716: Be Really Successful in Real Estate Really Fast with Jeannie Grant

Who says it takes tons of time to be really successful in real estate? Jeannie Grant is living proof that a new agent can succeed from the very start. With less than two years in the industry, Jeannie’s already getting referrals from her highly satisfied past clients. On today’s show, Jeannie shares the strategies that have helped her rapidly increase business. Not only does she cover the best way to run an open house, she dives into door knocking, communication with past clients, and more. If you’re looking for ideas that will help you make more money in real estate, you won’t want to miss this podcast!
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Podcast #13: Commercial Lending and Real Estate

podcast 13 commercial lending and real estate
For this podcast about commercial lending I sat down with Angie Hoffman at U.S. Bank.  During the podcast we discussed investing in real estate, commercial lending, and how commerceial mortgages can help investors.  If you want to learn more about commercial loans this is a great pdocast for you.
I hope you enjoy the podcast and find it informative.  Please consider sharing with those who also may benefit. Listen via YouTube: You can connect with Angie on LinkedIn.  You can reach out to Angie for more information on their lending products by emailing her at angela.hoffman@usbank.com.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram.
About the author: The above article “Podcast #12:  Hard Money Lending” was provided by Luxury Real Estate Specialist Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
TRANSCRIPT
Commercial Lending Podcast
 
Paul Sian: Hello everybody. This is Paul Sian, Realtor with United Real Estate Home Connections, licensed in the State of Ohio and Kentucky. With me today is Angie Hoffman with US Bank. Angie how are you today?
Angie Hoffman: I’m doing great Paul. How are you?
Paul Sian:  Great. Thank you for being on my podcast. We’re gonna start off. Today’s topic is ‘Commercial Lending’. Angie is a commercial lender with US Bank, as I mentioned. Angie, why don’t you tell us a little bit by your background. What you do with the US bank, and how did you get started in that field?
Angie Hoffman: Sure. So, I am a Cincinnati resident, have been my entire life. Was previously with a company called the ‘Conner group’, which is located out of Dayton, Ohio. They’re a private investment real estate firm. I was with him for about five plus years, just learned a ton of information, really loved the financing portion of their group. So, that turned me to the banking portion, which I ended up going with US Bank just because of the knowledge and the breadth of what they can do as well. Just the culture within US Bank has been phenomenal. I’ve actually been with us Bank now for five years; in the last three years I’ve been within the commercial real estate side as well as the business banking side.
Paul Sian: Okay. Your primary focus is commercial loans.
Angie Hoffman: Correct. Yes, both investment real estate as well as owner-occupied and small to medium businesses. 
Paul Sian:  Okay. The investment side, I represent a lot of buyers of multifamily. I know with the form below we do, the conventional space generally, and then when you’re in the five units and above. You go into the commercial space, which is your space. I have also heard it being covered with mixed-use buildings, industrial properties, is there something else that commercial loans would cover?
Angie Hoffman: Correct. I mean it can really be quite an array of properties, office is one that we see pretty often, and can tend to be either hot in certain areas, whether it’s office Class B or Office Class A. Retail strip centers, we’ll look at Triple Net properties, and absolute not properties. We are very popular, if you’re looking at diversifying a multi-family portfolio and adding in some triple net properties. We also do, obviously owner-occupied properties too. When you have that small business or medium business owner who wants to own their own real estate. We do that as well, and that’s again part of what my position entails, and then we will also look at portfolios will do single-family homes. 
I’m actually working with somebody now who has a portfolio of several single-family homes, that were looking to kind of restructure and refinance for him. We can even utilize current equity and properties to purchase additional properties to help you grow your portfolio. We do try to have a full understanding of your portfolio or a full understanding of what your strategy is. How partner with you, as you continue to grow that portfolio short- and long-term goals.
Paul Sian: For our listeners, who don’t know. What Triple Net means, do you mind explaining that.
Angie Hoffman:  Sure. So, Triple Net is gonna tend to be your properties that have the tenant itself is paying the taxes, the insurance, you may have some pretty minimal depending upon the property, responsibilities that are usually restricted to the exterior of the building. It may be like a roof or a parking lot. Type of maintenance but generally speaking the great thing about the triple net is that for some clients, it’s a property that you can basically own, and you have to do pretty much nothing with. So, you’re gaining that income without having to do a very minimal type of responsibility or maintenance. 
The downfall of that is that typically they’re gonna be somebody, who is gonna be a longer-term lease, which is great. However, you still have the issue that it’s a bigger square footage generally. So, five, ten, twenty thousand plus square feet. If you lose a tenant obviously, that can be very impactful. It just depends upon your, again your focus of your portfolio, and if you want to add in that. But it can be great opportunity, but tends to again be a little bit less of a return. Because of the minimal responsibilities.
Paul Sian: Going back to single family. That is similar, I am using the same term your bank use but to ‘wrap mortgage’. Is that what you use for single families?
Angie Hoffman:  We do have the ability, from the perspective of what you say wrap mortgage.  We’re typically calling that like an umbrella, if you’re grouping all, let’s call it, if there’s ten single family homes. You’re grouping this all into one, it lies together. We have the ability to do that depending again on the structure that the client is looking for. 
We also have the ability to separate out those facilities, and do a simultaneous closing for each one of them to have them separated out from each other. Obviously, there’s some contingencies but that the properties itself have to be able to cash flow by themselves, things along those lines that we would underwrite to. But we do have ability to look at it from both perspectives.
Paul Sian: Okay. The biggest advantage of that if someone has reached the maximum ten convention mortgage loanlimit. They can step into your space there and you could cover them, and they can either restart that or. With something like that, let’s say somebody does get ten properties, and are they able to finance in additional properties into that same loan or is that has to re-finance each time?
Angie Hoffman: No. We would be able to add in. I mean, if you’re asking like if they want to refinance these properties, and they’re also looking to maybe either use some of the equity in them or they’re also buying at the same time. We can do all of that together, so that’s not an issue at all.
Paul Sian: Let’s say to somebody new coming to investment. What is the typical down payment on commercial loans? That are looking to buy in the mixed-use space or multifamily space?
Angie Hoffman: So, generally speaking. We’ll go up to 80% loan-to-value. The biggest factor within that is gonna be how much the capability of the property to hold that debt. We’re gonna have, we have a pretty. I don’t want to say complex but we do have  multiple factors that go within our cash flow, and net operating, income calculation, that we’re gonna want to see. It balanced to a certain point for it to be able to hold the debt at an 80% loan to value. Again, we tend to partner with our clients. I have several clients who will send me properties on a daily basis, that they’re interested in. We will let them know what the debt capacity would be on that property.
Paul Sian: Okay. Income from the rents per sale, let’s say, something’s got a ten-unit building. Then you’re looking at the rents that are coming in. You’re also considering the buyers income level, income to debt ratio, all that as well.
Angie Hoffman: Yes. When I talk about the capacity, the debt for the property is being the one of the first things we look at is. In order to get to that 80% LTV, if you’re looking at the actual depth, they’re wanting the property to take on. Compared to other rent they’re taking in and the expenses, as well as some vacancy factors, things like that. That’s what we’re looking at to have a certain ratio, then on top of that. When we get to the next step would be look at the client globally, and their personal debt to income, and that factor too.
Paul Sian: Looking at that commercial mortgages, can buyer use the mortgage to upgrade property, to build in some equity in the property. Does the building of the equity get taken into account, and do you have a loan that allows them to do that?
Angie Hoffman: That question is kind of twofold. If you have a property, let’s say, it’s multiple unit, and you’re continuing to kind of do some improvements and renovations. If the property has the equity, we can look at small lines of credit to help with that renovation cost. Then once everything’s complete to be able to wrap that together. If you’re looking at a property that’s completely distressed, and doesn’t have any type of income. Then that’s gonna be something that generally we’re gonna have a harder time with. Because it’s a speculative type of scenario, and we want to typically see the actual income.
Paul Sian: How about converting something, I am interested in buying warehouse, either in retail space or multifamily. Do you offer products for that, or is that a similar situation when you’re looking at the risk as being a little high?
Angie Hoffman: Yes. So, that is gonna be a similar situation. Once the actual project would be completed again from a speculative standpoint, it just it becomes a little bit more difficult from a risk perspective. However, we’ve been in scenarios where we’ve worked with clients and partnered clients, people we know who work in that space more than we do. We can look to, guide them to what we would look at if we wanted to refinance that once it was completed, and there were leases in place.
Paul Sian: Okay. So, that is one of the benefits working with a big bank like US bank, is you can reach across departments there, and tap other resources within your organization.
Angie Hoffman:  Even if it’s within the organization, we have other resources whether it’s our private wealth or wealth group, have some capabilities that are different than what we have as well as from a CUI or network basis. It may be somebody just within my network that I know works within that space to introduce that way and hopefully can get that client taken care of.
Paul Sian: Are you able to comment on the underwriting process of commercial loans compared to residential. Is there a big difference in that process? 
Angie Hoffman: So, yes and no. I know we touch on it already a little bit. One of the biggest differences is obviously we’re gonna look at the actual collateral in a very different way, especially on the investment real estate side. When you’re looking at investment real estate, the factors that the net operating income as well as the cash flow of the property become factors. Whereas, when you’re buying a home, obviously it’s a lot more about the loan to value of the property. However on the other side of that, if we are looking at a property that’s gonna be owner occupied by a small to medium business. It becomes a lot more about the loan-to-value as well. So, it can depend upon the situation.
Paul Sian: Okay. How important is the person’s experience when they come to loan, get a loan for you. If it’s a new first-time investor looking at multi families versus somebody who’s already got five to ten units and then either self-managing or running it for a couple years.
Angie Hoffman: I mean, generally speaking, if you have somebody brand new, one of the biggest things is if you’re not familiar in the scope. You don’t have experience, you gonna be partnering  potentially with a property management company or somebody else who is maybe a partnership within the LLC or the property that you’re buying that has the experience. Just being able to show you may not have previous experience in this but you are partnering with a property management company that has historical success in these properties. You’re partnering with somebody, for instance, who has historical success in the properties.
Paul Sian: So, yeah boils down to your team then. What you’re bringing to the team. What kind of document requirements are there to start a commercial loan process with US bank?
Angie Hoffman: Generally speaking, in every situation is different, every request is different, client is different. But it’s typically going to be two to three years of taxes, personal and business, personal financial statements pretty standard as well. If it’s a purchase, we’re gonna want to see a purchase agreement or understand the purchase agreement as well. As you’re gonna want to have financials whether it’s profit loss or the rent rolls preferably a Schedule E or 8852 from the client. Showing what the historical trends of that property of have been. That’s where we really try and partner with our clients of understanding their portfolios, understanding what purchase they’re trying to make. So, that, does it fit, and is there anything we see because we see them on a very regular basis that. Maybe we need to discuss or let the client know that we are suggesting maybe prying a little bit more information.
Paul Sian: How important is ones credit score when they come to apply for loan with you?
Angie Hoffman: It is a factor, I mean. In any type of just like the traditional mortgage, it is gonna be a factor. But there are so many different factors that, it’s only one of many.
Paul Sian: One of the important things when it comes to purchasing real estate is I always tell the buyers that have a pre-approval letter ready. Is there something similar in the commercial loans place? A pre-approval letter, pre-qualification letter. Just something that says, somebody sat down with you, they started the initial process. They’ve got access to certain amount that they can borrow to purchase this property. Do you have something like that?
Angie Hoffman: We do. So, on the commercial side it’s gonna be called a letter of interest, and it basically lays out that we are working with a client. We have a price range or up to a price range that we’re looking for with the client, and depending upon the collateral. We are looking to work with him on the financing, again depending upon what the collateral is, and then we also have once we’ve actually maybe gone through a more official process of underwriting and submitted an actual financial package. We do have, depending again on what the financing contingency is for that client. 
We do have a letter of commitment, which lays out that there is an approval but it goes through all of the conditions as well like your appraisal certain things like that, that we’re gonna have to clear.
Paul Sian: Okay. How long does that process take? If you are writing an offer today for a client, and then usually you have to write in how many days we’re gonna close in. 30 days, 40 to 45 days. I know conventional, it’s usually a little quicker, a little easier. So, we can do it in 30 days or so. I mean, what would you recommend for a commercial loan?
Angie Hoffman: I think 45 days is very practical. One of the biggest things that I always talk about with my clients is that 45 days really is incumbent of me having a full financial package, meaning those two years of tax returns. The financials, I spoke about from the client that you’re purchasing, and or if you’re refinancing. To me, having that full financial package is really the key and then, again from there it’s gonna be some of the factors of the appraisal as well as the title work that would go along with it. But generally speaking, 45 days to close is pretty.
Paul Sian: Reasonable.
Angie Hoffman: Yes.
Paul Sian: You mentioned the documents that was my blog article documents for the conventional mortgage process. You mentioned W2s, 1040, tax returns, that is pretty similar the document requirements for commercial loans that it is for residential space?
Angie Hoffman: Yes. It’s very similar. With the PFS is gonna be one of the biggest as well as the two years of tax returns. Potentially three years depending upon, again the request size. Like you said, I mean, if they’re a W2 income type of employee, then we may need additional pay stubs. like I said, for any client, it could be very different depending again on what their history is. If they’re a business owner, then we may mean some more details but generally speaking, again it would be two to three years of personal business has returns, personal financial statement, and potentially obviously purchase agreement or additional documentation from that side.
Paul Sian: Okay. When it comes to partnership, people coming together, those documents from everybody. Correct?
Angie Hoffman: Correct. So, depending on what the ownership structure is. Generally, if somebody’s over 20% ownership within the property, then we’re going to need that financial information from them as well.
Paul Sian: Okay. I know with the conventional space. Lending into an LLC is generally impossible. Most lenders will not allow conventional borrowers to use an LLC. How does that work on the commercial side?
Angie Hoffman: The vast majority of the lending that I do is going to be through an LLC in a holding company. The clients are still a personal guarantor but the lending itself in the title is all within the LLC.
Paul Sian: Is it a requirement in LLC or is it an option for the buyer?
Angie Hoffman: It’s an option. I mean, one that again depending from an attorney’s perspective, if you’re talking about liability. It may be a best-case scenario to have an LLC with that property. But we always reference stuff talk to your attorney about what makes sense for you.
Paul Sian: How much, do you have any minimum loan requirements and your maximum loan requirement?  
Angie Hoffman: Up to ten million on the investment real estate side, and then once it’s beyond that, we do have a commercial group that we would work with a real estate group as well as our middle marker group that would potentially be involved. As far as minimum typically, again if it’s under 2,50,000. It’s still something that we would do. It just, we pull in a different partner to work with us on that too, because it kind of goes into a little bit different of a space.
Paul Sian: Is there, under 250,000$ or is there a lower minimum. I know some conventional lenders won’t touch anything fifty thousand and under.
Angie Hoffman: It’s pretty common. Yes, under fifty thousand is gonna be a little bit more difficult. 
Paul Sian: 50,000 to 2,50,000, and above that.
Angie Hoffman: But keep in mind too. I mean, if you have properties itself. It may be again, you see this more with the single-family home portfolios. You may have multiple properties that are under fifty thousand. But we’re looking at the entirety of the portfolio, makes a little bit different of a scenario. I would caution that anything that somebody is looking at from the perspective of either total lending amount or even individual property. We’re happy to take a look at it, have an understanding of what you’re looking to do, and if for some reason it’s not something that is in our world necessarily. Again, from an internal and external standpoint. We typically have somebody who I can contact.
Paul Sian: Discussing interest rates from general perspective, everybody’s situation is different and unique. But in terms of paying more, having a lower LTV, 60% LTV rather than 80%. People get themselves a better interest rate or is it generally, can we same and more just depending on credit and history.
Angie Hoffman: So, from an interest rate standpoint, the commercial side is a little bit different. Then maybe the mortgage or lines of credit side, then you then you generally see. Ours is based off of what banks cost the funds are, and then there is a spread that is on top of that. That’s where you get the percent from. Right now, cost of funds are pretty minimal. So, interest rates are extremely competitive. But from that perspective, it doesn’t necessarily factor in the actual loan it saw or the guarantor itself or the property itself.
Paul Sian: So, there’s some risk-based consideration towards interest rates. I guess a little higher risk project is that something you would price a little higher in the interest rate or generally that it’s not considered as much?
Angie Hoffman: No. That’s not considered as much, generally.
Paul Sian: Okay. Great. That’s all the questions I have for you today Angie. Did you have any final thoughts to share with the group?
Angie Hoffman: Sure. One thing I would say is if anybody has any questions about property specific, cash flow, if this property may fit into their portfolio or something that we would look to land up to 80%.I’m happy to partner with anybody on that side as well, and be resource for them. On top of that, I did want to mention that obviously US Bank is across the country. That gives us the ability even, if I’m your contact in Cincinnati to lend out-of-state borrowers.
I’ve worked with quite a few clients obviously from California that are buying in Cincinnati as well Chicago. So, those are people that I’ve worked with quite frequently as well.
Paul Sian: That is perfect. I’ve got a number of out of state clients to. That is one of the biggest challenges that I’ve faced with some local lenders is that they don’t lend to out of state. That’s a great ability to have.
Angie Hoffman: So, the key with in that too is just as I want to mention too. I mean, anytime that scenario comes up. We are happy to discuss it. One of the biggest factors with out-of-state lenders is that we do look for them to be within US bank footprint. So, we are very much on the west coast and Portland, all of those areas. If they’re somewhere you’re not familiar, if we’re within that area, please reach out. Let me know, and I’m happy to take a look.
Paul Sian: Great. Thank you again. I will leave your contact information on my blog post once it gets published live. Thanks again for being on the podcast.
Angie Hoffman: Thanks for having me. 

661: The Best Ways to Get Real Estate Business via Video Marketing with Tori Toth

Video is easily one of the best marketing methods for generating real estate business, but only when it’s done right. On today’s podcast, video expert Tori Toth covers the best ways for agents to build their brand and get new clients via video marketing. Not only does Tori discuss the best types of videos for getting potential clients’ attention, she shares tips for creating professional-quality videos quickly and cheaply. On top of that, Tori gives app suggestions, advice to agents who hate the spotlight, and more!
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Sponsors
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Visit futureofrealestatetraining.com
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Podcast: First Time Home Buyer

first time home buyer
Podcast: First Time Home Buyer
For this podcast I sat down with Walt Wollet, mortgage loan officer with Pacific Residential where we discussed his experience as a first time home buyer.  Learn about the home buying process from the perspective of a mortgage lender and how handled the process and what things he might have changed to make it even better. You can connect with Walt Wollet on LinkedIn, Facebook.
You can connect with me on Facebook, Pinterest, Twitter, LinkedIn, YouTube and Instagram. About the author: The above Podcast “Podcast: First Time Home Buyer” was provided by Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. With over 10+ years experience, if you’re thinking of selling or buying, I would love to share my marketing knowledge and expertise.
I work in the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Adams, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.
Transcript:
[00:00:09] Paul Sian: Hello, everybody. This is Paul Sian, Realtor with United Real Estate license in the state of Ohio and Kentucky. And with me today is a returning guest, Walt Wallet with 5th 3rd Bank. He was with a different lender in the past, and now he’s with 5th. 3rd. We’ll talk Are you doing today?
[00:00:24] Walt Wollet: I am fantastic today, Paul. We’re out here at the on my new piece of property that you helped me acquire and I’m excited. Toe do a podcast. It’s been a while.
[00:00:36] Paul Sian: Yeah, that’s that’s one of the reasons to that we decided to do this. Podcast is hey, your lender. I’m the You know, I’ve been through the process of myself of buying my own house as a real real estate agent, so I know how it is. So let’s we want to get the perspective of a mortgage lender, you know, buying the house. So I guess let’s just start from the very beginning. What’s what’s the first step that anybody has to do If they’re they’re interested in buying a house, they skip, you know, leave out the real estate agent. They know they want to buy a house, and they’re gonna talk to a lender at 5th, 3rd, and that happens to be you. So what’s their What’s their first step?
[00:01:10] Walt Wollet: So for my first step, and we talked a little bit before this about just being an active consumer, and we’ll get more into that. But it really it really what I what I would tell people is that you need to do an honest debt analysis, and you honestly need to look at budgeting eso. You need thio when you’re when you’re buying a place you need, you need to take in all what all those costs are, you know? So what are the costs that you know you have to pay every month, is there, You know, do you have a $40 credit card bill you pay every month? Your cars? You know, your auto loans, whatever, whatever you pay every month and you need you need to analyze that. Um, just just so that way you’re not wasting your time, right? So it’s like the first thing I would do is get is get pre qualified or talk to a lender, you know, And I’m an insider, so I kind of knew what I had to do and what I did was before I got pre qualified, was paid off, paid off all my credit cards because I could, um, you know, just to make sure that when my credit was pulled, I had I had a score that was higher so that I could get the best rate in terms that are available. Um, so that that was that was that was a big That was a big thing that I that I did your credit score a big part of it is is factored by credit utilization. So a lot of times, people that are borderline approval if they can get, get added to a secure card or get added to, you know, another account, unauthorized user account or pay down credit cards, Um, you know, say from 70% to below 50% utilization than their score could shoot up. And we can, you know, we can qualify them for, for for what they really want to buy. So that that that that would say that would be the first step is always to just talk to different lenders and talk to different people. Don’t go toe one lender and just trust them and like I wouldn’t want any what, buddy? That I work with to just talk to me. I want them to do their own research. And I want them to know that I’m going to take care of them now If they find someone else that maybe is promising them better numbers or whatever. You know, we I hope that we can talk about that. But, you know, at the end of the day, we have toe, we have to perform and do what’s best for consumers. Yeah,
[00:03:27] Paul Sian: definitely looking at that. Going back to the the credit score. And you mentioned credit score affects your your interest rate. And you know what? Let’s do you have Ah, breakdown. Basically, you know what? What credit scores and how how much impact on your interest rate is? I mean, is it is something easy to quantify? Or is it a little more, you know, computer oriented than that or computer algorithm oriented than that?
[00:03:53] Walt Wollet: So this is another. This is another question. Where it gets into every bank is gonna be different on that account. Okay, so you have the agencies Fannie and Freddie, right? That that back these the back these loans and securitized these loans. And they said, Ah, lot of what the fees and charges are on on those you know on those products and and those were built in to the actual interest rate into the actual loan. In a lot of cases,
[00:04:21] Paul Sian: those almost like base fees,
[00:04:22] Walt Wollet: right? But then other people. So what a lot of banks will do and Chase Chase is an example is notorious for this, but so say they don’t want They don’t want a certain loan. They still legally have to offer it. But they’ll raise the interest rate on that product so that they don’t have to, you know, originate or services many of those loans. So, you know, truthfully, you know certain certain companies will do that with government loans if they don’t want, You know, they don’t want to deal with the potential risk of having the the agency’s forced them to buy back those loans if there’s any sort of auditing or documentation issues, so they just set their their margins, you know, like this that their rate really high, um, to try to dissuade people from applying and you’re seeing that a lot with refinances that some of the larger lenders now, too, Just for the same. The same exact reason.
[00:05:17] Paul Sian: So what do you tell us about some of the hiccups that you had happened to you in your specific alone while you were trying to buy a house?
[00:05:25] Walt Wollet: So I would say that I would say that any hiccups we had Mike, who helped helped who helped us out on this purchase, did a did a great job with, you know, a soon as stuff came out of underwriting. Soon as underwriting came back with a message, he would reach out to me and anything we needed, we would get. We did a good job together. Me being an insider, of documenting everything up front that we needed Thio. So any letters of explanation and any sort of thing like that, I’d say that the biggest hiccup was probably and especially right now with Kobe, it was the appraiser. So you way had required a desktop appraisal on this purchase, which is essentially a drive by appraisal. Now, typically, you know, in any other market, a normal market. I guess you might say you would have that appraiser reach out. They would be reaching out to the selling agent so the agent would know. Okay. The appraiser has seen the property. They’re out here
[00:06:25] Paul Sian: there physically walked in the property, right? And almost like a home inspection,
[00:06:28] Walt Wollet: right? And so that didn’t happen with this purchase, I guess. I think he pulled. He might have pulled into the back, you know, a little bit and checked out some of the buildings and took off, right. Um and then and then the appraisal came back. Luckily, was all good, but I think one of the hiccups was just that. That that cellar not knowing that the that the appraisal was done and that the seller’s agent not knowing. And that kind of elevated there, um, anxiety, right?
[00:06:55] Paul Sian: E, remember talking with the seller’s agent, basically, you know? Hey, when’s the appraisal happening? And, you know, I asked, I did ask the agent. You know, did they praise will call you and that kind of send up red flag on her part unintentionally because, you know, they won’t be contacting her. They would just be driving by, you know, looking at the back of building or looking, walking the building that really get, you know, looking to get inside the building.
[00:07:20] Walt Wollet: But as far as just just hiccups now and generally on in this market with loans is ah, big thing I talked to with my team and my manager all the time is just getting things in is clean and as clear as possible, you know? So what I think a lot of especially first time clients don’t understand is you cannot tell me that your student loan payment is this when really, it’s this and you cannot You cannot say that you make this much money when really you make this much money and every little detail of that application is gonna be verified and is gonna be put through extreme due diligence. So with that said, you know, like where when where we run into problems or where any lender will run into problems is when the story changes, you know? So it Z okay, we’re calculating, you know, 40 hours a week for your income, and then we get you know, the verification of employment back. And it’s it’s 32 you know, a week. Um, even though your recent pay stub stay safe 40 like, you know, those kind of issues I think everyone runs into and deals with, and it’s just like we have to have it perfect, you know? So if we’re talking about homeowners insurance numbers up front and this is what they are, and this is what you know, this is what they need to be. Then that’s what it is, you know. So we can’t I guess we can’t have, you know, radical changes in process or else you’re gonna have a loan that goes on forever and ever.
[00:08:45] Paul Sian: Yeah. So make sure you, you know, you’re dot your I’s cross your T’s and making sure the information is 100% correct. I mean, probably one of the best ways to do that is, you know, go on your own, pull your own credit report. Make sure you see all your accounts. Kinda like you had mentioned the beginning. Take a look at all your debts and and your assets as well. You know, make sure all your income is properly documented. Make sure all that’s documented. You know, the numbers that you’re reporting are what you’re being, what it is being reported to the lender that way. It you know, it’s smoother process underwriting is gonna have less less questions and you know you’re the one will go through easier,
[00:09:20] Walt Wollet: definitely. And one thing that I advise a lot of people to is I like to have, if possible, if time permits have that credit conversation with the clients up front. So even, you know, two weeks before they’re ready to shop, you know, even months before ideally, we talk about the credit and that there was a There was a case recently with a friend of mine, a client who’s a doctor, and he had mentioned, though I you know, I have this collection from this utility and I don’t know where it came from. And you know, there’s there’s laws that debt collectors and that people have to follow. And a lot of times you know what we’re seeing in the world, right is with with corruption and people not following rules and people not doing what they need to dio Ah, lot of times you as a consumer and you do you have rights to dispute that and toe thio and try to clean up that information yourself. The, uh, credit bureaus have legally every year have to send you a copy of your credit report if you request it so and I always advise people to do that, definitely
[00:10:21] Paul Sian: take a look at it. It mentioned fees earlier. We talked about a little bit about lenders fees and let’s talk a little bit more. I mean, what? We have your base fees that the the these other, like government sponsored entities, so to speak, the Fannie Mae Freddie Mac’s that they have charged. What sort of extra fees are you know, Banks, tacking on the loan and whatever. I guess what? Some of the reasons for these fees
[00:10:45] Walt Wollet: so every every loan requires people that work on it. So one thing is, is that I always say is you know, I would advise consumers toe, look at different lenders and talk to different people Now, I’ll tell you right now that cheaper is definitely definitely, definitely not always better. And a lot of times there are lenders out there that you know they’re overpriced and they’re at the top of the market and they know it, um, and so I guess there’s a There’s a huge discrepancy between fees in various programs and various lenders, and it’s just a matter of going and asking those questions. Okay? What is you know, why is the processing fee this why, you know, what’s this underwriting fee? And then it’s always okay to ask. Well, hey, is there anything we can we can do about this? So in my case, when it comes toe the fees or the stuff that I that I had to pay for it. So you know, certain things that the bank paid for because I’m an employee, which is a great benefit to us. Um, you know, help me, Help me, you know, save money. As I bought this place, one thing that a lot of buyers don’t think about is all those incidental fees. So every home inspection is 4 to $500. You know, every, um, you know, just just buying garbage cans out here was $150 you know? So there’s these. There’s these costs that come up, you know, the wax seal on the toilet stuff will come up, and you just have to make sure that you have that budget it in and that you’re prepared for those expenses. And so, like we you know, a lot of times if there’s multiple people living in a house and it’s it’s one person on the loan, you know, like that’s when I’ll look at it and be like Okay, well, you know, really, there’s three people that are gonna be living in this house. Three people sharing expenses. It’s different. Um, but those kind of loans are are always more difficult, you know? So you really want to make sure that, um, you understand all the costs involved, Especially if you’re especially if your debt to income ratio is higher as it is because you have a lot more expenses. So,
[00:12:54] Paul Sian: yeah, we’re talking about those fees. I mean, it’s almost example is some of the car dealers used car dealers or even new car dealers? I mean, you know, the you get through the negotiation process you got, you got the price on the car, and then you go talk to the finance finance manager quote unquote. And that’s where they you know, they start trying to tack in all these, you know? Hey, let me let me throw this warranty on you. Let me throw, you know, non, you know, payment protection in case you’re disabled. Campaign and So that’s where they start packing in things, packing their basically fees. You know, they’re fattening the bottom line of the car dealer, of course. And you know, that’s that’s part of their job. But you know, the same time to as consumers, our job is to look at that critically and say, You know, do I really need that? You know, Do I need a no payment fee? You know, because I’m disabled. I’m not currently working, but at the same time to, you know, turn around, look at your auto insurance or look at your homeowners insurance. Are they providing some similar coverage that you know that you would need or you know would would avoid? And least in that case, in the autos auto example, It’s not so clear cut. You always don’t have that type of thing. You know you’re homeowners insurance. Not necessary gonna cover you. You know, if you can’t, you can’t pay the mortgage, but there might be other, some other benefit or some other protection. You know, your employer might be offering something for you too, you know. Why pay the extra fee to the lender. You know, when it’s saving you money and they’re just trying to pad their bottom line versus, you know, you’re trying to save your dollar and you know, it’s a long term purchase you’re investing for, you know, 2030 years. Mawr costs them or the higher the interest rate. I mean, the more you’re paying overtime,
[00:14:35] Walt Wollet: and that’s why it’s so. It’s so important up front. You have, You have power is a consumer, you know, like and lenders, you know, if if any lender doesn’t, you know, it doesn’t wanna be competitive. That za red flag, probably. You know, so especially with with us in the bigger banks, you know, we we have you know, we did until, you know, kind of some of the, you know, the new fee with Fannie and Freddie for refinances, um, kind of cut into our margins a little bit. But, you know, we’re willing, toe, do you know we’re willing to do whatever we can do toe win business, you know? But at the same time, we have to pay people off a fair wage and we employ Americans, you know, So that Z you know, that can can be a difference, right? But it’s just a matter of like weighing, weighing out things. You know different. You know this. This lender might have the best deal, but they might take a really long time to get it done. You know this lender there there really fast, But they’re very expensive, you know? And what’s the What’s the trade off? And so you know, it’s always good toe talk to multiple people about that to gain a broader understanding for yourself.
[00:15:46] Paul Sian: How are they giving those fees? I mean, I’m presuming you need to get a credit report. Run right, Okay. And then how how big of an impact is that? You know, you’re getting multiple credit reports. Let’s say I talkto 34 lenders and I say, Okay, go ahead, run my credit if I, if I do it over the same day or a couple of months, is a big difference.
[00:16:05] Walt Wollet: So as as Faras a assed faras, a hit on the credit report. Yes, it’s it’s 30 days, so you’re allowed. What sends a red flag to the to the bureau’s is when you shop for a bunch of different things. So say that when I was buying this house, I also have my credit pulled for a car and I had my credit pull it for a tractor on and I did all this financing stuff. Well, my credit score, which just start to tank because it’s because the way the agencies that their algorithms or reading that is this person doesn’t have any cash right there. They’re financing everything you know. Here’s another credit card inquiry, so it’s all within that 30 day window. So you legally you get your credit pulled once with a lender, and then you have 30 days and you could have the credit polled, so long as it’s a mortgage inquiry and not any sort of general finance inquiry. And it’s how they’re coded to the to the actual credit providers, right? But so long as it’s a mortgage inquiry, it only it’s only gonna count is one hard inquiry. So you you’re you’re the credit agencies. They don’t wanna dissuade people from shopping for mortgages because we need to have a fair, you know, a fair and ethical mortgage market. Um, and it and it iss you know it. It’s definitely better than at what I’ve heard about, you know, from from some of the people I work with in before 2000 and eight. Right? But, um,
[00:17:30] Paul Sian: but comparison comparison shopping is, uh, could be a big saver. I mean, you know, thousands upon thousands over the life of the loan. Definitely going back. Now, we’re going back to your own personal experience looking. You know, hindsight is 2020 looking back at the whole process. Is there something you think you could have done better? That you know, would be good advice for somebody else?
[00:17:51] Walt Wollet: Yeah, I think I am. I think I probably I probably should have paid off all my all my dead sooner, you know? So that was that was one thing is I really, um
[00:18:05] Paul Sian: when you say sooner, how much sooner? And say prior to applying the loan. How much quicker should you have done
[00:18:12] Walt Wollet: that? So just as an example, I had There’s a company. There’s a rental verification company, and I pay them a fee toe, add toe, add my rental trade lines to my credit report, and those were not added before my credit report was pulled. So just like things like that that I had done to strengthen my credit profile in my score, they weren’t reported, right. And then I paid off all my cards, like I said, but some of them were still reporting balances when we pulled s. So it was kind of like take
[00:18:45] Paul Sian: 30 to 60 days for some companies report.
[00:18:47] Walt Wollet: Exactly. And so And here’s what I found out is that you most companies will offer what’s called off cycle reporting so you can call them like, Hey, I’m you know, I’m gonna get my credit pulled for, you know, this investment property loan. And I just paid off this credit card. I’d like it to report. And so some of them were honest with me, and they’re like, Oh, well, yeah, we can report And they did, and others said they did, but they didn’t. And it’s just the nature of, you know, the nature of it. So I would I would say a lot of that stuff. I would I would just, you know, I would just get it done as soon as possible. If you know, you know, if you know that, that’s gonna happen. Like I had my I had my credit pull twice for this home purchase. Um, because the original credit report expired right. Um, and I did that in February, you know? So I knew in February like, Okay, that’s what my actual score is. And then I use that credit report to attack the, you know, some of the balances and anything. Any other derogatory is that we’re keeping my score lower than where where I wanted it to be. Okay, so
[00:19:50] Paul Sian: all great advice and all great conversation. So I appreciate you taking the time to be on this podcast with me. Any final thoughts?
[00:19:59] Walt Wollet: Um, I, uh I just I just say everyone stay safe out there. And, um, you know, it’s just like with with what we’re talking about with with lenders, you know, and with getting different opinions and different perspectives in the world right now, that is what I would advise everyone to dio, you know, So, ah, lot of people there usedto watching CNN. They’re used to watching Fox News. They get their perspectives in their opinions, you know, from this one place. And I think that, you know, especially right now, is as you know, things were kind of, you know, getting getting a little crazy
[00:20:38] Paul Sian: up in the air,
[00:20:39] Walt Wollet: right? We need we need to All kind of, like, you know, realize that that everyone’s a person and that, you know, people are people and that we just way have to We have to do a better job working together. We have to hold our leaders accountable in this country.
[00:20:55] Paul Sian: We’re in this together basically,
[00:20:56] Walt Wollet: right, you know, And then and then that’s that’s all I That’s that’s all I would say to people is just and especially if you’re working with mortgage lenders right now, we’re all you know. We’re all stressed out and we’re swamped. And, you know, your I promise you you’re not the only client you know. So it’s like, you know, just just be patient with people. Um, you know, there’s a lot of people that that, you know, behind the scenes that work on these loans and your your loan originator eyes going to do their best for you. But a lot of times things, things happen. Unfortunately, and you know, you just need to take it as a learning experience and move forward. And I think that’s what our country needs to do with, uh, a lot of this craziness right now
[00:21:38] Paul Sian: wholeheartedly agree in the awesome advice. Thanks again for being on
[00:21:42] Walt Wollet: awesome. Thank you, Paul.
 

What’s the Difference Between Enabling and Helping Someone? (Hour 2)

Debt, Career, Relationships, Home Buying

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