Ever dreamt of cracking the code of the mortgage industry? Buckle up, as our guest, Chris Delaney from Molitor Financial, an industry veteran, takes us on his fascinating journey from back-end processing to becoming a successful mortgage professional. Chris offers an insider's perspective on the mortgage industry, highlighting the power of referrals and shedding light on the five P's of success. Tune in as we navigate through the challenges of document requests and understand the key elements that contribute to client satisfaction.
In a fast-paced real estate market, do you know what motivates today's buyer? This episode gives you an up-close look at the characteristics and driving factors of modern homebuyers. From the financial benefits of homeownership to debunking common myths about its complexity, we've got you covered! Plus, get ready to unravel the secrets of mortgage rates, temporary and permanent buy-downs and the impact they can have on your loan balance. Listen closely, as we also discuss the concept of flex terms and the potential savings of converting to a 15-year fixed rate mortgage.
Attention Chicago residents! We’re decoding the mysteries of home financing and affordability in your city. We tackle the possibility of converting a 30-year mortgage to a shorter term and address the concerns of higher payments. You can also discover how bi-weekly payments can trim your loan term significantly. As we explore the world of multi-unit property financing and home equity lines, get ready to expand your investing strategies. Stay with us as we dive into first-time homebuyer programs, the potential of open houses and much more. Come join us and get empowered with the knowledge to navigate the ever-evolving real estate market.
Ever dreamt of cracking the code of the mortgage industry? Buckle up, as our guest, Chris Delaney from Molitor Financial, an industry veteran, takes us on his fascinating journey from back-end processing to becoming a successful mortgage professional. Chris offers an insider's perspective on the mortgage industry, highlighting the power of referrals and shedding light on the five P's of success. Tune in as we navigate through the challenges of document requests and understand the key elements that contribute to client satisfaction.
In a fast-paced real estate market, do you know what motivates today's buyer? This episode gives you an up-close look at the characteristics and driving factors of modern homebuyers. From the financial benefits of homeownership to debunking common myths about its complexity, we've got you covered! Plus, get ready to unravel the secrets of mortgage rates, temporary and permanent buy-downs and the impact they can have on your loan balance. Listen closely, as we also discuss the concept of flex terms and the potential savings of converting to a 15-year fixed rate mortgage.
Attention Chicago residents! We’re decoding the mysteries of home financing and affordability in your city. We tackle the possibility of converting a 30-year mortgage to a shorter term and address the concerns of higher payments. You can also discover how bi-weekly payments can trim your loan term significantly. As we explore the world of multi-unit property financing and home equity lines, get ready to expand your investing strategies. Stay with us as we dive into first-time homebuyer programs, the potential of open houses and much more. Come join us and get empowered with the knowledge to navigate the ever-evolving real estate market.
Yeah, I mean, even just this year, just looking back at some of my numbers, I mean the majority of what I have closed this year has all been past client referrals. Yeah, you know, yes, I've gotten a major referrals and things like that, but the majority of it has been past client referrals. So if you take care of those people and you do not personal level for months, you know as cliche as it is that you know the biggest financial decision of most people's lives. I mean they will appreciate it before it and then in the day TMS time.
Speaker 1:Yeah, well, they will tell their friends and family and co-workers. And that's how to you sustain yourself through down markets.
Speaker 2:What's the five P's? Do you remember it?
Speaker 1:proper preparation prevents powerful performance there you go.
Speaker 2:It doesn't matter how much money we get, if we don't close, it's no money, right? So no clothes is no money. I'm everything that I am because of my dad's death, and I wouldn't be as successful without his death. Welcome to the Jason theory. This is season two, episode 14, and we are with Chris Delaney from Molitor Financial and we are going. This is the last name, right.
Speaker 1:Yeah perfect.
Speaker 2:We're gonna be going over a Bunch of things that's going on in the economy the mortgage markets. Chris is going to talk to us about some exciting programs that he thinks are gonna be very popular in 2024, where he to see things now and Just kind of open discussion because everyone is a very interested in rates and where they're headed and inflation. So we'll hit up all those those good things. Chris and I have been having conversations over DM and Instagram and social media over the last six, seven months. I thought he's a good person they have in here because he has a really good grasp of actually the economy. We'll keep it like I always said kiss, and keep it simple, stupid, for everybody. We won't get too intense on his candlesticks and his this grass, but I think it's a really good conversation to have. So we'll start off. Chris, just tell us a little bit about yourself and we'll hop right into it sure.
Speaker 1:So I am originally from Missouri, jefferson City, missouri, in fact I moved here in 2006 If the long here doesn't give it away. I was in a band at the time. Obviously small town got a little bit of a big city right instead the nearest big city was Chicago, so moved up here with some buddies. I actually just got married very young and we all moved up here and then, you know, over time to come in our separate ways. But before I got into the Moriage space, I actually work with dogs can't remember if we you know about that at all.
Speaker 1:So I got a job at a dog daycare and started working with dogs and ended up running the daycare and doing a little bit of training and and so I kind of got a Good feel. For, you know, not only the management aspect of it and dogs are easy, it's the people that are always the problem. So you're dealing with a lot of emotions and complexities with people and their relationships with their dogs, and you know, I think that helps translate into what I do now. But the, the owners of Moller financial, were actually clients there and approached me one day and while I loved what I did, I thought, you know, I'm ready to try something new and, and you know, got into the mortgage business and started out originally as a processor, so have a lot of you know knowledge in terms of what goes into the actual under running process and everything else I've done. You know really everything from initial Introductory call with clients all the way through closing and finalizing closing figures working with the final company.
Speaker 2:So I think that gives me a good amount of Experience overall how many people think start at the processing and the back end and move to the front?
Speaker 1:I Wouldn't say as many that probably should. Well, you drink that.
Speaker 2:I think everyone should start there. I would agree. Yeah, so you know what you're selling.
Speaker 1:I think it depends on the, the company you start with. I'm always the type of person I don't want to work for big company. I just I just don't. I never had, I don't think I ever will.
Speaker 1:And so when you're at a smaller company, you have the ability to Get a lot more hands-on the Experience, because, I mean, it's probably the same thing in real estate. You know, you take the licensing test and that does a teacher anything, no, everything you learn as the hands-on experience and experience is the greatest teacher. So that was that was huge for me, because you know now and I'm working with clients, if I they tell me this or they tell me that, or I see this and their documents or see that I know, okay, we're gonna need a, b and C, now that you've told me this, so it it really helps in the the early stages of the pre-prop process and getting to the point where you know, once we get underwriting, it's very mental in terms of what we need and it just makes everything so much easier for you. Yeah, I think what are the big?
Speaker 2:complaints I always get, which you would circumvent. That complaint because of your back, back in knowledge is everyone's like oh man, they've always asked me for the same thing. And Now, when they ask for the same thing, it's like it's one thing than the other than the others. Like, why can't they just ask me for everything at once? I think a lot of times you know the front, the front end, you know just as soon as they okay, I take you out this, this, this, you pick a program. All right, here's the back-end person and you're not gonna hear from me again.
Speaker 2:Readers do that too. I mean, when you're, when you're like you said, when you're in a big team, you know the guy comes up and says you know, my name is XYZ, I'm top 10 in the state, I'm gonna do this, this and this for you on this, this. And you're like oh my god, so that matters a minute. That guy walks or girls, he's weak walks out of that door. You will never see or hear from that person Ever again, right? So the fact that you do the back-end, I think is I thought that'd be kind of a must, but I think that's a real differing Aspect to what you do, and you can definitely tell by the your posts on your social what is your social will. Quick, before I forget.
Speaker 1:So Sorry one is correct.
Speaker 2:This is the grams is is fantastic If you're into the market, so you really want to know what's going on and have a very good idea of what's out there. It's fantastic. I mean, I watched all the time. So I think that your knowledge coming to the fun end, it's obvious and I think that's really. I think that's something that's lacking. I think it lacks in every industry, but it's. It shows when you're this, shows on your Instagram. It shows when I talk to you that hey, listen this, somebody knows what's going on and you're, not me. Get tripped up.
Speaker 1:Yeah, and I actually glad you brought it up because it is something good to talk about now. I actually had a conversation with the potential client yesterday. He's, you know, interviewing law officers that he wants to work with and he was kind of asking how we work and things like that. And one of the things I told him was I'm the one with the license, right, so you come to me, you work with me. Yes, I have a couple team members under me because I can't do everything, but they're gonna help us to be under ready process and I'm gonna be there the whole time. Yeah, I'm just saying, hey, here you go, here's Andy, and I'll see you at the closing. It's no, I'm gonna be involved. When you cut questions, you call me and we'll go through those questions because, again, I'm the moment the license and I think so much of what people preach in this business is building out a team to handle all that so you can just get out there and sell, but I'm the lump office. This is my job.
Speaker 2:I think that's sustainable. I think it's sustainable when you have an amazing market. I'm and I talked about this on podcast. I actually talked about it with Nancy to sell me like a month ago, because she's kind of an individual, but she's the biggest individual age and people said individuals, fancy is. And I said it to her too. I said what are these teams gonna do when they can't feed these people anymore? Right, like you, gotta, you've got to be part of that process. And when things slow down and there's a flight to quality, you got to be in the mix. I think it's a big issue. I think it's a big issue in and everything this do a sales. And whenever you're on Instagram or wherever you're on Facebook, they're like make your team big, make your team big, do this. I mean, I just don't think it's. I Think it's.
Speaker 2:I think it's tough when times get slow and you don't have the relationships. Right, because the relationships that you're building on those daily phone calls, I mean those, those are the like. No one calls up their friend and says, oh man, I talked to this alone officer two months ago. I'm closing two months and I've never seen him again. He's not gonna refer you out. There's no relationship like they don't. They can't come to you and say all this stuff Like and when times are tough, let's say times are slow the last three or four months, calling in on those relationships is what really keeps you afloat till it gets harder again, until it gets easier again.
Speaker 1:Yeah, I mean, even just this year, just looking back at some of my number to send me, the majority of what I have closed this year has all been Past my referrals. Yeah, you know, yes, I've gotten a major referrals and things like that, but the majority of it has been past client referrals. So if you take care of those people and you do not personal level for months, you know that the, as cliche as it is that you know the biggest financial decision of most people's lives, I mean they will appreciate it before it and then in the day and that's not yeah, well, they will tell their friends and family and co-workers.
Speaker 1:And that's how do you sustain yourself through down markets?
Speaker 2:Yeah, I, every, everything is relationships and it's a. I think it's tough, especially, you know, especially when you have people coming in to the industry that are in their 20s, that have never really cultivated relationships. Because of social media, because of how the society is gone, I don't know how I mean. I love it because us old heads, when older do, but Us old heads are, be able to stay, sustain our market share because we have relationships and these young kids don't even know how to make relationships.
Speaker 1:And that's been. That's what's probably the hardest part about this business, other than you know. Learning your guidelines is building those relationships, not these.
Speaker 2:How are you dealing to kind of segue into that, if we're talking about it how are you dealing with those Relationships with that younger generation? Now, what's the difference between, let's say, someone that's in their 40s and someone that's late 20s in terms of like? It's a totally different ballgame for me, like when I get a call from somebody that's 37 plus, it's like hey, I know you're great, you do you. Where do you get out of your way? And you just tell us what to do, versus my mid 20s are like you know, they want to tell me what my how to do my job. I Mean I do you get that in that everything, I think the expertise in the mid 20s is fantastic.
Speaker 1:I think it depends a little bit. You certainly you can get people on, I think, an age group that will fat act like that. Either way, you know, lately the guy talked to you yesterday, you know, was just it, a lot of me were concerned about rates, right and so, and he wanted to get an offer and on the strawberry, and you know, we expired everything, god, everything done ready to go and and Obviously, when it came time to, you know, get go over things with them and start talking about credit. You know, scores a little bit lower and once I showed him the rate, what that was gonna be is like I kind of figured that, so he wasn't super shocked.
Speaker 2:But he's been through the process before yeah, I guess that helped.
Speaker 1:But you know, certainly the older generation I think is is more. It doesn't need as much handholding because most of them have been through it before, right, so they just kind of want to know the ins and outs, what's gonna make the most sense, you know what's, what is their need right at this moment and what does their need for the long term? And for the younger people it's. You know, they're most likely not going to be in that property For a longer term period of time. Of course, then you get the younger people that are, you know, trying to build real estate Empires, so they will hold on to a long term. So that it's not really a good answer, your question, but not yet.
Speaker 1:I think it just depends. Depends on the person, because every everybody's a little bit different in terms of what their needs and what their experience levels are. You know, I tell everybody to. If you're out there researching on Google, you come across something. Let me know that. We didn't discuss what. Let me know, and, and we'll go over it right, because Every state handles their transactions a little bit differently. There's certain programs that aren't available in certain places, and just so much.
Speaker 2:The information is outdated or it's just not relevant this year, you know, with the low inventory and the higher rates, you know we did hit Chicago was I posted, you posted it which is crazy. Chicago was the highest pre appreciating place, five percent year over year in America. The people that are purchasing this year with you talk a little bit about what they're doing, why they do it. You know people that are on the sidelines and scared obvious to this, people buying because we have no inventory and prices are up, which means that people are. You know we have more demand and supply. What have you seen and what are the characteristics of people that have been purchasing this year in this, in this rate environment, which historically is not that high? I mean for relative to price.
Speaker 1:Yeah, yeah.
Speaker 2:It's a little bit different.
Speaker 1:But yeah, well, I think part of it is, you know, when you look at the, the median age of a first time home buyer, it's, you know, low to mid 30s, right, and that's kind of where the millennial generation is Maybe sort of in the middle at this point, right, yeah, so you're having, you've obviously got more people coming into the market better of that age and in terms of you know what their, maybe what their reservations are.
Speaker 2:No, the people forget about the reservations. The people that are buying are their renters. That are just like. I can't keep paying this amount of money rent. I hate being displaced as a renter. I don't have many. This year I had hardly any buyer buyers so, because of lack of their mentoring, people stuck in the rain or like I'm not doing it. Yeah, if people are buying up, they were moving out of state and buying a bigger house out of state. But what did you see as most of your buyers Like? What were they? Their motivation to buy?
Speaker 1:Well, yeah, it was just that they didn't want to keep throwing away money in rent. So most, most people were coming out of the rental market.
Speaker 2:Yeah, yeah.
Speaker 1:And you know, we just actually had some good friends that have lived in a building for nine years and now it's up for sale and so they got to get out and so, you know, I suggested they buy. But I think that this sale is going through a lot faster than they expected and they're just on want them up police. So they got to go out and find something. But yeah, I think I think what people look at, you know, ok, obviously a paying rent and that's great, it covers my housing costs, but it doesn't add up to anything over the long term. And I think people are at least in terms of my age and below the younger are realizing that and it feels like to me and maybe it's just because I'm in this business, but it just feels like there's a huge push into real estate, for people to invest in real estate now, yeah, there's a yeah, there's a lot of house acting and house acting, and how can I acquire as many properties as I possibly can in X amount of years?
Speaker 1:And it seems like there's a big push into that. But you know, when you just show people the numbers of what that, what that adds up to over time, even five years, I mean, where else can you make that kind of money?
Speaker 2:Yeah, I agree with you. It's also for savings. It's like a 401k for people, because people have a hard time saving. So I'm always like, listen, this is going to force you to save. Maybe you're not going to have that extra meal of that extra coffee, maybe you're going to go to Starbucks and buy the bag and grind at your house. Versus paying five dollars three times a day, which is fifteen dollars a day. You'd be surprised that adds up to and then a lot of people still understand the tax savings, the write offs, and it's like man, like there's a lot here that you can do versus versus renting.
Speaker 2:This is a place for renting, but I think you know, when I talk to renters and this would be interesting, your take on it I would say man, probably selling out at 10 times people are renting because they don't know how good it is to own in terms of sure, in terms of financially for yourself, and it just odd that that doesn't get out there. And I think that's a good thing to do is to be honest. Is it a lack of people just saying taking the leap of faith? Is it a lack of people just being like I don't want to deal with it, like I'm just wondering how somebody pays six thousand dollars for a two bedroom, two bath. Well, and there's a lot of people that are doing that, because 98% full at four dollars a foot in the city of Chicago.
Speaker 1:Sure, there's those that are completely uneducated, that just they. In their mind it's more complicated and harder than it is. I mean, I had a lot of people that were nervous about it and came to me and we went through everything and their response was that is way easier than we thought and it is. I mean. Even somebody before I got into this business from the outside looking in, I thought, wow, this just seems complicated and very difficult and it's really not. I mean, you know, from from an economic aspect. I mean the government wants you to buy homes. I mean the economy does well when people buy homes, so we think we manufacture it Well. And so there there's, there are a lot of you know, we have some down payment systems programs.
Speaker 1:There are some down payment systems programs that help with things like that. Depending on your income levels, you might have the opportunity to get a better rate than the current market Right. And you know, I think at this point now a lot of people know you don't have to put 20 percent down. But every once a while I'll come across one of those people that think, oh, I've got to have 20 percent down. That that seems pretty rare. I don't know that that's that big of a misconception these days. Yeah, but you know what I was like to show people are the numbers right and in the breakdowns that I normally assume people when we do our initial pre-provol call, after I've reviewed everything and I start putting together scenarios.
Speaker 2:Perfect. So I call you up first time home buyer. Hey Chris, I'm looking at buying this place I rent now. I really wouldn't get on rentals. Break it down for me.
Speaker 1:Well, the first thing I always ask people is to tell me what they would prefer their budget to be Right, because there's no sense in me showing them options, for that are going to have a payment of five thousand dollars a month if they want to get twenty five hundred a month, right. So let's focus on how we need to get here, based on what you're putting down. Obviously, credit and everything else comes into play there. So that's where we start and then, once I have their application and I have all their documentation information would go through that I'll start putting together different options for them. Depends on their situation, what they specifically want to accomplish right now and then what we want to look at. You know four to five years down the road and I'll put together you know three to four different scenarios that we'll look at over, zoom together, and one of the things that I show them on that breakdown is the ratio principle to interest over time.
Speaker 1:You know and if they're paying PMI, I've got that on there too, just so they can see how, if we do this or we structure this way, this is how this is going to affect it. You know one of the big things of the temporary rate buy downs, which I think Are a little dumb, are you familiar with? Yeah, ok, so the biggest thing that the lenders don't get right when they're explaining this is you don't actually get a lower rate. You're. All you're doing is, let's say, the sellers crediting you for that temporary buy down, that money is held in escrow and it's paying the delta between what the payment would be at that nominal rate let's call it seven and a half percent and what the payment would be at five and a half percent.
Speaker 2:So to put that into layman's term, basically the seller is prepaying your interest. The spread between what the bank should be getting and what you're paying, that, that difference in the rate, that, that difference is what the seller is paying. That's what that credit is. So it's a certain amount money for the first year and a certain money for the second year. It's usually the layman term is a two one buy down. Yeah, there's other things but but yes, so that's being paid by the seller to you via credit.
Speaker 1:And only for a specific yes. So if it's a two one, buy down. You know it's based. It's based on a rate of, you know, let's say, the normal rate seven and a half. So it's based on five and a half. Yeah, first 12 months, then six and a half and it goes back to seven and a half, but you're not actually getting a lower rate. The reason I want people to understand that is because when you look at the mortgage itself over that time, your balance is not any lower than it would have been had you just been at, let's say, seven and a half.
Speaker 2:Yes, right, so it depends on the situation, because it's on the long about because the balance is going to be the equity that you have in the house.
Speaker 1:Well, the mortgage balance, yeah, but that obviously impacts the equity. So why always? Will show people along with that too, is you know, maybe we take that money from the seller and we do a permanent buy down, the delta in the payments not going to be as big. But when we start to look at it, over time the permanent buy down becomes more favorable and you have less of a need to refinance a freight strap.
Speaker 2:So how much I'm obviously depends on the the amount, but let's say it's 500 grand. So let's just say you do a two one buy down in doing a permanent buy down. Is it versus two points and one point? Would it be like a half a point for the life alone or a quarter point for the life alone?
Speaker 1:It's gonna depend on the loan amount. But I would say, at least in some of the scenarios that I put together recently, I wouldn't say it could be a full point. You'd probably get pretty close to a full point On a permanent buy down. You know it depends on also depends on how much credit you get right.
Speaker 1:You always have the ability to also just pay discount points outright which allow you to buy down your rate. You can only really go up to a certain limit before the loan won't pass a qualified mortgage test. But again, if you start looking at it over time, because on those temporary buy downs your mortgage balance itself is not impacted, the interest you're paying gets not impacted, but with that permanent buy down it is, and then again you have less of a need to refinance if rates drop, because on a temporary buy down you're still at seven and a half, yeah, whereas maybe on the permanent buy down you're at six, seven, five, permanently right. So now we probably want rates to come down at least at like six and a quarter, close to 6% for it to make sense To make sense.
Speaker 2:I always tell that to people like once you get to year seven, I'm like man. You have to look at the amortization schedule, which means that for everyone that's this display, it's the most. For me, it's the most important thing. When I look at a loan, the amortization schedule is basically the 30 years wherever your loan is, and it's how much interest you're paying versus how much you're paying in down payment. You got to get to about year seven and a 30 year to start attacking the principal. Once you get past year seven, you need a huge move in interest rates to revive because you're restarting the amortization schedule. That means you've gotten to year 70, 10. You're basically starting to really pay off the house. You say, fuck it, I'm going to refi and then all of a sudden, bing, bing, bing, you're back up just paying interest again. It's the biggest mistake people make. Yeah, to me, I think it's the biggest mistake.
Speaker 1:I would agree with that. And when 2020 and 2021, and a lot of people refi I know you've got to have people that refinanced towards your time. Just rates just kept going down.
Speaker 2:Yeah, that's a crazy time.
Speaker 1:But you can also do things called flex terms right. So if they closed last year and now we're refinancing this year, we could do a 29 year fix. So we're not kicking that out. But it also depends on a few years down or 70 years down the road. How are their income levels? If we were to convert this to a 15 year fix, does that keep their payment about the same? Because that's a great opportunity to say if you've been comfortable with this payment, let's cut the turn and we'll save you a significant amount of money.
Speaker 2:So that's really funny because that's what I get. So I was at four and then when rates tumbled, you know, the guy was like, hey, I can take you to three on the 30 year. And I was like, but what's the 15? And the 15, there was still a spread. The 15 was at two and a half, the payment was the same. But I literally just you know, I'm three years into it now and it's I'm almost like 50, 50 already on interest and on principle.
Speaker 2:So, I know it freaks a lot of people out, but, like what I said is to the guys I'm like well, I'm comfortable with my payment now, so all I'm doing is really force saving right, like at the same payment, and I have that conversation. But I don't think enough brokers have that. Mortgage brokers have that conversation. Because I think really looking at the amortization schedule, looking at how you can pay down your debt quicker and save more, is a huge thing that people don't really talk about and I'm concerned this is such a huge vehicle for earning.
Speaker 1:Absolutely Well, I think I always will show people the breakdowns right, and the amortization schedule is one of the most powerful tools when it comes to a mortgage and for people out there. If you have Excel, if you go just open up an Excel file, you go to the template, search amortization schedule there's one you can play with and I use it all the time just for quick calculations. Yeah, cool. But an example where you're considering converting something from a 30 year to a shorter term and you're maybe a little hesitant about the fact that now I think it was higher payment. What I always show them is okay, well, what if we did a 30 year, for example, and you apply basically the difference to the payment to principal every month?
Speaker 2:Yeah, so talk about that.
Speaker 1:So that's another way you can yeah, well, now you have flexibility, right. So maybe your payment's gonna go up 500 a month if you convert it right, and you're fine with that. But it'd be nice to have some flexibility. Maybe you're going on a trip one month or you have an expense come up. Well, now you can default to that 30 year payment. You're still going to pay it down much faster than 30 years if you're applying more every month, and that's, to me, some of the magic about it.
Speaker 2:The buys are the bi-weekly, like I used to remember. I got a letter hey, pass 15 bucks and we'll do. I'm sure they do it all online now with the actual bank, but I used to pay just bi-weekly, so you got an extra month payment and it chops. I think it went from like 30 years to like 23, or it was like making one payment a month. One payment extra payment a year was like chopping a third of your loan off.
Speaker 1:Yeah, I actually just had somebody ask me about it the other day, but that's still absolutely something that people do. I don't know that this day and age, with maybe affordability being one of these, that it's as popular, but it's definitely a tool that you can utilize and you can also just pay more. Yeah to the principle, which I think is something great to do.
Speaker 2:Where do you see affordability? I mean here's my two sons on affordability in Chicago. Is that Chicago is so cheap relative to the coasts that I think we could move another 10%, 15% up and still be under the spread between the two other coasts? I don't know. I always said this to somebody I go about. Four years ago they started having like bars and hotels and you have no goonie of all these things. I looked at somebody and said, oh, we're starting to become a city I'd like, and this somebody's spent a lot of time in LA, so like we just weren't I know that sounds crazy, but we were just weren't like ah-ha, weren't like a city city.
Speaker 2:And I think people are like, well, it's not affordable, it's not this, it's not that I'm like. Well, most major cities aren't. Like, it's just what it is and I think the more it. Definitely it's definitely slowed down because of the crime. I'll just be blunt about that, but before the crime all these baby boomers were buying. They're all leaving. I mean, why do I need to pay $60,000 in taxes in the North side or Hinsdale or this or that, when I have no more kids that are in the system? Everybody was buying everything downtown and everyone was moving downtown. Now they're getting. You know they sell a house in Hinsdale or going to, you know, south Florida or Tennessee or Arizona, but I just I don't see the city becoming more affordable. I just don't.
Speaker 2:And the outskirts we talked about this. Where you live, jefferson, I mean those places are. You think there's appreciation in North center at 12% and 8%? Try to move. Where you move it's up like 25, 30% and it's not stopping. That's very true. So, like I don't see where people think that the city is going to get more affordable, I think it's just going to become more and more expensive.
Speaker 2:And with the density issues the lack of density because of the zoning constrictions and the fact that you have to pay off 7,000 aldermen to get an extra unit I don't know how they do it and I'm going to go up one more rim. And when you go to get a zoning change to add more units to drop the price of the square foot, they make you add 20% affordability. Now, this sounds great in theory, just like everything else in Chicago. Great in theory. The problem is what the developers say is okay. If I got 20% affordability or 25% affordability, whatever they want to do, the project now becomes a loser.
Speaker 2:I keep doing so. Instead of doing that, I'm going to do six massive units that's what they're doing everywhere now and I'll just have a million dollar units. Instead of having 12, $400,000 or $300,000 units, I'll just have four $800,000 units, like it's having the adverse effect, which is killing supply, because the amount of rules that people don't understand, that developers have to do to create density, is insane. Okay, I'm done. No, I mean it's a good point. I mean, give us density.
Speaker 1:Well, I think too, if you want a house in the city, you've got to go from the route now. Yeah, and I mean the Northwest side, Damperson Park, Portage Park, Ryanette, they're great neighborhoods, but you're right, the values have gone. Skylos, Gestangials.
Speaker 2:Way more than Bucktown Like. If you're like everyone's like, oh, it's so expensive. I'm like you should see what's happening on the outskirts, but you're also getting these great downtowns. You meet downtowns that are explode-y in those areas and it's like really nice, the restaurants and this. I'm gonna say it wrong, but I went to Eris, eris, eris, great Mayhem.
Speaker 1:I went to where the first house is, I actually saw that I meant to comment on your radiation radiator. It's unreal. The radiator's fantastic.
Speaker 2:I walked in and I'm like this place is awesome, like there's so much cool shit that's happening because everything's being pushed out there. I just don't think it's gonna get cheaper.
Speaker 1:Did you go down to the six corners down there? No, yeah, yeah yeah, it's huge.
Speaker 2:Well, because I gotta drive that way? Because Milwaukee's closed to the courts, to the basketball court, right, so I gotta go through six corners and then come back down to Milwaukee. It's nuts there, yeah, and the beautiful hospital they just built there, northwestern has that really cool. I mean, I just think that. I mean I think it's like the suburbs. You wanna buy a house at 600 grand? You gotta go west of Batavia, yeah, you gotta go to Cardinersville.
Speaker 1:The suburbs have been extremely competitive, yeah, and so single family.
Speaker 2:I don't understand and this is like 8% rates.
Speaker 1:Right.
Speaker 2:What's gonna happen when they're at six? It's gonna be a shit show. Yeah, we'll get more inventory For sure, because they'll be like, oh, I can move now because I'm not stuck in this path, but the band is gonna outstrip that by mine, yeah.
Speaker 2:And you were talking before we got on. You were saying how many people have been coming to you over the last couple of weeks? Talk about that. Like you're saying, a lot of people are starting to come and you're the first. You're like the leading indicator. If we wanna talk about economics, the leading indicator would be the mortgage broker, because he has the gold, you know.
Speaker 1:Well, a lot of people go to the agent first and then the agent says, hey, you gotta talk to a lender. But yeah, I've met a lot of people recently. I think most of them are getting ready for 2024, which is normal at this time of year. You get an influx of people just getting their ducks in a row, which is great.
Speaker 2:For the 10 houses that are out there.
Speaker 1:Right, right. But like I was telling you earlier, there's the private listing network and I know that a lot of homes will be posted on that During the holiday days, just in preparation for going public. And if they get some bites, great. If they don't, they're ready to list publicly once the spring market rolls around.
Speaker 2:But I think a great thing. Just a quick note on that On the private market, a lot of these people because I'm going on the private market, I knew stopped that these people don't wanna close till March or April. Sure, if you can use this market, you know, like you know at Doomsday, have your agent doomsday it a little bit and you get a good price. You're not gonna be closing until April or May. I personally think that you'll be touching six. I think that's an opportunity for you to get pricing and people that are on the private market. They're on the private market because they don't wanna be bothered. There's money that sellers will give up to have an easy transaction. So you're getting a good price and, on top of it, you're gonna get a great rate versus closing right now. Anyways, go up.
Speaker 1:I think you're right to agree about that. I mean, as soon as 2024 rolls around obviously election year they're going to. The powers of you will put pressure on the other powers that control these things, not in a conspiracy theory way, but to your some fan members that are on the app scene.
Speaker 2:Let's two at two.
Speaker 1:So it's really great to bring rates down a little bit and I think I haven't really dove into it too much, just kind of thinking over my career there is almost feels like there's a little of a seasonality when it comes to rates, and in the spring it always does seem like they're a little bit lower than they are maybe this time of the year. Obviously, 2020 was the biggest outlier in that regard, but yeah, I think that'll help shake up some inventory. It'll definitely bring a lot of people back into the market, and I've been sitting on the sidelines. I mean I have a lot of people right now that they're pretty approved, they're good to go, they're in a great spot, even with rates at 78%, and they're just kind of biting with time.
Speaker 2:Yeah, I mean all my buyers, contrary to the people that go into open houses and aren't buyers. They're just wasting my time. All my buyers that are real buyers, they don't care about the rate, they just don't have product to buy Like I have these people that come into open houses. I don't know why they come to open houses. Right, they come in open houses. One guy came in last week. He walked in on the cake. I just gave him a little speed about the place. I get it. You come into open houses because you don't wanna talk to anybody or be bothered. You come to my open houses, you will not be bothered. Look at much right in open houses. You will not be bothered. Enjoy yourself, relax. If you'd have something, I always say scream, I'll find you. But they come in and they were like good guy yesterday, guy last week, I had a lot of poop over his last week. Last week just walked in and he goes. That's got a real tough freak on him and I'm like, excuse me, he's like no one wanting to buy this. I mean like Doomsday, I go. I looked at him. I said what are you here for? He's like what we're having like cheese to be to buy. I go, yes, I go. I told him. I said I have a ton of buyers that would buy tomorrow. I said I myself am looking to move. I would buy tomorrow. I have nothing to buy. That's the fucking problem. I mean, if rates were an issue, prices would be down, they would not be up. It's supplied. I just looked at him. I go, it's supplied. I go, why aren't you buying anything? He's like well, you know there's this, that, and he's like there's just not enough to look at. I go, exactly, I go.
Speaker 2:People get crippled when they have only two choices. I've noticed over 20 years if you have 30 choices to choose from, you're crippled. If you have two or three, you're crippled Right around 10 ohms to look at. You're confident in what you're paying and no one now wants to make the wrong choice and everyone's a sheep. So like, it's like, like.
Speaker 2:Then another person came in and this is my favorite one. Another person came in and they were like a house went under contract, like three days from my open house, and the person came in and they're like oh, I like the house, just really like the house, and pulling it, but it went under contract. I looked at them. I said really, I said because it was on the market you could have wrote on. Sure, I go, do you now like it? Because it's unattainable? No, because it gives people. Everybody wants an excuse to why they don't do something and it's a great excuse. Oh, we were gonna buy that guys. And then it comes back on the market. I call my clients it's back on the market. Ah, I didn't want pretty Brady, yet I'm like okay like there's gotta be something wrong with that.
Speaker 2:Yeah, yeah yeah, so what programs are you for? First time home buyers and I don't know if they're still around, but there used to be a ton of money they would hand out, like until a well went dry. You could do this, you could do that. There used to be stop where you put money down and they give you the money back, depending on the areas you were at, what program, and we don't have to get into those specific programs. But what do you see in 2024, and you're talking to all the other coming through now what programs do you think people should know about? And it's gonna make their life fantastic.
Speaker 1:Well, something I think people should know about, especially first time buyers, people that haven't bought in the last three years. Obviously you have the ability to put three percent out for talking about a conventional home, but one of the changes that happened earlier this year- Three percent down on a conventional loan, but you cannot have bought the last three years.
Speaker 2:Is that what you're saying? If you haven't bought the last three years, you're considering buying a home buyer, or you bought, sold at your rent.
Speaker 1:Sorry, if you had not, I wouldn't have wanted to buy in the last okay, okay, I just wanted to make sure that these people okay, yeah, then you're considered a first time buyer.
Speaker 2:Okay, born in Christian.
Speaker 1:Yeah right Virgin right, well, and one of the changes I have earlier this year was and this is a nationwide thing if your income is under the arid median income where you're buying, all the rate adjustments for things like property tax, credit scores, loan to bounties those will be waived If you're under the arid median income and you have not owned in the last three years.
Speaker 2:So this is really important. So if you haven't owned in the last three years, then you make under the median income in that area. So when you talk about areas, is it like a 60622, 60647, or is it the Lakeview West Chicago? Like how do they define the area or is it mapped?
Speaker 1:Well, it is mapped. So there's a couple of different tools. You can look it up that I can tell you. Pretty much all the Chicago lay in the area. It's all about 109, 400 right now Is the area median income.
Speaker 2:Well, 109,000. Correctly, year 400. So if you make less than 109,000, they just start waiving everything or lowering. Which level will we?
Speaker 1:have those adjustments on the rate. So like a condo, for example, has a 75 base point adjustment on a rate which can equate anywhere from a quarter to three. So about percent on a rate. Yeah, so that's a good. If you're buying a condo you're already at higher interest rates because it's a condo. So then a lot of first-hand buyers buy condos, right. So if you're under that limit you're gonna get a below market rate, as is. But I know I clarify. As far as the income goes, let's say your base is 109. On top of that you've got bonuses and overtime commissions. If we can just qualify it on that 109, you're good to go. You'll sunk at it. We don't have to include the bonuses or commission.
Speaker 2:Oh wow. So base salary, that's a lot, that's a lot.
Speaker 1:Well, in a lot of nights when you have couples buying, we all look at it and say, hey, if we just do this in one, two, three name, this is what we'll get right. And you do that sometimes with credit yeah, somebody's got different credit scores, but that's a really great opportunity for people. A lot of it's not something that's maybe it's not a specific program and it's not something that's maybe out there too much. It's not. I mean, I've gotten deals from other lenders. One deal is just because I looked at that, so I don't know if a lot of people just aren't aware of it, but it's not something that's really like a publicly advertised.
Speaker 2:Now this may be too much to do just off the top of your head, but 109 of 3% down. Any ballpark figure worth that puts it someone at. So 108, 400.
Speaker 1:Well, so I would say their payments probably got to be somewhere under, let's say, 4,200 all in per month. It's not a bad. So that would probably get them somewhere with 3% down, maybe somewhere close to the 400,000 ish range. That's a nice condo and yeah, if you're maxing out on that payment in terms of debt to income ratio, that's never a good idea If it's just you, but obviously if we got a household with two income that's not the same.
Speaker 2:You've got the cash coming from somewhere else.
Speaker 1:So I think it's really important to. That's where going back to focusing on payments super important, right? Because if that's where you're comfortable and we can accomplish this and get this better rate, then that's how we should structure it. And a solid idea paid one money one way. Whether they do that or not, at the end of the day, no, it's the best thing for the consumer, yeah, right, what makes the most sense for them. So that's something that started at the beginning of this year With all those rate adjustments that people didn't hear about till May.
Speaker 1:That actually went into effect in March. So that's something that I think is great and, unfortunately, something I don't think a lot of people are aware of. No, but then there's the change frame they made for two to four year properties. So standard conventional financing for that was 15% down on the two year. Fannie Mae was 25% down on the three to four year. Yeah, it was always 25. And this is owner occupied. Freddie Mac did 20% down on three to four units, but Fannie Mae's lowering that for two to four units to 5% down owner occupied to get two to four units. So you want to talk about house hacking? This is the way that you're going to do it.
Speaker 2:We talked about it, but hit on the difference between this and the FHA, which everyone thinks is the golden standard, which it's not, because you need to go into that too.
Speaker 1:Well, so FHA is three and a half percent down. Two to four unit right Sounds amazing. Super low down can aim it. You can couple that depending on the doubt paying and assistive programs. You can potentially couple that with it On a three to four year. And then it has to pass the self sufficiency test, which is essentially we're going to look at the market rents for the building. You're going to get 75% of that because it's a 25% faith in the factor, and that 75% total has to cover the entire mortgage payment principle, interest, taxes, insurance and the PMI all of it. And that is super rare to see. I've only one time, have I ever seen one pass in my career and, like I told you earlier, rates were super low and instead of enhancing the upfront PMI, he paid it outright.
Speaker 2:Yeah, I mean, I'm going to be blatant. I was really ignorant to this because I had clients at the start of COVID when rates were nothing but house hacking by two units of three units on FHA and they were loving it and I never heard of this. And then all of a sudden rates changed. The thing that was buying his second place no, and could switch over to owner occupy there. And the guy's like, hey, that's a passive affordability. And I was like what are you talking about? Because I had never been told this because rates were so low. And he's like, well, it's got to do this, this and this, like you said.
Speaker 2:And I just looked at the numbers and I'm like there's not one place in Chicago, unless you're going to go somewhere and just get murdered in two seconds. But then the rents aren't high. I'm like there's no place in Chicago that's going to pass this test. And he's like I know, he's like they're trying to change the affordability. And the biggest issue with FHA is what you said they don't count the unit you live in, so 75% of the building has to cover the whole building. It just won't happen. So this new program is fantastic for people and that's when it's getting a lot of pub.
Speaker 1:Yeah, it's a conventional program versus FHA. So you know, and I was telling you this earlier. So FHA is requirements If you're buying a two to four unit property is that you have six months of monthly payment reserves right, which can add up and obviously would never encourage him but if it all they have and to find a property and not him anything left over. So when that rolled out, I had actually called I called Freddie Mac all the time for underwriting questions. If I can't find the answer, and I was on the phone with them and I was asking them are you guys going to follow suit? Because normally they mirror each other more or less.
Speaker 1:Because, Freddie Mac, you know there was a requirements on multi units or you know for auditing to underwriting for the most part.
Speaker 2:And can you reserve requirements? Do you explain that Just for people that don't understand?
Speaker 1:Yeah, so reserves, yeah, sometimes it's dependent on the credit profile, but it's basically they want to see that you have X amount of monthly payments in reserves, which can be in the form of savings, checking, non liquid accounts like retirement or invest. Okay, so that's happy to cash on him, yeah, which they're going to. You know, for non liquid accounts, they're going to give you the call to haircut and basically they're going to knock a percentage off. Okay, because it's not liquid. But those are great ways to cover reserve requirements. We use stuff like that all the time with like jumbo financing, for instance, but I would assume that Freddie Mac will follow suit. When I spoke to the lady, she said she hadn't even heard it, but she also said that we know. At the same time, they know, yeah, so I would imagine that they're going to follow suit at some point would be my guess, which they potentially, you know, lessens the requirement that you're going to have to show reserves and maybe makes it a little bit easier.
Speaker 2:But you were saying also not only do you only have to put 5% on, but what's the what? Is it just basically conventional, so 750, or is it pumped because you have multiple units? What is what's the loan limit go up to?
Speaker 1:That's a good question off the top of my head. I don't know what the two loan limits are, but two units somewhere up in the 9,000 range, and then three or four units are up over a million, over a million.
Speaker 2:Yeah.
Speaker 1:So if it's 5% down, you know, and and and the DTI, as you said.
Speaker 2:so the debt to income ratio is how you qualify for it. You said they'll take 75% of whatever the rent is Correct.
Speaker 1:Yeah. So when you're buying a multi-uniform operate, you know whether you're buying it as a investment or a primary. But let's say you're buying it for a primary, for instance. So let's say it's a four unit, you're going to live in one, the. When the appraiser goes through the property on their report they're going to notate what the market rent is for those units and you can take 75% of those over three units and then add that back as qualifying and kind of a really specific question.
Speaker 2:You may not know the answer. What happens at? The unit is under rented and we as agents give comps for what the market rate is. Will they take what the actual rent role is or will they do like if it's rented like with, say, one of my $650,000 place in in Logan square, a two unit at least? They're renting it to family members at $1,000 apiece but the market rent is three and 2,500. Are they going to do the DTIs off of what it's at now or are they going to look at the market rate and give you market rate? I know that's super specific.
Speaker 1:No, because that happens a lot. So it would depend on is it a lease or is it a month to month? Okay, Right. So, because for an under rented perspective like they're looking forward, right? So if you've got this thing lease for the next year and that rent is lower than the market rent nine times that it's in, they're probably going to qualify you on that lower amount.
Speaker 2:But if it's a month to month, right If?
Speaker 1:it's month to month, then you you know the way they look at it is you're going to go in there and you're going to raise rents. Kick them out I mean maybe not kick them out, but you know you're going to, you're going to raise the rents.
Speaker 2:Yeah, right.
Speaker 1:And that's what you should do, logically.
Speaker 2:So the two big programs. We got the 3% under 109, which I didn't know about. That's going to.
Speaker 1:Well, well, and it just to the count of it. You don't have to put 3% down One more yeah.
Speaker 2:But you can take, take, but you still get the break on the, the rate, the rate, the adjustments, the adjustments, yeah, and you don't have to put anyone that rolled out which is the 5% down and staying conventional, and you don't have to do the effect, and we didn't talk about this. You know to do the FHA inspection, which is a nightmare.
Speaker 1:Well that that seems like a nightmare. I tell people all the time when, when they're thinking about this and they're we're trying to weigh FHA versus conventional, like is it going to pass? Well, and I tell everybody in Chicago these multi-unit beliefs are not new no, and so I get it all the time into the agency. There's a lot of hesitation about it because they're worried. Oh, I know the seller's going to have to fix this or fix that. I'd say nine times out of 10, it's chipped peeling paint. Yeah, we've already done Right. And and that's easy. And I mean listen, if, if that's all that's needed and the buyer wants to do it, from my perspective I don't, it doesn't matter right.
Speaker 2:Listen, if you're selling an old building, you have crocodile paint chips outside. Before you list it, paint over the fucking. You should do it anyway.
Speaker 1:It's regardless of who you're going to sell it to. Yeah, I mean right. But so those are two great opportunities. I think that are, and actually the the five percent out of that goes. I mean we, we can the wild lenders get early access to the stuff and can do it.
Speaker 2:So it's already live for us, but it technically goes into effect on what Sunday is when it technically goes, looking great on the jumbo end in terms of loans in the multi-million space that you're seeing, that, that you like that someone could be shopped to you and say, listen, I heard this. I'm looking to buy a one, five, one eight house and I wanted me team as much of my cash as possible.
Speaker 1:It's a low down payment Are people doing?
Speaker 2:I mean, I love them, I'm a piggyback guy, I love a 10, 10, 80. Is that still a thing? I?
Speaker 1:I haven't had a lot of people doing first and second, so, like I like, just paying off.
Speaker 2:I love paying off I love paying off the second, having it open and my payment dropping as I pay off that second as I get commissions, but it was always my favorite thing to do so.
Speaker 1:I think a suggestion I would have for people that are considering doing that. Maybe you have the capital on the let's say, do 20, 25 percent down, but you don't necessarily want to part with it instead of doing those simultaneously, because you're going to have a hit on the rate for there being a higher combined loan to value. So what I would suggest, it is Go in there, buy it, put down 20, 25%, whatever you're thinking, and then we close, we'll turn around and we'll pull out the home equity line of credit after that and you can take that money back out, or you could just take out that line in half. I just like to have it. Yeah, I think it's a great idea. I mean, especially if you're putting a good amount down.
Speaker 2:I mean, you write off the interest. If I want to do something with it, if I want to make an investment, I've got that capital that I can come in and out, sure, and I'm responsible with it, but that's a huge part too.
Speaker 1:Well, all of this is financial responsibility right, but I think a home equity line of credit is something great to have in the event of an emergency, because where are you going to access that kind of capital? On that short note, yeah, and credit cards aren't going to go that high, no. So it's something that I think is great to have, especially. You know, again, I would always have somebody close first and then to do it OK, just simply so we don't have that impact to the interest rate on the first loan because we have a higher combined loan, devalued. I got you on so and then we can. You know, most times, a lot of times, it's a home equity line of credit. We don't even need an appraisal. It depends on how much of a line you're taking out.
Speaker 2:So what are they giving on home equity lines Like what's the rate? Yeah, not that going. What's the ratio have to be Like will they let you take 90%?
Speaker 1:There's options out there that go up to 95% loan devalued.
Speaker 2:Oh, wow, yeah.
Speaker 1:You know, usually you're going to have to have a higher score profile. Yeah, the DTI limits can be anywhere from 40% to 50%, so they're pretty generous, ok, and they're always going to qualify you on the maximum line, like, even if you're not taking the whole thing out, they're going to qualify you on that. They're going to qualify you on a higher rate, usually about 2% above the actual rate, and those are generally variable rate products too. Yeah. So I always tell people this is variable rate.
Speaker 1:I know it's just 12%, 14% or something like that, but it's going to change, yeah Right, so just try to keep your balance as low as you can, or just keep it in case of emergencies, like out what you need when you need it.
Speaker 2:I had a home act that I was using for an investment on a new construction and as it started going up, I just called the bank and I'm like, hey, let's figure out how to do this. And they actually kept my rate and just turned it into a normal loan.
Speaker 1:So they just converted it. They converted, they favoritized yeah.
Speaker 2:And now it's never going to be. If rates cut it's not going to flow down Right. So I didn't pull from it. So as I pay it on, it's done. But I was like man and that was like at six. Now they're at 8 and 1 1⁄2, so I'm glad I did that. I fixed that debt. But you could also. I didn't even know that existed.
Speaker 1:Well, yeah, there's also I didn't know I could do a second lane like for a fixed end and that's just basically a cash out. You're just not touching the first mortgage. Yeah, no, so that's something that comes up a lot with people. They bought a refinanced over the last couple of years, right, Because they've got two to three to maybe even 4% rates they don't want to touch, but they've got some debt they want to consolidate. Yeah, Now, I hope what we'll always do is look at if we did a regular cash out refinance versus having this first mortgage and then the second mortgage and the blended rates between the two and what that's going to look like.
Speaker 1:Also, those second mortgages, you can typically go up to a little bit higher loan values than, let's say, cash out. We're usually going to be capped about 80% loan value, so it does give you the ability. How's all that? You got every angle covered. I can tell you I don't have a ton of people doing second mortgage products. It's nice to add that. It's a great tool to show people if they are hesitant about they don't want to touch that first mortgage. But I personally think that having a home equity line if I'm a home equity second line. I want to take their rate to it and unless you've converted or whatever, normally you have a 10-year drop. Yeah, and those are interest only payments. So you should go take the whole thing out and just be paying the whole mortgage, Pay down some Pay a ton.
Speaker 1:But you have a 10-year drop here and then it's a 20-year advertised repayment. So those payments are interest only, which means they're going to be lower than they would be if it was fully advertised.
Speaker 2:I think it's a great way, if you do want to hustle, do something on the side this that it's a great way to access capital. I always just called it the bank of stratton. So I'm like I want to borrow from the bank of stratton, write off the interest against my earnings and then be able to do stuff with it, versus any other way.
Speaker 1:I've had a lot of people buy a property, take out a home equity line of credit, buy another property. They start buying investments. Then I've got a guy to.
Speaker 2:Well, that's what I do with it. And then, as money comes in from the investment property, I take that money and I pay down the second.
Speaker 1:Right, and that's a long-term play.
Speaker 2:Yeah, because it's not years.
Speaker 1:What's happening right now? It's I'm looking down the road to when I can retire and then, at that point, maybe my kids are gone and my wife and I are my spouse. We can more or less live off that money because we did all this stuff.
Speaker 2:I always tell people I mean, use that cash flow if you don't need it. Now that cash flow just paid on the debt, right Like, just keep converting that cash flow that comes in, Just keep paying down that debt. And all of a sudden that's paid off, or it's really humming, and all of a sudden you've got your. Two years later, three years later, hey, you've got your gunpowder bag, let's do it again. All right, take that kid, you pay that down and just rinse and repeat.
Speaker 1:I've got a guy to. I joke with him all the time. Well, why? I tell him he's going to put my kid through college? I keep telling him he needs to sell a course on air BBs. I know there's a lot of people that do great with it, but he crushes it and I got to say his market just because he's kind of the king of that area. But we just did that. Every year he would buy a new primary and they would renovate it and they turn around the next year and sell it. Take 5%, buy a new primary, take the rest, buy another investment or we cash out an investment, he'd buy another one. I mean, he's making so much money with these Airbnb. Is that? Even though he's taking out these higher interest loans, it's more than just covering it, it's funding his entire life.
Speaker 2:Yeah, I have some air BBs and actually I did a podcast with this guy, matt Gorman, who does the managers of my air BBs, and it's so funny. Every time I see an Instagram, air BBs are popping. That's done this. This, I'm like, and I always just let people know. Listen, yes, in Tennessee or Arizona or places that I saturated for sure, to have an Airbnb in Chicago is extremely difficult because of the licensing that goes with it. You get an Airbnb in Chicago. It's a license to print money. That's what I'm going to say. It's tough. You've got to know how to navigate to get the license and there's certain things you've got to do and it's probably not all about board, but once it's going.
Speaker 1:There's always a loophole. We've done that, not here, but in the US.
Speaker 2:It's interesting the amount of, and people always like by Airbnb, and it's probably changed. But the last time I looked, which was months, not too many months, but seven months ago there were only 17,. Three bedrooms on the north side of the Airbnb because it's such a difficult product to get. Sure, and we won't go into Airbnb. So, man, it is a little creative and the taxes are so nuts on Airbnb. Let me tell you something, chicago, who was broke.
Speaker 2:Well, there's two things they're not getting rid of Airbnb and weed sales because they need the revenues. I mean, I'm telling you prostitution is coming soon. They need the revenue. Oh, they got the casino, we got the casino. I mean, when you see the taxes on Airbnb, they're not going anywhere and the amount of taxes I pay, I'm like it's 30%. Wow, 30% is the taxes. It's like 30 and change Every $100 I made I give them the city 33. They can't rid of that. I don't care what the hotels say. All right, in closing, anything you want to talk about now that we've repped for a while, tell me first off, go over your socials again, your phone number, how people get hold of you, all that stuff.
Speaker 1:Why social media is at CDLens, which my son and constraints like to make fun of me, for they all follow me. They even made some fan pages. I just tried to think of a name that wasn't something cheesy Like hey, I'm the mortgage guy, so it's at CDLens on Instagram. And now Lens Lens yeah, Like lending money, CD like. My name is Chris Glaney L-E-N-D-S. So at CDLens, Phone numbers 312-316-0076 and Chris D at Molliter Financialcom.
Speaker 2:I think if you've listened to this podcast and you've taken it all in, I think one thing you'll really realize is Chris having being in the back office and putting the loans together and then being the front, you kind of feel he has an extreme knowledge of everything that's on. Please follow him. It's a great follow. Even if they're not in the market right now, the market knowledge you're going to get of what's going on from his page is fantastic and it'll keep you in the know and then, when you're ready, you're going to feel comfortable knowing that he knows exactly what's going on. So I really appreciate your time. It was awesome. I have a man. I appreciate it. You got it All right, find. Thanks so much for spending some time with us, obviously spotted by Apple, whatever all the podcasts and we will see you soon. Thank you very much. One, two, three.