Wells Fargo is not the only one, there are a lot of good ones out there. I think that is where you will get the best advice, structure, and best assistance as you move forward with any type of project.

Reese Harper: Well Kent, thanks for flying in, man. It is always good to see you face to face and keep up all the good work! Everyone that I know that has had a chance to interact with you always felt like you give them great objective feedback and advice. Make sure and look out for them. I appreciate that. Good luck with everything happening and we will catch you again soon , man.

Kent Murphy: Thanks a lot Reese, appreciate this opportunity.

Reese Harper: Thanks!

Debt & Financing