Mexican Move

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Jeff Seabold ran into difficulties while trying to property in Mexico last year, so he decided to create a new arm of his company to help Americans facing similar problems in Mexico. After all, he had real estate experience dating back to the late 1990s when he left Countrywide Home Loans Inc. after eight years to form his own mortgage banking firm, CS Financial. Seabold’s Beverly Hills-firm originated about $1.7 billion in home loans last year and has around 75 loan officers. Meanwhile, the new CS Financial Mexico boasts it is the first company to offer across-the-border construction loans to individual U.S. citizens, a service it started in July. The company began offering cross-border financing in Mexico in late 2005 and has bilingual loan officers to assist non-Spanish speakers. Seabold, 39, estimates that his fledgling Mexican operation could grow into a $1 billion business, originating $25 million in construction loans by year’s end.



Question: So what sparked CS Financial Mexico?


Answer:

I was in Mexico looking at property in Cabo San Lucas for myself in October of 2005, and I realized there was no financing down there everything is done with cash. I thought: what a great opportunity if you could find financing around there. I knew I could even use it for myself. By sheer coincidence, GE Capital was rolling out a pilot program to do loans in Mexico for Americans. They asked us if we wanted to be a (partner in) that pilot and I said sure. The more I went down there and got involved, the more we got excited about the opportunity.



Q: Do you speak any Spanish?


A:

I don’t. Well, I speak a little bit. I have several guys that work for me who are from Mexico originally and they do the front-line heavy lifting. We have guys on the ground down there.



Q: Do you vacation in Mexico?


A:

My wife Lia and I like the area. It’s a short flight. We like Cabo; it’s grown a lot over the years. I like the desert climate. It’s basically Palm Springs on the ocean. It’s half the distance of Hawaii and you can buy more for your money than in Hawaii. I like golf and the area has some fantastic golf.



Q: What’s your handicap?


A:

It’s high. I said I like golf, but I’m not very good at it. I’m working so hard I don’t have time to play.



Q: Did you wind up buying property?


A:

I am currently in contract right now for a place in Punta Mita outside of Puerto Vallarta. It’s going to be built for me in a master-planned community. It’s a penthouse in a condo-hotel. We really like that because when we aren’t using it goes into a rental pool. It’s got ocean views and it’s gated with golf all around.



Q: Was there a defining moment for you that brought you into the mortgage business in the first place?


A:

After (spending some time in) college, I was not sure what I wanted to do. I knew I wanted to be in real estate and I thought about real estate development. I knew (Countrywide chief executive) Angelo Mozilo through family I went to school with his kids so I called him and I went to see him directly. I asked for an opportunity. He was surprised at the amount of focus I lacked at that point my life. He said some very appropriate things to me and challenged me to do something with my life, whether it be at Countrywide or anywhere. He challenged me to get focused and start making an effort.



Q: Mozilo sounds like a straight shooter.


A:

He is; he’s a maverick. I learned a lot from him, just from him and his presence. His focus and work ethic he’s one of the hardest working guys I ever saw. He wasn’t afraid to take chances.



Q: Did you go to the meeting expecting to get offered a job?


A:

Very early in the meeting he challenged me and it was a defining moment. I knew I had to take advantage of the situation. I started as a management trainee and it was a great time in the industry and at the company. If you were a hard worker, it didn’t matter what your background was. They gave you opportunities. The mortgage process is not rocket science. But I got to travel around the country with the very best the company had and I learned from the very best. So when I became a manager I applied those lessons.



Q: After eight years at Countrywide did you start itching to form your own company?


A:

I always knew that most likely I was going to start my own company. My father worked for about 35 years as an engineer for Southern California Edison. I didn’t want to work for the same company for 30 years.



Q: Did you get a lot of encouragement from family and friends?


A:

I did. My wife and I were already together at the time and she was 100 percent behind me. Countrywide had afforded me a very good lifestyle: I had saved a bunch of money and I had a lot of confidence. I wasn’t worried about the future. I was confident and knew what I wanted to do. For me it wasn’t a risk.



Q: What did your friends say?


A:

I had 23 people who I thought were my centers of influence, and I made a list of those people who I thought could support me in the transition from Countrywide to my own firm. I made a point to have breakfast or lunch with all of them.



Q: What came of it?


A:

It took a couple of weeks. I asked them outright: If I started my own firm would they support me? These people started referring me to friends and other professionals and that’s when I knew it was really the right thing to do.



Q: What were CS’s formative years like?


A:

We started in a 900-square-foot office in Westwood and we started with a list. I was commuting from La Ca & #324;ada and it was great because whether I was busy or not I was forced to be in the office every day for eight to 10 hours. If I wasn’t busy, it forced me to pick up the phone and be proactive with my business. It was a good thing because in 1998 when we started there wasn’t a refinancing boom. That came much later. Business was more of an environment like it is now more competitive, with higher rates and not as much volume. It was good because I had to earn my bones.



Q: So it had been a while since you were the guy making the calls?


A:

I did a lot of selling then, cold calling.



Q: Do you enjoy that?


A:

Not particularly, it’s not my favorite. I wouldn’t say that’s my forte. But again, I was lucky in that had a lot of people supporting me and I didn’t have to do a lot of that.



Q: Is there a lot of direct competition for CS from other boutique mortgage firms?


A:

There are not a lot out there that operate like us. We are 100 percent referral-based. We don’t market. We typically cater to professionals who have the ability to refer us business. The typical client is more high net worth and has more needs and is real estate savvy and has a lot of real estate investments.



Q: How does CS Financial work?


A:

We work together in trying to market the GE American Dream mortgage program. We are one of the only companies that provides construction financing and development financing. We cater to builders and developers we can provide them with construction and development financing. Basically, it puts us in the position to be the exclusive provider for the takeout (retail mortgage) financing when the project is completed. That is our footprint and our business plan.



Q: Why do you think there has been a recent uptick in the number of retirees moving to or buying homes in Mexico?


A:

It’s the weather, it’s the culture, it’s the value, and it’s the closeness to the U.S. To get to northern Baja, you can drive. In Mexico they can offer people great product for a very good price and people are sensing that. People wouldn’t buy down there if they thought it wasn’t a good opportunity. It’s secure. We think it a $50 billion to $70 billion market.



Q: But people who have not traveled farther south than Tijuana or Ensenada probably have images of the country as not attractive for more than a weekend visit.


A:

Mexico is investing an enormous amount of money in infrastructure: roads, highways, sewers and water. They want U.S. dollars down there and they want people to come down and enjoy the country.



Q: How is that reflecting in the real estate prices?


A:

You can be in northern Baja and be into something in the low $300,000s and you can go to Cabo and basically the prices are close to what you pay in Newport Beach and Malibu. There, you are buying into a city that is very well developed. Last time I went down after not being there for six months there was a Hummer dealership right in the middle of town. The lifestyle is very comparable to something we see in the U.S.



Q: I’m sure not everyone wants to see a strip of American boutiques. Are they keeping the original feel of Cabo?


A:

No I don’ think so. Dinero speaks down there. A lot of people are moving south and north of Cabo for cheaper land. So you are going to see that sprawl happen in Cabo, which I think is good. You can still get that Mexican feeling, but just not right there.



Q: How do you get around the traditional Mexican prohibition against foreigners owning property?


A:

The way foreigners own land is through a fideicomiso, a bank trust. That is relatively new; it was started in the last five years. The way they circumvent Mexico’s constitution, which does not allow foreigners to own property within 50 kilometers of the coast and 100 kilometers of the border, is that a Mexican bank owns the property with you as a co-trustee but you are the sole beneficiary with all the rights to improve, sell, and transfer the property.



Q: Are you looking to expand the program to other countries?


A:

Absolutely, Costa Rica, Panama and Nicaragua. There is a tremendous opportunity. We will look at Costa Rica, after Mexico, once we get it on board. There are so many Americans that already own real estate in Costa Rica and it’s an all-cash society. It will happen and we just want to be a part of it.



Q: You’re involved with Habitat for Humanity.


A:

Besides my work, that’s my passion. I’m very involved with Habitat. I’ve been with them for six years. I’m the past chairman of the board for the L.A. chapter and I’m currently on the board. Next year is the Jimmy Carter work project and Carter is coming to town. We will build about 35 homes in a three-month span. It’s an exciting time.



Q: How did you get involved?


A:

I’ve always been involved with charity and I’m always looking for good people and causes to support. With CS, I was trying to encourage the company to get involved in charitable work; we wanted to donate a certain portion of every loan’s proceeds toward a charitable cause. I thought Habitat made sense; they build homes, we finance homes. As a company we donate money, and I try to encourage people to give back.



Q: I’m looking at your bookcase and I want to know, who signed that USC football?


A:

That’s autographed by Pete Carroll, Reggie Bush and Matt Leinart. My dad played football at ‘SC Tom Seabold, he was a wideout in 1961 and 1962. They were great at that time. I go to almost every USC home game. I played football in high school at St. Francis in La Ca & #324;ada and I played at UCSB for a year.



Jeff Seabold


Title:

President


Company:

CS Financial


Born:

Glendale, 1966


Education:

Attended University of California, Santa Barbara

Career Turning Point: Starting his own firm, CS Financial, in 1998

Most Influential Person: Wife, Lia


Personal:

Lives in Santa Monica with wife, Lia, and son, Garrett

Hobbies: Fitness, travel, wine collecting, reading

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