The Jon Sanchez Show
07/18- The best loans for investment real estate
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Visit renterswearhouse.com to request a free rental price analysis that's renterswearhouse.com or call 303-974-9444 to speak to a rent estate advisor today. Good Thursday. Welcome to the John Sanchez Show. One new stock, 780-KOH. It's a pleasure to be with you and a great pleasure to be back with my co-hosts. Missed you guys on Tuesday and Thursday. Dwight Mallard, Guild Mortgage. How are you, my friend? I'm doing good. How are you feeling? Getting better every day, slowly but surely, getting better every day, man. Thank you. Thank you guys for filling in for me on Tuesday. I sure appreciate you. Yeah, no problem. We love to do it. Beautiful. Corey Edge of Edge, really, how are you doing, Big C? I'm doing good, man. Good to have you back. Thank you, man. It's great to be back. You know, as I was laying in bed with about 102 degree temperature on Tuesday night, I'm just thinking, "Man, I know the boys are doing good. I hope they're keeping things chattering." It was easy when the market was at a bus, John. Yeah, yeah, exactly. I think I'm going to go back being sick. Yeah, would we have that 700 plus point rally that day? And yeah, here we are down 533. So yeah, what the heck? I'm jinxing things, Dwight. I'm Corey, jinxing things. It does make it a little easier. That's for sure. Yeah, yeah, no kidding. No kidding. Holy moly. Well, it's great to be back with you guys and great to have somewhat of a voice back here. It's a little bit surely. So thank you again. Do appreciate it. All right, fellas, let me tell you what we have lined up for everybody this evening. Of course, we're going to recap today, tough day to day, sector rotation, moving things around, and that results in a lot of selling pressure. So I'm going to give you all the details what exactly happened. But here's the latest situation. And again, every day, it seems like when we're getting the economic data, guys, we're getting reports showing some various signs dependent upon the data, various signs of the economy are weakening. Today, it was initial claims up 20,000 filings for the state unemployment benefit, continuing claims, continuing to receive the state unemployment benefit. Those claims rose 20,000. And we keep getting these type of reports showing the economy beginning to soften a little bit, no major problems, but beginning to soften. So what's going on? Well, right now, this from an interest rate perspective. So right now, the street is priced in literally a 100% probability of a September interest rate cut of a quarter percent. So ahead of that, we thought, you know what, here we are, we're solidly seeing the 30 year mortgage below the 7% mark, do I bring us up to date, of course, where it's sitting as of today? So we're solidly below the 7% mark. So here's the situation we think many of you may be in. If you're planning on purchasing your first or maybe second, third, or who knows how, what number it may be, investment property, now maybe the time. Don't know how much better things are going to get at this point from an interest rate slash mortgage perspective. So we thought, you know what, let's lay this strategy out on the table. Now may be the best time for you to start thinking about getting that investment property. But what are the best loans out there? What are the best loans for investment properties? They are looked at completely different. When Dwight looks at your application for an investment loan, completely different, not completely, but a lot of different things that he looks at compared to, of course, when you're just getting your primary home. So with that said, what's the qualification process? What is the best type of loan or loans that are available? So Dwight is going to go down the list of some of the things that you have as far as options, owner, financing, FHA's, all these different types of things. And then Corio, of course, will chime in and talk about what he likes to see when he buys investment properties or deals with clients by an investment property. So this is going to be a situation where again, if you've been thinking about the investment property, take advantage of these lower interest rates. Well, after tonight's show, you should have every bit of information you need to determine what is the best type of loan for you. But there's no better way to do it, of course, than to sit down with Cori and sit down with Dwight and look at the real estate property, look at the actual situation and these two gentlemen, of course, can point you absolutely in the right direction. Real quick, Cori, let me start with you before I get to the stock market side of things. Are you seeing much pickup right now in the activity of people buying investment properties or is it a little too soon? No, I wouldn't say it's too soon. I think it's been decently strong, but pretty much all a year, and I think a lot of it is people looking for investments. So investors are funny animals, because they're always lurking around. If they go into hibernation, it's not because they're not looking. It's because they're not spending the deals that they want, but there has been a decent amount of transactions this year. So they must be finding some deals. I think they're also fairly smart, right? So if you see the interest rates may be going down and they can lock in an existing cap rate that is based on high interest rates, and they'll lock that in because you're just looking for cash flow, and that might be a decent cash flow moving forward. But overall, I think Dwight would say the same thing. The last, it's been decently busy all year, but the last month or so has been really busy in all facets. And so there's definitely some sparks happening. Love it. Love it. Good timing of the topic. Dwight, your perspective. Yeah. We've covered the strategies of what you look for to buy an investment property, returns, all that. And the products are out there. And I sent you a list of the basics. John, but there are some out-of-the-box ones too. And I just sent over another one we'll talk about, but if you're really, where there's a will, there's a way, right? I mean, if you really want to get that investment property and you get together with someone like Corey, it's out there. There's ways to finance this. There's ways even in my arena. So you're starting to see, again, we call non-QM loans. Those are the new terms for the subprime, but there's out-of-the-box type of financing as well. So, I mean, there's really no excuses when it comes out of it. If you have a little bit of cash and we'll get into the FHA, which we've talked about before, which I love, we'll talk about that one as well. But yeah, it's open if somebody's really looking for one. Absolutely. Hey, Corey, real quick, before I get to the stock market side, you just use the term cap rate. Can you once again define that for people that are not familiar with it? And then what kind of cap rate? Because you're going to explain throughout the show, this is where the whole process starts, right? You're not buying an investment property because it's got pretty pink flowers out front. You're buying it for the cap rate, i.e. the return and the cash flow. So what kind of cap rate should we be looking at right now that it's realistic in today's environment? So, cap rate is basically your net income. You can take your net annual income on any size property, but net annual income divided by your price. And what that's going to give you is a return, and it'll be in a percentage value. So let's say it's 5%, 10%, 1%, whatever it is. And you can kind of say, okay, this is the return on this investment. You can get into cash on cash and how much money to actually put into it and get into all different big mathematical calculations, but the cap rate's just kind of the basic one. I was just doing this for a client earlier this week looking at more plexus. And it seems like they were hovering, everything right now is hovering right around 4% to 6% cap rates. I'm sorry, 4% to 4% cap rates. I had noticed, at least in this particular gentleman and this part of town, the 3.5% to 4% were asking prices and they were still sitting. The ones that had 5% that those are true numbers were actually sold. So that's the little discount. That's a sweet spot. So I'm ready with 4-5. Right. So almost equivalent to which you can earn in a taxable high-yield savings account, that 5% mark. But of course, what you cannot get in a savings account that you can with an investment property, two primary things is, of course, hopefully future appreciation and some of the great tax benefits that go along with it. Correct. Yeah, you can do all those calculations. And I always have that conversation with my clients that get listed. At least for right now, you can take this money and go get 5% risk free. It's not going to last forever. You'd have to tie it up a little bit. So you really got to sit back because some people like to chase the equity, but some people don't want to deal with any headaches. So you got to look at both sides of the equation. Yeah. Okay. Excellent. All right, gentlemen, we've got a lot of great things we're going to be talking about. Let's get to the stock market. I'll be the Debbie Downer of the day. How about that? And this other stuff's so much better now painful day today. Again, we had this to yesterday's significant decline in the NASDAQ side of things. And we're flirting with some pretty substantial decline numbers. But what's going on? That's the number one question, of course. Again, folks, we keep coming back to this topic. This is sector rotation. This is where investors, the hedge funds of the world, institutional managers, waking up one day and going, you know what, tech is overvalued, semiconductors are overvalued, AI is overvalued. This is overvalued. That's overvalued. And oh, by the way, you know, if we're talking AI and semiconductors, oh, we need to throw the apples in the world and the Teslas and the Amazons and the Microsofts, so on and so forth. And they just lump everybody together. And then that rotation happens. Now, the bright side, as I mentioned on the show last night, we don't want to see this trend continuing for too long, right? Yesterday was a was a tough day. As I mentioned, you know, we remember if you recall, we had a 512 point loss on the NASDAQ yesterday, but the Dow gained 243. So, you know, my point last night was let's make sure this trend does not continue. And I told you that in the after hours, I saw in the video moving up and the NASDAQ features were up over 40 points, etc. Well, that continued to hold overnight. Matter of fact, we're up 143 right on the NASDAQ futures right before the stock market opened at 630 this morning. So things look fine. But man, it was just like somebody flipped a switch mid-morning and we saw the Dow roll over, then we saw the NASDAQ roll over, the S&P, etc. And everything began to unravel again. And once again, that momentum's like a snowball going downhill. It just got bigger and bigger and bigger. And again, there was no negative news. Like I said, we had the leading indicators and then the labor data that I just mentioned. There's no comments from Biden. There's no comments from Trump. It was just this sector rotation. So, you know, I'm telling some numbers for you just to kind of give you an idea, you know, where we said at this point, this is through today. But through today, we're down about 1.26% on the S&P 500 over the last five trading days. NASDAQ is down 2.87%. But to show what I'm talking about as far as this rotation, okay, so you got those two averages down. Let's go over to the Dow side. The Dow for the last five days is up 1.66%. And the Russell 2000, the small caps, are up 2.33%. So it's not like a normal market correction where they throw the baby out with the bathwater. Everything goes down. That's not the case. It's just we're seeing this rotation going on. And as I mentioned last night, I want to mention it again, guys, rotations don't usually last very long in my experience. And especially when we're rotating out of tech, I wouldn't be surprised again. Here we are, the NASDAQ, like I said, down 2.87%. I think we probably got maybe a 5% correction ahead of us total. So maybe a couple percent more. And then these things become so cheap that institutions have to buy them. Many of them use their investment strategies based upon market and specific security valuations. These things get cheap. They've dropped 5% just on the NASDAQ itself. But these individual securities, many of them have dropped much more than that. Many of them are in correction territory, meaning down 10%. And some of them are even getting close to a bull, or excuse me, a bear market, which is a 20% decline from its high. So bear with it at this point. Like I said, my best strategy for you at this point, I am not panic whatsoever on it. Use this as a buying opportunity. I think you're going to get this window for maybe another day or two to pick up again some of your favorite tech names, whether it be Apple, whether it being a video or some of these, again, that have dropped fairly well over this last week. And use that as a buying opportunity. But I am just convinced that this is not going to be a permanent rotation. I'm really not. So fret when I come back and I tell you what the market did overall, not all that bad. Again, considering especially where we are here to date, this is one of those phases. But I don't think this is going to be a long term rotation. This NASDAQ has too much momentum. And like I said, this is one of those unique periods that we get in like two a couple of times a year. But nothing really has fundamentally changed, in my opinion. All right, let's turn it over to Kristen Snow in the right now, traffic scenario, Kristen. Welcome back to the John Sanchez Show on Newstalk 780.co, which with courage of agility to white malartive guild mortgage. All right, here was the damage of the day, a 533 decline on the Dow 1.29%, still holding above 40,000 worth 40,000, 665. NASDAQ lost 126 or 0.70%. And the S&P gave up 43 points or 3/4 of a percent. Small loss in oil today or just down fraction when we bother with that 2/10 of a percent decline. Glow prices finished a little bit lower today, down about $3.50, 2,450, 640 an ounce. And Mr. malartive four basis point increase on the 10 year. Look at that, not even breaking into the 20 range, 4.19%. How do we do in the 30 year? Yeah, I like it. Well, on Tuesday, John, we were sitting at 6.84 today or 6.81, according to March news daily. And I went out and verified it. So yeah, I mean, the best of the best buyers are getting, you know, that upper mid sixes, you know, the less favorable, you know, they're probably high sixes, low seven. So we're in a fantastic spot. But, you know, FHA, the governments, as we talked about are trading even better, you know, you're around 6.28 on an FHA 30 year fix. So, you know, excellent time to your point, you know, if these things keep trending down, you know, it's... You may see it so crowded. You may see it so crowded. Well, you know, John, they've got a housing wire has got a little thing and there says lower rates can support a 2.7 trillion dollar recent. That's rally. I don't know, I don't know what's going to take to get that. But that's that equity we've been talking about. I mean, you know, that's a big number. Well, you know, that's a great point you bring up Dwight. I mean, yeah, think about that over, you know, $2 trillion in equity that is out there. And what's the saying you always say about that, Corey, about how people will people will do the equity once they get their hands on it? Well, I don't know. Hopefully they spend wisely, but they want that. Exactly. Exactly. But imagine, guys, imagine that this economy, you know, I don't know, let's cut it in half. Let's say a trillion dollars. Let's say Dwight, the rate drop, the refi boom hits again, and there's a trillion dollars of excess liquidity in this economy. Imagine what would happen there. Yeah. I mean, well, you know, the short answer, John, it would probably save some jobs in some companies, right? I mean, that's probably the short answer. It will put, you know, it'll get a momentum going. But I mean, you you look at when in 2021 and 19 and eight, we're doing three and four trillion dollars. I mean, come on, that was those were crazy numbers. You know, so, you know, it'd be nice to see the rate. I still in perplexed is what I believe will be the break point where you start to see, you know, I think it is probably five and a quarter five that people would really be willing to give up a sub three or, you know, three percent. Yeah, I think right. So, yeah, so I think if, but if we start trending down that way, it's going to make everybody so better. So, right, right. Absolutely. All right. So we're going to get back to our topic tonight, guys, which again, is where we want to explore the the process. What are the basically the best type of loans to get for an investment property? We're going to focus on investment properties tonight. But Corey, before we get to Dwight on this, I want you as the real estate broker to highlight how, again, as we touched on briefly a moment ago, how you look at a house differently from an investment perspective, right? It's about the cash flow, the cap rates, et cetera. But walk us in, you know, to, to the mind of you, a real estate broker who tons of investment experience and what you're looking at differently, just visualizing a, you know, an imaginary house, what you're looking at differently that versus, you know, you're taking, you know, John and Sally Doe out to buy their first home. What are the different features, benefits, locations, et cetera, you're looking at, you know, to start the investment real estate purchase process? Well, you got a couple of different things. So if we're talking strictly cap rates, right? Most of the time you're not looking at single family houses, not to say you can't put a cap right on them, but it's going to be a really low cap rate because you're competing against all the owner occupants that are trying to buy it. But let's just say we're theoretically looking at single family houses because somebody wants their first investment. You are looking for hopefully the same things that a potential homeowner would want in their house, good school districts, good area, good yard, good upkeep, all those things because what you're going to do if you buy it is try to attract a high, you know, a good tenant that's going to stay there as a reason to stay that'll pay a market rent, if not higher, to be in the area where you've purchased the property. So you're looking for those kind of things and, you know, the investment game is all different things, right? I have some clients that look for just the lowest price possible and they don't care what neighborhood it's in or what school is or anything else in there. No, I'm bad on anybody, but they're small and large and that's a business model for some people and it works. It works well. On the flip side of that, there are people that just want to set it and forget it. And so they're going to look for those newer houses, established neighborhoods, again, good schools, close to shopping, things that will attract a stable tenant that'll pay market rent or higher and then they don't have to worry about it. Okay. So a lot of the similarities of, I'll just use the, you know, your typical primary home buyer, but some differences there. Okay. Now, with that said, well, we're at the bottom of the hour already. All right. When we come back, Dwight highlighted four different financing options and then I want to sneak in a few others like hard money, et cetera. But we're going to highlight those and then look into some of these other areas like private money, hard money, seller financing, so on and so forth that we want to get into some details on. But Dwight's going to give us some, some current rates, et cetera, on your traditional, your FHA, et cetera. So what's this, Dwight said? Lots and lots of loan options. You just have to have the desire or the will to make this happen. And these guys will show you how it's done. But in the meantime, I'm starting over to you, Jack Saban. He's got a news traffic on weather. Hey, Jack. Welcome back to the John Sanchez show on new stock 780 kilo, which with Dwight Mallard of Guild Mortgage, Corey Edge of Edge Realty, a 533 decline on the Dow. Nasdaq losing or lost 126 S&P down 44. All right. What's the best loan option for your first or maybe your fifth investment property? Boys are going to highlight it now. Now, guys, we know how fast the time goes on the show. So Dwight, if I could, let's not spend a lot of time on the traditional, the conventional, et cetera. I want you to kind of breeze through those. I want to kind of go outside the box a little bit. So let's start first of all, because I want to make sure we have plenty of time to discuss this one. I think this is of interest to a lot of people. The owner financing side of things, Corey, you can chime in on this because you help arrange this also. But Dwight, you know, start us off, get the ball rolling on owner financing. What are some of the things that you recommend to people if, for whatever reason, they're not interested in quote the traditional mortgage process and loan? Yeah, you know, and Corey will be, you know, can jump into this. But but John, there are people out there that have significant equity in their property that don't really need the money, you know, to do anything with. So what they can do is actually, you know, finance that private space, they own it free and clear that the, you know, if they want to put some money down, you know, it starts to get into what you believe is the best type of strategy, because when you look at a conventional source, I mean, most people believe, and it's probably true, that 25% down is going to get you the best favorable terms on conventional financing, just straight up, 25% down. So that's a big, that's a big chunk of change for some people. And so there may be an area where somebody might be willing, you know, especially like a neighbor or a friend or something like that where there's a, you know, a connection that would be willing to, you know, be a little more favorable term. So I mean, that's just an alternative because I've seen this before, not so much recently, but you know, you start going, you get a pre-qualified blah, blah, blah, and all of a sudden they say, oh, you know, my neighbor next door, you know, let me, he's going to finance it. So it's not uncommon. I don't know how popular is right now, but it's an easier one because you don't have to go through all the steps of qualifying and things like that. But I want to quickly mention, John, though, when we talk about qualifying for investment property, if your ratios are good right now, your debt to income ratios before you buy an investment property, that investment property should not really affect your debt to income ratios. If you're already pushing the max, you know, then a little bit because in theory, the investment property, the rents received at the appraisal, no, it's already leased and we get a lease agreement should in theory offset majority, if not all of the mortgage payment. So it doesn't put a lot of pressure on people's debt to income ratios like they would think, right? Unless they're already pushing the threshold and their own debt to income ratios before you even buy that. So that's the great news about buying an investment property is, you know, you put enough money into it and you do it and you're getting favorable terms, it should not turn your debt to income ratios upside down to make it, you know, throw you into a very unqualified category. Love it. Love it. Great, great reminder of that. Great reminder. Corey, how do we convince someone to carry the paper instead of having to go through the quote normal process? It's not as easy in these markets as it is in other markets. I don't see that much of it right now. I'll tell you, I think there's some classes going on where they kind of teach that because I get phone calls daily. I got one yesterday on a property from somebody who they talked to me like we had grown up together to the point where I thought, man, I totally forgot this person because I felt so horrible and it was just somebody that wanted to know if I could get the seller to carry paper. So yeah, it's and so it's kind of a little strategy some of these investor classes give you. But it's difficult, right? Most people when they plan on selling a property, especially in investment property, I've already earmarked what they're going to do with their cash. And a lot of them I deal with, Sean, are going to take that cash to somebody like you because they're done with the real estate game or maybe partially done with the real estate game and they want to just sit back and have their money still work, but not have to deal with the other side of it. And so I'm not saying it's impossible, but you may have to do some convincing. You're going to have to have a pretty good case as to why you as the buyer are ASA for bet and a better investment or payoff than taking the chunk of money and giving it to someone like yourself, but let them handle it. In some markets, when markets get slower, people will look at the hunter carries because there's no other buyers out there. And that's just not what you have in this market. There are other buyers out there. So that's your competition. Okay, let me ask you this. I know the answer, but majority people probably do not. Someone asked the question on their behalf. If I want to buy in it, if I want to search an investment property, search out an investment property. Can I look at the public records and determine who has a paid off mortgage? Absolutely. No question. It might take a little bit. So you can go to the Washoe County Recorders website. You can now put in a parcel number or use a search by name just to make sure. And you can see the purchase, you know, when that person bought the property, you can start tracking the deeds of trust. So unfortunately, there's not one button that says, hey, is this property free and clear? You have to look at deeds of trust and find a reconveyance. And look at a deed of trust and find a reconveyance. So it takes a little bit of work, but certainly you could know all that well up front. There you go. There you go. All right. Now, I want to stay on this topic for just a second. So from a financial standpoint, here's when I've counseled clients on both sides, right? When they're, you know, they got plenty of cash, they can afford to carry the paper and then the other side of it where my client's the buyer. So let's work on the seller side. Here's what I kind of tell them guys. Look at, if this is currently an investment property and you go to sell like Corey just mentioned, you know, you got a lot of different options. You can take that cash. You can go invest to do whatever you want. Most likely you've got capital gains. So now you're going to start thinking about 1031, but as Corey has always correctly said, now you're going to be staying in the real estate game. So you got to do 1031. Uh oh, I don't want to be in the real estate game anymore. So now what do I do? So remember, if you go to sell that property, pay the capital gains tax, pay the depreciation recapture tax, et cetera, you know, make sure you meet with your accountant and you're going to be shocked by, you know, your net number in most cases. Most people are like, oh my God, forget it. I'm not going to do that. What's my other option, John? So by carrying back an investment property, keep this in mind. If you carry that paper, let's say for five years, even a you're going to get a nice down payment, right, Corey? What would you recommend 20, 30% down at least? If you're a seller, that's what you want. If you're a buyer, be willing to offer that to an adjacent seller. Absolutely. There you go. Okay. So as the seller, now I've got 25, 30% down payment, nice chunk of money. Number two, Corey, if that buyer defaults, where am I as the paper carrier, paper owner of this property, still the owner? Well, if you've done it correctly, you're a first deed of trust all there. So your first deadline to start the foreclosure process and get the property back. And do I get to keep the 25, 30% down? Absolutely. No doubt. You betcha. You betcha. And then third from it, let's say you, you know, your buyer, the deal works out. Let's say, again, it's a five year carryback. Remember, you get to spread that tax liability that I was mentioning a moment ago out over that five year time period. So you only have to claim one fifth of that capital gains tax each year. So you're, you're, again, you've got your capital continuing to work for you instead of an all right, an all out sale, where again, you're paying that full capital gains tax in the year of the sale. So whatever the term of your installment, five years, 10 years, 20 years, whatever it may be, you know what, you'd spread that tax liability out, but you need to make sure A, you start with an expert like Corey, and then Corey will bring in an attorney, escrow company, et cetera, to make sure that that deed, those notes, et cetera, are drafted correctly. So win, win there. But the final point I want to mention, guys, is all right. So here we are right now. Let's just hypothetically say, all right, we can get 5% for our money right now putting it in a, in a CD or high yield savings account, whatever the case is. Corey, what kind of interest rate am I going to charge or do I, what kind of interest, sorry, what kind of interest rate am I going to charge to make this worth my while to carry back the paper? You ask me, John? Yeah, start with you. Yeah, I would say at least double digits, right? I mean, I think if you're, I mean, I think you're 10, Corey, probably say you're more on the 12 13% range, I think. But yeah, if I'm carrying it, especially if I got a longer term out, I'm going to, yeah, why not? I'll give you a convenience you're going to pay for the conditions. Yeah. Corey, what's your guess or estimate on that? Yeah, it will depend on the risk, right? So if someone's got a huge down payment and there's, you know, for whatever reason, this can't get along right now, you might carry a little bit shorter. A lot of times, if it's appropriate, it's hard to sell, then you can carry it at those higher rates for the hard money stuff. But I'll give you a little bit of advice, too, from the buyer side. You as the buyer need to do your own due diligence. So if you find a property, think it looks good. Do your own research. Look at the recorder site. Figure out if it's free and clear. Figure out who the person is. If you can figure out what their age is, so you can get kind of an idea of what they're going to do with that money, because I will tell you probably 90% of listing agents have no idea if their seller's property is free and clear or what that person's going to do with the money or anything else. So if you call or your agent calls a listing agent, say, hey, would you be open to this? The automatic response is no, because that listing agent has no idea what you're talking about and hasn't even thought of that. Whereas if you can make a compelling case of, hey, I know the property is free and clear. I already know your client's probably going to do this with the money. There's an alternative. So, you know what I mean? You have to paint the picture. Don't rely on somebody else to do it for you. Excellent. So, where do you think, like Dwight saying, loadable digits? I mean, if I'm a buyer, I'm going to offer probably in the 7A range, because that's pretty good, compared to what you're at. But as a seller, yeah, you're going to probably ask for 10 or 12, and maybe meet somewhere in the middle. So think about this, folks, from a return on investment standpoint. Am I going to take that money? Let's forget the stock market for a second. Let's say I'm just going to put it in a CD. I'm going to get 5%. I'm going to pay taxes on that. I'm going to net maybe 3.5%, 4% depending upon my tax bracket. Or I carry back the paper, and let's say, you know, it's going to take the average, excuse me, the average between the two guys. Let's just call it 10%. Making 10% on my money. And I've got 25% or 30% down payment. Oh, by the way, I'm going to go invest that at whatever I'm going to do with it, stock market, maybe another property. Who knows? But I've got that 25% or 30%. If my buyer defaults, guess what? I get the property back, and I've done an installment sale, so I'm carrying back that paper, deferring the majority of the capital gains tax over the term of the loan. Cory, that sounds like a win, win, win, if I'm going to carry back paper. So if I'm the seller, so why are more people doing this? I think A, because they don't know the explanation that you just gave, nobody has sent out a talk to them about it. I also think there's a fear of foreclosure. There's a fear of if they don't pay, what happens, it was the property, I lose my note, I lose all this stuff. They're just not educated enough to understand. And this is also a good conversation for listing agents to have with their clients to say, before we get started, would you consider this? Here's all the pros, here's all the cons. I'm not telling you which way to go. I just want you to know that there are other happens out there to maybe continue having this property make you money, even when you don't own it. That's right. And Cory, to your exact point, I can't tell you how many times clients will call us out of the blue. Yeah, I just sold my property. Here's 400,000, 500,000. Good chunks of money. And I'm like, I know your finances. Why didn't you carry back the paper? Right? You're just putting it out. You don't want to invest it or you want to do something conservative, you know, why didn't you carry back the paper or make nine 10% on it? And to your point, Cory, I know this gets me so excited. Folks, you almost want that buyer to default, right? There's there's a lot of guys out there, guys and gals, that purposely want their buyer to default. Why? Because again, they pocket the 25, 30%, and they're on to the next deal. I've seen, I know Cory has, I know Dwight has, people do this two, three, four times. And before they know it, you know, they've got, you know, through three or four defaults, yeah, it's a pain in the butt, but you kind of get a hang of it after a while. You know, they've got the full sale price of the house and they still own it, right, Cory? Correct. Yeah, it has. And if you remember, we had that guest on a few years ago in that was his business. He was the largest private lender in this whole area for many years. I remember on the show, you asked him, like, I'm sure worried about people not paying and he's like, no, I don't want them to pay me. I want the property back. Exactly, exactly. Oh, fascinating. All right, let's continue on here. Kristen Snow, please drop us up in the right now, traffic center. How you doing? Welcome back to John Sanchez showing new stock 780K, which Mr. Ed, your phone number saw. 673-6700. Beautiful. Mr. Mallard. 240-2022. Perfect. Hey, guys, I was thinking of something, a question I received, I don't know, a little while back, but I thought let's kind of wrap things up because we just have a few minutes here. Cory, or either one of you, let's throw it over to your side, more financing, I guess. Can somebody carry back the paper if they still owe the bank money? Well, the short answer is yes, it's a wrap around, you know, sale to wrap around mortgage. You usually set up through an installment collection account where they pay there, but I think, Cory, if I'm wrong, if you're really getting to the meat of the deans and the note, any change like that, the lender could call the note to a payable. I think as long as they're getting paid, I'm not, you know, but that's never a guarantee. So, I mean, yeah, you can do it. It's just, yeah, it's, I don't know what Cory thinks about that, but it's, it's, people have done it. It's just, you've got to know what the consequences are if they want to call it real quick. Yeah, perfect. You can do it. I think we're teaching classes on it right now because I'm getting calls about that too. There is a do on sale closet, every single conventional mortgage. So just be where the lender could call the note at any point if that title changes. Amazing. Yeah, it's the bottom line, guys, is there's a lot of strategies out there. You, again, as we always emphasize when we have these type of topics, you need to build a team, contact contact to white, build your team of experts because if there's a will, these guys were saying this at the beginning, if there's a will, there's a way. If you want to, if one of your goals is to have 10, 15, 20 properties, it can happen, you know, just average person can make it happen. But again, you have to have the right team to do it because if not, it can be a disaster. You do it correctly. As I was just talking to a gentleman today, fully retired just because he's got residual income coming in off of his real estate. So, folks, it's all realistic. Great job, fellas. We'll do it again tomorrow night on the John Sanchez Show. God bless. Have a great evening. This program was sponsored by Sanchez Wealth Management, material in this program is intended as general information only and should not be taken as specific investment tax or legal advice. None of the information on this broadcast was intended to be a solicitation for the purchase or sale of any security. Further information is available by contacting john@sansheswealthmanagement.com or 775-801-01. John Sanchez offers securities and advisory services through independent financial group LLC, a registered broker dealer and investment advisor. Member FINRA SIPC, securities only offered in States John Sanchez is registered in. Sanchez Wealth Management LLC and Independent Financial Group LLC are unaffiliated entities. Dwight Millard is not associated with Sanchez Wealth Management LLC or Independent Financial Group LLC. Dwight Millard, co-host, NMLS #241259, Guild Mortgage Company Equal Housing Opportunity, NMLS #3274, Dwight Millard, NMLS #241259, Envy Mortgage Company #1141, French Address 5370, Kitsky Lane Suite 101 and 103, Reno, Nevada 89511. Phone #9723812410. The information provided today is for educational purposes only. The position strategies or opinions of the show do not necessarily represent the position strategies or opinions of Guild Mortgage Company or its affiliates. All information loan programs, interest rates, terms and conditions are subject to change without notice. Guild Mortgage offers home loan financing only. Guild Mortgage Company is not affiliated with the John Sanchez Show. Any speakers, companies or institutions featured. This is a paid advertisement. When it comes to renting out your property, the uncertainty of finding reliable tenants can feel like a real guessing game, responsible renter or perpetual party animal. Enter Renters Warehouse. 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