Video Closed Captioning:
good morning good afternoon good evening
folks michael zuber one rental at a time
back with his good friend and someone
who’s helped me a couple of times with
some lending mr stephen dao from
velocity mortgage how are you doing sir
oh i’m doing really really well how are
you i’m doing great hey one of the
things i want to talk about here is a
option on your loans that let’s be clear
i did not take advantage of and i
personally probably wouldn’t take
advantage of but i do think it makes
sense for some investors and i don’t
want to not talk about it just because
it doesn’t work for me
right uh and that is you offer obviously
30 or fixed
right i took full advantage of that
multiple times
but you also offer the ability for the
borrower to select upfront as i
understand
anywhere from one to ten years interest
only and then the loan will recast at
the end of that period do i have that
right
correct uh but as uh pertains to the
interest-only period it’s a minimum of
five years you could pay only the first
uh year if you’d like um but there’s no
difference in cost or or or um fees or
like that so i always say pick 10. it’s
always good to have it and not need it
versus need it and not have it so it’s
like yeah you know what i mean if things
are going well paid the fully amortized
but it’s not because it’s the same cost
and everything else so if you do opt for
the 10-year interest only but it’s
definitely
a tool to be used in certain situations
for specific bars but yes i i mean for
certain you know situations and and and
and borrowers it may not be the right
tool but yeah we’re going to be just for
cash flow yeah we’re going to go into
this a little deeper but i almost forgot
the marketing spiel did i do that but
that’s okay again
uh but what we talked about is it’s not
off topic i think so i don’t think the
yeah go ahead do the marketing charts
go do the marketing thing so we done
although i worked very happily for
velocity morris capital all the ideas
and topics discussed on this channel
that of my own so let’s keep it going
yeah so back to this this uh product
because again i think it was warrants
talking so again uh the minimum is five
years so you can’t select one course
okay see all these things because i
didn’t select it i didn’t know uh so you
select five to ten years you recommend
if you’re going to do it do 10 years
and you know as i sit here looking at it
as someone who has this pile of monopoly
houses it’s not an option i would want
but i got to remember i wasn’t always
here right there there was a time in a
market uh where i was finding amazing
deals but they were mainly pretty heavy
fixers
right right there was a time where you
know i was getting properties where the
act of
rent were pretty routinely 30 under
market right the landlord didn’t care so
you know when i when i look at these
products a
i mean there was one deal i know i would
have done in like
2011 or 12. uh i would have loved the
bank blanket loan
because i could have just bought
everything from this seller at one time
as opposed to trying to put it together
over a freaking year
but that would have been a great time to
use the i o um right thanks for better
cash flow where you’re trying to
stabilize the property that’s when you
need the payment release during that
period and so and it gives you the
flexibility so if things have cotton up
and you’re down stabilized properly you
got new renters in you know higher rents
now pay fully amortized or whatever so
it does allow for the flexibility of
cash flow so i just want to make sure i
understand the loan so i don’t
misrepresent it so i’m just going to use
rough numbers right correct me where i’m
wrong let’s assume it’s a 500k loan
let’s assume based on my credit when i
buy the the interest rate is seven
percent i’m just making this okay
okay so i have seven percent interest
only for ten years
yep then when it when i start my 11th
year
uh the loan recast as 20 year amp
because i bought a burger correct for
the remaining balance correct
all right two the interest rate stays at
seven
hundred percent correct okay
uh and it basically the only thing that
changes is my payment i don’t have to
come back to you and recast a loan
new loan docs nothing nope it’s a
30-year amortized loan in a sense uh the
rate is 30 or fixed right
if you decide correct but if you decide
to pay interest only for the full first
10 years then that’s at that point
you’re still alone the beginning 11th
year that’s when the payment gets
recasted otherwise you should have that
option of 30-year payment and or
interest only for the first 10 years so
so yeah heavy fixers would have been
something and
actually what so this would have made a
lot of sense to me again when i was
growing right you go through a growth
phase and you go through it kind of like
not that i’m done but it’s like right
i’m being pretty picky
and uh but you you but you can yeah
exactly
i have that luxury
right sir yeah so i you know
it’s probably a product that i
i wrote off as i don’t want to bring it
to my audience
probably too quickly because i i
sometimes forget where i i forget where
i was where you started yeah
and you could have used that extra
little kind of help and not stressed so
much it’s just like oh like just you
know ketchup soup and like you’re just
trying to make your money go around yeah
where’s the money gonna come from to pay
all the juggling of all this yeah so the
cost of capital if you can keep that
down and obviously the monthly payments
uh when you’re needing the you know most
uh payment relief in the beginning
especially as a brand new investor you
know just getting off the ground so in
some cases and that’s why our arb
program is an interest-only loan program
so it does help the beginning investor
um
with that as well so
it can be a useful tool just got to be
understood correctly and not like maybe
thought of in uh the
save all be all hey if i’m doing numbers
only on interest only payment you’re
gonna be sorely hurt and you don’t wanna
you know make sure you do the work and
do the number two
yeah
if you’re one of my students you better
write that thing out as fully amortized
if you want to make a business decision
because it’s value-added right let’s at
least make the acquisition with a full
payment okay no no cheating no this is
back to my arm blow up i had a big rant
about or just for eight mortgages the
other day i’m like
don’t do it don’t do it
well i think it was one of the videos
you said uh it seemed like a good tool
but you might be hanging onto the hand
grenade or something like that yeah
that’s adjustable right that’s exactly
what i think an adjustable rate mortgage
is because i’ve been doing this a long
time i had five year seller finance
deals you have no idea how fast five
years is right you’re working on it like
i had an apartment building with five
year money on it
i had to recycle tenants twice because
they were so low you don’t go from where
you are to where you want to be in one
jump you got to go through
right and that five years just came up
and it’s like oh it’s crazy well this is
why i think that 10-year period of
interest only yeah is very still helpful
because it’s like
an option of 10 years of interest only
when you need it it’s like a safety net
and so then
typically when people do need payment
relief during harder times then they
have to
resort to
you know hard money sometimes and so
then or bridge financing and then you
got to pay more closing costs and now
that’s a two-year or under loan and so
it’s just a short-term loan as well so
again the best of both worlds
flexibility of paper relief and then
fixed rate for 30 years yeah folks if
you want to get involved in any of this
at least ask more detailed questions
about your situation your deal uh
stephen how do you want them to reach
out
please email me at sdao velocity the
word mortgage dot com um in the subject
line just put the acronym o-r-a-a-t
in the body of the email
maybe just a brief description of what
you’re looking for as far as financing
uh property type address would be great
if not at least city and state of your
mid fico score and then best number to
reach your back hat and typically 24 to
48 hours i’ll be in touch let’s see it’s
friday this video is going to go out
friday let’s uh let’s see if we can’t
get 10 or 15 emails and let’s blow them
up over the weekend
i feel like an indentured servant to uh
oh or rat uh but that’s okay no the
people been great i mean really just
quality uh listeners um and people just
trying to you know see what’s what get
to that financial freedom they’re just
you know they’re and a lot of them are
really doing the work and they’re seeing
the fruits of their labor just like
larry i don’t want to give you know get
get too much into it but yes i mean
they’re they’re making it happen and
yeah he’s he’s sitting pretty uh pretty
pretty pretty nice so far from what i
could see so knock on wood we’re gonna
take that one down but yeah otherwise
good luck larry
yes sir all right buddy thank you very
much just been a lot of fun s dao at
velocitymortgage.com remember subject
line only five letters
o-r-a-a-t put everything else in the
body of the email thanks bud thank you
sir appreciate it