Cliff Notes: HOW TO BUY A HOUSE USING A VA LOAN

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and mortar. Because of things like depreciation, cost segregation, there's a lot of different things that you can do to offset your wins. If you got huge capital gains, you can put that in ten thirty one changes, buy real estate so you defern your taxes down the road. Right. Real estate gives you all these plays that the wealthy use at scale to continue to grow their wealth. Whereas with us in our community, we like to listen to everybody else, but instead of following the money.

revisit this real estate conversation. So like this at the beginning of the year twenty twenty three was a great time to have the third trilogy three p. There's so much stuff that we haven't talked about before, and there's so much stuff that has changed a lot of people. Are you know, nervous economic environment that we're in, interest rates and recession, different things of that nature.

But and even some alumni. Aristotle is a veteran. Yeah, we got a few other veterans, but a lot of times that they're not educated on what they actually have. The credit credit credit.

shout out to all the veterans. But a VA loan is one of probably the best loans that's available out there in the marketplace. It's an underutilized product. I don't think a lot of people speak about VA loans, and that's why I'm happy that we're having this conversation. So let's first start off with the credit score requirements. Most lenders will have a minimum credit score of a five to eighty to qualify for a VA loan. It's one

hundred percent financing no PMI. PMI is private mortgage insurance. So typically when you put down less than twenty percent down on a property, you have to pay the PMI, which is insurance that's insuring the bank, not you, the barwer in case you default on the mortgage, that that loan is insured and the bank can basically get their money back from the insurance company. Right. So, VA loans have no PMI. It does have a fund and fee when you do a VA loan, which can be on

average around two percent just depending on your status. If you are one hundred percent disability then disabled veteran, then you don't pay a fund and fee, But typically most VA loans that we're doing come with around a two percent fund and fee which gets financed into the loan. Now, with a VA loan, you can purchase a primary residence. It's not for investment properties. I just want to be clear on that it's for primary residents. You can buy condo VA approved. If you could buy condo that is

VA approved. You could buy one family, two family, three family, four family properties. They have to be owner occupied multifamilies. The requirement to for VA to live in the property is for one year, just like an f h A, so you have to live in that property for one year. But the main thing, there's a couple of things I want to discuss with a VA that's very important. Number

one is your certificate of eligibility your COOE. So to determine how much of a loan that you can get from a VA, you have to provide the lender or the lender can pull what's called the COE, your certificate or eligibility, and it will tell you exactly how much entitlement that you have from the VA. To determine what's the maximum, the possible maximum loan amount that you can get financed for using a VA loan. Now, unlike well, VA loans don't have a minimum a maximum loan amount requirement.

So if you go an FHA loan or a conventional mortgage, you have a maximum loan amount. So let's just keep in this so in New York, I'll just keep in New York so a simple what a one family right now, because this is considered a high cost area, you can get an FHA or conventional mortgage million dollars on a single family property, a four family property, you can go up to like two million, a little bit under two

point one million somewhere around there. So the loan limits increased in twenty twenty three, which is great because home prices have been appreciated. But with VA loan there's technically no minimum or no maximum loan amount for the VA. It's all on how much eligibility you have and obviously how much you can qualify for with your debt to income ratio and your residual income, which I'm gonna go into in a bit. So that's another great thing about

a VA loan. You can buy a single family home one point five million dollars and get one hundred percent finance and on it with a low interest rate with no PMI.

But I would say check which you know, your realtor, or your local lend or whoever you work and with, to see if you have to pay any type of mansion tax.

and cash boy. You have to have money when you go into that ballpark, right, But with a VA loan again, you can go up to a million and a half. You can go one point seven million. I've done loans myself one three, one four when the loan amounts were a lot less for conventional and FHA. So that's a huge benefit for that veteran who can qualify for that that large of a house. Right, And that's nationwide, so

it's not not determined on region where you live. If you live in Kentucky and your veteran, you can get approved for a million dollar loan with the VA if you have the eligibility to do so, right, So that's number one, right, But the most important thing I want to touch on when it comes to a VA loan because the most portant ingredient on any loan is the

debt to income ratio your DTI. Right, But what VA you have what's called residual income, and that residual income calculates basically, how much money do you have left over after all of your expenses? Can the veteran truly afford

this house? And they taking your household thoughts. Right, So let's just say, for example, you have a family of four, right the VA, and if you're living in the Northeast, they want to see after you're withholding has come out, so they're looking at your gross income and they're going to mind us out. You're withholdings like your fighter, your social Security, all the taxes, you paying, your W two wages. Then they're going to take the mortgage payment minus that

out of it. Then they're going to take your utilities on the home right. And if you don't know what the utilities are, lenders will use a calculation. It's usually the square footage of the home times point one four percent, and so if it's a two thousand square foot home times point one four percent, that comes into like two hundred and eighty dollars. That will guestimate what your utilities are. We looking at childcare, we're looking at you know, student loans,

car loans. Everything goes into this calculation. And then at the end of the day, after all of that is spent, do you have at least one thousand dollars a month left over? And if you do, you qualify right, and

if you don't, you don't qualify. So, for example, I've seen Dell's where you might get an aus aprise, which is the automated underwriting system that all lenders use that says, okay, your DTI is X, it works, But then you might not meet the residual income qualifications, and that can decline

your loan. So it's very important that veterans understand it, and anyone, any real estate professional, any loan officer who's working with VA clients, they understand the residual income calculation because that right there can make or break your deal. So what I try to advise any veteran or anybody who's looking to buy a house, you not only just want to get pre approved, you want to make sure that the lender that you're working with has the ability

to submit your loan into underwriting. Why you're in that pre approval status so that way an underwriter can reveal your loan and get you what's called a pre underwriting commitment or loan commitment while you're still in that home buying stage. Because now you know it's been reviewed by an underwriter. You know your commitment letter is legit. It's not just some loan officer sending your life and saying, hey, your pray approval for X, Y and Z. Go out

in the house shop. And then when you get a house and then you get in the contract, you do all these dispections, pay for appraisal, and then you go to underwrite and you get the climb because they didn't do the calculations properly from the very beginning. It happens all the time, so that residual income is extremely important when it comes to VA loans for all veterans out there, for all professionals who are originating these loans. And that's

a lengthy process. Yeah, a lot. It's a lot of information, a lot, a lot of tape, a lot of work that has to be fouled.

your primary residence. Now on that second property that you purchase, you're not you're probably going to have to put some sort of down payment because you use a lot of your entitlement already to buy your first home. But necessarily you don't have to refinance out of that initial property that you purchase to use your VA loan again. So

it gives you the ability. I've seen people that have three or four VA loans all still active because they didn't burn up their eligibility by going out and buying a million dollar million one point five million dollar house the first go around. They probably bought a two three hundred thousand dollars house, started slow and work their way up, and they still have had enough eligibility to use their VA over and over and over.

breaks down the calculations and everything like that. But essentially, yes, the certificate eligibility will tell Linda, if this is your first time using it, if you have used it multiple times, how much of your eligibility is available, and then there's a whole calculation that we have to do on our and to determine exactly how much of a loan that we can get you approved for. So it's a process on our end.

unquote non traditional way, and you're using the VA loan. Again, even if you have to put down a down payment five percent, you have no PMI, you're going to have a low interest rate, right, So it's still a huge benefit for someone who's looking to use as much of the VA as possible, because look, they earned the benefits, why not use it, use it as many times as

you can. So some people might start off with the start at home two hundred, two hundred and fifty thousand, whatever it is, and if they understand how to run the play, they'll continue to use their VA, move out of one, living it for a year, move out another one, and keep going to keep going. So if you do it the right way, you can you can buy a couple of properties using your VA loan and having all those VA loans still open, not having a refinance out of them.

the VA is endorsing them. So a lot of people will go to these lenders because it sounds like it's military and it's a military mortgage company or something like that that is VA endorsed, and it's not. The VA doesn't endorse one particular lender over another. That's just a

marketing tactic. And you have to be careful, especially your veterans, because a lot of times these companies are offering you higher fees and higher rates than someone like myself or a mortgage broker, a mortgage banker, So you got to be They may not have military slang in their company name, but doesn't mean they can't get you a better deal.

So I want people to understand when you when you're shopping for who's going to do your VA loan, don't just go with the company or the mortgage company just because they have some sort of military affiliation in their name, because it's all a marketing tactic, right. So that's number one when it comes to people offering V loans. But again, not all in is a built the same. Not everybody

unders stands VIA loans. These are easy loans if you understand what you're doing, but they can become very difficult if you don't. And again, the residual income is one of the big things that I see people mess up on because they never heard of it before and they don't know how to calculate it. But for multifamilies on house hacking, you can't. If you're a first time home buyer and you're buying a multi family property and you're looking to use the rental income to qualify, Unfortunately, the

VA doesn't allow that you have. In order to use rental income to help you qualify for a multifamily using a VA loan, you have to document that you have at least twelve months experience of property management or owning a multi family property. So if you don't work in the property management field, if you don't have a multifamily currently and it's filed on your taxes and we can see that you've owned it for a year and you're collecting rent, then unfortunately, you will not be able to

use the rental income to qualify you. Now, if you do have that experience, then the VA will require at least six months of reserves off your mortgage payments. So if your mortgage payment is one thousand dollars a month, we're going to require at least six thousand dollars in your bank account post closing, after you pay your closing costs left over. So I want people to understand using a VA loan to house hack and buy multifamilies, if you're dependent on the rental income to qualify you can

you can be up for a root awakening. You will have to qualify using your own income to purchase that multi family all right.

it's very different, and it's a lot more strenuous. Well, I'll let you talk about it, but a lot of I don't think people are They wouldn't know that unless they've actually done it before. So building a house, you know, it can have some advantages, but you have to know what you're getting yourself into before you before you decide if it's gonna be a good decision or not. Absolutely, So what's to deal with the construction loan situation?

way to do a construction loan. And then now you go to the bank to get a construction the permanent loan, where now that construction permanent loan is basically it's treated like a refinance now because since you already own the property, so there's no rush right to get your plans and your permits and things of that nature. Because with most construction loans, when you're talking primary residences, which this conversation is about, the bank is only going to give you

a construction time of nine to twelve months. So we all know permits can take six months. So if you do a one time closed construction loan, which is you're buying the land and trying to get the construction loans simultaneously, and you're using the bank for the finance and of the land as well, that's when I see problems arise

because you're not technically the owner of that property. So you can't go out and submit architectural plans to the town that you're buying a property in until you close, because you technically don't own the property unless the seller of the property is willing to submit the plans on your behalf, which in most cases they're not going to do that, right, So it's much easier for you to acquire the land on your own then use the bank

for the construction loan to build your home. And the reason being again is because architectural plans can take depending on the scope of your work, that can take two to four months, depending on how busy your architect is and how efficient they are, And when you get plans you're going to go back and forth to adjust things of that nature. So if you're doing a one time close to construction, that means you're in contract and you have a time clock already to close with the seller, right.

They don't want to sit there and wait four or five months for you to get your plans together before you close, So again that can cause a delay and it can cause some between you and the seller. Now, if you've got an architect who's on it, it can get you plans in thirty days. Cool, you can do the one time close. But again another con of that is after closing, now you have to submit those plans to the town to get approval and depending on the county, which it has hit a miss, right, hit a miss

for plans. I mean New York is kind of like, I don't want to say nothing negative because you know, but.

their dream home, acquire the land first. Acquire the land first, have a dope ass architect who understands the urgency of what you're looking to do, get your plans and everything drawn up because you already have the home now or the land, so you don't have to rush. And now, once you have your plans submitted, then applied for your construction loan, because now it's more like a refinance. There's no time clock, there's no sellers. You can take four

months to close, it doesn't matter. And once your plans get approved, then close on your construction loan, then boom, you can start your construction pretty much immediately.

But yeah, you're going to have a payment. So if it drags out, you know, and the lender says, okay, now it's trying to convert from the construction to permanent. Now you're going to be paying the mortgage payment. That's going to be hired because now it's principal and interest that's going to be included into your mortgage payment. So your first twelve sixteen months is all going to be

interest only. And that's why it's very important if you're going to take the leap of faith and build your own home, especially if you're going to act as your project manager. You're hiring your GC, you're hiring your builder, you're hiring all these folks. And you're not buying directly

from a builder, right, you're hiring everybody. You have to make sure you know what you're doing and you're hiring the right folks, because folks will sit here and overpromise and underdeliver you and kill your entire timeline, which ultimately is going to cost you more money as the homeowner.

So it's very important that you make sure you vet out your team because your team has to understand the urgency of you getting it done the timeline, and they have to understand how they get paid as well, because there's a process of how they get paid. So when you close on a construction loan, the lender is only going to give you ten percent or max fifty thousand within ten ten days fourteen days after closing, and typically that money is used to cover you know, demolition permits, plans,

you know, things of that nature. You're kind of like your soft costs, right, But the lender, I mean, the builder will have to be able to front that job. So let's just say that the building's going to cost a million dollars Fellas to build, and they only released in fifty thousand dollars. But the first phase of the project is going to cost you all quarter a million dollars. So now where does that two hundred thousand come from? Right, that two hundred thousand has to come from the builder.

They have to be in position to start that job. Complete phase one. Then the lender will send out an inspector to inspect, you know, phase one, to make sure autis across ASA dotted. And then the inspector will go back to the bank say okay, you can release the draw of two hundred thousand, and then now the builder gets paid that two hundred thousand, and then they move on to phase two and it goes on like that

until the job is complete. So it's very important that you understand your builder, understands how they get paid, and they are liquid because a lot of builders out here are not liquid as well. So you can't pick the builder just because they might have gave you the cheapest price.

want this house built. They don't want to own the property, especially if is something that's not built right. So it's in their best interest as a lender to make sure that the builder can get this job done and they have the experience to get it done as well, because a lot of people talk to talk, but they can't walk the walk. So that's why again like a two or three K, I like to call it two or

three K, the training will for investors. So a construction loan when you're going through like the conventional way for a homeowner, is kind of like training wheels if you want to get into development as well, because you have the lender by your side and the inspectors by your side that work for you, and the lender to protect you against the builders because you know, we all say contractors are you know, you know what I'm saying, but you got to But the bank is always going to

make sure that they protect the investment at the same time.

if you do. If you do a bathroom over in your house and you don't like the contract and you fired them, now a new contract is going to come in and say, well, their work is not good, So now I've got to tear all their work down and restart it over again. So now the cost will be more than what you anticipated. So you have to weigh out what's the opportunity cost really of me firing my contractor right now or my builder at the phase that I'm in right now, because I'm already started and it

can wind up costing you more money. Now, if they're just negligent and they're just disrespectful and they just don't they're not really there, then obviously you're going to have no choice. But you got to handle your business because you are a CEO. This is real estate, right, so you have to fire them. But understand there's going to be now a whole new vetting process that now the lender is going to have to do. And then ultimately, if they're going to charge more than what the scope of workers.

So it's best while you're in the underwriting process. If you're going to make any changes with your contract or your builder, is best to do it while you're in the process because if they come with the higher scope of work, then you can protect yourself easier and reapply or not reapply, but you can ask for all request to see if you can get more of a approval

to compensate for that extra money. So you just have to make sure again vetting out your people to make sure that they are who they say they are.

paperwork through in a timely matter. But ultimately, again it's relationships, right, Like if you hire a great architect and they have good relationships within the town because they're doing a lot of business and they're doing a lot of jobs, then they might not need to hire experdita because they know Mary Sue over here in this department and their sons go to soccer together, right, so they can have that type of conversation and kind of try to get things

pushed through. But that's hit and miss as well. So no, is there a way to vet, really really not. It's kind of the lucky to draw and you have to put your plans in as complete as possible because sometimes they'll come back and they want corrections.

so minor to us. It might take them thirty days. That's setting your timeline back, right, So again I think not vetting the building apartment, you need to vet the architect to make sure that what's their turnaround for changes, what's their relationships with the town that you're building in. How many jobs have they submitted in the last sixty ninety twelve months? Right, these are questions when you're interviewing

an architect. Just don't go off the referral like, oh, he's a great architect and this than a third Nah, Chill ask the questions. Right, this is your house, this is your business. You own the property, You're responsible for the mortgage payment, nobody else. So you have to make sure whoever you're hiring, you have to make sure they can get that job done. And they have a sense of urgency too, right, And because a lot of these folks they just don't have it.

experience with investing number one. So most lenders, if you're a first time investor, they probably won't lend to you on build to rent financing because you just don't have the experience of being a landlord. So that's number one. So this is really not like a first time home buyer type of product. It's for the real estate investor. Everything is in your LLC, it's not in your personal name, just like when you're buying a turnkey prop. But essentially

it's the same like construction loan. You're getting a loan from the bank to build the multifamily that ultimately you're not flipping the multifamily. You're going to rent it out. It's a new construction multifamily. And you can do this product nationwide, so it's a great product. Right now, interest rates are going to be a little bit high on a higher level just because the market that we d so you have to make sure the numbers still work.

But traditionally for this type of finance, and you can expect you need to be able to put down at least a thirty percent down payment twenty five to thirty percent down payment plus your closing costs to get this done. But again it's the same thing. You need architects, you need to get your plans, You gotta submit earners. What's up?

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to the town. Now that process can take a little while longer to get approved just because of the amount of plans that has to be submitted to the town.

then you have to build the property. Right, Building the property can take a year, maybe a little bit longer. So you gotta figure your first two years you have no income coming into this property, and then now you have to go out here and rent the property and depending on the market at that time, you might be protracting two years ago. Hey the rents are here, I'm going to make X right, or construction costs is this. But if construction costs goes up while you're filing your permits,

that can blow up your numbers too. Let's say a rental income goes down or rent income goes down in your neighborhood, that can blow up your numbers as well. So there's cons with doing any type of build to rent type of finance. And so I want any type of deal. I should say, not just the finance of just taking on those type of deals, because anything can happen and within that time frame before you even put a shovel on the ground, right, which can really hurt your numbers.

Right now, we're still in an appreciated market. Although home prices and values have come down, they haven't went negative, right, so you're forcing the appreciation. If you're able to get good court with materials, you can probably find yourself to have a lot of equity in that multifamily that you're building, and then now you'll be able to refinance out of that loan, get into and possibly take some cash out

now so you can go and do another project. So builtering financing is a right product, but it's strictly for live men, not for freshmen, not for freshmen, not for freshmen,

not for freshmen. You really have to you have to have a team, And I will advise anyone who's looking to do any type of bill to finance any type of deal like that, get some partners who know what they're doing, because it's a lot to try to develop property, and if you're a rookie, you're going to make a lot of mistakes, and it's almost sometimes better to either pay for some sort of consultant or mentor because that will save you a lot of time, mistakes and money.

So I would highly advise anyone who's looking to do this for the first time to get to get some real people in their circle that can really help them and guide them. So that way you learn. You're paying for it, but you're earning while you're learning, so to speak.

your LLC name. Right, we are living in the post pandemic era where a lot of people made a lot of money over the past two years, and folks are buying, you know, their mini mansions and their the mansions right now, and if you don't want the world to be able to find you, the best way is to put it in a l SE so that way they can't google your name and find you because it's in the LLC. So now the mortgage is in the LLC name, the

deed of the properties in the LLC name. You own the LLC, the LLC owns the property, so it's the same It's the same way as if you're buying investment properties and putt in LLC, but this just so happens to be your primary residence. So there's several lenders that out there that will allow you to do this. But again, interest rates wise, right now, non QM loans is going to be in that seven to nine percent range, just depending on the lender and the deal that you're doing,

but it can get done. I've done several loans like that over the past twenty four months where I'm working with celebrities or influencers and we're using these products to kind of shield their identity. And then also when you set up the LLC and it's gonna be a brand new LLC tool by the way. It doesn't need established business credit. You can have a minimum of a six forty credit score. Obviously, the lower the credit score, the

higher interest rate. But the key to this is when you open up the LLC, you know where it says you open an LLC, it says registered agent. You don't put your name there as the registered agent. Because if someone looks in some way somehow finds that LLC and your the name is the registered agent, then obviously they're going to know you own it. So you got to have another registered agent's name there, so that way you

showed as well. But yeah, that's a play right now that we're using on a daily basis.

then they're gonna come after you. So yes, the high the credit score, the lower the interest rate, and in today's market, that lower rate will represent probably somewhere in the sevens the higher nine ten percent, especially if you're not low six hundred credit score.

monies to do the two one buy down. So how it works is a lender, let's just say you're doing the FHA loan. Let's just say today's rate is five and a half percent on a thirty year fix for example, the first year your interest rate will be three point five percent, the second year the rate will be four point five percent, and year three to maturity date will be the note rate of five and a half percent.

So the lender will determine how much money are you saving between three and a half percent and five and a half percent and four and a half percent and five and a half percent. So let's just say over those two years you're saving a combination of ten thousand dollars. Right, you need to get a sealers concession of ten thousand dollars to fund that two one buy down, and that essentially will give you the opportunity to have a lower rate for the first couple of years, kind of like

a teaser rate, so to speak. But it's a thirty year fixed program. And the idea behind this is, and this is why lenders started bringing this program back when rates jumped up, is because you know what, lenders are still going to lend. We're going to be creative, We're going to figure this shit out. Right, it's totally illegal, so we're going to bring back products that makes both

sense and sense for all parties involved. This is a way to make home ownership affordable over the first couple of years while we ride the wave of this current cycle, and when rates tick down there's going to be a refinance boom in the next twelve to eighteen months, maybe sooner right now. Another way is to buy down points. Buying down points now you can fund this with a salies concession, or you can use your cash out of your bank account to buy down points and as part

of your closing costs as well. And one point is equivalent of one percent of the loan amount, So if you're buying let's just say it's a five hundred thousand dollars loan, one point is five thousand dollars, and that will bring your rate down, depending on the lender, a quarter a point to three eighths of a point. So if it started off at five and a half, you brought a point, it will go to five point one two five percent or five and a quarter on a

thirty year fix. And each point you buy will knock down quarter to three a's of a point. So that's also another way that you can bring down your interest rate. But ultimately, the way to lock in the lowest rates possible is to have the highest possible credit score that you can have, especially in today's market, where you know, even if you have a seven hundred credit score, you might not still get the lowest rate, whereas a year ago that still would give you a great rate at

seven hundred and seven to twenty. Now you really have to be in that if you're going conventional, you really have to be seven forty seven sixty and higher right now to really get that whatever that national rate that people see online with no points, you really have to be in that higher upper echelon of credit when you're talking conventional. Now, fha, you can have a six eighty seven hundred credit store still get a great rate with those scores.

So folks who had adjustable rates prior to the pandemic,

they won because they rates. If there was an adjustment phase, they rates drop down so they didn't really necessarily have to refinance and pay closing costs and things like that because the market was in a favor now on the flip side, huh difference, so they I advise all my clients and people who I was speaking to who had adjustables, you might as well get out of it because the ten, fifteen, twenty, and thirties the cheapest has ever been, So it doesn't

make sense to play the risk. But in this market, adjustable rates make sense. For someone who is not looking and they know that not going to stand at home for the long term. This is not a thirty year play for them. This is a five year place. So if you know I'm gonna be in this house for five years and I'm just using this as my starter home. I wouldn't recommend getting a five year ARM. I would probably say do a seven or ten because life happens

and you never know. And if you see an opportunity to refinance over the next couple of years and you still own that house, take advantage of the refinance opportunity as well. So adjustable rate mortgagees can work if it makes sense, But in most cases, from what I'm seeing, sometimes it just doesn't make sense.

do they know that we don't know. These people are smart as hell, they're not stupid, and if they're buying homes, then why are we sitting on the sidelines, Well, not us, but why are some of our audience sitting on the sidelines and waiting for a quote unquote crash or anything like that to happen to get themselves in the game. If you look at the institutional money out there, they're buying all of Georgia right now for the most part. You know, you got Jeff Bezos and his back companies

that are buying real estate. JP Morgan Chase just partner with another hedge fund. They're buying billion dollars worth of real estate right All of these companies, all these institutional investors are putting their money into the safe haven of real estate for a reason and the purpose because real estate is going nowhere. Right, Crypto was up to sixty plus thousand dollars. Now where is it at? Stocks was up where and where is at? If the housing market

does crash, I can still go touch my house. The tenant still has to pay me. I'm still going to get the same cash flow because with inflation rising, even though it's coming down a little bit, people still have to pay their rent. And if you buy right, there's always going to be cash flow coming in no matter what the market is doing. So real estate is it will be probably one always one of the greatest investment tools out there, especially because of the tax benefits that

come with it. And you have to understand the tax play behind buying that much real estate as well. So these people are rich and wealthy and they're trying to hedge their taxes and minimize it too. So what's the best player real estate? Brick and mortar because of things like depreciation, cost segregation, there's a lot of different things that you can do to offset your wins. If you got huge capital gains, you can put that in ten thirty one changes, buy real estate, so you defering your

taxes down the road. Right. Real estate gives you all these plays that the wealthy use at scale to continue to grow their wealth. Whereas with us in our community, we like to listen to everybody else, but instead of following the money, so the institution investors are going to continue to buy real estate and also playing devil's advocate. Why is that too? Besides everything I mentioned is to keep the middle class middle classing right to make America

ten period. Like the middle class areas they don't want you to own homes, They don't want you to be wealthy. They don't want you to be rich, they don't want you to build your wealth. So they're buying all these properties in my opinion, to keep the middle class at the middle class.

people live in single family rents. Who's longer than multi families. Multi family apartments are smaller than somebody want to live in house. So if you have children, you don't want to live in the hood where are most multi families at. And now New York is different, right because you can go to Brooklyn and be in Park Slow and it's five million dollar multifamilies there, right. So New York is just a different peace in the self. So I can't

compare New York to the rest of the country. But if we all travel around the country, and where you see multi families at. You don't see them in the suburbs, you don't see them in the good school districts, you don't see them in where there's good stores and amenities and things of that nature in the area. So most folks who have children, especially young children, that want school districts, They want to live in a single family home. They

want backyard and bar mitzvahs. They probably just can't afford to buy right now, but they still want to live good. Right. So America's institutional investors understand that this is why they're doing more build to rent properties where they would build these communities for single families, and traditionally they would sell those and flip them now with rent at all time high style one bedroom apartment is on average nationally two thousand dollars a one bedroom apartment in New York right

now average is six thousand dollars. Right, look at what's happened in New York. The empty office spaces are now being converted to what apartments? Yeah, right, So investors, especially institutional investors, are always going to find a way to make money. So it's no right or wrong way, whether single family or multi family, to me is no debate. Right if you are there some areas where it might

be better to buy a single family and rentals. I know a lot of investors that swear up and down about single family rentals and won't touch a multi family and vice versa, Like the Julian Gordons of the world. They won't touch a single family. They want more family. So I think it's really about picking your poison and doing what works for you, not kind of following suit with everyone else, and understanding your numbers and what your ROI needs to be and they kind of moving on from there.

and those are rentals right, they're leasing. They're not owning these skyscrapers in these buildings. So they rather pay the penalties to get out, then they can deduct it anyway off they taxes, so it's a whole place. So it really doesn't If they are a profitable company and they got a lot of money, it's not going to hurt

them to get out their leavest. But from the landlord perspective, it's going to hurt me now because maybe I got the penalties and all this upfront money, but now I still got a vacant property, So why not convert it? Because there's a housing crisis. I think America needs about seven million homes right now to kind of balance out

the housing market. So why not where you have all these cities and people now want the amenities, they want downtown living, they want the New York City flair, so to speak, in smaller towns and things of that nature. So why not create loss? Why not can create one bedrooms, two bedrooms in a downtown area, because now that's going to command what more rent, So you'll find people that will live in these as an apartment versus businesses that probably can't afford to rent them.

past the class. Once you pass the class, then you have to submit for your license and for the state that you're in, and then once you get approved, you have to get sponsored by real estate brokerage and then once you get sponsored, they issue your license, and then today I'm a real to So you really can become a real estate agent thirty days forty five days is depending on where you're located, and it's only going to cost you a couple hundred dollars to do, so it's

not an expensive investment. Now on the flip side, just because your licensed real estate agent doesn't mean you're gonna make no money. The average real estate agent probably does one deal a year, if that right, So twenty percent of the people and really to have a real estate license are doing eighty percent of the business. And it's like any sales profession. I'm pretty sure when you were financial planning the numbers were pretty much the same. Even

on the loan office socide. It's the same thing. So just because you got a license, it doesn't give you a license to print money. You have to go out there and you have tool network and you have to really roll up your sleeves to get some business because it's not easy at all. I think in New York Co. Loan is over thirty thousand real estate active real estate licenses. Thirty thousand people are not closing deals. You know what

I'm saying, It's not happening, so, but it is. I believe that if you are looking to get into real estate, and if you don't have the capital to get into real estate, go get licensed. It's not going to hurt you. Because everybody knows somebody who needs to rent an apartment or do something like that. You can. It's so many different streams of income when you become a licensed realtor.

You can rent apartments, you can sell homes. You can represent sellers, you can represent buyers, you can represent investors, developers. You can property manage right. You can do BPOs broken price opinions, which is basically appraisers right on behalf of the banks. You can do short sale negotiations. You can wholesale because in some states now they're requiring you to have a real estate license to even whole sale properties. Right. So there's many different avenues of making money. When you

have your real estate license. You just got to figure out what's going to be your play and kind of stick to it. Now. Also, to get your mL license. To get become a licensed loan officer. Believe, you've got to take like a twenty five hour class and tests, and then when you pass that, you got to take a federal exam. You pass the federal exam again, it's a couple hundred dollars for a couple hundred dollars investment to get licensed. Once you pass the federal exam, then

you submit to the state, you submit to NMLS. You got to do your fingerprints, your background check. It's a little bit more intense on my side because of the wild cowboy days and the market crash, so they kind of overregulated us. They blame us for everything, so we got overregulated a little bit. So now once you get your passed and then you have to get sponsored by a mortgage company, but the same rules apply. It doesn't mean you're going to make money, but both careers could

be six figure careers. Seven figure careers if you really hit a lick and you really get a good referral sources and you're out there putting in.

will always offer training. They will always have mortgage professionals in their offices like me, training you on loan products. They'll have title companies in your office. You'll learn so much. So it's a great way to get started if you want to be a real estate investor is to start off by getting your license, earning some money. Now you take your commissions, and now you start buying properties because now you start learning all the players are, especially the

local players in your area. And now you can build a referral worre. I know people who got their real estate license, they don't sell the house at all. They just a referral network. They're refer to agents all over the country and they'll just get all the leads and they'll make thirty three percent of that transaction. Right, So that's also another play too, right, So there's a lot that you can do with you have your real estate license face BENGI.

you're staying on top of the game. But I wonder, now, as you look at it from where you stand, what's a missing like, what's a missing link inside of real estate that nobody has tried to solve or nobody has found a solution for it just yet?

mortgage bank or mortgage brokerage. So for me, what's missing in my career I've been doing this now twenty years is ownership. Most people think I own a mortgage company, but I don't. I just represent my team and I represent my last name. So for me, my goals have shifted, especially because of the past couple of years of what we've all been through together as a unit with Euyle University. We're doing events and traveling and now becoming an international speaker.

I'm going to definitely use that all the time now, Rashana, thank you as you should. First he said I was the authority of real estate, and I'm like, what Now I believe them and I'm living that. But that's another story, y'all. But ownership for me is what matters. So now I'm in the process of getting my mortgage broker license to open up my own mortgage company. Which I would turn that into a mortgage bank and hopefully within the next five years take that mortgage bank public and have a

couple billion dollar evaluation. So for me, what's missing in my career right now is the representation of ownership. Because it's great to sit out here and do content. It's great out here to teach people and do loans for people, But how do I bring up the next Who's next? Right, who's the twenty year old MG, the mortgage guy who might watch this and they might want to get into the business, but they want to work for someone that looks like them, that talks like them, that understands where

they come from. Right, That's where I want to do. So it's easy for me now to hire people and have them a part of my team. Right now, I got to really do this for my last name, how do I really leave the legacy of everything that I work hard for? And that's really what ownership bro So yeah, so galland Mortgage Group. Hopefully I can get that name approved with the licensing and the FEDS and everything like

that coming soon. But that's my next step is ownership and becoming one of the biggest black owned mortgage companies. In the world.

There are some of the programs have income restrictions on it, so you kind of have to check and see what if there are income restrictions for the areas that you're looking to buy in. But ultimately it's a great loan for someone who's looking to own a lot of land and you can get one hundred percent finance and with low, low interest rates. Yeah, so it's a great program. But I'm not gonna say I hold you up. I don't

fund too many of these loans. I can, you know, do a whole class on this at a later note. But for this purposes, I would just say Google's your best friend and kind of really look into it more. Google's your friend, bro. Google's your best friend.

You can also go to my Instagram page MG the Mortgage Guy links in the bio set up a consultation with the team where would love to help you guys achieve your real estate goals, especially if you're learning from me. We'd love to help you. The book House Economics and real Estate Investors Manifesto both are number one best selling books on Amazon MS two times, the third times The chim Dog Got another book coming out soon soon come,

and the books. So I'm glad you brought that up a shot because the bookstore is like my baby right now, because I have a lot of information in my head and I want to be able to provide people. I want to be the number one source for real estate education in the world. So people like to read. Although I'm not a reader per se, I know other people out there love to read books. They love to hold the book in the hand and just read it right. So for me, it wasn't enough just to put out

courses and do webinars and do content. It was like, how do I reach more people? And that's where the bookstore and putting out books came into place. So for me, I don't want to. You know, most people they put out books a book every two years. I'm like, forget that. I can put out a book five times a year if I really wanted to, because the information is always changing and I can always do house economic, second edition, third edition, fourth edition, and so forth, right as time

go on. So the bookstore, you know, go to mg Bookstore dot com and you can pick up some books and then the Home Buys Blueprint Volume one and volume two. Volume three is coming soon. So it's a part of succlusively part of e y L University. Eyl University is the number one online financial literacy platform the world, powered by Recession Proof. We have what twenty seven chapters in there.

We have the Homebuys Blueprint Via one, Volume two. I mean we have a whole calendar man and it's like it seems like it's something going on every single day. We have the book club with Troy and Greg shout out to Greg. We have financial planning calls with Rashad. You have break bread calls with me once a month as well, and you have so many different things that

are at ey L University. So I wild highly recommend you guys be a part of eyl University, become an owner and take your financial literacy and your business and your education to the next level.

I thought it was trash and it's a nah, you're good, I said, nah, bro, it's trash, Like, can we not put it out? I was nervous as hell and that

thing took off? And I'm happy that you guys ain't listen to me because it changed the trajectory of all of our lives and I'm very thankful for YouTube Brothers for allowing me to always come back on the show and being a part of the network and having businesses together, and just the friendship and the camaraderie the hood and the conversations that we have at individuals and as a group is very important to me. So I want to

thank you guys for everything. That this guy calls me like a month ago says, Yo, you're not hitting the mark or something, and I'm like, damn right. So these are the kind of conversations and this is real. Your circle is important. Those are the type of conversations you need. People who are going to be honest with you. That's in your circle's just not going to give you yes

man answers and stuff like that. Even when you're not asking them for their opinion, they'll still call you and give you their honest opinion without trying to get at you in a negative way, because you never know how people receive information too at the same time, So I always appreciate when both of you guys call me on something and say Yo, MG, X Y and Z or X Y and Z like you did, and you know what I'm saying. I'm appreciative of that, and I'm thankful

for that. So I always got to give you guys your flowers when I have the opportunity to, especially in the public setting, like earn your leisure podcast or earn your leisure show. The biggest show in the world was love.

relationships and real brotherhood. And I hope when you hear Matt speak and you know all those con words that he just said, that's just you know, it goes to show you, like you never know who's gonna come into your life at what time, but make the opportunity worthwhile.

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