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CORWYN:
Good morning. Good morning and great morning, guys. Welcome to another fabulous. Fabulous. Fabulous. Yeah, I’m trying something new here. Exit Strategies Radio Show, guys. Thank you so much for tuning in. Look, what I tell you every week, and I’m gonna tell it to you again, our mission here on this show, guys is to empower our community through financial literacy and real estate education guys, we’re legacy building that is what we do. Look, my energy level today is in the 1000s. Right? I am like up here in the clouds because this is the show. All right. So look, if your friends are hanging out somewhere different from where you are today, I need you to pick up your phone, I need you to send them a text message, I need you to tell them to tune in right now. I need you to call people. I want you to go on social media, I want you to tell people to tune in. Right now, when we talk about legacy building. When we talk about creating and generating wealth, we oftentimes are approached first and thought process with the obstacles. However, today, guys, I am very fortunate to have with us none other than Chris Barker. Chris is with Angel Mortgage Solutions. Chris is our bridge today from financial freedom to legacy building. Here’s our bridge today to get us over yonder beyond all the obstacles and all those false walls that we put up, because Chris is going to share some golden– matter of fact, we’re gonna go beyond that today, Chris, we’re gonna do platinum nuggets that you’re gonna drop here on our guests today. So, Chris, thank you and welcome to the Exit Strategies Radio Show.
CHRIS:
Thank you so much for having me, Corwyn. And you are always invited to the karaoke contest I have every weekend at my house. You’re getting it. Thank you to your audience for having me here today too. And I was just telling you before we came on set here, that, always feel like a failure if I have not given somebody a real value at the end of the talk time. Do not– I start off teaching loan originators, those are my customers. So those are the guys that come to me when things blow up. And I’m like, you can bring these loan scenarios to me reactively or proactively. And so what I’d like to do today is talk to everybody on this podcast and say, Let’s get proactive with it. Let’s go out there and seek ways to build that wealth and get deals done. I’ll call them deals or loan transactions. Some people get upset with me talking slang about it. But I want you to have the first shot that these deals these transactions and it does kind of blow my mind and I get a little upset with the loan originators again, those are my customers. And then the realtor is the loan originator’s customer. They will have a deal blow up on him. It will be a reactionary, knee-jerk. Let’s call Chris, let’s get this thing figured out. See if he can say this. And all of a sudden, and it happens every time hey, can you close this loan in seven days? And I’m like, how many did you give the original? You gave them 30. And I ended up doing it. I ended up doing it. But my point is if I can teach today, how you’re not jamming a square peg into the round hole, that you’re the first shot, you’re the leadoff hitter, and you’re going to hit that home run straight out of the gate. You’re not going to upset the realtor, you’re not going to set the seller or the buyer and you’re not going to upset the loan originators, processors, underwriters, I mean the whole team just kind of loses it. So two things I want to focus on today and I hope the people that you asked to call their friends are getting on here right now because I love to start when I give realtor presentations, and on behalf of loan officers, I’ll go out and talk to their realtor swarm. And my first question is, and you’ve seen this, I’ve done it in your office. But the first question I always ask is if you’ve closed a– let me tell you a little bit about me before I get into this. Okay, we don’t do Fannie, we don’t do Freddie, we don’t do FHA. We don’t do USDA, we don’t do VA, we don’t do anything that ends with A for government agency. This is a 27 billion. Billion with a B billion dollar hedge fund that has been in business now for 10 years, I’ve been with them for seven and a half. So I kind of understand how they operate. Here’s an example: 50% of the loans that we closed, and we’re closing half a billion a month, so 500 million a month, 50% of them don’t meet our guidelines. Okay? Is that really what’s the value there? The value is that if you can show me as a buyer, a realtor, a CPA and attorney, a loan officer if you can paint that picture, think of the story you tell as a coloring book that has no color on it. And you’ve got to paint that picture, to show a show me and I’ll do the talking for you, as you can tell like the top if you can paint that picture, and you can show us that there is the ability to repay, somehow in there, in that picture. And it doesn’t have to be the borrowers, it can be the properties. And I’m gonna get into that in a minute when we get into what some people call the sexiest product in the mortgage business, which I think is the dumbest name I’ve ever heard. I will show you the most bulletproof loan and the mortgage business and your jaw will drop when I finish with this one. What I like to start with is to let everybody know that we’re not the vanilla inside-the-box lender. What do I mean by that? I mean, a commodity, Fannie, Freddie, FHA, USDA, something, those are all full income documentation loans that require W2s, pay stubs, tax returns, 4506 transactions where you go way back and you check every number there ever was that in the last two years. So we don’t do that. Okay, we can do that. But we don’t work, we’re outside of that box. Okay. So everything we’re going to talk about today is not vanilla, not in the box, not a commodity, okay? Because everybody’s got the commodity every mortgage company out there has the same Fannie 30-year fixed rate and product. We’re not, I’m not going to bore you to death of that today. So let’s get going. I ask every realtor like, hey if you’ve ever closed a VA loan, raise your hand. Anybody that has been in a business for six months, does this right here? Wow. I just said I don’t do that. Why am I asking that? The reason I’m asking is that there are more self-employed and 1099 people in the United States than there are veterans. Okay, I love veterans. I’m so happy that we have that product available to them. And I love it. But my point is this. If you’re good at VA loans, you ought to be great at bank statement loans. Why? One, because there’s more of them out there. Okay. There are just simply more customers. Number two, they are underserved. They’re underserved because of missionaries like myself, and I say this to everybody I come across, I’m like, we have to be a missionary and spread the good word about these products for self-employed and 1099 people. Okay, so one, there’s more of them out there. Two, They’re underserved. No one has bothered to be a student of the industry and learn about this product which I’m getting ready to to tell you about. And three, if you want to go on your President’s Club trip or get that house or whatever it is. This is the best way to do it. Because really, the fluent people are not getting a W2 like the super affluent, the painter, the plumber, the roofer, the lawyer, whatever it might be. These guys are– they’ve got an LLC, they’ve set up their own company, that money’s flowing in, and guess what else they are. They’re very smart because they’re running their restaurant owners, whatever it might be. These people are running their businesses and managing their budgets, and they also utilize the US tax code to its fullest benefit. So let me tell you the worst advice I have. I don’t know how many loan originators are listening to this right here. But I’m gonna upset some people with this one. The worst advice I have ever seen a realtor will go bananas when they hear this and I self-employed person will go: Oh, yeah, that’s been said to me plenty of times before, and I just gave up the worst advice I’ve ever heard a loan originator gift to a self-employed or 1099 individual is, Hey, see that door over there? I want you to walk out that door, huh? Come back in two years, stop writing off your home office and your car and your credit card and your lunch tabs and whatever it is you’re writing off. So let’s just call it 30 grand a year. Okay. And I need you to do that for two years. Because Fannie and Freddie and inside-the-box commodity lending, just get old conventional lending, they need 2 years of tax turns. So I need you to stop taking that $30,000 refund, year one, and year two. So that’s a $60,000 loss. Hello, the loan originator is instructing that self-employed or 1099 person take plus loss of two years of appreciation on the house. How much is that? Let’s just call that 30 grand, that’s probably a low number. All right. In addition to that, the inconvenience of not being able to get the house you want when you want it. So you might be looking at living in mom’s basement, or just a smaller house that you don’t want to be in. And it’s, there’s a cost intermediates there too. So all in let’s just say that’s at 200 grand, 30 grand and loss refund 30 grand and a loss refund again, or we can close the bank statement loan in three weeks. Yeah, always stop right there and go. Does anybody have any questions?
CORWYN:
So Chris. So we’re talking for our listeners, guys, we’re talking about non-QM. So, you framed it on the front end, to give our listeners a little bit of like insight. A QM is essentially a Qualified Mortgage. So full documentation, which is what most people’s standard is, it is your age, your FHA, VA, USDA, your Freddie, your Fannie, that kind of stuff, the government backstop, or otherwise government insured, that is the stuff that you guys don’t do. So basically, for our listeners, we’re not necessarily talking, it’s more of private funding, if you will, Hedge fund puts this money out, and all these programs. So, it’s like the, like you said, Christmas, it’s the ones are the deals that you can’t get done in other places, you can maybe look over here and have some options. So, when I talk about legs, I’m gonna I’m gonna bring you around on this, but I want to come back to, a couple of specific programs. But I want to start Chris a conversation about your debt coverage, debt service ratio loans to coverage ratio loans. So those are for investors. So give us the 50,000-foot view on one of those loans. What does that look like for somebody who’s looking to get into real estate investing? Does it give them away in what that looks like somebody who wants to buy let’s say rental properties to hold
CHRIS:
Okay, so this is the product that people call the sexiest product out there, which I think is just dumb. That’s not a good name. Okay. It’s the most bulletproof product out there because you can’t kill it. Okay, okay. So the 50,000 view is, or the 50,000-foot high view there’s no income required. No employment is required. No DTI is required. No DOE, no pay stubs No 4506, No W2, no tax returns, no articles of incorporation, what does that make it? That makes it a no-doc loan, doesn’t it? Yeah. Okay. Well no doubt now many of our real estate friends that are probably 55 and older right now just took a big gasp and went Oh my heavens. So I am however they’re much different. Now I did the pure no docks before O8 I’ve been telling my age here but I’ve been doing it for about 25 years and, I could close the loan in 45 minutes back in the day and I did I’ve got the world record for you can’t do that anymore. There believe me there are things like TRID and Dodd-Frank regulations and all these compliance things which frankly are very good. They will help us from ever having an O8 again and the thing that got us in oh eight was appreciation depreciating values going backward, and at the same time, ARMS adjustable rate mortgages, adjusting upward so your payments going up, your value is going down. And people gave that mortgage to the Heisman. And they were. So it just created a snowball of value going nowhere. So today’s laws and regulations require, as I said at the beginning, something that people refer to as our ability to repay, okay, and every loan originator out there gets that driven into their head at loan officer school, that each loan and this is post-O8, Dodd-Frank regulation, each loan must exhibit the ability to repay, okay, I said each loan must, not each person. So, back to that vanilla box in the QM world of qualified mortgages, there’s only one way to exhibit ATR and that is the borrower’s ability to repay non-QM, Qualified Mortgage, We can allow the property’s ability to repay. Okay, so, and instead of the old way, refer to it because I don’t even mess with DTI loans. I can do em, I can do Freddie, I can do all I don’t want to it bores me, it’s commoditized. Anybody can agree, I’m a creative guy. So instead of the old way of looking at debt to income ratio, the new way on an investment property is debt service coverage ratio. Okay, well, what does that mean? So, these can only be done on investment properties. Why? Because a primary occupancy and/or a second home cannot generate rental income. If it did, it wouldn’t be a primary occupancy or a second home, Follow me? So no, dock loans are illegal. I love to scare people and say that they should shock factor. They are illegal on primary and secondary homes, but not on investment properties because investment properties uniquely can guess what: pay for themselves. And this is what I want people to–
CORWYN:
And that’s what they should be doing, they should be paying for themselves and they should be thrown off the cash flow. But the first part we got to pay for themselves to throw off cash flow.
CHRIS:
So here’s here’s how the nuts and bolts of a DSCR loan work and I’m going and if I don’t prove the bulletproofness of this, this loan, I want you to raise your hand and yell at me. Okay, so DSCR: debt service coverage ratio, simply means does the rent cover the mortgage payment? Is it a one-to-one? Okay, so instead of DTI, everybody thinks, oh, what’s your ratio? You got to hit 50%? That’s kind of the target you got to hit on DSCR does the rent cover the mortgage at one to one? If it does, bam, off the closing. As I said, No VOE, no pay stubs, no 4506, no W2, no harassment, no blank fee, then, give me the feelings out of your teeth. I need everything to close this loan I need. All I need is an appraisal. And that appraiser’s opinion on that market rent analysis. I just need him to say, here’s what it’s going to rent for. And then I’ll do the math and go does that cover the mortgage? Yes. Boom, off to closing. I can close that loan. I closed one last week, in 11 days. Yeah, I’ve closed them faster than that. Now, I don’t tell people that all the time because sometimes the insurance is slow, and they might get the mortgagee clause wrong or some minutia type thing. But let’s get back to how this loan works. And let me prove the bulletproofs, I’m going to, I’m going to scare you. But I’m going to tell you what a good realtor or a good loan officer would do in this worst-case scenario. All right. So here’s a couple of examples. So we have a DSCR loan. The borrower just went W2 to 1099 and on the W2 to unemployed doesn’t matter on the loan application leave the employment blank. They may not be their DTI might be 60, 70, or 80% Doesn’t matter. Leave the income blank. All we’re worried about is can the property itself pay for itself. So here’s how here’s how the example works. So the loan originator takes a loan application pulls the credit, and checks everything out. I pre-underwrite it myself. I send them back a pre-qualification pre underwrite and they’re off to the races looking for properties. They then order an appraisal the appraiser goes out there and he does what’s called a 1007 market rent analysis and then this rent analysis all he’s doing is going out there and looking at comps and going okay 2500 square foot house within a mile, three bedroom, two and a half bath in my professional opinion. This should rent for $1,000 a month. Okay, what’s my mortgage payment $1,000 a month rents for 1000 mortgage payments 1000. Bam, off to closing Boom. Oh, that’s easy. That’s super easy, the fastest long you’ll ever close. Okay, now here come the curveballs. Now we’re in the real estate business. So, you get some curveballs from time to time. This time, the loan officer orders the appraisal, and the market rent analysis, and the appraiser goes out there. And he maybe didn’t do the greatest job ever. And he comes back and let’s just say that the mortgage payment target to hit is 1000 bucks for easy numbers, cutting mortgage payments, 1000 bucks. He goes out there and he says, In my professional opinion, looking at 2500 square foot two and a half. Bathroom two, three bedroom, I think it’ll rent for $800 a month. Is that a dead deal? Costs 1000, only rents for 800. Is that dead? bulletproof? No. Okay. So if now this is there’s a variety of ways to save this deal. One, the quickest and easiest way is okay, Well, what if I switch this loan to interest only, because now instead of principal and interest for the payment, I’m looking at just the interest? So now, I can drop my 1000 down to like 850. So 50, boom, off the closing we go. But if you put and these loans different than the no doc loans, before Oh, eight, these require some skin in the game, you got to put 20% down, okay. Okay. In that situation where the rent’s only 800 bucks, if you’ll put 25% down, and you’ve got a 700 credit score, we are fine with an 80 – 1 ratio. Okay. Fine. So go ahead and close it. No big deal. Okay, hold on. Hold, there’s more. Okay. I said this is the most bulletproof loan in the real estate industry. And I’m gonna prove it right now. And maybe you should not go into this tear. But here we go. The appraiser goes out there. And he does the absolute worst job in the history of appraising. And he comes back and says, In my professional opinion, I think this property should rent for $100 a month.
CORWYN:
Wow.
CHRIS:
What? What are you? You can’t rent a cardboard box for $100 a month. Man, what are you talking about? Is that a dead deal? No, Nope. Same thing. If you got a 700 credit score, and you put 25% down, I will still close that loan. Now the difference between the points .8 – 1 and 0 -.8 The rates are going to go up 2% because we’re going to be compensated for our additional risk. Yeah. So you kill that deal. Now. However, if you get something that bad, either the appraiser truly did do the worst job in the history of appraising, or as a realtor or loan officer, you might want to advise your customer, Hey, man, maybe this appraiser knows that there’s a nuclear waste site about coming in over there. And we don’t need to, we probably ought to move on to another property.
CORWYN:
So let me throw this at you. So in the appraisal process, they’re looking strictly at Rent are they looking at the condition, Let’s say that a property in this situation somebody is looking for a rental, and they plan to go in and remodel the kitchen and bathrooms, or something of that nature, and be able to get the rent to a certain amount? How does that factor or play into this?
CHRIS:
So what you could do in that situation? So we don’t do renovations on these, okay? Okay, but you can buy a property that you want to fix up, you can use our DSCR product. If people can’t remember DSCR and I’m telling you, there’s people in this business that don’t they call it that DCR or VCR and like, Yeah, I know what you’re talking about. Just call it the no-doc investment line. But what you can do is purchase that property, and fix it up. And we require a six-month seasoning where as long as you hold on to it for six months, we’ll give you the appraised value after you initially buy it and we can keep on up in that game and we can give you cash out on it too. And there are a lot of bells and whistles in the non-QM space such as interest only. So let’s say for example, and we’re seeing a lot of this right now. Realtors are big customers of ours right now they are buying different properties because they’re out there showing the buyers and the buyer, he didn’t DTI or he just changed jobs, or whatever it might be. And then the realtor goes, I’m not letting them go, man, I want to do that deal. Now, what they should have done was get that customer done through a DSCR line, but they might keep it for themselves. But we’re probably 20% of the loans we’re doing right now on these on DSCR are to realtors, because they’re seeing these opportunities, and they’re capitalizing on them.
CORWYN:
So let me change you, uh, bring you back around, because, all of our listeners are that person. But this conversation where we’re going, the next part, and, for our listeners, guys, I need y’all to stay with us and make sure you come back because there is. And here we are going into part two, because we got to talk about these loans that y’all can get, let’s see if we can frame it that way. So for your self-employed person, Chris, you guys do bank statement loans. You know, for that person, that truck driver who was 1099 runs, maybe locally here in Charleston from the ports, so maybe, they’re a hotshot driver, I got plenty of those, as well, maybe you’re a beautician, maybe you’re a barber, all of those people that would qualify, that they have good income, but they don’t it’s not documented, as well as it could be. Could well it could be, what, what programs do you have for them.
CHRIS:
So really, I try to steer most people to the bank statement program. Because it’s easy, it’s super easy. It is good for truck drivers, nail techs, hairstylists, I mean, anybody who is self-employed or gets a 1099, I would recommend this program, You can also do a 1099-only program. But this late in the year, it becomes a bank statement program, because I want to see seven months of bank statements to see what they’ve done this year. If a 1099 person is not getting a monthly summary, if they’re getting a monthly summary, I’ll just take a 1099 summary the whole time. But the bank statement loan is super easy. You literally and people ask me all the time, how do you do the calculation? You like do is subtract out this and subtract out that and do that. What about the ending value– It is so easy. You look at that bank statement and self-employed people who are listening can do this. Look at your bank statement, see what the total deposits were for the month, do the next month, the next month, and the next month, add them all up and divide by 12. And there’s your income. And I bet you I say this four or five times a day, Hey, if you got tax returns in that file, I want you to shred them, burn them, trash them, whatever you make sure nobody accidentally uploads that into my bank statement loan. Because here’s what happens all the time. People are self-employed and 1099 people go into a mortgage broker’s office. And they will say hey I’m making about 110, 120 a year let’s say truck driver, nail tech, whatever it might be owner of a nail salon. And you would not believe the money I see getting deposited in people’s bank accounts. I’m just like, holy moly. But they’ll go in there and say hey, I’m making 120 a year. And the loan officer comes back and says well, your tax returns say you’re making 20 a year or not you’re missing a digit there you can watch 20 So you were looking at a $400,000 house and I’m gonna call qualify you for $80,000 house. And that doesn’t make anybody happy. The buyer, the realtor, nobody’s happy in that situation. Another cool thing about that is if you have a self-employed buyer who wants to go out shopping, and I think Realtors probably feel the pain of this one a lot. They’ll put people in a car, drive them around all Saturday, and not know what they’re qualified for. And all these bank statement loans can be before the property is selected before you do anything. You give me those 12 months of bank statements. Four hours later, I will send you a really pretty income determination that will say your income is exactly $13,297.46 a month You plug that into your loan application, you check the DTI and you hand that over to the realtor and go here Mr. Realtor I’m qualified for up to a $700,000 loan amount and remember the ello said gave you the worst advice ever. Guys ever there go here’s your qualification for a $75,000 loan amount, which person you want to work with. And that realtor is going to love it because you’re not wasting that realtor’s time and I can nail it right down to the penny of what the maximum they’re qualified to purchase is. So it’s super easy for all the self-employed 1099 people Just turn over 12 months of bank statements, and I’ll have it back to you in four hours, you can do that on a Friday, and you are ready to go shop, and Saturday and Sunday. No, exactly. I pre-underwrite the whole thing. There are three big parts of underwriting three big parts, credit, capacity, and collateral, The credit underwriting, capacity is the ability to repay. So I’m looking at banks and underwriting that myself. And collateral is the property itself, that’s your job, that’s a realtor’s job, or the borrower’s or the buyer’s job Go out there and finance but two-thirds of the whole underwrite is done in the first four hours.
CORWYN:
So that makes it real. And I don’t want to say easy, but it doesn’t overly complicate the process and makes it a lot more of an efficient process. To get someone from, Hey, I found this house, I love this house, I’m ready to close on this house so Chris, I’m always excited when I get to talk to you. And the reason that I’m excited is because a lot of the people are around me, so obviously in my office, I have a bunch of real estate professionals around me, and I deal with a lot of business owners. And everybody’s trying to figure out how to fit into the conforming box, if you will, they’re trying to figure out how they can qualify for an FHA loan when your income varies– is variable fluctuates. And, if you just don’t fit, check all the boxes, but that’s vanilla, that’s the go-to, for most people to try to figure out. But those that think creatively, to think on the other side, like you, you’re on the other side, you work the other side exclusively, you’re able to provide options to help bridge and get people over and get them into investing in property, get them into homeownership, because these other people, I mean, I’m a prime example. I know a guy who’s been working for a company forever doing a particular thing. Now he has started his own company, doing the same thing. He has the experience, but now his income. One is completely different because he is the company, then the next part of that is on top of him being the company, and his bank statements reflect it. If he was looking to purchase a home, he wouldn’t fit any of the other programs, none of them. And he’d be able to buy a home in this situation. Barbers, beauticians, stylists, and anybody who is self-employed, they fit this. And I’m super excited every time I get to talk about it because I see opportunities that other people are just walking right on paths. Right? They just walk and ride on paths. I’m like, Look, you can buy a house, what are you trying to qualify? This person says can be two, or three years before they can get you qualified. Well, two, or three years from now, what you’re going to pay for the house? Well, what about the– and you always get this question. What about the race? Well, great. But if rates come down, then refinancing the future. But you don’t save yourself the money by buying the house at today’s pricing instead of tomorrow’s pricing. So, Chris, we’ve covered DSR we covered bank statements, we covered integrated 1099. But for those people that receive 1010, nine hours from their employers, you have an elite program you also have jumbo programs. Um, the jumbo probably you do loans up to what 3, 4, 5 million?
CHRIS:
Well, we say 3 million, but we did one last week at three and a half. I mean, it’s, it depends on how much I talked about skin in the game. Skin in the game is the most important. The two most important things are that the lifeblood of real estate is appreciation. Okay, as long as you have appreciation, you’re pretty safe. But the insurance policy, and I’m talking about on a national scale of what can hurt us out there. As long as things are appreciating, we can’t fail. But our insurance buffer is skin in the game meaning before 08. It was 100% loan to value there was no down payment whatsoever. And people didn’t have any skin in the game. So if you put 5 – 10% skin in the game will open doors We will make magic happen. But that’s the most important. That is the secret sauce to us is there’s a little bit of skin in the game. So if something does go wrong, we’ve got a buffer there to work with. And we think it’s a good idea when we go into these loan transactions together that the borrower that we’re working with is more like a partner. You know, you’ve got your skin in the game. We got our skin in the game. Are we all working to make this thing happen? And a lot of people, question and go, how do those loans perform? And if you compare us, we are our loans because of that skin in the game. And because of our years of underwriting experience are better, way better than FHA and better than Fannie and Freddie even. We do not. I mean, I haven’t had one delinquency in seven years, I mean, these people pay, and something that you were saying a minute goes a little bit sad, but at the same time, happy. So many of these self-employed, people get told no, oh, I’m sorry, your tax returns don’t work, you’re gonna stop doing that, what do they say back? Man, I’m not gonna stop writing that off, You’re telling me to stop right now, and I’m not going to, I’m just going to keep renting, or I’m going to save up cash, might take me 1015 years, or they’re just not going to not do that, they’re gonna get that tax refund. And I don’t blame him, especially if you’re talking about, some of these truck drivers and, and a lawyer, a painter, whatever it might be, they’re writing off everything. Home Office, cell phone, credit card, bar, tab, Bar Mitzvah, barbecue, I have seen people write off the fertilizer that they put on their grass, like, well, that’s part of that’s my home, but my home office is in there as part of maintaining my stuff. And I’m, like, go after it, but they don’t.
CORWYN:
So I’m not to cut you off, Chris. But you’re right. I mean, I can’t tell you over my years, how many times I’ve had a lender, say to someone, well, hey, we’re gonna have to we’re you’re gonna have to start writing this off, which then creates goals, take someone from they’re a small, tight liability to now they gotta take an increased or higher, much higher tax liability, to be able to get on paper to a number that allows them to qualify, now. They qualify, they make income, and they have income to support and sustain the mortgage. So, we’re meaning the ATR, the ability to repay, look, I learned my term today, take that off the list. But on the other side of it, they’re being exposed to having to pay a substantially higher tax bill, because Okay, to Linda saying, Well, look, I can’t add this number back in your income. Technically, if you don’t write this off, we’ll be here. And we can qualify you for this. But you can look at that same scenario and say, Well, look, based upon what you’re already reporting, based upon this, we can qualify you for this, which is more than what you’d be qualified for. Otherwise, by doing it this way, you have the assets, you save money, and your business is making money, so you’re showing a profit, but not because that’s what you’re looking for, all you’re looking for, is the amount of money coming in to say what the income is. So make it simple, and, and this is for our listeners, guys, I’m, I’m excited, this is kind of, Chris, I’ve had this idea about doing, a series of workshops. So, we’re going to work on that, because I want to help the people that, we leave out I do a lot of, work in certain niches, and this is a niche that I work in, but it’s hard because people are so conditioned, they’re so conditioned to do the same thing over and over and over again, but they miss the opportunity to accomplish more by doing something a little different. It’s not massively different, just a little different, and you can accomplish so much more. So I appreciate you bringing that information to share. So let me ask you this, When I get another, I have a question. And then I’m gonna get us quote unquote, to our mic drop question if you will, but Chris, what kind of scenarios, what’s the most, let’s say, the easy peasy as and then the most outlandish scenarios that you’ve had, that you’ve been able to serve as doing what you do? And I look? Yeah, I just saw that. So that that was a glimmer, you you got you got something outlandish. But what do you have to kind of share? When somebody’s looking at this thing is saying it’s not possible, but you made it happen?
CHRIS:
Well, I mean, twice today, I’ve done that. I mean, I got a phone call, one out of the upstate, and one out of Somerville, and called me two or three weeks ago. And, here’s something I want to touch on too, is rates, people are like, Oh, what’s the rate on that? What’s the rate on that? But it was a DSCR loan. It was an investment property and the guy thought he could DTI and he thought he could use his tax returns. And he went, the vanilla inside the box conventional way because the rate was like half a percent lower, and it blew up. And now they’re all I mean, everybody you involved in a transaction is, can you close this in three days? And I’m like, Hmm, that you can’t even legally close a loan, you got this waiting period for disclosures and for closing disclosures and this waiting. I mean, all these compliance things don’t allow that, but you talk about easy peasy. Those are easy. But, jamming that round peg in a square hole. That’s what they’re trying to do there, that round peg belongs in an open borderless hole there, it’s like, Come on, bring it over here, we’ll do it and knock it out in no time at all. But, to me, the DSCR loan is just the easiest. I can pre-underwrite one of those in three minutes, man, I mean, it’s just like, Does this make sense? Check, check, check pre-approved, send it back to the mortgage gu, The mortgage guy gives it to the realtor realtor calls the borrower or whoever, let’s go shopping, or this deal done, let’s get this thing rolling. But those are super easy. You know, now complicated. Holy moly, man. I have seen it. Um, there’s so many, there’s a lot of them, but because like I said before, 50% of our loans do not meet our guidelines. People start throwing everything at me, okay, hey, I got this guy who’s got five different companies. He’s writing off all this stuff on his taxes. And I like to stop them right there. I don’t want to be rude to him. But I’m like, Hey, burn the tax returns, shred them. And I’ll forget the word is talking about bank statements that I have taken five different companies that this is a guy who is a real deal entrepreneur, okay. He’s got, a food truck. And he’s got a motorcycle company. And he’s got a hair salon. I mean, he’s got all kinds of stuff. And I would take all five and put them together and ended up closing like a 2 or $3 million loan for somebody like that. But you start putting pieces together. And we can do even a bank statement W2 hybrid loan. So for, let’s say, the guy. And we’re only looking at 12 months of bank statements which makes it easy to but let’s say in months 10, 11, 12, he was just getting started on his really good income. And he didn’t quite hit the debt-to-income ratio. And I’ll always ask the question, Hey, is he got a spouse or she got a spouse that works? Yeah, but he’s W2. Cool, we’ll add it to it. Or he’s fixed income. Cool. We’ll add that to the bank statement income. Now we have a bank statement, fixed income bank statement, and W2 hybrid. We’re now at 48% DTI, BAM off to closing. So the beauty of this is the creativity and I even think of it as artistic because you’re in there going. What if I put a little like I was talking about painting that picture? Right there. All of a sudden, my DTS 49 Bam, off we go. Then people just sit back and go, How did you do that? Like, it just makes sense. We painted the picture. The picture makes sense. We’re off to closing. But Fannie and Freddie don’t do that. Oh, who are they? Who is failing? I don’t even know them. So
CORWYN:
So Chris, man, look here. I just want you to know, that I almost fell out of my chair over here. Okay. Because I wasn’t ready for that seat. And that’s why I am I guess, so excited to talk to you because what allows the flow of creativity and all that because you just gave me like, a lot of other ideas and stuff and ways to help people with this and you also touched on something, I explained this to my buyers I’ve been doing this for years, as an explanation I explained their loan as the canvas, if you will, the underwriters to artists, and the colors are the pieces of your life. You know, your employment, your credit, your income, this that whatever it is, those become the colors and the loan officer has the unique. Well, my friend me phrase that the underwriter is the art buyer, but the artist is the loan officer, because they take calls on your life and they paint out this canvas, and then they present it to the art buyer. And hey, what do you think about this? Will you buy this and when they buy it then you have to deal with this code. That’s how that works. If they don’t like it, then they take your canvas back and they try to change it up a little bit. And sometimes they can get it to where it looks appealing. You just made this thing man so simple. For our listeners, guys, look out y’all have got to engage on this. Now Chris, look, I know that you’re not the guy they should talk to, first because loan officers do this. Like you said loan officer, your customers. You’re the guy beyond so for our listeners, I want you all to know that look, we come a little bit higher up in the tree. We had to get Chris off one of the top limbs out there because he services everybody below. So, reach out to me reach out to our group, our team here, and we’ll get you in contact with one of our lending partners that do these kinds of loans working with Chris, That’s how we’ll get you connected, how we’ll get you service, and how we’ll get you into homeownership. Now, Chris, I call this one my mic drop question. Okay. And it’s that thing that whatever point in time you say, you’ve been doing this 2020 Somebody has 25, 26 years now. So, you gave me hope, because I’m quickly approaching 20. But my mic drop question is that thing, if you didn’t know, this thing, whatever it is, whatever it is, if you didn’t own this a long time ago, what particular thing would have completely changed the trajectory of your life that you will be catapulted to the way where you already have the catapult into where you are now, or far beyond if you’d have known this way back yonder when, and it could be related to the mortgages, it can be related to any particular thing. This is a mindset question. What would that thing be?
CHRIS:
I would have done exactly what I was doing. And I gotta tell you, I had a buddy of mine, I was working seven days a week, 14 hours a day, working at a local resort, I mean working. And he tried to recruit me into this. And he, again, goes back to being a missionary, he was spreading the good word to me. And I didn’t believe him, I’m like, it can’t be that good. I got a great job. I work a lot, like all the time. But you can’t have it that good. So he ended up things in my life changed where I had to. And I started doing this. And I would not change one single thing from that moment, because he taught me what I’m sharing, keep saying you got to be a missionary, you got to spread the good word. He taught me everything that I’m saying to you guys, today. I’ve been doing this for decades, I could not do any more of it. I have closed over 100 loans a month, several times I work now voluntarily, till two in the morning, I will get up, not take a shower, and start slamming and saving these deals and saving people. You know, tomorrow morning, I’m driving to Greenville to talk to a bigger real estate group up there. I wouldn’t change a thing, this has been the best life that my friend taught me this. And I have gravitated to it. And I just keep, I’ve got to do a better job of talking to more people. And the only way to do that is to work on Saturdays. And I can’t do that. But I would just urge everybody to take what we talked about today, it levels them up in the real estate game. You know, you talk about video games or powering up or leveling up this is what does it right here, your competition will not be able to compete with you. Because they’re not complete. What this does is complete the real estate mind through financing, and abilities that the people who aren’t on this that aren’t listening to this. They don’t know, everybody that just listened to this has a new superpower. Okay, they have creativity. They have abilities that they didn’t have before they got on here. And they’ve leveled up in the real estate game. And they’re complete. And I get sad when I see people in a mortgage business and real estate business who didn’t get to have this talk. But that would be my most important message spread the word, utilize what we’ve given to you here today, and go get ‘em, man.
CORWYN:
Awesome. Chris, thank you so much. Thank you for taking time out of your busy schedule to be on the show with us. I get excited every time I see you and I get to speak to you. Because I know. You know I’ve always said this and I’m gonna say this brief and close this out. But I’ve always said that real estate is like a domino and it’s multifaceted. And depending upon your angle, your view, you’ll see it a certain way. But if you turn it just a little bit if you adjust yourself just a little bit, you get a completely different view. And that’s what I love about this industry. If you can believe it if you can figure it out if you can think of a way you can get it done. And the programs that you guys offer are just that they are a different way to get it done. It’s a creative way to get it done. It is the other, it’s another facet, if you will of loans or mortgages it’s another view of the same thing and I always get excited about it because everybody doesn’t fit the vanilla box. Everybody doesn’t fit the chocolate box or whatever flavor it is. Everybody doesn’t fit. But some options are out here for those who don’t fit, but who still can. So thank you so much for taking time out today. For our listeners, guys, look, this has been an amazing, two parts show. You know how I feel. You know what I say always put the two of those things together. And I always say it to you this way, which is I love you. I love you. I love you. And we gon’ see you guys out there in those streets.
