Non-performing loan

Laulu do you see all those people doing the deep dives and putting comparison of GTB and Opie side by side meanwhile Opie had less like their NPL was lower than GTB's NPL that's what triggered me I was like no I have to actually go and look

at meanwhile GTB is carrying their own NPLs for an entire year They are carrying it.

They've written it off.

Because there's a thing about a general debt provisioning.

There, because there's Ocash.

Right.

Because even at four point something percent, five percent NPL, CBN is already going to be asking you how far, like, Baba, what's going on with all these NPLs that you're carrying? Right.

So I think that what they will do is that high risk borrowers or first time borrowers that they don't really know what's happening with them will go on another book.

Because even at the most extreme sides of the bubble, the loan to value ratio was 50%.

So actually where the consumer NPLs are rising in China today is not in mortgages.

It's in sort of consumer lending platforms used by younger people.

You in your notes this year have been, I don't know if it's your phrase, the slow bull market.

We've seen even in going from the institutional investors down to the individual investors, it's a sliding scale.

Some of the things that we're seeing on activity around selling more of these loans and NPLs and RPLs, that's been stagnant really over the last year or two years.

There's been some activity, but not near at the level that we really need to see as an industry and so we're actually starting to see a lot more activity there which i think will definitely end up rippling down uh obviously the gses aren't moving as much on uh exiting the uh npls and rpls so maybe we'll start seeing them participate a little more in that but uh the individual investors right i mean with the the cost of capital And the overall limitation of inventory, as Zach illustrated, that's been the biggest challenge that I think every individual investor that I've talked to and deal with.

So they're having to take more risk out there to try and... to try and make money essentially, but to find more deals.

But again, that cost of goods, the cost of construction, and the overall market resistance is kind of creating more challenges.

But you either need to... do new build in in the beginning or you need to focus high on a higher end into that that range of the neighborhood those properties i've seen consistently move and those in the middle kind of are the ones suffering with condition issues

oh and just going back to your question about the capital and whatnot and the the volatility of of uh assumptions in your costs um I will say that I have competitors in this business because a portion of what we do is basically a fix and flip trade, but we're buying NPLs from HUD.

And I've seen three major investors walk away from this strategy in the last 12 months.

Meaning, out of the 7 trillion outstanding green loans, I would strongly believe that more than 90% are bankable without government subsidies.

And they are profitable, and they're generating very little NPL ratios.

In fact, the non-performing loan ratio of the green loans in China is much lower than the overall green loan ratio.

I think it's less than 1%.

And a lot of that is just the environment.

But we're just under a billion in NPLs, which are non-performing first mortgages.

And then we're similar in the commercial real estate side.

We're about a 50-50 portfolio between commercial real estate and the mortgages.

And that fund is more of a debt structure, and it enables investors to avoid UBIT, and it also enables them to be able to compound returns.

So a certain segment of our investor base likes that.

And then we have a fund that just does NPLs, well, primarily NPLs.

It's a closed-end fund that has like a ramp-up period of a year to 18 months.

And it's less about the demand side, but more about the supply side and the scoring side.

What has happened to your NPLs over the past 12 months?

They've increased about 1%, 1.5%.

So in check? Totally in check, yeah, totally in check.