Video Closed Captioning:
good morning good afternoon good evening
folks michael’s uber one rental at a
time it is friday and that means we tap
to the man the myth the legend who has
personally
allowed me to refi some apartments and
office buildings into 30-year fixed-rate
mortgages yeah i know steven dow how you
doing man did you like that i was
screaming for you i i did i felt the
energy man
that’s why i don’t drink coffee i just
you know watch your videos every morning
and get that little jolt and get me
going man
one of the things i wanted to talk about
here well first off let me do the
marketing thing first because i’m about
to get a little cranky so go ahead
all again although i work happily for
velocity mortgage capital all the ideas
and topics discussed on the channel are
that of my own and uh yeah let’s get to
uh
why am i talking again yeah
so um i’m gonna lump you
yeah i’m gonna love all mortgage brokers
together today right yes yes
i believe the mortgage market is i’ve
shared before right i did a video
earlier in the week where i said cash
out or refinances
mainly in the residential space are
going to fall 75
uh very quickly because rates are going
up 60 percent of loans have already been
refined in the last two years 48 of them
have a two on it it’s just like
you know the refi business is going to
tank
right what that means is people are
going to get um
stressed they’re going to start missing
quotas
they’re going to start creating exotic
products
and they are going to start the high
high
high high high
high high high pressure
selling
adjustable straight
mortgages
yeah they’re going to sell payment and
they’re going to say hey you’ve seen the
rates go up let me get you that other
one
salesman kind of mentality when you step
on the lot how much can you what are you
looking to pay
what do you mean what am i looking to
pay
what’s interesting what’s good car
you’re saying you know me so yeah almost
the same thing but go ahead yeah so a
couple of things i
i don’t you know i’m just going to keep
being real adjustable mortgages in my
opinion in this environment in this
environment
are without question the wrong idea for
99 of you there may be unique personal
financial situations
where a adjustable rate mortgage makes
sense
but if you have to think for a moment
it is not right for you
right it is not right for you if you are
following one rental at a time and
you’re in my course so you’re following
me and you want to get one of these
cards and you get
an adjustable rate mortgage on a rental
property
shame on you
it’s this is not the environment rates
are going to be going up i think rents
will flatten i think this is the time to
de-risk again
i do this business i told you what i’ve
done i’ve gotten 30-year fixed rate
mortgage i refined with 30-year fix i
would not you could not pay me to get an
adjustable rate mortgage today because i
have been doing this for 20 some odd
years i am afraid about 2025
not happening so
your industry maybe it’s the industry
you came from in the 08 crisis
you all are about to get starved shark
pressure man it’s it’s the big short you
know
ah
drives me crazy
uh
i mean again
yeah the only you’re as good as your
last month yeah exactly yeah as a
mortgage broker if no one else is
refinancing because you know they got a
ton of them did them in the twos and you
know low threes and now they’re going up
into the possible fours
um
you’re getting like you said sparingly
small percentage of the you know
outliers of oh well if i combine all of
my debt and pay for all these credit
cards and do a cash out even though you
know it’s a higher interest rate but my
overall cash you know payment uh to paid
off is lower that’s gonna be the next
sale of course it would be the other
yeah
how many pools consolidation yeah yeah
you know don’t you yeah all that stuff
so you know i came from that world you
know i know yeah
it’s it’s icky it’s an icky
it is a great area as far as you know i
never tried to push that angle as much
as just kind of what their specific
needs were yeah and i can’t kind of make
a judgment from what their needs are i
just try to come up with the best
product yeah
uh just to kind of you know uh uh uh
help out with that situation uh as far
as that are available you know
but other than that yeah
i don’t wanna i i gotta be really
careful right i’m talking about the
industry i don’t know what it is maybe
it’s half of them well first and
foremost the industry is about to get
smaller
oh no i know this i have a lot of
friends that are you know in the retail
side they’re seeing a slow down yeah
yeah so it’s about to be smaller uh when
that happens again i’ve been i’ve been
through several business recessions in
my career
people you’ll have layoffs and you’ll
have to get creative you still gotta you
still gotta cover overhead
right i get it
um
i have chosen you and matt the mortgage
guy because i believe both of you are
about asking questions
yes right like what are you trying to do
what is this how long are you going to
hold the property all of that right but
yeah man i uh i feel bad for the average
consumer
because they’re about to get hammered i
can already see hey have you ever
thought about putting in a pool have you
uh how many credit cards do you have do
you have a car loan i mean it’s the
collection and for most people that’s
just that’s just recipe for disaster
because a let’s just say you had 50
grand in high credit cards 21 interest
it makes financial sense to do it
right right put the 50k on your house
your total payment goes down blah blah
blah but let’s just be honest
right behavior average consumer is going
to do that and their 50 000 dollar
credit card will be charged up within
two months
right oh i’m free oh i’m off this debt
burden oh my god
exactly what uh man we need we need to
talk about money more we need to do all
these things so yeah do
if you’re following one rental at a time
discipline daily discipline day so it
starts yes don’t do it overnight like oh
yeah no you’re gonna just save all this
money overnight and if you do this well
you don’t change your mindset first
you’re never going to change the outcome
you know what i mean so
that’s yeah i think we should we
more people should be talking about that
and i don’t think enough and so because
nobody’s really i think as real to
themselves where it’s like oh no i’m
just about this yeah but you still
haven’t changed the mindset of why do
you need all these jordans that come out
every month and why do you need to get
five pairs of you know sunglasses you
know designer why do you you know
whatever the case is yeah whatever that
is it’s a mindset but uh yeah it’s
short-term fix right now or adjustables
not in this environment it’s just uh
gambling you know in three or five years
that rates are going to be better
otherwise when you have to get refinance
again what’s the offset of the value of
having to do it again rates are going to
be higher more you know more uh closing
costs and can you afford the adjustment
who knows what the you know situation
with the rental property is maybe yeah
somebody you know maybe partly became
vacant or whatever the case is now
it’s just not stable in my sense it’s
just
a good piece of mind it’s too again i’ve
been doing this too long so i’m maybe
i’m looking too far ahead but i just got
to do it i’m like nope 30-year fix good
for me the other thing we’ll talk about
is wrapping this up is if you’re buying
a new deal today that’s commercial
apartments you know 20 because again
i’ve only bought it for 20 units so
let’s say i’m buying another 20 unit
building i would come to you first
because i want that 30-year fix because
i don’t know what’s going to happen to
rents
taxes all these other expenses i want to
make sure my biggest expense which is a
mortgage
is fixed and now
i may pay higher percentage today but
i’m not really buying today i’m buying
25 in 2030 and 2030
right when you do the overall yeah
calculations if you’re in a short term
for like you know five years and then do
it like all week 10 years from now
typically
the amount of interest i mean again it’s
such a moving variable as far as what
interest rates would be like after the
five year intervals but in increasing
market
you end up paying less interest on that
fixed rate because it was fixed at a
lower rate at that time when you first
got it versus five years later when
rates went up and so you’re paying
interest rates higher it’s just kind of
like
overall you gotta have to project on
even further that second third loan of
adjustables where rates are going to be
at but i i think once you lock in at
that 30 or fixed there’s no more
additional closing costs um because
again now whatever you saved before from
that previous loan you have to kind of
recoup that cost back a little bit to
try to see what your overall savings so
in the big picture 30-year fixed in an
increasing market i think especially the
fact that on commercial
it’s a 30-year amortization so sure the
interest rate seems a little bit higher
but your cash flow might be about the
same if not low or if not better and
it’s fixed for 30 years so i don’t know
so i would agree with you if i had that
opportunity to buy more
right now just a comparison and a lot of
people are seeing it that way as well
because less
stress and
uh uh issues to get the financing
um less restrictions because you can
hold titles in entity uh and of course
um the fact that it’s 30-year fixed and
30 are amortized you have the best of
both worlds and i still have the feature
of adding the 10-year interest only
option i know you don’t like that yeah
you believe in it i know but some people
kind of remember that you get the fixed
period but you have the ability
they’re just more or less have that as
an insurance policy they may not use it
but if they need it it get you know it
helps out so and it’s not as expensive
uh and there’s other strategies with
their perspective but anyway i wanted to
put that out there but third year fixed
upon money all day long yeah and again
for me i if i was going to evaluate a
deal today that’s all i’d be using and
if the numbers didn’t work i would have
to get a better price i mean it’s just
that simple
it is do the work numbers don’t lie none
of this fluff of multi-syllabic
adjectives if you just do the work give
me a call we’ll crunch some actual hard
numbers i’ll give you all the actual
fees price everything exact never
changes from start to finish unless your
your fico score changes when i pull it
otherwise what i’m calling you up front
because we’re not tied into the 10 year
treasury it’s not as volatile i don’t
have to pull credit right away to see
what we need to lock and reprice later
on it’s good for right now but
oh let me think about it no we don’t
have that option so if whatever
experience just took place with the
secondary market the appetite change
yeah we got to change with the times and
so that might be sudden and abrupt which
is what’s happening but we’re just
saying hey don’t wait not to confuse
pressure with urgency i’m not trying to
tell you hurry up because i’m trying to
get paid faster it’s just reality
on the move so make a move quickly there
you go well stephen uh people can reach
out to you s dao at velocitymortgage.com
it is in the show notes below
uh make sure you put o-r-a-a-t in the
subject line and uh yes we’ll get it
going for the description of what you’re
looking for right in the body of the
email uh bit factor score you know
probably type seating state at least if
not the address uh your telephone number
i can reach you back at and then yeah
let’s make let’s make it happen very
cool thanks brother next time