To start this episode, Jason Hartman talks about the game-changing concept of the self-driving car and the benefits of moving to Las Vegas, Nevada, a no income tax state. He then tackles what it means for real estate investors to have Donald Trump as president. His guest in the interview segment represents a company who provides private equity loans and portfolio lending to business entities in the US and foreign nationals. They discuss Whitmore’s “Rental 30”, how to pre-qualify for private equity loans, loan limit of private equity loans, and how to save on origination charges under the portfolio program.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:12
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution. Real estate investors.
Jason Hartman 1:03
Welcome to the creating wealth Show Episode Number 758 758. As we get closer and closer to episode number 1000 Yes, it won’t be long, folks. It won’t be long with three episodes per week, every Monday, Wednesday and Friday. Thank you so much for joining me. This is your host, Jason Hartman. And glad to have you here. Do it is the end of Thanksgiving weekend here in the United States. Happy Thanksgiving to all of you. I hope this was a great reminder for us all to be grateful and thankful. Are those the same thing? grateful and thankful? Not exactly are they? But anyway? Yes, it’s a good reminder at least once a year to remember that it is an amazing time to be alive. It’s an amazing time to be alive. You know, I was just leaving the shopping mall. Here. You In Las Vegas, and you know, I guess this is as good a time as any to formally announce my move to Las Vegas. Yes, yes, I know. It’s kind of weird. I’ve been saying I’ve been spending a lot of time here. So I’ll tell you about that in a moment. But here’s why it’s an amazing time to be alive. I was just leaving one place and coming to another and the car was chauffeuring me. It was driving me. I mean, do you realize how incredible that is really, the game changing concept that will change real estate investing that will change so many things in our lives, the self driving car, a total game changer. It just never ceases to amaze me how this technology is going to change the world radically. It is huge. Of course, there are many other amazing reasons to think it’s an amazing time to be alive 3d printing biotech, nanotech, all of the rest, I mean, wait till we start rolling out that amazing new material called graphene and how it will change everything and make everything light and high tech and strong and incredible. So it’s an amazing time to be alive a lot to be thankful for definitely, definitely, definitely. So today we our guests will be talking to us about financing your properties with private equity. Yes, private equity financing. That’s what we’re going to be talking about today. And our guest speaker attended our last event in Phoenix when we talked about well, we talked about technology and real estate investing and some of those implications there and how to use software in our real estate investing business, but he will also be at our upcoming meet the Masters event, and a lot of you have been registering like crazy even though I only mentioned it once on the podcast. Yes, we actually have booked meet the Masters our annual event, our big annual event. I believe this will be our 19th meet the masters. Now, why don’t I exactly know, because we haven’t been doing this for 19 years? No, I haven’t been doing it that long. We used to do this event twice a year now we only do it once a year. So the count is a little bit screwy. But yes, meet the Masters is coming up in January. Go to Jason hartman.com. Click on events at Jason hartman.com. Get your tickets early bird pricing. Pricing just went up a little bit, but it’s still pretty darn good. By the way, if some of you are thinking, what happened to the pricing of this event from several years ago? Well, I will tell you, it’s called inflation My dear listener, yes, inflation. Hotel prices have been skyrocketing. Carrie, who you’ve many of you know have met, she’s been on the podcast, she’s on our team. I’m so thankful for her help in planning this event. And she is just as amazed as MSI, about the hotel prices and how they have skyrocketed. The food and beverage minimums, the room rates, everything has just gone up, up, up, up up in recent years. So these events are much more expensive to do than they they ever have been really. So if you’re thinking, Well, why aren’t you selling meet the Masters tickets for $397 anymore? Well, because factoring into that is the inflationary pressure of hotel pricing for meetings and conventions. So that has a huge impact on our business. And it’s made a big difference in the price of these events. So just understand that and what does Trump mean for us as real estate investors? What does it mean for the economy? To me, what does it mean for markets overall? Well, we’ve had a few guests on the show discussing Trump anomic. So I guess we’ll call it I am more and more convinced that Mr. Trump, President Elect Donald Trump, although being very good news in many ways, because it at least at the very least, we have a president who appears to be pretty direct and blunt. And yeah, I know I called him a buffoon before I stand by that remark. He’s a bit of a buffoon. I mean, why would he say such stupid things, you know, to be direct and blunt and honest, you don’t need to offend everybody, but hey, maybe that’s part of the strategy. This is above my paygrade. And I don’t understand how it all works. But enough of that Trump commentary, I think Trump is inflationary. If we become more protectionist in our trade policies, which that is the direction it’s going, that is going to bring in inflationary pressure for sure. So as we’ve talked about, with my technique known as inflation induced debt destruction, yes, the technique I pioneered Yes, yours truly not any of those copycats you might be listening to out there those other so called real estate gurus. The technique I have I talked about how inflation really is a home run to us, as far as investors, but at the same time the countervailing forces is of course technology. with Trump. We are going to see lower energy prices, we’re going to see more of an energy exporting nation in the US and that’s good that’s deflationary. And then of course, technology, I think we’ll see a lot more capital investment into technology. So overall, if there’s more capital investment into technology more into r&d research and development that is deflationary. Which one wins I don’t know, I really just do not know. These are two very powerful forces. And we will continue to monitor the situation. It’s about all we can do as things roll on here. But it is an amazing time to be alive. So Las Vegas, huh? Las Vegas? Yes. Sin City. Well, as you may or may not know, I have never been much of a fan of Las Vegas. But I moved here. Now, why would I do that? Well, for many years, you’ve heard me talk about how one of my goals is to live in a no income tax state. And when I left the Socialist Republic of California only to come back for seven short months to catch a tax break last year. I left basically five years ago. I couldn’t believe when I moved from California to Arizona. How much faster I could create wealth in Just lowering my tax burden and lowering my cost of living. It was dramatic. It was absolutely dramatic. And so I have wanted to live in one of the many no income tax states for many years. And I have looked all around various areas of Florida. I have looked, I’ve even considered places like Tennessee, another no income tax state, Texas, of course, being being the big one. I’ve considered moving to Austin, I’ve considered moving to Dallas. I’ve considered moving to Nashville. I’ve considered moving to Tampa to the east coast of Florida, the West Gate. I don’t know I’ve looked all over the place. You know, Seattle, beautiful I love the Pacific Northwest Washington State is gorgeous, but you know when it’s not raining, hi, Neil and Elizabeth. They’re probably listening to this. And it’s a beautiful place no income tax state, also Washington State. That’s fantastic. But Um, you know, all things considered Nevada especially Las Vegas has a pretty darn good formula. Now I’ve long hated Las Vegas because, you know, you think of Las Vegas, is this the strip, right? The the casinos, the hotels, the big hotels, all of that craziness. And by the way, a bit of trivia for you listeners. Do you know that the Las Vegas Strip? Yes, just the Las Vegas Strip area. Not all of Las Vegas, not all of Nevada. Just the Las Vegas Strip area has more hotel rooms than the entire you’re ready. You’re ready for this? This is a big piece of amazing trivia I just learned I took a little helicopter ride over the Las Vegas Strip one night. It was pretty, pretty incredible with all those lights, amazing views. And one of the things they said on the helicopter ride is they said that the Las Vegas Strip has more hotel rooms than the entire continent of Europe. Wow. Talk about capitalism. Oh my god. That’s insane. The Las Vegas Strip, just the strip, not the city. Just the strip has more hotel rooms than the entire continent of Europe. That is truly amazing. Well, once you leave the Las Vegas Strip, it’s just a normal town. You know, it’s a normal city in beautiful areas like Summerlin or some of the areas in Henderson. It’s just like being in Scottsdale or Orange County, California. You know, it’s like the same deal basically. So that’s what it’s like. So I’ll tell you more about my move here. But here’s the thing look at I always seem to find myself being chauffeured in my self driving car to either Los Angeles or orange county or San Diego. It always seems like I have to Go back there for something to these places, right? And here the drive is actually about an hour hour and a half less than it is from Scottsdale Arizona. I have no income tax here in Arizona, it’s I think it’s about 4.6 is the top tax rate versus the Socialist Republic of California. 13.3%. God, if you live in California, please make it your goal to move. It was mine for many years, and it’s only improved my life. It’s just a wealth creation suggestion. That’s, you know, it’s a pretty good one. Check that out. And in addition to that, invest in real estate. But yeah, so we’ll see I you know, I took a big risk moving here. I moved here homeless. I was basically living in hotels. A friend of mine has a vacation Airbnb condo here that I was living in a little bit and, you know, moving around, it was a big hassle, but I kind of got to audit and try some different hotels here in Las Vegas, which was kind of a interesting experience. But a huge hassle nonetheless, I just took the risk because I kept looking and looking at properties here and it was just too hard to do it remotely. You know, I took a couple trips back, I kept looking for properties to rent to buy to lease, I just thought I gotta be here. If I want to look, I got to be here. So I’m just going to move as a homeless person. And, and live in hotels and I and I did that. And I will update you on a future episode as to what I actually did for housing in Las Vegas, I think you’ll find it pretty interesting. You might even say it’s a little hypocritical. You can be the judge, but I will tell you the real story, so you can judge yourself and see how it all fits into our real estate investing and wealth creation plan. So that’s coming up on a future episode. I don’t want to go too long on this one because we’ve got our guest who’s going to talk to us about financing with private equity funding. answering your real estate investments. So let’s go ahead and dive into that. Go to Jason hartman.com. Click on events, get your tickets. Early Bird pricing for meet the masters. We got another fantastic event planned for you. It’s in Irvine, California, Orange County, Southern California. Again, not at the same hotel. We’re trying a new hotel in Irvine. We’re looking forward to having you there in January. Be sure to get your tickets ASAP. Because people are registering fast The room is filling up quickly. And as you know, the price escalates as the room starts to fill. So be sure you get that this is our signature event, our annual event, meet the masters of income property investing, go and register for that, get your tickets right away. Let’s go to our guest and talk about some creative private equity financing for your real estate investments. Here we go. So all of you investors know that there are tremendous opportunities to invest right now. And one of the reasons there are so many great opportunities is that it is harder for your tenants who are would be homebuyers. They would probably many of them would like to own a home. It’s harder for them to get financing. And we’ve been in this weird environment ever since the Great Recession where we have very, very low rates, historically low interest rates, but the lending market is relatively tight. And that pendulum has always swinging back and forth throughout the decades and throughout the years. And one of the nice things that’s happened is that there’s a whole new source of lending that we’ve talked about on the shows a bit but maybe not as in depth as we’re going to today with our guests, and that is private equity lending. That is portfolio lending, meaning the loans are kept they’re not sold off to Fannie Mae and Freddie Mac. They’re not sold off to any Secondary Market necessarily they could be but you know, that’s not the intent. And our guests will talk a little bit more about that. But this is an interesting new source. And in the, in the old days, I’ll just tell you, it was either get your typical Fannie Mae, Freddie Mac, what’s called agency financing for a property when you’re when you’re investing. And those rates were always the best rates, because you know, that they’re propped up by by a fake distorted market with the government in there, right. And that’s one of the cool things about real estate in the United States. It’s really been subsidized since the Great Depression seven decades ago. And then at the opposite end of the spectrum, there was hard money financing, which was very, very expensive. But now there’s the sort of middle market, the private equity market, and that’s what we’re going to talk about today, where there are some phenomenal opportunities for investors, especially those investors who want to go big and build really large portfolios. You have a lot of flexible To do that, so I want to welcome our guest and that is Courtney. Courtney spoke at our conference that we had a couple of months ago in Scottsdale, Arizona. Courtney, welcome. How are you?
Courtney 17:10
I’m doing good. How are you doing today?
Jason Hartman 17:13
Good. It’s good to have you on and tell us a little bit about what is private equity lending. Explain that to listeners, if you would.
Courtney 17:19
So I would say with private equity lending is we’re taking a much more common sense underwriting approach to people that are real estate investor centric, so their main business is doing real estate loans. And when you go to someone like a Fannie or Freddie agency, they’re looking at your personal debt to income ratios to qualify you and then we qualify you. It’s all based upon the property income, as well as some personal underwriting factors. So I will say that’s the main difference between the regular government government agency sponsored programs and in our private equity aside Lindy, we really know the investors inside and out and we tailor a program that fits their needs, versus having to find financial side, make a loan and it does not fit their needs.
Jason Hartman 18:03
Know your company is one of the biggest players in this world of private equity lending. So describe what you mean like where where do you get the money to lend and give us some reference point as to the size and volume of business your company does. So we’ve been in a space for over five years, and we just launched our long term product about a year and a half ago. And our our money comes from secondary financing based upon capital markets. That’s Wall Street bank, hedge fund money. So that’s where it’s backing us to be able to originate these loans. And we’re getting ready to go to securitization with over 250 million dollars securitization for this round 30 products. This is our barn hole loan. So it’s secondary financing. There’s not Fannie or Freddie, but it’s his foreign bank where they’re looking for return on their investment and from those dollar amounts, then that was that’s what helped us. Place those loan volumes for people. We’re looking for investor financing. Okay, so in other words, there are these hedge funds out there that go out and raise money to invest in various things as hedge funds do. And then those hedge funds go and look for places to put that money. And one of those places is with a company like yours, to loan it out to investors on real estate deals. And basically, you were an early player, I mean, at your company, one of the bigger players in this market, you were like employee number three or number eight or something? I believe you said, right? Yes, I’m employee number three with more capital. Correct. Wow, that’s fantastic. Okay, so So you’ve been in it, you know, it’s it’s not that old. of an industry really, but I guess by today’s world five years is, you know, you bet in business a while nowadays. In The World of Internet years that, you know, it’s like dog years, it’s like, four, seven, it’s like 35 years. Definitely. So you’ve got this money to lend. Tell us about some of the rather tract of programs and listeners should understand Of course, rates and terms are always subject to change. We’re just talking about what’s available today it by the time you listen to this that may well have changed either better or worse, we don’t know. But give us some example for a buy and hold investor like our listeners, what what kind of financing they have available to them.
Courtney 20:21
So our loan product which is called a rental 30 is a 30 year fixed fully amortized loan. This loan is made out to some type of see where they say LLC S corp, whatever type business entity they want to make the loan in. That is the key category there because this alone does not show up on their personal credit report. It’s a true business loan. So it falls on the spectrum of being a commercial loan. And it’s made for them to buy single family residential properties one to four units that can do single properties just like if they were going to buy a regular Fannie or Freddie home or a real bonuses that could do portfolio homes. I had a guy who just called me out of the day out of Florida say hey, how The 1031 exchange, I need to place $2 million. And so he’s able to buy 10 or 15 houses at one time in a portfolio type loan using us for leverage. So those are the type of financing that we’re providing for people raised a little bit higher than your normal conventional financing. So you’re not saying the three to 5% rate is between 6.5 and 8.5, depending on someone’s credit score, and the amount of leverage they take out on the loans. Right, but that’s
Jason Hartman 21:27
not that bad. I mean, compared to the old world, before companies like yours were around, you know, it was either Fannie Mae, Freddie Mac agency type conventional financing, or hard money. That was it. There was nothing in between and double digit school in the heart. Yeah, you know, they’re paying 12 15% interest and that’s insane. So, so that’s not bad. Okay. So give us those rates again, where are they? They’re between 6.5 and 8.5%, right. Okay. So six and a half to eight and a half percent and What does that program look like? If someone’s just buying, can they just buy one house? Or do they need to buy several and finance several at once,
Courtney 22:07
they can buy one house. So we will provide 75% leverage on the purchase price or appraised value, whichever is less on their products so that when they’re doing a purchase, they always have to put at least 25% down, they can put more down, the right will get better, but if they put the minimum of 20 25% down the property will provide it type leverage for them. And the same with the portfolio. Okay, so hang on before you go to portfolio and
Jason Hartman 22:31
we’ll look we’ll kind of dive into what that means portfolio when you say that in a moment. But they’re buying $100,000 house they put down $25,000. What is their rate going to be?
Courtney 22:43
So if they’re taking out a math leverage of 75%, and they have a 740 credit score above, they’re looking at a 7.4 rate, in fact, taking out a mass leverage and then it takes opera down based upon their credit score and the leverage they decide to take out.
Jason Hartman 22:56
Okay. So what is the term of Is it a 20 year amortization 30 year? What is it?
Courtney 23:04
That’s a 30 year fixed fully amortized loan.
Jason Hartman 23:07
Tell us what that financing is like with 30% down or 35%? Or what are the breakpoints? Where How do you get it down to 6.5%? In other words,
Courtney 23:17
so if you want a 6.5% leverage, that means you’re putting down 40% or more on that on the product. So give me we get down lowest rate is 45. Okay, so
Jason Hartman 23:27
6.5% at what credit score was 40% down, that can be as high as 30. That could be at our minimum safe. 30 Oh, wow, that’s pretty easy for most people listening. So so your FICO score only has to be 630. And if you put, if you put 40% down, you’ll get the lowest rate of 6.5%. Right? Correct. Okay. And tell us about the amortization on that, again, if it’s still a 30 year face, fully amortized. And it’s not doing Sooner there’s no balloon or there’s no adjustment, no balloon, there’s no adjustments. So that’s a, that’s a straight 30 year amortization. Hmm. That is correct. That’s pretty phenomenal. And do you do business in every state? We do.
Courtney 24:13
There’s a geographic places that we won’t cover so I can cover those quickly. We we land throughout the US places. We do not cover North Dakota, South Dakota, Maine,
Courtney 24:24
Hawaii and Alaska. Those are the places we do not cover. Okay, well, we don’t cover those either. So we’re not in any of those markets. So that’s fine with us. Okay. All right. So that’s pretty great. Now, what about people who are either foreign nationals investing, you know, maybe they live in Europe or, you know, they’re Australia or whatever, and they want to buy us real estate, or IRA buyers? What about those categories? So yes, we with our foreign buyers and our our rail ticket, and again, what were you looking at both. They’re both non recourse loans because they’re foreign, national. We will require a minimum of 30% down from our foreign nationals with this loan.
Courtney 25:07
And then as well with our re has to be a non recourse product, and they can put down 25%. But the rate is adjusted a little bit higher 50 basis point higher based upon based upon that loan because it’s a non recourse loan. Okay, so with 60 basis points, it leaves them at what 7.9% then so it’d be at seven 7% to 9%. And then that’d be capped off at 9%. Okay, so
Jason Hartman 25:32
so that’s pretty high at 9%. Then you’re getting into like, that’s, that’s just too Yeah, I agree. Okay, so foreign nationals can get financing through you, and how much do they need to put down just be really clear on that? So they understand
Courtney 25:45
a minimum of 30% down, okay. 30% down and what is
Jason Hartman 25:49
the rate going to be for a foreign national on 30% down?
Courtney 25:52
It’ll be between seven and eight 8%.
Jason Hartman 25:56
Okay, can they bring that rate down by putting more money down?
Courtney 25:59
The lowest you can go is 7%.
Jason Hartman 26:02
Okay, so it’s so it’s half a percent higher, just like is that Okay, got it. And the IRA buyers can put as little as 25% down, but that rates kind of high. Where’s the sweet spot for IRA buyers that want to buy it inside a self directed IRA.
Courtney 26:16
So if they’re taking out the max leverage of 75%, and their rate is going to be right around eight to 8.25. Okay, can they use less leverage and get that rate down, they can get used less leverage and get their write down. And as well as like the foreign buyers, the laws we can go into our 7% Okay,
Jason Hartman 26:34
still not bad. Not bad. This is pretty good, folks. Okay, so Courtney, does your company ever loan to a an individual as a person or do you always need the borrower to set up an entity? Even if they’re just buying one house? Do they need an LLC to be created to do that? Yes, we do need some type of MC to set up. These are not personal loans. So we made a loan to someone personally based upon the new Dodd Frank loans that would be falling around us doing predatory lending, because these loans are for business purposes only, and not for someone to live in those properties. So we have to make those loans out to some type of entity. So you see folks how, once again, the government has overcomplicated everybody’s life, because of the Dodd Frank legislation. Everybody in the marketplace has to react to that and they got to do special things. And you know, this is just the way it always works with government. So, yeah, no surprise there. Okay, so you, you do need to set up an LLC. Talk to us about portfolios. What do you really mean by that? I mean, most of our clients buy multiple investment properties, you know, when it comes to your company and financing them, what do you mean by portfolio? When we say portfolio what we’re looking at if if someone is buying two or more houses at one time, so they go to a certain a turnkey rental provider and they say, hey, I want to buy five houses at one time instead of one. We can portfolio those five. So they’re not incurring all the origination charges on each property, or they’re not
Courtney 28:14
occurring, all the closing costs, when it were where would it be if they were buying separate properties at one time? So they can portfolio and put five properties or two or three into one loan at one time.
Jason Hartman 28:26
Okay, and and what does that really do for them? Do they get better rates? Is it just easier mechanically to do? It’s, it’s it’s a blanket loan, right? They’re just getting one loan where they just have one payment for Say, say 50 properties say they want to buy 60 properties at once. They just have one mortgage.
Courtney 28:44
Yeah, so it’s almost the functionality of it is they have one mortgage, one mortgage payment that’s due to them based upon that portfolio instead of a mortgage payment on each separate houses. And they also save on their origination charge on the whole portfolio versus origination charge over 30 property 30 or 50 properties separately. Okay, so what is the origination charge? What do they say they the origination charges 2%. So if you do 2% over 50 properties is definitely gonna be more than 2% on a on a portfolio of all houses at one time.
Jason Hartman 29:19
Can you give an example of that?
Courtney 29:21
Yes. So let’s say they’re buying a property for
Courtney 29:28
150,000. Okay, you can just make it 100,000 and make it simple. So
Courtney 29:34
if they were doing buying a property on a property, bought a property for 100,000, then origination charge would be 30 $500 minimum.
Courtney 29:45
So, if they did two properties at 100,000,
Jason Hartman 29:49
then their origination charge is going to be 4000. Oh, only 500 more. Okay, and what if they do 10 that’s a $1 million $1 million in property value. So they might be financing say 750,000 of that. What would their origination charge be? Then? We do 1 million.
Courtney 30:09
That is point 2%. Then origination charges 20 million, not 20 million up to 20 to 20,000. I’m sorry,
Jason Hartman 30:17
right? Big difference, okay. But is that for 1 million in in the amount financed or property value purchased that and then 1 million in amount finance. Okay. So so in that example, it might be, you know, 1.5 million in property value. Okay. Got it. Correct. Okay, good. So how does this work on these blanket loans? Because if someone buys 10 properties, for example, and say, three years pass, and they decide, you know, I want to sell two of these properties, but I want to keep the other eight. What do they do them? How do you handle that make a sale to those properties outside of the portfolio and then we will
Courtney 31:00
We do have a prepayment penalty, so it’d be a prepayment penalty on their principal balance of that home that solid portfolio. So a year three, it would be 3%. So we have prepayment penalty that steps down 1% per year up to five years. So year one is 5%. year two is 4%. year three is 3%. year two is 2%. year five is 1%. And then nothing after that right up is nothing after that correct. Okay, so this really is designed to buy and hold for at least five years, right? Correct. Okay, good. That’s okay. Tell us more about the portfolio and how that all works. So a bargain come to us and say they they got a deal on the properties where they’re buying it at $1 million for seven properties, then all it works just like a regular loan, they will just have to put the 25 to 25% down or whatever amount of levers they want to take out to achieve the best available rate. The thing is What happens with the portfolio is we take a total value of the portfolio itself and not each individual property inside of the portfolio.
Jason Hartman 32:07
Okay. And how about documentation? I mean, it’s a lot easier to get your loans than it is regular Fannie Mae, Freddie Mac loans that people are always complaining about jumping through all those hoops and doing all that paperwork.
Courtney 32:21
Definitely. So for us, what we’re looking at the pre qualify someone is we need two months of bank statements or quarterly statement of their outright driver’s license, and a copy of one of your tax returns. Only one year. Okay, great. That’s easy.
Jason Hartman 32:35
All right, what else and then you are going to run credit you do you do use personal credit? Yes, we will work right. But once they get these loans that the loans do not show up on their credit report, even though you check credit correct to make the loan, right, correct. Okay. And what if they did some strategic defaults and had a foreclosure in the past? I think it’s four years. They can’t have any in four years. Right, like to not have it in four years, correct. Okay. So it might still show up on a credit report if those stay for seven. But as long as it’s not in the last four, they can still get the loan through you. Correct? Correct. Okay. And one of the other problems with Fannie Mae and Freddie Mac agency conventional financing, is that you’re, you’re limited to 10 loans per person. So a married couple could conceivably get 20 loans. with you. There’s no limit at all is there? There’s no limit. So you can buy 200 houses? 1000 houses? Doesn’t matter, right? Correct. Correct. What else do people know?
Courtney 33:38
And we’re not calculating. I always get asked these this question, why do you need my tax returns? Well, we just want to make sure you don’t have any tax liens against you as a person. We’re not calculating personal debt to income ratio. So as a real estate investor, we understand you have a lot of write offs on your tax returns. So we’re not calculating personal debt to income ratios.
Jason Hartman 33:57
Okay. Okay. Good, good stuff. Just anything. You want people
Courtney 34:00
to know, I feel like we give the best customer service that they need. And any questions concerns is definitely here for us to answer those, and your investment counselor can answer those as well.
Jason Hartman 34:11
Fantastic. Well contact our investment counselors through Jason Hartman calm, they can put you in touch with Courtney and some some of this alternative financing. Of course, we have outlets and sources. And, Courtney, you met them when you spoke at our event in Phoenix that do conventional financing as well. And the idea investors is if you can get the conventional financing, get that first, get your first 10 properties in your portfolio, and then go on to something like we’ve talked about today. This is what you do for property 11 through infinity. But the first 10 you do want to get the conventional Fannie Mae Freddie Mac type financing because the rates are so good, but after that, this is a fantastic opportunity or if you’re a foreign national, or you’re buying inside a self directed IRA, or you’ve already got more More than 10 properties. This is great. You know, one question we did not ask is that we have a lot of listeners and clients who are sitting there with portfolios that they purchased, maybe with cash during the Great Recession. And they want to refi those, do a refinance, take that cash and buy more properties. Talk to us a little bit about refinancing, if you would, before you go. Yes, we would love to help those people. As long as they’ve had those properties for the least one year of seasoning, we can refinance them up to 75% of the present day value of those properties. And they can pull cash out so they can do cashout refi 75%, LTV or loan to value and what will their rate be on that? cashout refi? That’ll be like 7.4 7.4. And does that depend? That depends on their FICO score, right, that they’re gonna cycle score, and they choose to take out less leverage than 75% then the rate will go down. Okay, just like you said before, and are they the same rates as the purchase Money loans, whereas refi are they priced differently? They’re the same race. So that’s nice and simple. I love that. You know, one other thing that a lot of our listeners may not know. And I only somewhat recently became aware of this myself is that there’s a lot of different FICO scoring models. Most people don’t know this I, you know, I hate I almost hate to admit, I did not know this until somewhat recently. Do you know which FIFO you’re using, by the way, are using FIFO eight as your model? Or do you even know? I don’t know if you know this or
Courtney 36:30
not? I’m not sure we know. I know. We take the median score, and we pull it from all three bureaus. Yeah, that’s there. But that’s a difference.
Jason Hartman 36:38
That’s that’s the Bureau’s. There are three bureaus to pull it from. But there’s also different FICO scoring models. And you know what, I’m going to bring an expert on that on a future episode to talk about the different FICO scoring models. This gets rather wonky, but it’s kind of interesting. So so we’ll do that on another episode, folks, Courtney, thanks for joining us today. Thank you so much. I really appreciate the time. Record.
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