Unleashing the Power of Real Estate: Strategies for Wealth Creation with Frank Dippold

In this podcast episode Chris has on Frank Dippold, a residential lending expert and founder of Velocity of Money, shares his insights on real estate and lending on the show. He discusses the importance of cash flow, the risks and rewards of property ownership, and the need for education and planning in real estate investment. 

Frank and Chris also explains mortgage qualifications for different employment types, alternative loan options for the self-employed, and the impact of financial difficulties on mortgage eligibility. He emphasizes the value of real estate as a wealth creator and the importance of removing emotional biases through mathematical approaches to investment. The episode is rich with advice for first-time homebuyers, current homeowners, and investors.

 

Follow Chris HERE! IG - @christarta Follow

Frank HERE! IG - @frankdippold

 

 

 

 

 

 

Speaker 1 (00:00:00) - Issues will come up. You'll need a roof. You'll need a furnace. The tenant breaks up whatever it is. Appliances, 100 different things can come up. A lot of people want to buy with cash, right? They're like, I got 200 grand. I'm gonna buy a little condo and rent it. Inherited money. I earned $500,000. I'm going to put that all into a piece of real estate and leaves. You broke.

Speaker 2 (00:00:15) - 100%. And the less people make, and the less people have, the more willing. It's the craziest thing I. Sometimes I yell at my customers, not in a bad way, but like, they'll throw the whole thing. Grandma told me to put 20% down. How much you got? 21%. I'm like, are you crazy?

Speaker 1 (00:00:36) - What's up buddy? How's everybody doing today? Uh, snowing here, but we get through it. It's the northeast. So that's how it goes. I'm here with Frank DePaul. What's up? Frank? Um, Frank's Frank is a residential lending expert, founder of Velocity of Money.

Speaker 1 (00:00:52) - And really more of, like, a like a real estate coach. Lending coach and has lots of really creative ideas on how to attack owner occupied first time homebuyer deals and is, uh, got some stuff to share with us today. So how are you doing, man? I'm good.

Speaker 2 (00:01:08) - Thank you. Thanks for.

Speaker 1 (00:01:08) - Having me. Yeah, I know you're living in Florida now, so you're up here just in time for the storm, and you're enjoying driving around, I'm sure. Yeah. Yeah, yeah. Um. All right, Frank, so let's start out with, uh, I always like to start with some personal development story or some mistakes you've learned in the past, and maybe have a lesson or something. Then we can get into the business and the nuts and bolts of what you do and how you can help people.

Speaker 3 (00:01:29) - Mm.

Speaker 2 (00:01:29) - Oh, okay. Well, there's probably a lot of them, but, uh, so.

Speaker 1 (00:01:34) - We all have too many of those, if you like.

Speaker 2 (00:01:36) - Yeah. I mean, you know, we could tie this to real estate a little bit, right? We're kind of the velocity money came from, which is, you know, when I started buying real estate in the 90s, I bought a house and it went up in value, and I was like, oh, that's really amazing. So I bought another one, right? And that went up in value. I'm like, wow, I'm really smart. I wasn't smart, it just went up in value, right? Right. So um, and then fast forward 2005, six seven, I had a pretty big mortgage company and I started buying real estate for the wrong reasons. I could lose 300 a month on that property because it's a cool it's a mountain in Colorado that's it's going to go up in value. Right. So America a lot of times thinks about flipping and appreciation. So I was playing a little bit of an appreciation game mistake. If you play the appreciation game, you're kind of subjected to the the whims of the market.

Speaker 2 (00:02:22) - The the market could go up and down the long term. It always goes up. And I got burned. So that's where Velocity Money kind of got birthed was you always base real estate if it's an investment on cashflow, not appreciation. So I learned a valuable lesson because I make a joke. It's not funny, but I guess I got to laugh about it. I lost a half $1 million, literally, on the mountain of Crested Butte, Colorado, because I bought two properties that. It's just a long story, but it was based on this Vermont family buying the mountain, literally. And there was development and there was 400 million coming into the mountain. And then 2008 happened. All the funding got pulled. So we all, you know, we have lost. But what we teach, which I'm sure we're going to get into, is, you know, everybody's got to start with an owner occupied property, but it's all about cash flow and that pain. Right? I've gone to Harvard 11 times.

Speaker 2 (00:03:19) - Right. That pain birthed the formulas that I created in the Velocity Money, which are helping a lot of people. And my goal is to help 10,000 everyday Americans retire using real estate. Um, so it was a valuable life lesson, but it was painful.

Speaker 1 (00:03:34) - It's a it's a it's a good lesson. And in my experience, the best lessons are the ones when you take the loss and it really sticks with you. Um, at the end of the day, what you're saying is very important because there's a lot of people and I talk to a lot of people that actually. View real estate as that short term gain. And when you own real estate for a long time, depending on the timing, things and conditions in your life change, and if you're caught at the wrong time in the market, you take a loss and a lot of that is out of your control. Yeah, the last three years have put a lot of false hope into actual appreciation of real estate. It's not usual. This is not normal.

Speaker 1 (00:04:10) - And at some point it pulls back. Flip to the buyer's market. Who knows how long that stays. We've been waiting for the seller's market to stop for, you know, a year or two years now. Um, and it shows no signs of slowing down. In a matter of fact, I think it's going to appreciate again this year, uh, just based on the conditions, but. To understand that that is possible in real estate. When you're speculating like that is a big lesson and it's you got to look at that with clear eyes, especially if you're an investor. Mhm. Yeah. Um like anything else. Right. Like any other investment.

Speaker 2 (00:04:41) - Well I ask, I ask people at my seminars or when I coach them. Is real estate an asset or a liability. And it's a trick question. Yeah. The answer is it's both. Right. Because our owner occupied property that we live in. Is a liability. It costs us money. We have to go to work to pay that mortgage.

Speaker 2 (00:04:59) - Or if it's paid off, we still have to pay the property taxes. It's an asset if it spits off income. Right. So, you know, Robert Kiyosaki talks about when our passive investments outweigh our bills at home. That's the definition of wealth. So if I had three pieces of real estate or 5 million in stock, and that money makes me a half a million a year, or my bills at home or a quarter million a year, I'm rich because I don't have to show up at work to pay my bills. So when I ask. Husbands and wives that question. There's usually two answers, right. There's an and they start arguing with each other. Which is which is which is great because I want to train their mentality that, you know, look, if you have equity in your home, that's not an asset either, unless you do something with it. So I always say you have money buried in your backyard. So America has that now, right? And what a gold mine.

Speaker 2 (00:05:55) - Like one of my little posts that I just put out last week was. Is your equity killing your retirement? Like what? What's this guy talking about? If it's buried under the swingset, it's not doing anything for us. If you and I were 23 years old and somebody said to us, hey, you could buy a real estate for 100% financing, would you do it? Oh, and by the way, it's going to have cash flow and someone else is going to pay it off for you. Would you do that? Of course we would do it. Well, a lot of people in New York and New Jersey and Florida and other places that that we do business have that much equity where they could take it out and buy more real estate and secure their retirement. They just they think it feels good to keep it buried in the backyard. So part of my thing is psychology, right? I did the Tony Robbins stuff. It seems like 100 years ago already. I think I was like 27 years old.

Speaker 2 (00:06:42) - Um, you're an early adopter. Yeah. Yeah. It was. Yeah. My my kids don't believe that I walked on hot coals. They're like, no, you didn't. I'm like, no, no, I really did. I walked on hot cold. But um, it's mindset, right? It's let's let's look at our pie chart. And if you know, we'll talk about first time homebuyers too. But right now we're sort of in the existing client base with equity in their home. If, if we look at somebody's pie chart and 80% or 90% of their net worth is in equity in their home, they're not in a great spot. It's it's great that they have equity in their home, but they need some liquidity. Right. And that liquidity can create some wealth in the future. So that's the stuff I love talking about.

Speaker 1 (00:07:22) - Yeah. The equity, um, I look at it as whatever that number is, that person has an equity is really invested in the real estate market.

Speaker 1 (00:07:30) - Right. It's it's it's it's. Part of the swings of the market, you could lose 10%. You could lose 15% of that. You know, how fast did things happen in 2008 and 2009 happened fast. I was I was in the I had a I had a multifamily home and uh. We chose to move at that time. And I took a beating, you know, I took a beating, and I. I never understood how it could really affect you until I saw the numbers and actually until I saw what I paid the realtor. And that's when I started thinking about it. I should be a realtor.

Speaker 4 (00:08:01) - Yeah, yeah, yeah.

Speaker 1 (00:08:02) - Um, but exactly. That's exactly right. That is an investment. It's not sitting there 100% safe, shielded from anything. And you can use that. Like you said, use that equity and put it to work. Right. You know, 100% you.

Speaker 2 (00:08:14) - And that's the and that's the cash flow part too. So there was a guy, there's a guy who owns a very big mortgage coaching organization.

Speaker 2 (00:08:22) - And I lost a little bit of respect for him when at some point in his seminars he said. When my properties went down in value, I just accepted the beating. I sold them and I'm like. If you base it on cash flow only. Right. The other thing I teach is use the banks money to buy the property. Use the tenants money to pay off the property. Right? Then we're going to get a paid off in 15 or 20 years and put it in a trust for our kids, for generational wealth. So I don't necessarily want them to sell the properties. And the point is, if it has the cash flow from day one. Who cares if it goes up 20 grand or down 30 grand? We're keeping the property. And if you look at historical values of real estate every 18 years in America, real estate doubles. It's about a 3.7% gain year over year, right? The only seven year period in America where real estate actually went down in value was 2006 to 2013.

Speaker 2 (00:09:18) - But then obviously look what look what's happened now. So. So it's like it's like I have a business, right? Let's say you and I own a business together and our business is putting. 150 grand a year in our pockets each. And that's all we care about because we need, you know, we need that income. And one year, the business is worth a million bucks, the next year the business worth 800 grand. But if we really never plan on selling it, we don't really care, right? Right. That's the same thing with this real estate. We don't really care. So part of the problem with America and why I'm so passionate about this is they don't really have. They don't really have a long term goal with real estate. They buy it because they think they're supposed to buy it. And well, what am I doing with it? My my flipping it? Am I keeping it for three years, five years, ten years? So I'm like, hey, it starts with the first time homebuyer.

Speaker 2 (00:10:08) - We trademarked three products that shows first time homebuyers how to buy multiple pieces of real estate for very little money. And then turn into investments. But if you're already owning a home, like we said, the equity turns into more real estate. We. I show them the plan. The plan is we're going to get the sucker paid off in 15 or 20 years, and we're going to have 12 to 15,000 a month in cash flow on our real estate. And then I show them the math on what's going to happen generationally. And then they go nuts like, oh my gosh, why? Why isn't everybody do this? I'm like, I don't know. Everybody should do it.

Speaker 1 (00:10:47) - There's people who are nervous about owning real estate. And I know when I was a landlord, I did not enjoy it. I took I had issues with with the property. The tenants were actually pretty good, but I went a long stretch with no renter there. And that crushed me at the time. Yeah. Um.

Speaker 1 (00:11:05) - What do you say about something like that, a situation like that, you know, because these these when you're invested in real estate, you have these risks. Yes. Um. Rent markets go up and down. Renters are not qualified. Renters lose their job. Is there a shield for that or is there not a shield for that? And that's just the risk you need to accept.

Speaker 2 (00:11:23) - Well, the kind of both I mean, you know, new Jersey strong, New York is strong. Um, rents are going crazy right now. There's a housing shortage, especially because a lot of people from Manhattan want to live in the suburbs since Covid. Um, and what I tell people is it's all about liquidity. So everybody falls in love with the idea of equity. And they and they leave themselves no liquidity. Like, especially you and I both deal with builders, flippers, real estate investors, and they live and die by the 1 or 2 deals they're doing. It's like, well, I paid 400 cash, I did 150,000 on renovations.

Speaker 2 (00:11:56) - And I'm like, well, what's your total liquidity? Well, I got 700 grand. I'm like, all right, you're doing great. And you just buried 95% of it into one deal. What are you, crazy? Like get a loan for 3 or 400? Maybe that allows you to do two deals at once, but keep 150 liquid so you don't.

Speaker 1 (00:12:11) - Have that.

Speaker 2 (00:12:11) - Issue. Have that issue. So when people buy real estate, the hardest is the beginning, right? So the trademark products is, um, you know, you buy a single family or multifamily, you live it at one year and then you move out and you buy another one. I tell people for the first year, you're not throwing any extra money towards the mortgage. You're creating an escrow account. Right? That's what they don't do. We and I've made these mistakes. We use the money we get from the properties for income and to pay our lifestyle. But if we if we're like, okay, this real estate is a separate business, I can't touch it.

Speaker 2 (00:12:44) - Hopefully you know that that that happens and say the property is making 800 a month. Okay, that's $9,600 that you could put away in the first year and just put an escrow account right now in year two. I want them to take 50% of the profit, pay towards the mortgage, because I'm going to show them how it's going to shave ten years. It's literally going to go from a 30 to a 20. Always take a 30 year fixed, but pay it off sooner then the other 50% is for repairs and issues, right? The first 2 to 3 years are critical because if they really focus and save the money, they're going to be okay to weather the storm. The wealth that gets created from owning real estate is much greater than my charts even show, because my charts are conservative on purpose. Because I don't want people to be like, oh, he's selling a dream. No, I'm actually giving you the conservative numbers. It's going to be better than that. And so that's that's what we have to do is put it away, be disciplined, put it in an escrow account, grow the money that way, and over time they'll be plenty of money there.

Speaker 2 (00:13:47) - It's the beginning and it's. And I've done like I said, I've done this too, where we're mixing our real estate profits into our maybe real estate business or our bills at home. And by keeping it separate and having those disciplines, it helps create the liquidity that keeps people safer. Right.

Speaker 1 (00:14:02) - Gotcha. Yeah. You have to have that security blanket kind of thing. Um. That's a smart way to look at it, because. Issues will come up. You'll need a roof. You'll need a furnace. The tenant breaks something. Whatever it is, appliances, 100 different things can come up. And I like what you touched on too, because a lot of people want to buy with cash, right? They're like, I got 200 grand. I'm going to buy a little condo and rent it. I got crazy, I inherited money, I earned $500,000. I'm going to put that all into a piece of real estate and leaves. You broke.

Speaker 2 (00:14:31) - 100%. And the less people make and the less people have, the more willing.

Speaker 2 (00:14:37) - It's the craziest thing. Sometimes I yell at my customers. Not in a bad way, but like, they'll throw the whole thing like I won't. Grandma told me to put 20% down. How much you got? 21%. I'm like, what, are you crazy? Like, the roof is going to go like you're going to. And oh, by the way, you could put 10% down, buy out the mortgage insurance, get a quarter better on the rate because if the loans insured the rates a little better, you don't even have it monthly. You get rid of it. I keep 10% in your pocket. You have the liquidity, and your payment is like 100 bucks more than it would have been before. Like so, so strategies like that. You know, and it's not America's fault, right? Nobody's educated. Everyone's like. And one of the other reasons why, you know, we'll talk about the velocity money stuff and how the, you know, the agent partner program ties into, you know, my marketing company and all this stuff is I created a first time homebuyer series that is literally free when it's any of my Realtors clients.

Speaker 2 (00:15:33) - And nationally, I sell it for $279. Very inexpensive. It's nine different modules of just teaching people how to buy their first home, because it's a very fragmented, you know, they call you up and you're like, hey, use my mortgage guy. All right, call Frank. And, um, okay, let me get your documents. This isn't me. This is how other people do it. Give me your pay stub. Give me your W-2. I'll give you six and a half. Okay, great. And then they they they they're literally holding their breath, hoping that when you find them in the house, they're going to get approved. There's no education. It's just transactional. A lot of the mortgage people don't care about the clients. We go out of our way. And that's why I did the series, because sometimes I'm having a bad day or whatever, and I don't have two hours to sit there and train every single person.

Speaker 1 (00:16:16) - So one by one.

Speaker 2 (00:16:17) - Take the videos. Do it at your leisure.

Speaker 2 (00:16:20) - Right. And then come back to me. And now we're a little bit speaking the same language. Even one of the modules is how to understand a loan estimate. Every single time a client gets a loan estimate, they freak out. Why? Because. S grows five months. Things are, you know, inflated. So, you know, it's things like that that we're trying to educate people. And once people get educated, they feel more secure. Once they feel more secure. You know, you look at a $600,000 house with them and you're like, hey, it's probably going to go for 630. They'll they'll have a greater likelihood of jumping on that if they're secure versus insecure. So I think that's very important in this market because if they're scared or confused they're just not going to act. Yeah.

Speaker 1 (00:17:02) - No. And that's 100% true. I used to do first time homebuyer webinars. We get 300 people on the call. Yeah asking questions. And not that it's a bad thing from the consumer side, but they'd be pretty basic questions meaning that, you know, they're asking simple things.

Speaker 1 (00:17:16) - What do I need for closing costs? What do I need for this? How much can I put down? My credit score is low. I had a bankruptcy. And these are things that are most of the time. Or you can overcome with lending depending on timing and whatnot or how bad the situation is. But. Home ownership is sold as a dream. I want to say sold. It's discussed as a dream when you when you're being raised in America and. There's no. Education behind it. How do you do it? What's the right way to do it? And I think that's what you're going for. With your with your courses and your education 100%.

Speaker 2 (00:17:49) - And one of the things I'm training the realtors on is what do you say when they say, I'm just going to continue to rent because rates are high and values are high. Right. Do you go stick your head in the sand because you need to know this? Here's the answer. If I could show you a way to put 20,000 a year in your pocket by buying versus renting, would you at least let me show you the math? Right? Here's the math.

Speaker 2 (00:18:14) - Tax deductibility, which no first time homebuyers understand. Right. They're going to get 4 to 6000 back from the IRS every single year. They don't get that I explain it to them. Usually I have to explain it to you. It's it's when you take the interest in the taxes and you write it off, say somebody is in a 30% tax bracket, right. And they're making 100 grand a year. They don't really pay 30. They might pay 25. But you know, there's FICA and Social Security and some other things. But so they're paying in $25,000 to the, to to the tax bracket. But if you write off 25,000 in interest in taxes, you take the appropriate tax bracket that you're in and you divide it into the interest and taxes that you pay as a, as a homeowner. And that's the percentage of the money of your interest in taxes that you're going to get back. So if somebody pays 20 or 25,000 an interest in taxes, which they absolutely do here in new Jersey, um, they're getting 5 or 6 grand back.

Speaker 2 (00:19:06) - Yeah. Check. And I make bets with the first time homebuyers are like, okay, because they don't believe me. Like, that doesn't sound right. Yeah it does. Okay. Split it with me when you get it. You know, it's funny. They get the check and then they call me a year later like, oh my gosh, this really did happen, right? Yeah. No, you're not lying. It wasn't a sales pitch. So that's the first then amortization right? You take a $400,000 loan. About 5500 is paid off that mortgage in year one. So now you get 5 or 6 from the IRS. You get 5 or 6 in paying down of the loan. And real estate, if it goes up 3% in value, which is historically lower than it's been, if you buy a $500,000 house, it goes up 15,000 a value. So look at the math. Do you still want to rent? Because it really doesn't matter if rates are 7%, 6%, 5% or 4%, it's putting 20 grand a year in your pocket in some form or fashion.

Speaker 2 (00:19:57) - Once we show the first time homebuyer renter that they might not buy tomorrow, but they know they have to buy.

Speaker 1 (00:20:04) - They get a plan out for a year, maybe have to remember for another year. And a lot of renters depending on, on on the rent you're paying. You know, around here it's three, four, five, $6,000 a month to rent. Especially if you have a family. You're looking at 6000 bucks a month in my town. And you are, um, if you're going to lease another property by the time you calculate your fees, your security deposit, you're looking at the amount of an FHA down payment, correct? Depending on the price of the home. Um, they don't realize that they're going to grin and bear it. Pay that, pay those fees, rent another year and pay rent. Yeah. You know, that's the mindset that most people miss. Yeah. And they just think automatically, how could I buy a home? Yeah. I can't buy a home.

Speaker 1 (00:20:45) - I'm a renter and I'm not stable enough. I don't have this. I don't have that where it's in many cases it's not really the truth. They can buy a home. There's programs for that. And that's what you talk about all the time. 100%. Yeah. Yeah.

Speaker 2 (00:20:57) - And you can't you can't rent. I mean, the people that own real estate are much better off financially than the people that rent. Right? I have a I have a couple right now that I'm just pre-approved. And they're looking finally for $450,000 house and they've been renting for 25 years. And I'm like, you know, it's crazy. And then if you parlay the three, two, one down to the single family fast, track the trademark products into how do you buy? It's $1 million in real estate for 40 grand or less. So by using owner occupied loans, buy it, living it, turn it into a rental, buy it, living it, turn it into a rental, repeat and rinse a couple of times.

Speaker 2 (00:21:38) - I mean, if I came to you and we just kind of got landed from Mars, right? And I said to you, hey, you, you just have to go to get a job, right? If you're out of college, you could have a salary in the first month and buy real estate because you don't need a two year history. People think you need a two year history with a college degree or a salary job. You can get a loan right away. And I said to you, you could get $1 million in real estate for less than 40 grand. Then we're going to turn some of that real estate into rentals, and somebody else is going to pay it off for you in 15 or 20 years. The million dollar asset is going to turn into a $2 million asset in 18 years. And when that's all said and done, you're going to have 12 to 15,000 a month coming in without going to work. Would you like to do that?

Speaker 1 (00:22:23) - Tell you what, man. Your phone is not going to do that.

Speaker 1 (00:22:27) - It is not going to do that. These are the. These are the advantages of having real estate that you turn into income producing assets, and you structure it to pay it down properly, structure it for taxes properly. And you can you can get in that market that can become a retirement plan. Or you have 3 or 4 properties. I mean my mind saying maybe one each is a college education for my children. Oh, yeah. Now you've saved your. Now you've saved your, uh, your college money.

Speaker 2 (00:22:55) - That's 100%. Why not have the tenants pay your kids college?

Speaker 1 (00:22:58) - You're actually not paying for it, right?

Speaker 2 (00:23:01) - You're not, because the cash flow is paying for it. Yeah. So, I mean, they talk about all, you know, it's 250,000. Well, if you really break that down, if it's 2 or 3 grand a month for a couple of years and you have that in cash flow from your tenants. See, once again, back to the equity thing, America.

Speaker 2 (00:23:16) - What they do is they'll literally like carry minimum credit card debt and then they'll pay extra towards their mortgage. And they feel good that they have a lot of equity. And then by the time the kid goes to college, because I deal with a lot of financial planners, um, now they have to take an equity line or a cash out refi to pay for college. But if you look at if we just invested that money in other real estate, then you would not only have four times the equity, but you'd have somebody else paying it, paying the college education for you. So it's really just about planning that we want to help people do. And at the at the ripe age that that I'm at, right, I've had these experiences where it's like, it's so funny when I deal with younger realtors because I'm like, I bought my first property in 95 and they're like, yeah, I was born in, like, I.

Speaker 1 (00:24:04) - Wasn't even born in.

Speaker 4 (00:24:05) - 2001. Yeah.

Speaker 2 (00:24:06) - That's okay.

Speaker 1 (00:24:07) - I pay 30 bucks.

Speaker 2 (00:24:08) - Yeah. Well my first yeah, my first was a it was actually my grandmother's house. That's another really unfortunate but good lesson for people is that my grandmother kept everything in her name. She was a Italian German lady, old school, you know, and my father and my uncle, um. My grandfather saved some money. They had some cash and they had the house paid off. It was in Livingston, new Jersey.

Speaker 1 (00:24:35) - That was the old school mentality, the old school mentality.

Speaker 2 (00:24:37) - I mean, he and he never made a lot of money. They just saved. He was a German guy. Yeah, it was really good with money. My grandfather. So my grandmother gets sick, has to go to a nursing home. And back then it was a three year lookback. So if she had moved the assets into my father, my uncles name after three years, it's over. They can't touch it. But because it was still in her name, she broke her hip. She had dementia, it accelerated.

Speaker 2 (00:25:02) - It got worse and worse. Had to go to a nursing home. And the way that it works is they'll take your cash. They want you to sell the house. When you're depleted of all the assets that Medicaid will take over. My father. My uncle lost every dime of their potential inheritance. They sold me the house. They went to each of the grandchildren. I was like eighth in line. I was just kind of like in between seasons playing minor league baseball. I had no money. And they're like, ask my brother. You want to buy grandma's house? No. That's everybody. And I was the eighth. I'm like, golly, I'll buy it, you know? And then I had to get my uncle from the other side of the family, who had a job and had a few dollars, and we bought the house. And we put a tendon in there and it went up in value in all these things. We got it at it at a reasonable price because it was a family deal.

Speaker 2 (00:25:50) - Um, but the point is that that's another little lesson that people have to make sure they protect what they have by, by doing it the right way. So there's all these things that have gone on in my life near misses. I've done very well. But then I've also given a lot of it back and and that that's invaluable. That's why I make a joke. It's like five Harvard educations because it's it really is. It's kind of like the way you've lived your life. It's it's not been easy, but we're hustling. And that hustle gives us knowledge because of experience. Right.

Speaker 1 (00:26:20) - Exactly, man. And the experience is way more valuable than an education in my in my experience in my life, I never wanted to hear the education part, you know, but that's a whole nother podcast. The, uh, but like, you were just talking about, like. Two quick things. My father is an estate planning attorney. He has families come in. A lot of them are very wealthy.

Speaker 1 (00:26:39) - And he structures things with trusts, and he structures things with different styles of trust and where to hold things. Um, for tax planning, estate planning and for exactly what you're talking about, the nursing home issue or when you get older, you know, and I think, um. I know there was just a house on the block next to me, and there was one old lady that lived there, and I went and I showed it to a client and I was speaking to the realtor, and she's like, no, this house is in receivership now. The nursing home is taking you from the from the from the owner. And here's a woman. I don't know that I don't know the story, but I speculate that her her husband probably died and she was left alone. And then it was too much to care for, for herself. She couldn't she had to go to a nursing home, was not protected properly. And they took it all. It's crazy. They took it all. Yeah.

Speaker 1 (00:27:21) - Every. Everything. The house, the equity, it was all gone. I don't know what if she kept any at the end, but the person selling the house was the state and it was in receivership for bankruptcy, that they were claiming it all. It was all the nursing home. Yeah. They're ruthless. Yeah, they're ruthless. And you can lose it all that way. So it is it is smart to plan. And that's the next level of real estate ownership, right? 100%. Once you own it, what do you do with it. How do you structure it? It becomes a whole nother question. But there's advantages to it. There's depreciation with real estate. There's there's 1031 exchanges where you can avoid all your taxes. Yeah. Um, you know, we hear about this stuff on the news, but that that's that's the real thing. Um. What are the. Do you want to go into any of the courses that you offer in a little more detail? So the people that are watching or listening or listening, that's great stuff.

Speaker 2 (00:28:07) - Yeah. So so first time homebuyers, we have that that that seminar, uh, the nine modules for $279. Invaluable. Whether they use me for the mortgage or not. What I actually do is if they use me for the mortgage, they get $500 off closing costs. So it's actually a free education. As a matter of fact, they make 230. Yeah, they make 280. Whatever. It's 220 bucks. Um, then we have if somebody comes to me and says, I want to be a real estate millionaire, and I'm committed, I have a full blown coaching course that we talk to them about. Um, that's a video coaching course. And then I have one on one coaching. So I do all of that. Now, any of the clients that want to get a mortgage through me, through my realtor relationships, the education is free now. It's not as robust as, you know, when they pay. It's but it's more than 99.9% of the other mortgage. People like, I'm not just like, hey, give me a pay stub.

Speaker 2 (00:29:05) - We spent 20 minutes or a half hour on the phone. We give them the modules, um, because I want them educated, because I want them confident, because we need to be confident in this market, as I mentioned. Um, you know, then I've partnered up with the agents and now this thing called the agent partner program. So if any of the agents want to talk about that, we can talk about it. Where through Velocity Money Enterprises. Right. We drive leads for buyers for real estate because I'm creating a national database and I'm affiliated with five different mortgage companies nationally and four different real estate companies nationally. And my goal is to educate America how to buy real estate and then partner up with organizations. Because ultimately, my dream is if I added between 20 and 100 new clients a month in coaching, then I can divvy it out to my partner relationships. We can go, hey Chris, they're looking at Bergen County. Let's go. They're fully educated already. They're going to buy between 6 and 8.

Speaker 2 (00:30:05) - It's an ideal buyer for you because they they kind of know what they're doing already. It's a dream. Yeah, it's a dream. And so we're creating that. And I have a gentleman in down in Miami creating a more robust web presence for me that does that. Because if you think about it. Zillow is great, right? But it's it's it's it's just a beast. Right. They go on, you guys talk to him. We talk to him. We're, you know, we're fighting to get on the phone with the client. The internet is lying to them. You know, certain mortgage companies are advertising. 4.5% were made at six and a quarter, and it's like $299 Mercedes commercial. You're like, wait, how's it 299 well, you got to put 11 grand down. Yeah, right. This nonsense. So America has never been educated the right way. How to buy real estate, as I mentioned before, starts with the first time homebuyer. So first time homebuyer modules coaching.

Speaker 2 (00:30:59) - We do the loans. Obviously we partner up with only the top agents. There's a lot of real estate agents out there and I love all of them. But there's you know it's like with mortgage, it's like with football there's good quarterbacks and bad quarterbacks. Um. I've been fired, and I've also fired people that I've worked with, you know, and early on in my career, I screwed up a bunch of deals, too. And, you know, um, you.

Speaker 1 (00:31:21) - Learn, you learn.

Speaker 2 (00:31:21) - You got you get the battle scars. So, um, the velocity money. Com is our website. Um, we have a full social presence. Um, we're we're going to begin doing at least 2 to 3 posts a day, and I'm going to do them in series. There's going to be first time homebuyer series where I give them little tidbits. Then there's going to be current homeowners series, and then there's an investor series. Because whenever I did a seminar, there's always three groups of people in the room first time homebuyers, current homeowners, people who consider themselves to be real estate investors.

Speaker 2 (00:31:53) - And we have an answer in a solution for each of them. It just depends on where they're at in their trajectory. Somebody could have five properties and I could look at their tax returns. You mentioned depreciation. The CPAs all screw up depreciation. They don't use it enough. They write off all these losses and they make the people not fundable for the next deal. And I'm like oh my gosh. Depreciation is the best thing since sliced bread. I literally just had a conversation last week with the CPA. I'm like, why did you use two grand in depreciation and 11,000 write offs? The guy doesn't qualify now. Thank God it's tax time. And this year they're going to show more less write offs and more depreciation. Um so all of that stuff. The best part about it is you could be 22 years old and just getting out of college with a job. We can help you. We have the three trademark products. You could be 45 or 50 or 60. Worried about retirement? Maybe you have equity in your home.

Speaker 2 (00:32:47) - Maybe you don't have equity. You know, it doesn't matter. We can help. Or it could be real estate investors who only think about the flipping mentality. And I have a whole module where for the flip guys, I could show them how to get in and out of real estate, keep the property and get all their money out. What do we want to be in real estate for free. So yeah, it's it's it's I bought, I bought and sold over 50 properties myself. I've done over 2 billion in loans. I've seen a lot. I can't say I've seen it all because every day I learn, every day I laugh, I'm like, oh my.

Speaker 4 (00:33:17) - Gosh, yeah, what.

Speaker 1 (00:33:17) - Is this one? This?

Speaker 2 (00:33:18) - The mortgages are crazy. Why? Because America pays their bills differently, you know, I mean, I have people that say a lot of people that say, I don't trust banks, I have cash in my house. I'm like, do you trust the house fire? Because if you have 20 grand cash and it burns.

Speaker 1 (00:33:37) - God.

Speaker 2 (00:33:38) - I would trust the FDIC. You know, like, God forbid there's a robbery like, you know. So anyway, it's crazy. And then I'll be like, you need to put that money in the bank, and it needs to be seasoned. And then they they go look for a house and they're like, I'm in contract. Where's your money? It's still in my house. I'm like, oh my God, why is it still in your house? So stuff happens, but we're trying to help people.

Speaker 1 (00:33:59) - We had a guy shot to buy one of our properties and, uh, literally had the picture of cash as proof of funds.

Speaker 4 (00:34:05) - Perfect. Yeah. That's great. Great.

Speaker 1 (00:34:07) - So you you think I can submit this, man, you out of your mind? He's like, that's all I got. You know, he was a hard working guy, blue collar guy. But I'm like, oh, man, we got to back up a few minutes and do things the proper way.

Speaker 1 (00:34:18) - Yeah, you told me you were ready to go. I didn't know this is what you meant, you know? And you know, that opens a whole nother can of worms. How do you do this? How do you put it in the bank? You know, you got to follow. Certain.

Speaker 4 (00:34:27) - Yeah. It needs to be.

Speaker 2 (00:34:27) - Seasoned for two.

Speaker 1 (00:34:28) - Months. Yeah. And you can't just walk in with with 150 K in cash and deposit it. You know, it's it's it's tricky. But yeah, I mean I'm sure you see wild stuff. But we all see these deals that come in and. Somehow I feel like there's ways to make a lot of things work. Some things just don't work. But that's the rare case. And, um, if you have somebody who's really representing their client and wants to do it, you can figure it out.

Speaker 2 (00:34:50) - Yeah, yeah, yeah. People ask me, you know, it's really hard to get loans now, right? I'm like, no, not really.

Speaker 2 (00:34:54) - It isn't. If people are working and people have a halfway decent credit score. I mean, you know, FHA loans, we can go down in the five hundreds. Um, so. Yes. There's you know, there's debt to income ratio, right. So you have to qualify. But the W-2 employee it's very simple formula. Right. Like 40. You know I'm not going to get into the details, but 4549 on Fannie Mae and Freddie Mac. So like if if you make a ten grand a month, you couldn't have up to $4,900 in total bills on your credit report, card payments, credit card minimums and your mortgage. Not that hard. The self-employed people often don't know what they make. They know what they gross. Like if you take a plumber and electrician, I gross 400 grand last year. Great. I look at their tax returns. They made 30 because the CPA wrote off stuff. So you know, with self-employed people it's a little trickier. But we also have business bank statement loans where I don't need a tax return.

Speaker 2 (00:35:51) - We have DSR loans where if the property has cash flow, we don't need tax return. So there are some flexible products. It's very hard for me to to call you back and be like, I can't help that guy. It happens. I have a bunch of people right now that, you know, one guy, um, had trouble a year and a half ago and his mortgage went like 120 days late. Well, that person's in trouble for two years. They can't buy. Right? But after that, you know, then then they can't. So worst case scenario, we just coach them. Or worst case scenario, we get them to one of our credit repair companies. Right, right. And and that's the thing about helping people is we're not one and done. I'm not even like, you know anybody. Realtors and loan officers can be very good at the low hanging fruit. Like if you called me today, I was like, hey, I'm buying a house down the street. I'd like a loan.

Speaker 2 (00:36:39) - I'm I'm great at that. Right? Like, oh, yeah, let's do it. Let me, let me help you. But it's, you know, it's other people that were all not so good at. So I've learned over the years and that's why I have Jasmine, who heads marketing for me and, and a staff of people that make sure we stay in touch with everybody because we put them in buckets. Right. Credit repair bucket. Um, have to save more money. Bucket. Um. Want to buy more than they can get. Like somebody might want a six. I had a guy yesterday wanted to buy a $600,000 house. He showed 30 grand last year. I'm like, you can't afford that. You know, this guy in particular would have had to show 120,000 to afford that house. Not because it takes 120 to a 4 to 600 K house, but I got average two years right. So now I got the 30 and the 120. So it's all of that. And because we care about people, um, hopefully they come back and we stay in touch with everybody to get them to the point where they want to buy some people.

Speaker 2 (00:37:33) - Talk to him in two minutes. Yeah. You're good up to 800 or you're good up to 400 or whatever. And they buy a week later. Yeah, but other people take time.

Speaker 1 (00:37:39) - Yeah, I can remember that when I owned restaurants and, you know, in the beginning it's like, oh, yeah, man, I don't want to pay any taxes. All right. You made 20,000, you made 10,000, you lost money this year, blah, blah, blah. And then it's like, all right, well, now it's time to move. And it's like.

Speaker 4 (00:37:52) - You're screwed, man. You can't get a loan.

Speaker 1 (00:37:53) - You can't get a loan. Like we have to work around this. We have to figure something out. You have to go another route. Um, you figure it out, but then you have people like yourself. Or if you have other advisors in your life, say no. You have to structure things a certain way. If you want to buy a house in the next year or two, talk to your account and let them know before so you're not screwing yourself out of the situation where you don't qualify or no, the other programs that you can get Ahold of, where you can use your business bank statements, your business can you make it 50 grand a month that'll qualify you? Yep.

Speaker 1 (00:38:21) - You pay a little bit more, but you're not paying taxes, right?

Speaker 4 (00:38:23) - 100%.

Speaker 2 (00:38:24) - Right? Exactly. Yeah. I always make a joke. You can't cheat the government, right. And then go get a government loan. Like like. Oh, by the way, like Fannie, Freddie and FHA are all owned by the government, right? Yeah. Um, so but that's a great point. You could make an argument that the business bank statement loan financially is even better, because if they're paying less tax, they're going to pay a higher interest rate. I mean, I'm not here to tell people like, you gotta, you know, pay Caesar what Caesar is doing. It says in the Bible, so, so they got to pay their taxes. But all I deal with is what I have in front of me. If somebody shows 30,000 but they bring in 50,000 to the business, then they're going to qualify for a business bank statement loan, right?

Speaker 1 (00:39:03) - Yeah. No matter what they're writing off, the business is coming in and the banks understand the game and they're the ones that are willing to play.

Speaker 1 (00:39:09) - We'll play. Right. That's it.

Speaker 4 (00:39:11) - 100%.

Speaker 1 (00:39:12) - All right. This is awesome. Um, any advice, any any any advice you want to leave for the guys who've got some people watching out there? Um. What can we let them know?

Speaker 2 (00:39:21) - Well, I think that it's always a good time to buy real estate. Not every real estate deal is a good deal, right? So for owner occupied people, there's equity in homes. And we're not telling you to take equity at home and buy a Lamborghini. Right. We're telling you to use equity wisely to buy more real estate. Um, if you're a first time homebuyer, we have a great education series to help people. And you can never go wrong if you buy real estate. We have to live somewhere, and 20,000 a year in your pocket is real. Um, in some form or fashion. So I would say, let us educate you. Um, if you think we're jerks, let somebody else educate you. Whatever. But real estate is the greatest wealth creator in America by far.

Speaker 2 (00:40:10) - Here's why. And then I won't talk anymore, because it's if you can borrow at 96.5 or $0.95 on the dollar, you're able to buy the million dollar asset, right, for three and a half to 5% of that. What other investment vehicle can you pay pennies on the dollar to get the bigger asset and. Everybody's like, well, but how do I know what real estate to buy? We have this formula called the power four, which shows them exactly what a good real estate deal is and what a good real estate deal isn't. So it takes away. It takes the blinders off because the property either fits in the formula or not. Now, if we're buying an owner occupied, great. You're going to live there for a year, but we're going to teach you how to buy it as an owner occupied, but then turn it into investment and it's got to fit in the formula now. And you've been to the seminars. The math either works or doesn't. It's just math. It's not emotional.

Speaker 2 (00:41:01) - Yeah. So we just I just love helping people. I appreciate you having me. I love talking about this stuff. Um, there's so many people. I think we're going to surpass the 10,000 number. Right? And then I could retire once I get to the 10,000. We've helped so many lives. Real estate, if done well, is the greatest, greatest wealth creator in America. Not even close.

Speaker 1 (00:41:24) - All right, you guys hear the advice Frank gave, and, uh, if you have questions for him, or I put it in the messages, message him directly. Um, this was great, I appreciate it. A lot of great information. I think this was was a was a value packed time. And, um, I appreciate you coming on, man. I know it was not easy today.

Speaker 4 (00:41:40) - Yeah. Got some weather. All good. Thanks, brother.

Speaker UU (00:41:43) - Appreciate it. Yeah. Yeah, yeah.