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Speaker 1: Earners. What's up.

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Speaker 2: You ever walk into a small business and everything just

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Speaker 2: tipping is a breeze, and you're out the door before

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Speaker 2: just thinking about launching something soon, Square is hands down

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Speaker 2: can keep pushing your vision forward. This episode is brought

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Speaker 2: to you by P and C Bank, a lot of

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Speaker 2: people think podcasts about work are boring, and sure they

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Speaker 2: definitely can be, but understanding of professionals routine shows us

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Speaker 2: how they achieve their success little by little, day after day.

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Speaker 2: It's like banking with P and C Bank. It might

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Speaker 2: seem boring to save, plan and make calculated decisions with

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Speaker 2: Bank Brilliantly Boring since eighteen sixty five. Brilliantly Boring since

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Speaker 2: Financial Service Group, Inc. P and C Bank National Association

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Speaker 2: Member FDIC.

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Speaker 3: Because yes, once we get pre qualified, preapproved, now we

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Speaker 3: need to figure out what type of loans we should

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Speaker 3: be looking for, right, So let's talk about let's get

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Speaker 3: into that because there's different programs for different people who

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Speaker 3: need different types of assistance.

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Speaker 1: But let's get into that a little bit. Yeah, man,

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Speaker 1: so there's tons of loans out there, right, So you

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Speaker 1: have the traditional loans, you know, FHA, conventional VA loans,

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Speaker 1: you know, you have Knacker I know someone mentioned out there.

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Speaker 1: But let's do a brief overview, right, faha, minimum five

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Speaker 1: eighty credit score. You can buy one to four family properties.

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Speaker 1: All properties must be on the occupied for at least

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Speaker 1: one year. Okay, again one to four family own the

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Speaker 1: occupied properties. You can even buy with a FAHA a

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Speaker 1: mixed use property. Right. So, now, a mixed use property

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Speaker 1: is basically a commercial building. Now we have a lot

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Speaker 1: of these mixed use properties here in New York where

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Speaker 1: you might have a bodega on the bottom and three

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Speaker 1: apartments on the top. Right, that's a mixed use property.

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Speaker 1: So FAHA will allow a home buyer to buy this

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Speaker 1: mixed use property. As long as the residential square foot

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Speaker 1: which is at least fifty one percent and the like

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Speaker 1: likeness of the building is more residential in stature, FAHA

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Speaker 1: will allow you to buy a commercial property. So that's perfect.

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Speaker 1: Let's just say we have any business owners here in

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Speaker 1: the chat right now, watching this live or going to

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Speaker 1: watch this on the replay. If you have a business

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Speaker 1: that needs a brick and mortar, right, you can go

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Speaker 1: with FHA loan buy this mixed use live upstairs, have

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Speaker 1: your business downstairs, and put as little west three and

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Speaker 1: a half percent down for a mixed use property that

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Speaker 1: is a home run. FAHA also allows you to get

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Speaker 1: rehab money with the two or three K program where

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Speaker 1: you can get one hundred percent of your rehab court

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Speaker 1: as well. Right, So FAHA is a terrific program you

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Speaker 1: can go up to. Like I said, four families were

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Speaker 1: putting down three and a half percent. Now, some of

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Speaker 1: the cons about FAHA is obviously the PMI. Right. The

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Speaker 1: PMI is if you put down less than ten percent

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Speaker 1: is for the life of the loan, and if you

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Speaker 1: put down ten percent or more, the PMI automatically goes

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Speaker 1: away year eleven. Right, So that I would say that

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Speaker 1: was probably one of the biggest cons with FAHA. But

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Speaker 1: despite what everybody would believe, FAH loans do close really quickly. Right.

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Speaker 1: A lot of people out there think, oh, if you're

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Speaker 1: getting an FAH loan, it's going to take forever, and

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Speaker 1: you got bad credit, you don't really qualify. No, that's

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Speaker 1: not the case. FAHA is a great program. It gives

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Speaker 1: you a higher approval amount sometimes than conventional lutgage is

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Speaker 1: because the debts and income racial requirement is higher than conventional.

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Speaker 1: Now with conventional let's.

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Speaker 4: Let's let's let's do this though, Let's let's before you

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Speaker 4: go on, let's really take our time. Let's just take

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Speaker 4: our time. I want to make sure everybody understands. So

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Speaker 4: even terms like PMI, somebody might not understand what that is, right,

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Speaker 4: primary mortgage insurance. And even like okay, the FAHA loan,

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Speaker 4: somebody asks like it's this first time home by its like,

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Speaker 4: you can use that for your first time home, right,

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Speaker 4: and it allows you to put three point five percent

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Speaker 4: down as opposed to a traditional twenty percent down, but

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Speaker 4: you have to pay the PMI until you reach twenty percent.

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Speaker 1: Right, No, No, So to answer the question about the

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Speaker 1: prompt the first time home buyer, FAHA is not just

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Speaker 1: for first time home buyers, right.

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Speaker 4: It's not just for first time home buyers. But you

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Speaker 4: can use it if you're buying your first time home, right.

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Speaker 1: Correct, you can use it if you buy your first home.

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Speaker 1: But most people think if I own a home, I

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Speaker 1: can't do FAHA, which is not the case. You can

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Speaker 1: do FHA as long as it's going to be your

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Speaker 1: primary residence. Now, the PMI, the private mortgage insurance on

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Speaker 1: FAHA is called mortgage insurance premium that only goes away

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Speaker 1: if you put down ten percent or more, and it

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Speaker 1: goes away year eleven with a conventional mortgage. If you

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Speaker 1: obviously put down twenty percent up front, then you have

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Speaker 1: no PMI. But if you put down less than twenty

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Speaker 1: percent on a conventional mortgage, then that PMI will go

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Speaker 1: away wants you. You can request for it to go

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Speaker 1: away once you get about twenty percent equity in the home. Right.

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Speaker 1: So it's a little bit different than FHA. You don't

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Speaker 1: have to wait that long of a time frame to

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Speaker 1: get the pm I removed the conventional loan. You can

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Speaker 1: get that pm I removed much faster. And it was

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Speaker 1: something else you said in the ever shot. What else

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Speaker 1: did you say? I just had a brave freezon.

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Speaker 4: No, I think that you think that was it. I

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Speaker 4: just wanted to just make sure that they was just

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Speaker 4: understanding everything. But yeah, I think I think that was it.

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Speaker 4: But somebody asked the question too though, from the chat.

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Speaker 4: Somebody in the chat trenton Stewart. He said, what if

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Speaker 4: he's ten ninety nine and not w two?

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Speaker 1: Good question, great question. So if you are ten ninety nine,

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Speaker 1: you are considered self employed, Trent, So it's very important

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Speaker 1: remember two year work history with all of these traditional loans. Right,

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Speaker 1: So if you are ten ninety nine, you need to

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Speaker 1: be ten ninety nine for two years. But the most

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Speaker 1: important thing, Trent and anyone else who is self employed

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Speaker 1: or teny nine, your tax returns need to need to

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Speaker 1: line up appropriately. So let's just say you get one

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Speaker 1: hundred thousand dollars on your ten ninety nine. If you

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Speaker 1: write off ninety thousand and tell Uncle Sam that I

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Speaker 1: only made ten thousand, you pay income taxes on ten thousand.

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Speaker 1: That ten thousand is the money that we're going to

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Speaker 1: use to qualify you. And let's just be real, ten

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Speaker 1: thousand enough to buy the home. Right So if you

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Speaker 1: know you are self employed and you write off a lot,

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Speaker 1: this is why it is extremely important in the beginning

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Speaker 1: to have a great lender and start mortgage planning. Right.

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Speaker 1: Everybody type and chat mortgage planning, especially my self employed people.

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Speaker 1: You have to plan for your mortgage. You just can't

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Speaker 1: walk out and say, hey, I'm going to buy a

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Speaker 1: house today and you don't know what your finance is

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Speaker 1: looking like. So having a great lender and also having

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Speaker 1: a great account and a CPA who understand and real

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Speaker 1: estate to guide you to let you know, okay, if

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Speaker 1: you pay less taxes this year, if you write off

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Speaker 1: less you're going to pay X, y, and z amount

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Speaker 1: of income taxes. Is it worth it for you to

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Speaker 1: buy a house and use this income or is it

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Speaker 1: better for you just to put twenty percent down and

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Speaker 1: go with a non traditional loan where we don't need

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Speaker 1: tax returns. Right, So you have to look at both

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Speaker 1: sides of defense to see what's most beneficial to you

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Speaker 1: as that entrepreneur and trying to get into real estate.

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Speaker 4: Somebody else, ex can you have more than one FHA

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Speaker 4: at that.

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Speaker 1: Time if you meet the one hundred mile room right.

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Speaker 1: So if you buy an FHA to say duplex in Brooklyn, right,

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Speaker 1: and then you're moving to Atlanta and you want to

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Speaker 1: use FHA again to buy another duplex in Atlanta, and

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Speaker 1: you can prove that you are moving there is work related,

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Speaker 1: then yes, because it's old Brooklyn and Atlanta as well

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Speaker 1: over one hundred miles away. So that is really one

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Speaker 1: of the only circumstances that I've seen get approved when

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Speaker 1: you are looking to have multiple FAHA loans. But if

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Speaker 1: you're looking to house hack right. Prior to conventional loans

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Speaker 1: changing the guidelines about a year ago, the strategy was

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Speaker 1: by the four family use FAHA. You know, refinance into

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Speaker 1: a conventional, then go into a three family and then

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Speaker 1: use FHA again. But now that conventional allows five percent

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Speaker 1: down payment on multifamilies for your primary residence. Now you

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Speaker 1: don't really need to use FAHA more than one time.

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Speaker 1: You can now go the first property FAHA, then the

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Speaker 1: second property, which could be the three unit, Now you

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Speaker 1: can use conventional and put the five percent down because

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Speaker 1: it's now your primary residence. Right. So the strategy for

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Speaker 1: the four three to one change a little bit with

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Speaker 1: that guideline, which is which is a home run for

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Speaker 1: everybody looking the house hack. But no, you don't need

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Speaker 1: to have two FAH loans at the same time to

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Speaker 1: continue to grow your real estate portfolio using the house

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Speaker 1: hacking strategy. MG. You brought up the FAH loan.

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Speaker 3: We talked about conventional, but when we were at invest Vest,

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Speaker 3: one of the biggest seminars that people were lined up

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Speaker 3: for was the VA loans. So can you touch on

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Speaker 3: that and tell people about the benefits of that and

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Speaker 3: salute to everybody that's a veteran.

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Speaker 1: Yeah, shout out to everybody who's a veteran. You know,

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Speaker 1: I got my Pops flag right here, so I want

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Speaker 1: to show this man rest in peace, Pops man. So

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Speaker 1: shout out to all the veterans. Yeah, yeah, yeah, Mike,

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Speaker 1: I appreciate that. Shout out the pops right there. So

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Speaker 1: all all the vets, all my military folks, you got

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Speaker 1: a special place in my heart for sure, So salute

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Speaker 1: to all of y'all. But yeah, with the VA loan,

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Speaker 1: you could do a one hundred percent financing on your

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Speaker 1: primary residence. Some lenders would go down as low as

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Speaker 1: a five to eighty credit scores as well, but tip

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Speaker 1: usually six hundred to six twenties ideal, and you can

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Speaker 1: buy one to four family on the occupied properties. One

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Speaker 1: of the great things about VA loans you're going to

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Speaker 1: have great interest rates even in today's market. They're a

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Speaker 1: little bit lower than FHA, and it has no PMI

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Speaker 1: on the loan, which is a home run right. And

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Speaker 1: you can use a VA loan twice as long as

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Speaker 1: you have enough eligibility right to do so. So VA

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Speaker 1: is a terrific program. I encourage all my military folks

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Speaker 1: out there who's watching this live to please use that

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Speaker 1: VA loan. Use it to the highest and best use.

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Speaker 1: If you can get a multi family with it with

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Speaker 1: your first one go ahead, get that multi family first,

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Speaker 1: and then you can go ahead and probably get a

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Speaker 1: single family with it later on down the road. So

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Speaker 1: Va is an amazing product and I hope more people

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Speaker 1: use it.

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Speaker 4: So okay, so let's get back to the steps. But

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Speaker 4: before we get back to step last, the last detour,

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Speaker 4: you talked about the four three two one. Can you

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Speaker 4: just explain that for people that don't know what that is?

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Speaker 1: Okay, So the four to three to two one strategy

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Speaker 1: is only for the folks out there who want to

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Speaker 1: be a landlord. If you want to be a landlord

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Speaker 1: type landlord and chap, please, I want to see.

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Speaker 4: This is so, this is what this is for the

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Speaker 4: real estate investors.

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Speaker 1: This is what the real estate investors. But you're using

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Speaker 1: low down payment loans and your house hacking, meaning you

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Speaker 1: are going to live in this property for the requirements

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Speaker 1: that the guidelines are saying. You're not saying that, hey,

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Speaker 1: I'm going to live here and I don't live there.

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Speaker 1: Right here, I earn your leisure an MG, the mortgage God,

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Speaker 1: we do not participate in mortgage fraud. Let me be

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Speaker 1: very clear, Okay, we do not participate in that. Okay.

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Speaker 1: This is the disclaimer. Here, Okay, you must live in

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Speaker 1: a property for at least twelve months. That's what the

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Speaker 1: godlines state and the guidelines are in your favor two

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Speaker 1: house acts, So do it the right way so that

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Speaker 1: way you don't have the compliance police knocking on your door. Now,

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Speaker 1: the goal of this is to build your real estate portfolio.

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Speaker 1: Four unit first, if you live in an area that

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Speaker 1: has four units, live in it for a year maybe

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Speaker 1: two years. Now you don't have to refinance out of

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Speaker 1: that FAH loan. So let's people, since we started off,

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Speaker 1: we just left VA loans. Think about this. You're a veteran.

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Speaker 1: You started off with your VA loan, first one hundred

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Speaker 1: percent financing for a family. Then you go FAHA for

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Speaker 1: the next one, the three family three point five percent down.

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Speaker 1: Then the next one you can go convention them with

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Speaker 1: a duplex five percent down. And then that last property,

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Speaker 1: single family, you can go back to VA if you

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Speaker 1: have enough eligibility and get one hundred percent financing on

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Speaker 1: that one with no PMI as well. So now the

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Speaker 1: cash flow that's coming from all of these units, that

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Speaker 1: for that three and that two, which what's that seven

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Speaker 1: non units right there, can now pay for your dream

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Speaker 1: home So the purpose of the strategy is most people

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Speaker 1: when they buy their first home, they're over extending itself.

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Speaker 1: Everybody trying to keep up with the Joneses. Everybody don't

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Speaker 1: I don't know what the hell's going on these days.

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Speaker 1: Nobody believes in starter homes. Everybody wants to make mansion

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Speaker 1: right now, I just don't understand it. So instead of

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Speaker 1: you people who don't want to start a home getting

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Speaker 1: a nice little townhouse or something like that, start off

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Speaker 1: with the multifamily, build that portfolio so that way, by

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Speaker 1: time you get to that one family in four years,

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Speaker 1: five years, now you've got cash flow coming in and

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Speaker 1: you can potentially live for free. So that's on the

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Speaker 1: basis of the four to three to two bus strategy.

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Speaker 4: So for okay, let's for the people that need a

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Speaker 4: little bit more further explanation on this. Right to the time,

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Speaker 4: the American dream is to buy a home, a single

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Speaker 4: family home, right, white picket fence, the whole nine. And

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Speaker 4: people think, like, that's your dream home. They want to

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Speaker 4: drop by their dream home. But and there's some debate

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Speaker 4: on this, but a home is not technically an asset.

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Speaker 4: If it's not producing cash flow, it can actually be

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Speaker 4: a liability ken. So the idea is to say, okay,

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Speaker 4: instead of trying to buy a one family dream home

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Speaker 4: right away, buy a four family home in a not

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Speaker 4: great neighborhood, but like you know, an uppercoming neighbor because

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Speaker 4: the four family home is going to be expensive. But

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Speaker 4: usually don't even have four family homes in great neighborhoods anyway.

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Speaker 4: So you buy a four family home in a relatively

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Speaker 4: slightly dangerous neighborhood, and you live there, and you're a landlord,

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Speaker 4: and you rent those other three units out. Right Now

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Speaker 4: you establish yourself as a landlord, and you're getting rental

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Speaker 4: income from three tenants after you lived there for a

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Speaker 4: year two years, right, then you can leave rent the

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Speaker 4: other one out. Now you have four units that you're

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Speaker 4: actually getting rental income from. Now you can move to

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Speaker 4: a slightly better neighborhood. The houses will probably costs a

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Speaker 4: little bit more, but you'll have an asset that's actually

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Speaker 4: producing income that you can add to your W two

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Speaker 4: or ten to eety nine income also, and you repeat

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Speaker 4: the process, and now you have two other incomes coming

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Speaker 4: and then you you're living there. Then when you move

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Speaker 4: out after a year two years, now you have seven

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Speaker 4: and now you have seven units from four family building,

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Speaker 4: a three family building, you do the same, and a

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Speaker 4: good neighborhood in a two family home. Right, And so

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Speaker 4: by the time you've done this, it might take eight years,

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Speaker 4: but by the time you've done this process, you have

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Speaker 4: nine nine units that's producing income, and now you're able

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Speaker 4: to actually a have enough income that's coming in that

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Speaker 4: you probably don't even have to work a real job

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Speaker 4: anymore because you have nine units that's producing income, and

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Speaker 4: now you're able to move into the dream house and

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Speaker 4: you have the income from the units that's paying for

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Speaker 4: the house, as opposed to what most people do. They

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Speaker 4: move into their dream house, they don't really have enough

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Speaker 4: money to pay for it. Then they're just working every

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Speaker 4: single month to just maintain the mortgage and they don't

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Speaker 4: have enough money to invest, they don't have enough money

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Speaker 4: to buy any additional real estate. They get stuck in

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Speaker 4: a thirty year mortgage. That's not a recipe for building wealth.

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Speaker 4: That's a recipe for being in debt until you're seventy

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Speaker 4: years old. So yeah, that's kind of the ABC version

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Speaker 4: of it. But I think that that's kind of important

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Speaker 4: to like fully lay out because everybody, and I might

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Speaker 4: not get it at first, like which you know, you've

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Speaker 4: been doing this for twenty years. So some people are

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Speaker 4: just getting into real estate today, right, so they got

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Speaker 4: to kind of be read. Even how you think about

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Speaker 4: buying a home kind of has to be rewired in

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Speaker 4: your brain so you can just kind of have a

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Speaker 4: different perspective.

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Speaker 3: It definitely will change your perspective on how you look

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Speaker 3: at it. And I remember five years ago hearing you

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Speaker 3: say it, and obviously we tweeted it a little bit,

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Speaker 3: but it was mind blowing as I was sitting in

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Speaker 3: my home doing that interview. But Matt, I got it.

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Speaker 3: There's another great question. And I know the four three

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Speaker 3: two one was a great strategy, but there's another strategy

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Speaker 3: that I know you like talking about. And Terry m

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Speaker 3: asked the question. They said, I'm about to get married

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Speaker 3: own a townhouse. Can we still use my fiancee' fha

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Speaker 3: loan before we get married? And so we're talking about

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Speaker 3: two single people, two different loans before they get married.

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Speaker 3: I know this is one of those topics you love

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Speaker 3: talking about.

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Speaker 1: Yeah, go for it then, yeah, I mean divide and conquer, right,

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Speaker 1: I definitely love that strategy and congratulations to you, guys,

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Speaker 1: But I would say before you tie to not if

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Speaker 1: you each can qualify for your own property and it

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Speaker 1: be your own occupied. You live in one, he lives

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Speaker 1: in one until you get married, then I think it's

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Speaker 1: a great way to start your life together. Right now,

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Speaker 1: you buy a multifamily, he buys a multifamily. You each

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Speaker 1: use FAHA if you both can qualify independently of each

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Speaker 1: other and build your folio that way. So now, if

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Speaker 1: you can start with a three or four even a duplex.

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Speaker 1: Right say you live in an area that doesn't have

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Speaker 1: three or fours, you start with a duplex. You get

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Speaker 1: a duplex, he gets a duplex. Now you have four units.

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Speaker 1: Now you have cash flow coming in that could potentially

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Speaker 1: pay for now your dream home as well. Now, one

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Speaker 1: of the great things about buying a multifamily, especially with

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Speaker 1: FHA loans, guys, the rental income. The market rental income

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Speaker 1: can be used to help you qualify. Lenders will use

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Speaker 1: seventy five percent of that rental income. So for example,

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Speaker 1: if the gross rental income is one thousand dollars, a

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Speaker 1: lender will use seven hundred and fifty dollars as income

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Speaker 1: to help you qualify. Forward now. I saw in the

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Speaker 1: comments go while ago someone was asking about Airbnb income

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Speaker 1: and does lenders like Airbnb income with these multifamilies. Their

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Speaker 1: question is no, The lending landscape has not caught up

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Speaker 1: to the times that we are in down to allow

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Speaker 1: Airbnb is very unstable. So what lenders are always going

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Speaker 1: to use right now, guys, is market rent right, not

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Speaker 1: rent that you're going to get from Airbnb or if

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Speaker 1: you got to make in your house a content space

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Speaker 1: or anything like that. The guidelines have not caught up

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Speaker 1: to that. But divide and conquer is a great, a

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Speaker 1: great strategy for all you couples out here who want

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Speaker 1: to be landlords and grow your real estate portfolio.

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Speaker 5: An illegal alien from Guatemala charged with raping a child

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Speaker 5: in Massachusetts. An MS thirteen gang member from Al Salvador

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Speaker 5: accused of murdering a Texas. Man of Venezuelan charged with

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Speaker 5: filming and selling child pornography in Michigan. These are just

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Speaker 5: some of the heinous migrant criminals caught because of President

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Speaker 5: Donald J. Trump's leadership. I'm Christy nom the United States

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Speaker 5: Secretary of Homeland Security. Under President Trump, attempted illegal border

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Speaker 5: crossings are at the lowest levels ever recorded, and over

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Speaker 5: one hundred thousand illegal aliens have been arrested. If you

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Speaker 5: are here illegally, your next you will be fine nearly

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Speaker 5: one thousand dollars a day, imprisoned, and deported. You will

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Speaker 5: never return. But if you register using our CBP home

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Speaker 5: app and leave now, you could be allowed to return legally.

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Speaker 5: Do what's right. Leave now. Under President Trump America's laws,

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Speaker 5: border and families.

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Speaker 1: Will be protected. Sponsored by the United States Department of

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Speaker 1: Homeland Security,