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It's a crazy time that we're living in. Everybody knows obviously we in. You know the age of Corona, and I remember texting you like when when Corona first hit.
I'm like, yo, that's when the stock market was crashing, and I'm like, there's real estate market about the crash, and he was like, nah, it's not And I'm like, how people were losing their jobs, stock markets crashing, people can't go to work, like all the writings on the wall for another two thousand and eight to happen, and you was like, nah, commercial real estate might be in trouble, but residential real estate, I'm like, all right, we'll see.
And then to this day, it hasn't crashed. It's actually going up. In most most places in America. The price the home prices have actually going up. It's a shortage of our inventory on the marketplace. So where we're at right now as far as the state of real estate in the United States of America.
The market is on fire for residential you know. And I told you this back in March. I said, nah, bro, it's not going to happen because with people and everybody was kind of saying the same thing, like, yo, two thousand and eight is coming back. Wait, don't buy weight, And I said two thousand and eight was different. That was a credit crisis, right, This is a health crisis.
Credit crisis means that banks, Wall streeters, everybody, homeowners, you know, investors, everybody was greedy, you know, appraisers, everybody, right, So when the market crashed, the government was reluctant on trying to save everybody. They didn't want to bail out everybody, but they had no choice but to bail out the big names. Right. So with this one, I said, now, this is health This has nothing to do with nobody. This is nobody's fault.
And if you think about it, if you look at the real estate market going into twenty twenty, it was already on fire. It was due for a correction at some point, because what goes up must come down, right, But I said, nah, this is not going to crash. There's no way, because the government is going to have to bail out everybody now, right from the big businesses
to the everyday person. And when you told me that it's going to crash, that's what was in my mind because I knew, especially with the election year, they couldn't just let all these people die, people lose their homes. There's no way. And as you see, all these stimulus packages came out, everybody getting their ppe money and everything.
It was recklessly and hopefully they wasn't reckless.
Hopefully they wasn't reckless, and hopefully they did the right thing. But you know, you have unemployment benefits, people are getting them with ease, with no problem. So you know, you got to give the administration credit for what they tried to do to help as many people as possible. And that's why I just didn't feel like the market was going to crash. But residential real estate is on fire
right now all over the country. There's thirty forty offers on one house, you know, So if you're a seller right now, if you're thinking about selling your home to upgrade or downsize, this is the time for the sellers right now, because they're going to get twenty thirty percent above asking price in some markets right now because it's
just too hot right now. It's too many buyers out there, and with these low interest rates, you know, or rates being in the mid twos to low threes, depending on your circumstance, Like everybody wants to buy a house because money is cheap now, right so it's easy to the person who couldn't afford the half a million dollar house last year when rates were three and a half four percent, now it's two and a half.
Can can you explain like that? Like, because the average person that maybe never brought a home might not fully appreciate because they say three and a half, two and a half, it's only one percent, that's not that big of a deal. But because they looking at it like it's stocks, like it's like if you earn one percent, you know what I'm saying, or just regular life, one percent doesn't move the needle. But in your world of
mortgage is one percent is huge. Right, So if you kind of put that in perspective out.
Here, I mean, look, one percent depending on your loan amount, right, that can be three four five hundred dollars a month. That could be six thousand, eight thousand, ten thousand a year, depending on the size of your loan. Right. So the big of the loan, the low a rate, the cheap
of the payment. Right. So someone again who couldn't afford the five hundred thousand dollars home or get pre approved for a five hundred thousand dollar home a year ago because the rate was probably three and a half to four percent, now they're able to because now that brings their payment down and they're able to get approved for
now that higher amount. So one percent is huge in the real estate in the mortgage world, interest that you're gonna pay over the life of the loan is also very important too, because if you're looking at any house that you buy, let's face it, right, the way the mortgage in the banking system is set up, it's you know, you're gonna pay interest three times more than what the
houses actually work. But if you're getting a cheaper interest rate, that softens the blow a little bit, and now you can focus on your debt strategy, which is repaying back your debt and trying to beat that interest trap. You know what I'm saying, and you know little things you can do to do that. You can make one extra payment a year and you can pay off your loan in twenty two and a half years if you have
a thirty year mortgage. Know what I tell folks all the time, take your income taxes refunds right and apply that every single year to your principal balance. That could
bring down your debt. You can do as little as one hundred dollars a month to your principal balance and you'll be surprised how much interest you'll save on your mortgage, especially if you plan on living in the house the long term, the full term of thirty years you don't want to just make your regular payment because you're gonna pay you know, on a three hundred, four hundred thousand dollars home, you may pay back eight hundred thousand.
Now that was a gym, what you just said. And I learned that in business. I don't want that to go people's head. When I first got into into the industry working in finance, I learned that like one extra payment a year on your mortgage cut seven years off of your mortgage.
Absolutely, or eight seven, eight twenty two and a half years.
Yeah, so that's that's huge if you really think about it. It's like one extra payment a year absolutely can really take almost a decade off, like.
Basically, and it has to be towards your principal balance only. So if you're making a payment, you can't just give the bank money because they're automatically going to apply it to interest, right, because you have to direct them where you want that money to go.
How does that even look?
So if my mortgage is three thousand, I gotta pay six thousand if I'm doing it.
Yeah, So if your mortgage is three, you can pay six and you can tell them the difference to go to principal balance only. Some online everything's online right now with all the banks, right so you can go pay your mortgage and you can specify their two principal balance only. You can write a check, put on a check two principal balance only. So, depending on how you pay your mortgage,
do that. And if it's not an online option to pay extra, call the service and lender that you're paying your mortgage too, and figure out a way to accomplish that goal. Maybe they can just do automatic drafts from your account something like that and set it up to where you can make that extra payment, you know, and you'll be surprised if you make two payments extra year.
That's what in my mind, I'm thinking that if I make two extra pas now that seven ers of the fourteen, I'm really at a fifteen year.
Mortgage basically, And I'm glad you brought up fifteen year mortgages right, especially right now folks want to go into fifteen year loans and look, the fifteen year rate. The lowest I've seen it since we've been in COVID was
around two percent, which is phenomenais, right, that's incredible. But what I try to tell people is maybe not going to that fifteen year right now, because life happens, right, you're committing yourself to a much higher payment, and what if, you know, COVID twenty one comes God forbid and it's worse,
worse strained than this. Now you're committing yourself to that higher payment just to try to pay it all early, when you could have went to a thirty year, had a cheaper payment, and just manage your principal balance yourself that way, you're not committed to that fifteen year term or that twenty year term. You stay with the cheapest possible payment, but still you're paying down your debt, you
know so, And I'm not against year mortgages. I think for the right people it works, right people who have substantial income and they can really afford the payment. But most people are trying to pay off their loan fast, which I get, but they're now cash strap, right, They're becoming house rich and cash poor because they're making their payment so much higher because they're just focusing on I just want to get rid of it, which again I understand, but you got to be a little bit smarter right now,
because anything could happen. As we've seen, we woke up in twenty twenty, Kobe dead with God bless you know, then COVID came. Like this year has been crazy, you know what I'm saying. So like, if this doesn't teach anybody anything, you got to have cash flow right now.
You got to have liquidity because anything can happen. So that's why I just try to tell home own future homeowners and current homeowners who are refinancing, if you don't have to go to the fifteen year, just stay with the twenty or thirty years, so that way you can have a little bit more cash flow.
Can I go back to something you said, because when you say, I'm like, oh, how does that work? Because I've heard of corrections obviously in the stock market, and we know that's maybe eight to ten percent or eighteen percent. What does that look What does the correction look like in the real estate world? Is that interest rates go up? Like, what is the correction in the real estate world?
I mean it could be rates go up, It could be home prices depreciate, you know, it could be lenders tightening up their guidelines. You know, all of these things could be corrections in the market that can affect the buying power of Americans. Right, if home prices decline like you thought it was, I mean, it sucks, but what goes up must come down at some point. Right. So that's why over leveraging is not over leveraging is key,
you know. And this is why I talk a lot about rehabs, rehab loans, and things of that nature, because I want first time home buyers to think like investors. When you're buying these homes, buy them the same way that you'll see a Caesar by them, or Envy buy them, or any investor that you guys are following online by the same way they're buying. You know, there's nothing special about anybody who's flipping real estate or doing anything. They just have more knowledge than you, and they know where
to look and where to find these properties. You can do the same thing. The information is available, you know, there's no excuse. It's not like ten fifteen years ago when I first came into business, there was no social media. Right, you can hashtag and follow a hashtag and you'll see hundreds of people flipping houses and they're giving you all this information. So now you just got to apply it.
And if you're a first time home by it, there's so many different programs out there for you to get the rehab money to be able to now buy a home that's undervalue. Put that money into it, force the appreciation, and now you have equity in that home, and God forbid the house does depreciate. You still good because if you lose ten percent equity because the market is declining five percent equity, you're not over leverage. You're not upside down.
So I try to promote don't buy retail if you don't have to, But I understand you have to in some cases buy retail because the school districts, family needs, things of that nature, don't have a choice. But still try to buy the ugliest house in the best neighborhood.
So let me ask you this because you know, obviously you said that it's a seller's market, absolutely what interest rates are extremely low right now, so that would say it would be better.
It's good for the buyer so.
To get along, but it's great for the seller because they're going to have multiple offers on their home.
Okay, So for people that's looking at maybe purchase a home, is this a good time to or should it? Because like, all right, average, like let's say somebody hasn't brought a home yet, and they looking at it like, all right, I got some money saved and low interest rates, it's a good time for me to buy a home. But if it's a seller's market, should they be looking to buy a home or should they just be waiting for it to be a buyer's market?
Again?
Good question, right, So this is what I tell everybody. If you have financial security, if you have down payment, closing costs and reserves, and you have the knowledge and your mindset is right and everything is where it needs to go, you have your team, and if your goal in twenty twenty prior to COVID was to purchase, then I personally believe you should still purchase, right because the money is dirt cheap. Now on the flip side, should you wait till the quote unquote buyers market come and
the homes depreciate? When the hell is that going to be? No one has a crystal ball that could come five years from now, and then the race could be seven percent then, So like, I don't care if the homes go down ten fifteen percent, but now I'm paying seven percent on the money, right, So you got to look at the whole opportunity costs for yourself of what's going to be best for you. Everybody's going to have an opinion on this, right, everybody has. Everybody's an expert, everybody's
an economist, you know what I'm saying. Like everybody knows when the crash is going to happen. People will say, oh, the foreclosure craze on waver is going to happen next year. How do you know that? How do you know that? No one knows. You know what I'm saying. So for me, if you're financially secure and you want to buy real estate and you want to get in the game and you want to invest, then invest.
Do it.
Just be smart about it. Take it to because iteration. If you're buying rental properties, make sure you're doing your due diligence. If it has tenants in the property, make sure you ask it for proof that they're paying. You know what I'm saying, Because anybody can tell you anything. Yeah, I got three tenants in here, they're all good. Okay, show me the proof, home seller. You know what I'm saying. Let me see two to three months of your bank
statement showing these deposits going in. Show me the proof, be smart, and that's what it's all about, doing your due diligence and applying that information and going out there and executing at a high level, and being a CEO of your real estate business. Even if it's your first home, it doesn't matter. You still got to be a CEO. You can't be out here emotional. And I think I said that on the last episode two, and I've been saying it's pretty much my whole career because at one
point I was emotional when I was buying homes. I wasn't really looking at numbers. I was just happy to be able to buy real estate, and I made a lot of bad decisions, which you know, I share with you guys that just paid for Like it was bad decisions and I just had to pay for it, and it sucks. But these were lessons and this is why my message my message, and I try to educate everybody to tell them, like, look, you just got to do
the numbers, and don't be scared. Just be sharp and understand on what you're doing, but don't worry about what could have, should have or what can happen, because if it's going to happen, everything's going to happen in God's time anyway, it's nothing you can do about it. So just be smart to have your reserves and be prepared for the worst. You know what Ian said, you need five five years of reserves sixty months. It's like you know what I'm saying. So like many people ain't in
that position to have five years. But if you lose using your last dollar to buy real estate, then you're playing yourself. You're really playing yourself. You should not be house rich and cash Paul like, you have to do your due diligence.
So it's up earnest.
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Yeah.
One of the other things you said on episode twelve was that the equity in your home is monopoly money. Correct, And I feel like maybe thousands of people must have heard that right because the refive rates have been low and thousands of America's been doing it right. So what has that been like for your business during Corona?
Well, it is a pandemic. Some people call it a pandemic plandemic. I'm calling it a pandemic because right now, if you're in a real estate industry, God bless you, you know, and you're having record breaking years all across the board in the industry, from the appraisers to the realtors to shit, even the loan processors and loan assistance. They're levering up their bag because it's so much volume
that companies need to hire. And now, look, I ain't gonna tell all my business, but I had to pay some people some money that I never thought I would have to pay them to come work for me right because you need talent right now because there's so much volume coming in. It's not enough bodies in the real estate industry to handle the amount of people who want to do a refinance right now or buy a house. It's absolutely incredible. So what is done for my business
is blowing up. It's a great thing. I love it, but it's also overwhelming. It's stressful, like you're dealing with people's lives and that's never an easy thing when you're trying to help someone either save money on their mortgage, pull money out to go buy other real estate, then helping them do those transactions, so you know, it's late night, early mornings, lack of sleep, you know, lack of time spending at home with the fam and everything like that.
It's a lot right now, so a lot of things being sacrificed, and it's for the greater good obviously, but it's a lot man. So yeah, you're making money, but it's also a lot of responsibility that comes with it because you're trying to service so many people. It gets overwhelmings and that's important. Having that balance.
We talk about that a lot, just having.
Balance in your life.
And like we've been watching the news and it looks like the races are going to stay that way for a while.
So this is going to be business, you know, God willing, you know, race will stay low. Me personally, I hope they do go back up a little bit, slow things down. That's just me, you know what I'm saying. I'd rather go up a little bit, get rid of some of these people so we can all breathe and get back to regular life so to speak. In our world. You know, the mortgage businesses set the break records this year in
twenty twenty. Trillions of dollars are being went in twenty twenty. Like, I can't wait till the final number it's talied up to just see what what the mortgage business did. But it's it's incredible right now, what we're on pace to do right now. It's a couple of trillion dollars. Like I don't think people understand that it's a lot of money being lent. And people think COVID and quarantines slowed
things or stopped anything. They didn't stop anything. It may have slowed certain components down, like appraisals, getting tied of reports and things of that nature. But it didn't slow nothing. Now people are buying homes. And that's why I tell folks over time, if you're looking to buy, buy, what are you waiting for? Go ahead? Because your opportunity may not be there.
Yeah, so let me ask you this.
As far as this is a business show, so a lot of people that listen to ernalisia Is are entrepreneurs or aspiring entrepreneurs. One of the hardest things for entrepreneurs, business people ten ninety nine, contractors, things of that nature is to buy a home because it's like a lot of times it's one of the benefits of being business owners that you get to write.
Off a lot.
Absolutely, but the problem with that when it comes to getting a mortgage is that you don't show enough income. So now it's like, you know, you're in a tough spot because, yeah, you might have made two hundred thousand dollars, but you're only paying taxes on twenty thousand.
No blessed Americans.
Like that, or seven hundred and fifty.
Dollars yea, yeah, yeah one eight beautiful beautiful old living.
So but yeah, it's like it's hard to get a mortgage, but you was actually enlightened me, Like there's different programs for business owners, like especially like bank statement loan things that you could We haven't really covered that.
Can you talk about that?
Yeah, So you have loans out there that fall into that non QM category, non qualified mortgage. It basically means Fanny Mae or Freddie Mack who buys conventional loans from banks, right, they won't purchase this type of loan, but there's private lenders out there that will fund bank statement loans whereas you can put as little as ten percent down. You can borrow up to four million dollars with this type of loan, and we're using the deposits as your income
for your business. So you can use either twelve months or twenty four months of those deposits in your business bank account and that can be used to qualify you for your loans. So it's no tax returns, there's no W two's obviously because you're self employed. We're not looking at any of that stuff. We just need to see twelve months of your business bank statements and we use that for your income to qualify, and you can put down as little as ten percent with these loans.
How's the interest rates?
Oh yeah, the rich interest rate you're gonna pay for it, like you're gonna pay like, You're gonna talk probably like in the right now six to eight percent range, depending on the lender, you know what I'm saying. And you know, when you're talking six you're probably going to have to be more thirty percent thirty five percent down, you know, high credit no minimum credit score for this program six sixty.
But you want to get that lower rate, you're going to have to probably be in the high sevens with a larger down payment. But if you're talking ten percent down, you know, jumbo bank statement loan, you're probably gonna get collaborated for like seven and a half percent.
Can you refinance later?
Absolutely? You can always refinance. Right, And here's another gym. If you use the bank statement program and you get into let's just say you're raighted seven percent. Right, file your taxes and your business has been in business for five years, like legally in business, right, Like you have your filing receipt in this document. Freddie Mac has a program where you can use one year tax returns as a business owner. Right. So now this is a conventional loan.
So you can refinance into the conventional loan. Just file your taxes the right way, show the income. Now pay the tax the tax man they what you owe them, or get into a payment arrangement so that way you have a monthly payment on your tax bill that's outstanding. We include that tax payment into your debt to income ratio. And now you can use one year your TAXI terms and you don't those negative tax with terms. We don't
even have to look at it. So you can just use the one year and then refinance into a conventional loan. After you do the bank statement loan.
How long you have to stay in the property.
If you're doing a primary residence, it's one year I can perceive. But obviously Banks namer loans is not just for primary residents. You can do vacation homes with it, you can do investing properties.
What it is well, but that's that's that's big, especially for business owners because if you compare, it's like a hard money.
Hard money's like ten percent, yeah, hard money.
Right now, COVID rates are probably going to be ten to thirteen fourteen percent depending on who you're working with. Yes, only in your LLC's name. So these bank statement loans just to clarify us in your personal name. Still it's not in your LLC's name. So when you go asset based or hard money, that's strictly in your LLC's name. And that's why the rate is even higher because it's on LLC based.
But that's the semi valuable and even if it's six percent or even eight percent, it's still depending on how much income you're not showing, because you have realized it's like it's a trade off, right, you either show a bunch of income. By showing a bunch of income, you have to pay taxes on that money.
Correct.
So like let's say you're making two hundred thousand dollars and you're showing twenty thousand. In order to qualify, you need to show one hundred thousand. So now you got to show eighty thousand dollars more correct, So now you could potentially.
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Be paying thirty thousand more. Absolutely taxes, So even if you're paying twice as much or even three times as much on an interest rate, it might not equal that at least upfront. And then you always have the opportunity even if you're paying a higher amount to refinance down the line. Absolutely, you always have the opportunity to sell the Propertylute, you always have the opportunity if it's a multi family home to generate income to kind of upset that.
So that's something that business owners should definitely be aware of because, like I said, that's a decision that business owners have to make all the time, Like, all right, do I sacrifice, do I show more income and pay more taxes? Or do I just rent an apartment forever because I don't have enough money to just buy a home and cash something that you know, if you if you if you don't, if you don't own a business, it's not a big deal, but not just business owners.
But also, like I said, ten nine contractors.
Independent contractors are considered self employed in the mortgage world because you're not having any taxes taken out of your your checks. So you're self employed. So you're filing a schedule C, right, and you have to pay taxes. So it's the same thing, you know, But if you're if you're ten ninety nine, you're going to have to I would probably set yourself up as a business so that way you can get better tax benefits of having yourself incorporated or LLC brusu's just having yourself as an ESQ.
I mean schedule see filing. But you know, like you said, pick your poison, right you want to pay seven hundred and fifty dollars like you know, or you want to go buy real estate, so you're going to have to pick what's your poison right now. So if you want to have this program gives you the option of having your cake and eating it too, paying less taxis, using the deposits to qualify, and you still buy in real estate. You're just going to have to pay a premium for it.
So for me, I think the program is amazing and it and it helps so many entrepreneurs get into the real estate business.
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Yeah, get you, get you a great get you a great CPA.
That's a fact.
So you have you have a question, Jory, No, I wanted to going into one of the things that you mentioned before, and that's the appraisal process. Okay, because obviously I've spoke about this a number of times of how my family was robbed of thousands of dollars doing during the appraisal process. And one of the things in speaking to you, what I came to find out was something called the AMC.
Can you explain what that is?
So AMC stands for Appraisal Management company. So when the market crashed, the government said it was the bank's fault in the appraises. So they took the control away from the banks and the brokers, the mortgage brokers. They took the appraisal control away from us, that process away from us. Right, we can't have direct contact with an appraiser, so when we do a deal, we go through the appraisal management company. The appraisal management company now picks from a round robbin
of appraisers that's approved. But whatever, Linda, they're working with and then they're the ones who have the communication with the appraiser. They set up the order with them. You got to contact this person whatever.
Right in my mind, I'm thinking the government did this because it's like if I was an appraiser, I know you worked at the bank, You're telling me, like, yo, just give them a good rate so we can make money on the deals.
Is that why?
It was kind of like this.
Let me tell you how I.
Went to tell you the story.
Let me tell you how it went. In a wild cowboy days, it would say, Yo, Giovanni, I need this deal to go this eight hundred thousand. I know it's probably on the worth seven, but what can you do? We can make we can pay you extra, and Giovanni will come back with appraiser report of eight hundred thousand dollars. And there was no systems in place back then and no technology like we have now where underwriters were really vetting that appraisal. They would just close on it, right,
they would take their words. So the market was being inflated. And what they're saying is true. You know this call was made this bad. We had too much contact. Right, if you're on a praiser and you know I'm sending you a lot of business. Look, if I need you to make this happen, make it happen, and they would because there was really no regulation behind it. Now with the appraisal management company, that's out of the window. You
can't even talk to the appraiser. It's illegal for US loan officers to talk to appraisers now, so I don't know who to hell, the appraiser is going to be on a deal until I get the actual report. And even when I get the report, I can't make contact with them. If I want to dispute something, I have questions, I think there's errors. It all has to funnel back through the AMC, and then the AMC goes back to that appraiser to make whatever corrections.
And so my thing is like, and I've seen this a lot, is like, I wonder how many people look like us in this management company.
Oh, it's slim to none. Because in most cases, right, we need black appraisers. We need we need people that look like us going into our neighborhoods valuate our property because we know the true value of our areas in our neighborhoods. Most most of these folks don't and that's when you see people getting these homes of praise and like your situation, they devalued.
You came in, spent ten minutes here, I paid them seven hundred dollars devalue mee. We lost like one hundred thousand on the deal.
It's terrible, you know, it's terrible. So if anybody's looking to get into the real estate industry, looking to becoming an appraiser, there's a serious need to become an appraiser, and especially if you're a minority, this could be a good way for you to learn the real estate market because you learn and how to value properties right, and if you're going to invest, what better knowledge to have than and being an appraiser. It pays well, and it
pays well ten minutes, ten minutes. But you got to think about though, it doesn't pay that well no more for the appraises, right, because now you have that AMC of the company. So now the AMC has to eat too off that same fee. So now the appraisers actually make less. And that's why you see a lot of sloppy work now, right, because they're not making as much money as they used to. Now, what you see a lot of now they'll make the So there's two there's
two appraisal reports. Right, it's either going to come back as is or subject to repairs. Right, So if it comes back as is, I mean the house is fine how it is, right, but it comes back subject to repairs, then whatever the appraiser list on that report that needs to be repaired, it needs to be repaired prior to closing. And then they have to come back out and do a reinspection. That's another trip fee that could be an extra one to fifty to five hundred dollars just depending
on the property type and everything like that. So that's how they're making more money. You know what I'm saying. They're making up for that loss is because now praisers are going in and they're looking for cracks, they're looking for mold, they're looking for whatever's out of order, you know what I'm saying, So that way they can put that.
Put back on.
The appraiser is different from the home inspector. Even though they come in they look at the property. They may say, hey you need a new furnace, Hey that bathroom needs new plumbing.
That's different from the home inspection. Absolutely, home inspection. The home inspector is coming in to look at the house, and they're going to see about the mechanics of the house to make sure the roof, the baller, the heat, the plumbing, electrical everything is where it used to be and what they feel like needs repairs and what's the cost to cure those repairs, right, And then they're going to give you probably a thirty to fifty page report
with all this information in there right telling you this is wrong, this is wrong, it's wrong. So the home inspector is going to be thorough right. They're not spending ten minutes, they're spending two three hours, you know, depending on the size of the home, and they're looking through everything. But even with a home inspection, you're really not going to know your home until you live in it, you know.
But this would give you a good idea of what you're buying, right, So it's very important get a home inspection. And there's a lot of times that I'm starting to see on deals with folks are opting out of home inspections because they think it's a good house or it was just recently renovated. If it's a flip, definitely get a home inspection because these investors are being cheap with
their materials and they work. So you need to go in there and double check and have somebody with professional eyes that you don't have to kind of look at this stuff because a lot of them are putting cheap materials.
I'm thinking like, yeah, they probably going to bring the cheapest material to be done the fastest, tells the quickest.
Absolutely, they trying to turn the burn, you know what I'm saying. So don't don't devalue your home and home inspection, you know what I'm saying. Make sure that you take serious notes. You're looking be there, you know, ask questions, learn about it because if you're going to invest, that's also free not free training, right because you're paying for it, but it's still training if you if you use that information,
that you're learning because now they work for you. Now they got to tell you this stuff, right, what's wrong with this? Blah blah blahlah blah. Now you're starting to learn, right. So that's another hack, so to speak. If you're trying to get into real estate and you're buying your first house, take the process serious, learn the entire process, everything that you need to know. So that way when it's time to do more deals. You already have the knowledge. No
one can take it from you. You have the blueprint, you have the blue brinds.
So you know, one thing that a lesion. We're not just tied to America. We get support from all over the world, like literally, we get tons of support in Canada. Shout out to Toronto, Shout out to Montreal, out to Shout out to Vancouver, Shout out to the whole country in Canada. Shout out to the Caribbean, all the countries in Caribbean. Shouts at dr Shout to pr Shout to Jamaica, Shout out to Antigua.
You guys are like number one in all these countries.
We got we gotta find.
On Shout to the Caribbean. Shots to Monday, London. The UK is a big hub for us. To London, shout out to everybody out there, and shout out to everybody in Africa. We've been doing a lot of stuff in Africa. We're going to go there. Yeah, Shout out to the whole continent in Africa. Shout out to Asia. Shout out that all over the world or every continent. So you know, a lot of most of our continents kind of you know, based around America because that's where we're from and that's
where we live. But we want to talk to people and get people information that because you know a lot of people live in especially like the you know, London, Toronto, Jamaica. They have family in America and you know they go back and forth and they might want to invest in America. So there's different programs and things for like international people as well.
Right, absolutely, absolutely, So you have what's called foreign national loans where if you're not living here or a US citizen, you still have the ability to get a loan and buy investment properties here in the US. So it's called the foreign national loan, and depending on the lender, you can put down as little as twenty to thirty five percent down payment on these loans. And it's not a
real difficul cool process to get approved foreign national. Right, there's only a handful of lenders that will take these type of loans. There's not too many of them. So if you are, you know, overseas and you want to get a foreign national loan, just do a simple Google search and you'll see a bunch of lenders that will come up. They will tell you there are different requirements, but the baseline of it is no credit score requirement
because obviously you're not US citizen. Some lenders will want you to have a US bank account and have the money transferred over to the US. Some lenders don't. They'll accept the money coming in from overseas the day of closing, but a lot of them want you to have the money in the US already, So check with the lender
for their particular guidelines on what they require. If you're self employed, then you have to get a letter from your account or your CPA just verifying where your income is and how long you've been in business, if a lot of good standing and things of that nature. If you are a W two employee, I'm not sure if they even call it W two them Lloyds over there,
but whatever you guys call it. If you work for somebody, then you get a paycheck from someone else, then we have to get a letter also from your employer, just to verify your employment. Some lenders will rub not rubbed, but run like you do a certain country, I forget the name what they call it, and just do make sure you're not on like any terrorist list or anything like that fair enough. Well, you know, got to make sure that you're not, you know, doing nothing crazy out here.
But you know, there are options out there for foreign investors to invest here in the United States and buy investment properties. I've helped ton of foreign investors, especially in the Philadelphia market. Like you know, a couple of years ago, everybody in China was coming in to Philly and buying up all the Philly right. Shout out to my guy Malik caught out there in Philly. We did a lot of deals out there together. But shout out to my
god real estate coach Carter. But yeah, it's opportunities out there for foreign investors too, that's here in the United States. So COVID slowed it down a little bit, so you know, it's not too many banks like it was prior to COVID that are doing it, but you can still, you know, find good financing out there.
What are some of the biggest hurdles that stop people from buying homes credit score? Is it not having enough for the down payment, because that's something that you know a lot of times people. Is it just not having a proper education like what it's.
Above, you know, not having a proper education first and foremost. That's the biggest thing I see. People don't they fear what they don't know, right, So most people who don't buy a home, and when you speak to them, they don't know nothing about the process. They don't know nothing about loans, they don't understand interest rates. It's just overwhelming for them. Right, So that's first things. First is the knowledge.
Then credit. Credit is probably the second biggest thing. People have bad credit out here, and they need to get worry about fixing their credit and stop spending so much. Then I will probably say cash the capital, you know. I think that's probably the third thing that I see that hold people back, especially in cities like New York. LA was very expensive to buy real estate. You know, a two family here is a million dollars. Right, you've got to talk about you need probably three point five
percent plus closing costs. I mean, before you know, you can be close to one hundred k you know that you need to buy a house. So it's a lot that happens. I mean, it's a lot that stops home buyers. But these are the things that I see the top three that stop the lack of education, credit and capital.
Yeah, I like what you said, we don't know what we don't know, right, And part of that is the question. And so like, when we're getting into this process, what are some things when we're trying to find the right loan office or the right commercial bank or investment bank. What are the questions that we should be asking before we take that step.
When you interview on your loan offices?
Right?
Oh man, there's tons of questions that you need to ask them. First of all, do they own any property themselves?
Right?
Are they investing their homeowners themselves?
Right?
How long have they been in the business? Very important question to me because look, there's nothing wrong with rookie loan officers, right, but they don't have the experience. They don't have the product knowledge yet, they don't know how to maneuver.
Right.
They're going to be more reactive than proactive because they're learning on the job. So I experience. You know, how many deals are you really closing? How many did you close last month?
Right?
Just to get an idea of what that person is closing people, are they really truly honestly helping?
How much is a season person? How many how many closings that they haven't a season loanovers.
I mean, you could be seasoned, it's still you know, not right. So, I mean, if you're a top producer, in my opinion, you closing well over one hundred plus deals a year. You know, if you're a top producing loan officer. But the mega producers are closing a couple hundred loans a year, you know they're they're out here really killing it. So but you know, the average loan officer is probably closing four deals a month somewhere an there,
which is not bad. You know, depending on your compensation level, you can still make great a great living closing four or five deals a month. But you know, you want to ask these people these questions. Do they have a team, very important, especially in times right now where everybody's overwhelmed and busy. Are you the only person that they're going to speak to, right? So team is very important. They are they underwriting their loans in house?
Right?
Is their underwright and being sourced to somewhere else? Or what kind of control do they have? You know, these are all the things that are very important because you want to know that your deal is going to be able to go through the system with no issues.
So, speaking of the mortgage industry and working with a mortgage professional. You're a mortgage you're a loan officer, correct, So we haven't had this conversation either. We talk about like investing in real estate, but there's always two sides of the coring, so you can make money actually working in real estate as well. Like you know, we've interviewed Kata Keanu wats we talked about like being a real
estate agent or realter. So like how what are the opportunities for people if they want to become like where you are as far as a loan officer? How do you do that? Like you have to go to school for that? Is it like a test that you take? Like do you how do you get hired? Like what's to do?
Well?
So first and first you have to get license, right, So you have to get licensed. You have to take the safe test and that's I think twenty five hours, which is not a long period of time. It's not a lot of hours, right, you can do that in a week. You can do it online with no problem. Of course you're a couple hundred bucks. Once you pass the class, then you have to take the federal exam.
And when you pass the federal exam. Then you have to submit your information to NMLST, you know, National Mortgage Licenses System, that's the acronym. You keep saying. Yeah, actually, and I'm saying that because I'm official telling you I'm a licensed loan officer, like I'm not an Internet guy. I always say this, right, and that's why I started saying my license number one to be compliant. At one point I knew about her. Yeah, I heard on every video,
every video. It's like NMLS number five as I almost forgot that.
Right.
But it's important that once you once you pass, then you submit all your documentation got to get fingerprinted. I mean, we're getting your credit gets looked at. So you can't really have bad credit. If you have any issues on your credit, you have the right explanations of why, if you have outstanding child support and things like that. This is serious. This is not like you. Just when I came into business, there was no licensing. They literally gave me a phone book and said call people. Right, I
didn't know a damn thing. But now after the crash, they make people get licensed now, So if you're a licensed loan offic shout out to all the licensed loan offices, by the way, that's how you start to get licensed. But that doesn't mean you're going to get a job, right because most banks right now don't have time to hire and train new loan officers. It's too busy, right, So you have to find either more company, a mortgage broker, or even a big bank right that's willing to take
the chance with you and hire you. Or I would recommend anybody looking to get in the business try to join a team, right because if you join the team, like I run a team right around my own division. But I won't hire anybody. No, sorry, not right now, not even not right now. Please don't hit me up on that. You need to hear experience minimum, right, But there are there are people in my position that will hire new people because they may have the capacity to train.
I don't have that capacity right now. Unfortunately, at some point I will, but not not today, right. But get on the team so that way you can get that experience, you can get that train and you can mess up and have somebody to guide you and hold your hand. Because there's a lot that goes into originating loan people think, you know, especially with the digital stuff that we have and the information and technology era that we're in. It's so easy to go on these websites and people get
a pre qualification letter and they think it's so easy. Right, It's not that easy. It's something these guidelines. If you look at the underwriting guidelines, even from like an FAHA loan, right, the underwriting guidelines is over a thousand pages. There's a lot of information. You know what I'm saying, And we have to be Godeline ghats like, you know what I'm saying, Like, we have to know our guidelines. This is our bible, this is this is how guidelines, this is how we
make our living right. So for me, I study these guidelines. I live in these guidelines. They tell you everything you need to do to execute right and and then you have to now be able to articulate that to someone who has no clue. Right. So it's not it's like, what.
Are some of the guidelines that you have to memorize?
Man, Everything guidelines changed today, all certain things right, like especially in COVID. Right, things are changing rapidly. It seems like almost every other week there's something coming out from the government saying this or that right, especially with self employee borrowers making sure that their businesses operate and they're running. If if you're buying investment properties, they want to make sure now that rent is being collected, especially if you're
refinancing and you're using an income to qualify. Right, we got a document, you're receiving rent. Now. There's a lot that's happening, and all that I discussed in the blueprint, by the way, but there's a lot happening in the market right now, and it happens at a rapid pace. We wake up and the guidelines are changed, and then we have to just learn them and adapt, and it
affects every loan that's in the pipeline. Sometimes they'll give you like, oh, it's going to be December first or January first, twenty twenty, but sometimes they say effective immediately.
I remember we had a conversation. I was reading an article and I think they gave you like a week.
I think it was September. It was for the refinance feed that they added the refinance fee, and the whole industry got pissed off, Like the entire mortgage industry was pissed right, And then they they delayed it to December first.
What did that?
So they added so Fannie Mae and Freddie Matt came out I think this was August, that they're taxing lenders now, basically saying, hey, y'all doing a lot of refinances. Rate is low. We need to make some of my stimulus to basically, and we're going to tax y'all a half a point for every refud that you're going to sell to Fandy made and Freddie Mack effective immediately. So that means that you're going to sell to them, right, So they basically said, we want our money, and you have.
You could have a pipeline of a thousand loans, two thousand loans in your pipeline right now. You got to pay a half a point per loan. That could be twenty thirty forty fifty million dollars worth of loans one hundred million dollars a long times a half a point that you didn't expect. They're taking your revenue, right, but they're not going to take the lenders revenue.
I know.
Is it's gonna take your revenue. They're gonna get charged charge you more. We're gonna we're gonna charge you more because we're not gonna pay for that, right And and anytime things like this happened, it gets passed on to the consumer, like the lenders are not going to pay for it, you know. So the industry went crazy and they decided to delay it to December first. So people who are originating refinances right now, that half a point is already built into your rate sheets already, you know
what I'm saying. Which in town made interest rates for refinances depending on which Linda, go up by eight to three eighths of a point over the past week. Because now it's loans that's sold by a certain period of time, so we have to cut. Once loans are closed, it takes a while for it to get sold to the agencies, you know what I'm saying. So you got to price that in now because you don't know when they're gonna buy it from you.
You know what I'm saying, Coach, The energy out there felt different. What changed for the team today?
It was the new game day scratches from the California Lottery players everything. Those games sent the team's energy through the roof.
Are you saying it was the off field play that made the difference.
On the field, A little play makes your day, and today it made the game.
That's all for now.
Coach one more question play than new Los Angeles Chargers, San Francisco forty nine Ers and Los Angeles Rams Scratchers from at a California lottery. A little play can make your day face play responsibly. Must be eighteen years or older to purchase play or claim